Rich Getting Richer, Paying Less Taxes

An Internal Revenue Service report simply verified what we already know: it's good to be rich. And it's even better to be very rich.

We learn from the IRS that the portion of income headed to the upper one-tenth of 1 percent of those who pay taxes jumped two years ago as the percentage reaching 99 percent of the country dropped.

Those at the elite level are also paying less in taxes, as their effective income tax rates dropped considerably. The top 10th of 1 percent contributed about 23.6 percent of income in taxes, down from about 27 percent in 2002. By comparison, tax rates dropped by three-tenths of a percent or less for the bottom 80 percent.

Incomes increased 2.7 percent overall in 2003 compared with 2002, according to the IRS. But one-fourth of the boost found its way to the upper 10th of 1 percent. This group is made up of 129,000 taxpayers with at least $1.3 million in income. Incomes were up by less than 2 percent, a level below the inflation rate of 2.3 percent, for the bottom 99 percent.

Perhaps the most interesting statistic coming from the IRS is the fact that the upper 10th-of-a-percent generated greater income two years ago than the lowest one-third of taxpayers.

By Glenn J. Kalinoski, Executive Editor, Customer Inter@ction Solutions

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Comments to Rich Getting Richer, Paying Less Taxes

1. RE: Rich Getting Richer, Paying Less Taxes
   Anna :
   March 12, 2006 5:52 PM

   The top 10th percent of rich people are only being taxed at 23%? That can't be right.