A new report from the New York Times today reveals that although the top one percent of earners have seen a slight increase in taxes over the last four years, the top one thousandth percent have given themselves a sizable tax break. This group has gone from paying on 20.9 percent in taxes to 17.6 percent, on average: a cut of over three percent. When compared to the tax rates wage-earners pay, the discrepancy is much larger:
Each of the top 400 earners took home, on average, about $336 million in 2012, the latest year for which data is available. If the bulk of that money had been paid out as salary or wages, as it is for the typical American, the tax obligations of those wealthy taxpayers could have more than doubled.
The wealthy are able to navigate complex tax laws by employing family offices that convert one kind of income into another. Victor Fleischer, a law professor at the University of San Diego told the Times, “We do have two different tax systems, one for normal wage-earners and another for those who can afford sophisticated tax advice.”