Tax Day Blues: Super Rich Pay Low Tax Rate; Some, Like the Dodgers' McCourts, Don't Pay at All
Ah, tax day.
Frank McCourt is poorer than you (on paper).
Don't let the complicated line items and nonsensical deductions get you down. That's all gravy compared to this fact: Nearly half of U.S. households don't even pay income taxes.
And the super rich are paying less than they did a few years ago. This as some of them complain about government overspending and the strong possibility that Bush-era tax cuts for the wealthy will come to an end. But wait, there's more:
Yeah, taxes have actually decreased, mostly for the haves, with America's 400 richest earners seeing federal income tax rate at 17 percent -- down from 26 percent in 1992 -- according to Associated Press.
The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation's tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.
There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.
If that doesn't depress you, read our old pal David Cay Johnston's "9 Things The Rich Don't Want You To Know About Taxes." Hope you're sitting down.
Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers.
Happy tax day.