Fact Check: Obama Says Rich Pay Lower Tax Rate Then Middle Class.

[Obama 2012 1,714]

Looks like the President loses this round.

--------------

http://www.wfaa.com/news/national/FACT-CHECK-Are-rich-taxed-less-than-secretaries-130275213.html

WASHINGTON (AP) — President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said as he announced his deficit-reduction plan this week. "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."

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.

The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.

In his White House address on 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 the billionaire investor.

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." 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.

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

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. But that's less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

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, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 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.

[Danno 1,228]

In desperate times, truth is the first thing overboard.

Obama is desperate.

[Usui Takumi 1,562]

In desperate times, truth is the first thing overboard.

Obama is desperate.

Wow then what does that say about the GOP candidates who all have a sub 50% fact check rating with the exception of Ron Paul (53%?)

[Gary and Alla 3,694]

Eliminate Income Tax of all sorts. Implement FAIR TAX.

Done.

[Usui Takumi 1,562]

Eliminate Income Tax of all sorts. Implement FAIR TAX.

Done.

Go wide spread tax evasion and black markets! Yeah!

[Danno 1,228]

Wow then what does that say about the GOP candidates who all have a sub 50% fact check rating with the exception of Ron Paul (53%?)

Proves my point....since they too are desperate (to win).

[slim 1,525]

Eliminate Income Tax of all sorts. Implement FAIR TAX.

Done.

I can't support the fair tax because it's not fair. What if you make less money than I do? You're going to pay less taxes. That's not fair.

The only fair way to do it is have everyone pay the same amount. "This year congress has legislated everyone will pay $2,340 in taxes." That's fair.

[Usui Takumi 1,562]

I can't support the fair tax because it's not fair. What if you make less money than I do? You're going to pay less taxes. That's not fair.

The only fair way to do it is have everyone pay the same amount. "This year congress has legislated everyone will pay $2,340 in taxes." That's fair.

How wlll the mentally ill homeless man who lives in a rubbish bin pay that?

[slim 1,525]

How wlll the mentally ill homeless man who lives in a rubbish bin pay that?

Not my concern.

[Usui Takumi 1,562]

Not my concern.

It would be when he is in jail for tax evasion.

Edited September 22, 2011 by Sousuke

[slim 1,525]

It would be when he is in jail for tax evasion.

How would he go to jail if he's mentally ill and lives in a rubbish bin?

I'm guessing he wouldn't even be accounted for by the IRS. No income to tax, probably not going to go looking for him.

[Usui Takumi 1,562]

How would he go to jail if he's mentally ill and lives in a rubbish bin?

I'm guessing he wouldn't even be accounted for by the IRS. No income to tax, probably not going to go looking for him.

Is that still fair per your previous assessment?

[slim 1,525]

Is that still fair per your previous assessment?

If they don't know you exist, how could they tax you?

It could be argued that he benefits from the protection of national defense and interstate trade (hence all the rubbish) but if our poor people truly lived in rubbish bins I wouldn't be worried about them paying their fair share. What I don't like is PAYING those people to sit around smoking weed and repoducing all day.

[Usui Takumi 1,562]

If they don't know you exist, how could they tax you?

It could be argued that he benefits from the protection of national defense and interstate trade (hence all the rubbish) but if our poor people truly lived in rubbish bins I wouldn't be worried about them paying their fair share. What I don't like is PAYING those people to sit around smoking weed and repoducing all day.

So its not a taxation issue at all.

[slim 1,525]

So its not a taxation issue at all.

Nope. It's a fairness issue.

Everyone should pay their fair share. The dude in the rubbish bin isn't using up resources the way the welfare moms are.