The current discussion led by President Obama that top earners are not paying “their fair share” of taxes is not supported by the facts. His claim could result from an unfortunate reliance on anecdotal information or (as is more likely) a political strategy to gain support for tax increases from an unwitting public and media. So what is rhetoric and what is fact? The most common way this issue is presented by the president and his supporters is that millionaires and billionaires don’t pay as much in taxes as their secretaries. To quote directly from the recent State of the Union address, “Now you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.” Most Americans should know (but unfortunately do not) that millionaires and billionaires pay a whopping amount in federal taxes and disproportionately much more than their secretaries.
If we take a closer look at the top 0.1% of earners, their average adjusted gross income in 2009 was $4.4 million and their average tax bill was $1.07 million. Included in this group were 137,982 tax returns. Their total tax bill was $147.6 billion. Several sources indicate that the average income range for Secretary III’s and Administrative Assistants is between $38,000 and $43,000, and that there are 4.3 million secretaries and administrative assistants in the U.S. (www.bis.gov). Using the average 5.6% tax rate for the tax payors in the top 25%-50% of earners, each secretary on the average pays between $2,128 and $2,408 in taxes.
In no way is my presentation of the above data meant to lessen the status and importance of secretaries and administrative assistants (nor is it intended to make a judgment about the appropriateness of income levels). Indeed, my professional life, and I venture to say the professional lives of almost all of those individuals in the top 0.1% of earners, has been blessed and made immeasurably more successful because of the secretarial and administrative support we were fortunate to have. The one and only reason for this factual essay is to make the data available for all to assess and to understand that the popular claim that the wealthy do not pay as much in taxes as do their secretaries is totally absurd.