Taxing the rich: A guide to the controversy

The wealthiest Americans are flourishing, while the middle class falters. Are the rich paying their fair share?

Protesters, Occupy Wall Streeters, and even President Obama have called for millionaires to pay their fair share in taxes.
(Image credit: CC BY: dignidadrebelde)

Are millionaires paying lower tax rates than the middle class?

Most of them aren't. The 238,000 American households with taxable incomes of $1 million or more will pay an average of 29.1 percent in federal income and payroll taxes in 2011, according to the nonpartisan Tax Policy Center. That's almost twice the average rate of 15 percent paid by middle-class households making between $50,000 and $75,000. But some millionaires do get off lightly; one out of 10 of them will pay less than 15 percent, and about 7,000 will pay no income taxes at all. Warren Buffett, whose August call for higher taxes on the rich generated a fierce controversy, says he paid federal taxes of only 17.4 percent last year, half the rate paid by his secretary.

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