You might find this post at ProPublica interesting. They’ve obtained IRS information on the tax returns of some of the very richest people:
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.
To some degree the post is an exercise in sophistry since they keep switching back and forth between wealth and income which are two different things. Presently, we tax income but we do not tax wealth. Except in one case, of course. A tax is levied on my house based on its assessed value and it’s reassessed every three years. That is, in effect, a wealth tax. It isn’t done that way in all states. In California, for example, you pay real estate taxes based on the value of your house when you bought it. In other words we tax the wealth of the middle class, most of which is held in the form of their homes, but not that of the ultra-rich which is held in other forms.
They do provide a helpful explanation:
In 1916, a woman named Myrtle Macomber received a dividend for her Standard Oil of California shares. She owed taxes, thanks to the new law. The dividend had not come in cash, however. It came in the form of an additional share for every two shares she already held. She paid the taxes and then brought a court challenge: Yes, she’d gotten a bit richer, but she hadn’t received any money. Therefore, she argued, she’d received no “income.â€
Four years later, the Supreme Court agreed. In Eisner v. Macomber, the high court ruled that income derived only from proceeds. A person needed to sell an asset — stock, bond or building — and reap some money before it could be taxed.
Since then, the concept that income comes only from proceeds — when gains are “realized†— has been the bedrock of the U.S. tax system. Wages are taxed. Cash dividends are taxed. Gains from selling assets are taxed. But if a taxpayer hasn’t sold anything, there is no income and therefore no tax.
As I noted above there are major differences in the sources of wealth depending on just how wealthy you are:

Warren Buffett has quite publicly declaimed that the rich pay too little in taxes but he has also criticized taxing capital. If that’s not hypocrisy it is, at the very least cognitive dissonance.
Ultimately, the marginal tax rates don’t matter—especially for the very rich. Whether the highest tax rate is 34%, 38%, or 90%, if taxable income is zero the tax is still zero. What matters is how income is determined.






