The loudest story in this chart is the diversity of tax rates among the rich. In 2006, the typical effective tax rate (ETR, for short) for an American family was about 14%. That means the average family paid the federal government one in even seven dollars they earned, through payroll, income and other taxes. Obama paid twice that rate in 2006. McCain paid even more.
But Kerry paid only 13% in 2003 under the same tax law. How come? His tax return here is combined with his heiress wife Teresa Heinz. About half of her money came in the form of investments in tax-exempt municipal and state bonds, the New York Times reported, which made her "the wealthiest spouse of any major party nominee in United States history."
Tax diversity at the top is still the case. Compare Mitt Romney and Newt Gingrich, who paid about $1 million on $3 million of income in 2010. Both men are in the top 0.1% of earners today, which cuts off around $3 million in income. But Gingrich paid an ETR of 32% in 2010, whereas Romney paid an ETR of 14%. Why the gap? It's all in the source of income. Almost all of Romney's income is taxed at a 15% marginal rate because it's investments. Almost all of Gingrich's income is taxed at a 35% marginal rate because it's earned income.
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