A quarter of all households making $1 million paid a smaller share of their income in taxes than 10 million middle class families, according to a new report from the Congressional Research Service. In addition to the 94,500 millionaires paying a lower tax rate that much of the middle class, we've also shown that about 7,000 likely paid no federal income tax at all.
The super-rich escape middle income taxes in two ways. First, the payroll tax, which comprises the bulk of most families' tax bills, doesn't touch any income above $107,000. That means millionaires pay this tax on a smaller share of their income. Second, investment makes up a larger share of richer household's income, and it is taxed at a lower rate than regular income.
In short, millionaires make more of the kind of money the tax code preferences and less of the kind of money the tax code punishes.