Sep
21
2011

Tax Facts About Millionaires–and Bill O'Reilly's Threat

Yesterday's AP "factcheck" (9/20/11) of Barack Obama's speech about raising taxes on the super-wealthy cleverly debunked an argument that Obama didn't make. No one is saying that all millionaires pay a lower rate than their secretaries–Warren Buffett drew attention because he said he did, and there are undoubtedly other multi-millionaires in the same boat. As Dean Baker observed at Beat the Press today (9/21/11):

President Obama made a simple and true statement in his speech on the budget Monday. He said that there were millionaires and billionaires who pay tax at a lower rate than middle income families.

Many news outlets went to town to point out that on average millionaires and billionaires pay tax at a higher rate than middle income families. Of course this is not what Obama said. He was pointing out that some of the richest people in the country (Warren Buffet was his model) get most or all of their income as capital gains and therefore only pay taxes at the 15 percent capital gains rate.

Baker recommends a piece in today's New York Times (9/21/11) that was more factual than AP's factcheck:

In 2009, 238,000 households filed returns with adjusted gross incomes of at least $1 million. One-quarter of them paid an effective federal income tax rate of less than 15 percent, the data shows, and 1,470 paid no federal income tax at all….

Though the group is small, the dollars are large. For the top 400 taxpayers, the effective federal income tax rate has dropped from 29 percent in 1993 to 18 percent in 2008. The average adjusted gross income of those 400 households was $271 million. By comparison, households with $50,000 to $75,000 in income paid an effective rate of 15 percent, according to the Congressional Budget Office.

But the AP piece has legs–a Slate article noted: "But as a general point, Buffett is wrong: In aggregate, richer earners do pay higher rates." The link goes to the AP factcheck. Again–Buffett was talking about himself and others like him. It would not seem to be a hard concept to grasp, but for whatever reason there are reporters who seem interested in protected the super-wealthy.

In other tax news:Fox's Bill O'Reilly has apparently threatened to quit working if his taxes go up. Let's hope Congress considers the enormously positive political and social effects this could have on American life.

About Peter Hart

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.