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One reason why America’s rich have amassed such large fortunes: The federal tax
rate on income in the top tax bracket has ...
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Taxing the Ultra Rich: A Little History

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America’s 20 richest people — a group that could fit nicely in a Gulfstream luxury private jet – now own more wealth than the bottom half of the American population combined, a total of 152 million people, details the new Institute for Policy Studies Billionaire Bonanza report. One reason why America’s rich have amassed such large fortunes: The federal tax rate on income in the top tax bracket has sunk sharply over recent decades. This infographic also appears in Too Much, the inequality monthly. Check www.toomuchonline.org for more.

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Taxing the Ultra Rich: A Little History

  1. 1. One reason why America’s rich have amassed such large fortunes: The federal tax rate on income in the top tax bracket has sunk sharply over recent decades. Sources: Institute for Policy Studies, Billionaire Bonanza, December 2015; Internal Revenue Service, Average Effective Tax Rates for Taxpayers with the Top 400 Adjusted Gross income, 1992-2013, December 2015. Friends of grand fortune have a standard rationale for lowering tax rates on America’s highest incomes. The super rich, they say, never end up paying taxes at high rates. They hire fancy lobbyists and lawyers to establish and exploit tax loopholes. Taxing the Ultra Rich: A Little History America’s 20 richest people — a group that could fit nicely in a Gulfstream luxury private jet –¬ now own more wealth than the bottom half of the American population combined, a total of 152 million people, details the new Institute for Policy Studies Billionaire Bonanza report. 94% 91% 70% 35% 0 25 50 75 100 1942 1952 1962 1972 1982 1992 2002 2012 Top federal tax rate on income over $400,000 Warren Buffett, America’s second- richest billionaire, has famously noted that he pays taxes at a lower annual rate than his secretary. America’s rich do benefit royally from loopholes. But top tax rates do matter. The latest evidence: The tiny hike of the top U.S. tax rate that went into effect in 2013 has raised the share of total income the rich pay in federal taxes by over a quarter. 17.2% 16.6% 18.1% 19.9% 18.0% 17.1% 16.7% 22.8% 2006 2007 2008 2009 2010 2011 2012 2013 % of total income paid in taxes by top 400 reported U.S. incomes Top federal income tax rate on income over $400,000: 35% Top rate: 39.6%

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