Over 10,000 High Earners Paid No US Taxes

A study from the Internal Revenue Service has found that one out of 189 high earners in the US paid no income tax in 2009. That is, 10,080 households who reported adjusted gross income of at least $200,000 annually — 0.26 percent of high earners — paid no income taxes in the US or to other countries. It is further reason to support President Obama’s “Buffett rule,” which would tax high-earners at a rate of 30 percent or higher.

The IRS also reports that the number of high earners who paid no taxes rose from 0.51 percent to 0.53 percent. Under US tax law, citizens must pay US taxes for income earned around the world; they do receive tax credits for payments they make to other governments.

The number of households whose income exceeded $200,000 feel from 2008 (4.4 million households or 3.1 percent of the population) to 2009 (3.9 million households or 2.8) percent.

High earners are able to avoid paying taxes — even the alternative minimum tax, established in 1969 after 155 people earning $200,000 were found to have paid no taxes — through a variety of legal means including deductible charitable contributions, the exclusion for state and local government interest (“tax-exempt interest”), medical and dental expenses and other items. Via the Buffett rule and other proposals, Obama has supported limits in precisely these areas, deductions and the tax exemption for municipal bond interest. As the IRS report notes,

“High-income returns are more often nontaxable as a result of a combination of reasons, none of which, by itself, would result in nontaxability.” (p. 15)

A chart on p. 16 of the IRS report shows the primary reasons for no tax liability in 2009.

Overall the IRS found that there were 35,061 households, or 0.88 percent, that paid nothing.

Related Care2 Coverage

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Photo by 401K


Lynda Harrison
Lynda Harrison5 years ago

And this is news because?????? The rich do not pay taxes, the poor do not pay taxes, it is the shrinking middle class who pay, whether we have a Democrat or Republican in the White House.

Scott Gurstein
Scott Gurstein5 years ago

LOL!!! Steve R. said: Here's the thing Kristina Chew - the IRS works for the government. The government is controlled by the Democrats at the moment.

Oh, REALLY? Well gee, let's see...the President only PROPOSES legislation; the President does NOT pass laws. And the Senate has a SLIGHT Democratic majority. The House is a lunatic hell hole infested by bible thumpin', animal hatin' TEA BAGGER Republicans! I am NOT saying the Democrats are wonderful or blameless, THEY ARE NOT. But Steve R. takes the CAKE in the ignorance competition today.

Teresa Cowley
Teresa Cowley5 years ago

Why do some people have to jump on the "it's Obama's fault" train for every thing the politicians do?
If the 1% don't pay taxes, it's because they are crooks--lowlifes who feel "entitled" to allow others to foot the bill while they hoard their bucks.
I NEVER heard this much bitching about GWB when he was ruining our country, starting war after war! Karl Rove is the master of evil, but no one seems to have a problem with him!
When Clinton left office, the country was in good condition. Karl Rove, Dick Cheney and GWB razed and ruined this country, building up a monumental national debt the eight years they inflicted themselves on us. Obama takes over, has four years of trying to piece America back together, but too many people give him the blame for a fallen America!
If I was given the choice, I would CHOOSE to pay taxes. I am part of America, I owe my share, just like everyone else. Anyone who wants a free ride needs to leave America, as far as I'm concerned--and they can pay the taxes they owe us before they leave--no "off-shore accounts", no convenient "tax loophole".

Steve R.
Steve R5 years ago

"Over 10,000 High Earners Paid No US Taxes"....

Good for them. I must learn their secret!

And if Kristina Chew knew their secret, she would also pay no taxes.

Here's the thing Kristina Chew - the IRS works for the government. The government is controlled by the Democrats at the moment.

So who is allowing these high earners to legally pay no taxes?


David Fletch
David Fletch5 years ago

For once the liberals and the conservatives have something in common. No one thinks the 70,000 page tax code is working, toss it, and phase in a Fair Tax code.

John Hablinski
John Hablinski5 years ago

The Republicans have a favorite saying that goes something to the effect of “We don’t have a Taxing Problem, we have a Spending Problem.” I don’t think anyone of sound mind could deny the fact that the nation wastes entirely too much money and many cuts could and should be made. That, however, isn’t the whole story. The biggest problem we have is the only people paying taxes are the rapidly declining people of what used to be the middle class. Our legislators, in their infinite stupidity, have created tax cuts for every friend or supporter they have. Yes we have a spending problem but we have an even bigger taxing problem. For the Republican members of our legislature to give more weight to the pledge they swore to Grover Norquist than the “Oath of Office” they swore before God is Traitorous.

Bill Eagle
Bill Eagle5 years ago

Taxes are the price that we all pay for our civilization. These people may pay no taxes, but they take advantage of our police, fire, courts, city, county and national infrastructure. When they pay no taxes, then we subsidize them.

Suzanne L.
Suzanne L5 years ago

People should pay according to their incomes. The wealthy should be taxed more because they have more wealth than they need. Instead of buying 10 porches for example, they could be taxed and still afford 5.
As an outsider looking into politics in the U.S. I think President Obama has done a very good job given what he was left with after 2 terms of President Bush. The problems created during Bush's terms were so extensive, debt, deregulation in finances, etc. that no one could have turned things around completely in one term. Also, look at what's happening globally. The whole world is in a deep recession. At this time I don't think there is anyone more capable in the U.S. of presiding over affairs than President Obama.

Lynda Duke
Lynda Duke5 years ago

Obama For President - 2012! Support the Buffet rule - everyone should pay taxes - everyone!

Mike Chrissie
Mike Chrissie5 years ago

Let's do the math, 47% of americans pay no federal income tax, that's over 100 million people and only ten thousand were high earners.

Scott Walker is leading by 7%, he is running on his record, class warfare is not working for democrats, people understand that obama is a failure and this kind of care2 BS is designed to take your eye off the obama record.