Tax Dodging – Center for American Progress
by John S. Irons
July 15, 2005
Americans want a fair tax system. This means a system that is both progressive—where we require greater responsibility from those with higher incomes—as well as one in which people in the same general situation are treated equally. Our current tax system, however, allows thousands of high-income tax filers to avoid paying any tax at all.
The IRS recently released data on high-income tax returns which show an estimated 5,650 tax filers with incomes over $200,000 paid no U.S. federal taxes in 2002. This was a substantial 15 percent increase over the previous year. In 1977, there were just 85 of these high-income tax filers with no income tax liability (see figure 1).
While on average high-income tax filers had higher effective tax rates than the overall population, a total of 88,586 of these high-income filers paid less than 10 percent of their income in taxes, and 618,203 paid less than 20 percent—which is less than the average for all filers.