President Barack Obama makes it sound as if there are millionaires all over America paying taxes at lower rates than their secretaries.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said Monday. "That's pretty straightforward. It's hard to argue against that."

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The data tell a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

In his White House address Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the "Buffett rule," named for billionaire investor Warren Buffett.

The rule says, "People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay."

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.

The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.

"People who are doing quite well and worry about low-income people not paying any taxes bemoan the fact that they get so many tax breaks that they are zeroed out," said Roberton Williams, a senior fellow at the Tax Policy Center. "People at the bottom of the distribution say, but all of those rich guys are getting bigger tax breaks than we're getting, which is also the case."

Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates.

"So it really depends on what is your profession, where's the source of your income, what's the specific circumstances you face, and the averages won't really capture that," Geithner said.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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As you can see, the top 1% earns 20% of the countries income but pays 38% of the income taxes.

income taxshould be abolished an a straight 25% fed sales tax should be instated

those on ss could get a exempt card and those that make less than a certain level can get a tax return and a sliding scale return upto 60k

if you spend it it is taxed if not it is not taxed

those w/more money will spend more thus they will pay more

but hey what do i know

That percentage is kind of high especially when looking at the averages I posted. Even the highest bracket doesn't pay that much. It would probably only need to be around 15-18%

If you look at the total income generated and total taxes paid and do
taxes paid/ total income X 100 you get 12.24% so 15% is already giving you about a 25% increase in taxes.

it is the idea not the amount i was trying to make the point about

Well in that case I agree with you, but it will never happen.

Buffett has long noted that the poor inordinately carry the country's tax burden. He has said the super-wealthy often pay little because their investment gains are not taxed as income. In August, Buffett wrote an op-ed for the New York Times in which he said last year his federal tax bill was $6,938,744, only 17.4 percent of his taxable income. That is lower than what the other 20 people in his office paid, which ranged from 33 percent to 41 percent and averaged 36 percent.


http://abcnews.go.com/Business/nobel-prize-winner-joseph-stiglitz-raising-taxes-class/story?id=14554508

More misleading data if you're interested in fairness in taxation. (It talks only about Federal Income Taxes). Go back to the Ezra Klein graph I've posted repeatedly. It shows an ever so slightly progressive bias to our tax structure based on all taxes paid (not just Federal Income Taxes).

Its not misleading. Its the actual income tax. Most of the arguments are about federal income tax.

well according to warren buffett it is misleading info

but hey he only knows what he and his staff pay

Right, this is averages. The average person in the top bracket isn't warren buffet.

point is he makes more n pays less

maybe a ot think they should pay more
so they dont take all their allowable deductions

but they could

just a thought

The American people don't seem to care much about this kind of data.
http://www.talkradionews.com/news/2011/9/21/poll-americans-favor-jobs-plan-taxing-rich.html

There's that same 33%-66% split that we see all the time. Still sure Obama is going to lose the 2012 election? Is there any question who the outlier-fringe thinkers are?

DO I still think he will lose the election? I think his job plan wouldn't have much to do with his chances. No candidate has been reelected with unemployment how it is. Independents are not sure of him either. I am not saying he is gonna lose. I am saying he might be in trouble. It depends who runs against him of course.