Quick question: What percentage of their income do richest 400 taxpayers hand over to the federal government? Seriously, take a guess before you read on.
Back at the end of the Clinton administration, when the federal government was running a surplus, the ultra-rich paid an average tax rate of just 26.4 percent.
Then the George W Bush administration pushed through two rounds of tax cuts mainly benefitting the well-off. (Reportedly when Dick Cheney pushed for the second set of cuts, Bush himself was initially reluctant but finally went along.) So by 2012 the richest 400 were paying an average of just 16.7 percent.
But that year Democrats succeeded in passing the American Taxpayer Relief Act of 2012, which gave some breaks to the middle class but allowed some of the Bush tax cuts to expire on households making more than a half-million dollars a year. That, together with some lesser changes in tax laws, caused the 2013 tax bill for the richest 400 to jump to 22.9 percent. That was still below what it had been in the late 1990s (let alone in 1940s through the early 1980s).
To be fair, it should be noted that one reason for the 16.7 rate in 2012 was that a lot of wealthy folks sold appreciated assets that year to avoid paying the somewhat higher capital gains taxes they knew were coming the following year. This made the overall rate in 2012 a bit lower than it would have been otherwise.