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Last Updated: 6/7/2010 11:37 AM

Top 400 taxpayers in the U.S. pay a 17 percent tax rate

08-17-2009

Oh wealthy people! How great it must be to know that

 while you are raking in about a quarter billion a year,

you pay a lower tax rate than the average American family.

And even better news -- thanks to the Crazy Channel

which does such a great job of making your interests

popular with the angry mob, hundreds of those averagely

paid Americans will defend your right to pay lower taxes

than they do.

It pays to be among the top 400 taxpayers who earned

roughly $250 million on average in 2005. According to an analysis by the New York Times and David Cay Johnston for Tax Notes (subscription only), the last IRS report on the top 400 taxpayers showed that they made a little more than a penny of each dollar of total income in America, but paid income taxes at a 17.2 percent rate. Add in payroll taxes, and the figure still rounds to 17.2 percent. Those top 400 paid a tax rate lower than that of a family making between $50,000 and $75,000 a year -- which was 17.4 percent, according to Johnston.

When Will Ferrell channels former president George W. Bush with his immortal words: "You're Welcome America!" those top 400 taxpayers are the only ones who understand what he means. For the average American whose income has been unchanged since 2000, W's message remains: Let them eat cake!

Peter Cohan is a management consultant, Babson professor and author of eight books including, You Can't Order Change. Follow him on Twitter.

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