Poor rich people! The IRS recently released its latest annual analysis of the tax returns from the 400 filers with the highest adjusted gross incomes, and looks like they had 29% less income speech in 2009 than in 2008.
From CNN Money:
The 400 tax filers at the top of the income scale hauled in an average of $202.4 million in 2009 — a 25% haircut from the prior year, according to the latest tax data from the IRS.
But there is good news–two pieces of good news, in fact! First, Citizens United hadn’t passed yet. If it had, we the unwashed public would have been deprived of 25% of these people’s speech, thus hindering Democracy and the free exchange of ideas. And second, for job creators (also known as “the .01%” by Art Majors) money speech doesn’t just come from “income” (which is vulgar); it comes from tax-exempt income, such as interest from municipal bonds, or from investments with low effective tax rates, like capital gains. It is therefore possible that their money speech was not reduced quite as much as 25% between 2008 and 2009, since the IRS was only counting “income.” Also, the astute reader will note that they barely have to pay any taxes, but, as CNN Money notes (for balance, because this is journalism) this is only FAIR since all of the Poors have been living it up for ever.
Overall, the top 400 as a group paid an average effective tax rate of 19.9%, up from 18.1% a year earlier. The average effective tax rate is a measure of one’s total income tax bill divided by AGI. Individually, however, about 40% of them paid an effective rate higher than 25%. But close to a third paid an effective rate below 15%, which is also the case for the majority of Americans. Lower-income households have very low effective tax rates thanks to a host of credits, deductions and exemptions that cancel out much if not all of their tax bill.
But just in case, because it’s better safe than sorry, they made up for it by cutting back on charitable donations:
Their average charitable contributions, which made up nearly half of all deductions claimed, dropped by 28% relative what they’d been the year before.