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Politics : Politics for Pros- moderated
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To: Katelew who wrote (410707)2/15/2011 7:25:40 AM
From: Bill3 Recommendations  Read Replies (2) of 793572
 
The uber rich have a low effective tax "rate" because they store their accumulated wealth in tax free bonds and other such instruments. Their earned income tax rate is the same as everyone else's. But because so much of their total income is tax free, their effective "rate" of taxation on all their income is low.

If you had earned income of a million dollars and Warren Buffett had earned income of a million dollars, you'd both pay 30 something percent of it in income tax. But if we include the income generated by $10 billion in tax free instruments that Warren has, of course his effective rate is going to be lower than yours.
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