U.S. wealthy - how much tax do they pay?

This is a recurring theme in newspapers and the blogosphere. We note this new fact sheet from Citizens for Tax Justice in the U.S., which has crunched the numbers.

"One complaint we often hear is that Americans who work hard and become successful have to pay over a third of their income in federal income taxes. But a recent report from the Internal Revenue Service (IRS) shows that this is not remotely true. . . in 2006 (the latest year for which data are available), the 400 richest income tax filers paid just 17.2 percent of their adjusted gross income (AGI) in federal income taxes. That is down from 22.3 percent in 2000, and is less than half of the top statutory income tax rate of 35 percent. Almost 65 percent of the income reported by those 400 taxpayers consisted of capital gains and dividends subject to the preferential rates."

With a couple of extra tidbits on the 400 wealthiest:

• Although 400 returns are less than 1/1000th of a percent of the total individual tax returns filed, these 400 taxpayers collected almost 8 percent of the total preferential-rate capital gains and dividends in the nation in 2006.
• These 400 taxpayers paid income taxes averaging $45 million in 2006. As a share of AGI, their tax bills averaged 17.2 percent.
• This decline from 22.3 percent to17.2 percent represented a total tax cut of $5.4 billion in 2006 for this group, or an average tax cut of over $13 million each.

CTJ add this fact sheet looking at the whole income spectrum, which includes the following observation:

The total federal, state and local effective tax rate for the richest one percent of Americans (30.9 percent) is only slightly higher than the average effective tax rate for the remaining 99 percent of Americans (29.4 percent).

Which shows that the tax system is hardly progressive at all.