WASHINGTON — A quarter of millionaires in the United States pay a smaller share of their income in federal taxes than many middle- class families, according to a new congressional analysis that offers fresh support for President Barack Obama’s push to raise taxes on the nation’s wealthiest households.
The report, by the nonpartisan Congressional Research Service, found that when all federal taxes are taken into account, including taxes on wages, investment income and corporate profits, households earning more than $1 million face an average tax rate of about 30 percent versus the roughly 19 percent rate paid by households earning less than $100,000.
However, the average obscures a great deal of variation within income categories, the report says, with some millionaires paying rates as high as 35 percent and others paying rates as low as 24 percent. Using 2006 IRS data, the CRS found that about 94,500 households making more than $1 million a year paid a lower rate than the most heavily taxed households earning less than $100,000 a year. The prime culprit, according to the report, is low tax rates on investment income, such as capital gains and dividends. The Washington Post
