The nation's top 400 taxpayers reported a total of $85.6 billion of income on their federal income-tax returns for 2005 -- an average of $213.9 million apiece, according to Internal Revenue Service data obtained by The Wall Street Journal.
Just to make the cutoff to join this exclusive club, you had to report income of at least $100.3 million, up sharply from $74.5 million the previous year. The average income among the top 400 in 2004 was $172.8 million.
Indeed, the top 400 taxpayers have greatly increased their share of individuals' income since the mid-1990s. The group accounted for 1.15% of total income in 2005, up from 1.02% the prior year -- and more than twice as large as its 0.49% share a decade earlier. It's the highest percentage since the early 1990s, which is as far back as the IRS data go. [...]
The average federal income-tax rate for the group was 18.23%. That's up from 18.16% the prior year, but lower than in any other year since 1992 -- and well below the average income-tax rate of nearly 30% back in 1995, when Bill Clinton was in the White House. [...]
Under current law, the basic federal estate-tax exemption, now $2 million, will soar to $3.5 million next year. In 2010, the tax is scheduled to disappear entirely -- but only for that one year. President Bush has long called for total elimination of what its opponents call the "death tax." But those efforts have fizzled in Congress. A likely compromise might include making the exclusion somewhere around $3.5 million to $5 million and cutting the top estate-tax rate, which is currently 45%.
The IRS numbers might also prompt calls for higher taxes of some kind on the super-rich, such as possibly a higher capital-gains tax rate for those making megamillions a year.
That $213.9 million apiece is for their annual income, not their overall net worth. Their "salary and wages" account for only 8.6 percent of their annual haul — the rest is dividends and capital gains and such, which are taxed at much lower rates than your paltry salary or your tiny wages.
So the ultra-rich are pulling in more than twice the money they used to, while paying two-thirds of the taxes they were under Clinton. Meanwhile, we borrow zillions from China to give tax stimulus checks to every American, whether they borrowed from a crooked subprime-pushing bank or not. It all makes perfect sense. In hell.
At least these rich people have only until 2010 to die tax-free. As I've predicted before, my guess is that 2010 is the year George H. W. Bush will die, because Junior wants his daddy's Saudi-CIA allowance untainted by something as working-class as taxes.
