He has to pay his effective rate, and we will assume that to be 28% (most investors fall into this rate).
France has long seen income tax as a mechanism for soaking the rich, who currently pay an effective marginal rate of around 60%.
Folks caught in the AMT pay an effective federal gains rate as high as 22%.
But the 400 highest income taxpayers do pay a lower effective rate than mere millionaires an average of just 18.1% in 2008.
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They can also choose an alternative, called a HECM Saver loan, where they pay much lower fees but can borrow less and may pay a higher effective interest rate.
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Those returns between the bottom 50 percent and the top 25 percent pay an average effective tax rate of only 5.6 percent, accounting for only 11.8 percent of all federal income tax revenue.
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And he went on to talk about a concrete vote the Senate will take in the next few weeks on the so-called Buffett Rule, his principle, named after Warren Buffett, built around the idea that a billionaire should not pay a lower effective tax rate on his income than his secretary.
The unions are protesting at pay deals which they say are below the rate of inflation and would mean an effective pay cut for their members.
The new report also shows the impact of the Bush-era tax cuts on the effective tax rate higher-income folks pay.
As I pointed out here, because of the historically low 15% rate on long term capital gains (compared to a top tax rate of 35% for ordinary income, like salary) the 400 highest income Americans now pay a lower effective federal income tax rate than the merely well paid.
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So does the President believe that you can achieve the revenue goals that he wants, and increase the effective rate of what wealthier Americans are paying without necessarily increasing the marginal rate that they pay?
The White House says that if a millionaire household's effective tax rate falls below 30%, it would have to pay a surcharge in essence a new Super Alternative Minimum Tax to bring the tax liability to 30%.
The average effective U.S. corporate tax rate the amount of tax corporations actually pay is far lower than 35 percent, roughly 20 percent to 25 percent by some estimates.
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