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Seven U.S. Zip Codes That Prove a Need for the Buffett Rule
Think Progress / News Analysis
Published: Wednesday 18 April 2012
“The Buffett Rule, the GOP says, is a gimmick that doesn’t raise enough revenue to merit consideration and is simply a weapon of class warfare, not a means to bring about more equity in America’s tax structure.”
Senate Republicans last night successfully filibustered the Buffett Rule, a minimum tax on millionaires that the GOP has falsely claimed would actually hit small business owners and “job creators.” The Buffett Rule, the GOP says, is a gimmick that doesn’t raise enough revenue to merit consideration and is simply a weapon of class warfare, not a means to bring about more equity in America’s tax structure.
A new report from Innovation Ohio and the Center for American Progress, however, shows that the Buffett Rule is far from just a gimmick. According to the report, some of America’s wealthiest zip codes — ritzy communities like Fisher Island, Florida and Wyoming’s Teton Village — collectively pay lower effective tax rates than other lower-income communities, even though they are largely populated by millionaires. In seven of the wealthiest zip codes, the report found, 27 percent of residents earn 94 percent of the income — an average of $2.2 million annually — but their combined effective income and payroll tax rate is just 17.2 percent:
In zip codes with far lower incomes, however, the tax rates are higher. According to the report, 99 percent of all Ohio taxpayers live in zip codes with effective tax rates higher than 17.2 percent. The average Ohio taxpayer earned roughly $49,000 in 2008 but paid an effective tax rate of 21.5 percent, higher than the rate in any of the seven wealthy zip codes examined. Two-thirds of Ohio taxpayers live in zip codes where the average income is less than $50,000, but the tax rate is higher than 17.2 percent.
The data is similar in other states — 99 percent of Pennsylvania taxpayers, for instance, live in zip codes with effective tax rates above 17.2 percent.
The report adds to the evidence that the American tax code has grown incredibly benevolent to the richest Americans. Republicans, however, continue to urge lower- and middle-class Americans to “share some of the responsibility” of reducing the nation’s debt, all while pushing for even larger tax breaks for the wealthy.
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ABOUT Travis Waldron
Travis Waldron is a reporter/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Travis grew up in Louisville, Kentucky, and holds a BA in journalism and political science from the University of Kentucky. Before coming to ThinkProgress, he worked as a press aide at the Health Information Center and as a staffer on Kentucky Attorney General Jack Conway’s 2010 Senate campaign. He also interned at National Journal’s Hotline and was a sports writer and political columnist at the Kentucky Kernel, the University of Kentucky’s daily student newspaper.
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By Ronnie Cummins
5 comments on "Seven U.S. Zip Codes That Prove a Need for the Buffett Rule"
April 23, 2012 12:31pm
These statistics show how pathetically poor so many of our countrymen are. It should come as no surprise that with income stagnant or falling for the bottom 90 odd percent since Reagan's revolution, 50% are too poor to pay any taxes. A steeply graduated income tax should ensure that the upper incomes pay a higher tax. High taxes on high incomes and large inheritances ensure that the monied elite cannot rule the country. Oops. we failed on that one.DSNA
April 18, 2012 1:03pm
I suppose you could look at tax rate as one measure, but the Congressional Budget Office's analysis looked at income earned and percentage of all tax paid, and for the last year they have all data for, the top 20% of wage earners earned 60% of all revenue but paid 70% of all taxes paid, while nearly half of Americans paid nothing.
April 18, 2012 11:48am
The Buffet Rule is a bandaid. We need to change the Tax Code completely and get rid of all the loop holes. In 1938 we had 33 tax brackets that went from 4% for income up to $64,000., all the way up to a top marginal rate of 79% for income over $79,Million. I don't think we have to go that far, but we have to change this income inequality in some drastic ways. My sugestion is: 3% for income from $0. to $20,000. 6% for income from $20,000. to $40,000. 9% for income from $40,000. to $60,000. 12% for income from $60,000. to $80,000. 15% for income from $80,000. to $100,000. 18% for income from $100,000. to $120,000. 21% for income from $120,000 to $150,000. 24% for income from $150,000. to $200,000. 27% for income from $200,000. to $250,000. 30% for income of $250,000 to $300,000. 33% for income from $300,000. to $500,000. 36% for income from $500,000. to $1,million. 39% for income from $1,million to $2,million. 42% for $2,million to $$4,million. 45% for income from $$4,million to $6,million. 48% for income from $6,million to $8,million. 51% for income from $8,million to $10,million. 54% for income from $10,million to $15,million. 57% for income from $15,million to $20,million. and the top marginal rate of 60% for all income over $20,Million. Now that is "Fair and Balanced". As you will note I believe that no one pays a higher rate but the incomes over $500,000. These people have had it too easy, too long. To paraphrase an FDR saying: I will tax no one that doesn't have the money to pay. The rich are the only ones with the money. "20 Brackets to $20,Million" is a nice catch phrase. It has a nice ring to it.
April 18, 2012 10:22am
It might be interesting if there could be some way of breaking what I think is clearly a myth of the rich being job creators -- beyond their personal servants. Just how many jobs do they create that they wouldn't create anyway if they paid their fair share.
There is also the simple fact, that doesn't seem to register, that to simply survive decently in this country requires a certain level of income -- and that most people simply have to spend all or next to all of their income to live modest but decent lives.
That there is a threshold "maintenance" level that the progressive tax once addressed and still tries to, but has been whittled away at. It is not so much that the middle class, or at least the lower ends of that nebulous status, is being taxed to death by the IRS, but by the hidden "taxes" -- local regressive sales taxes, state taxes, city taxes, county property taxes -- and the "tax" imposed by insurance requirements. For cars, for houses and if we can afford it, for health care. At this point, in my modest household income (52K), nearly 20 per cent of that is paid in one way or another to obligatory insurance demands.
April 18, 2012 10:15am
Wish someone told me where and when the next Great Giveaway’s gonna take place? Bush’s Tax Cuts have handed $2-trillion to the 1% so far. Their coffers are bursting. Rumors run our neighborhood billionaire’s handing out $1000-bills and jobs to us and every other neighbor. Fox News or the Teapublicans should know place and time of next Giveaway as vendors of Trickle Down: That tax cuts to the rich mean jobs and money to the 99%. I just ask, what happened to the $2-trillion? Where’s the jobs? Where’s the dough? Can someone tell me??