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How much should the rich pay in taxes?



 How much should the rich pay in taxes?
It's a heated question these days. President Obama and his Republican challenger, Mitt Romney, spar over it bitterly. And the taxes Romney pays on his own vast wealth have become the subject of massive press attention.

But the question is not so easily answered and depends on a number of hard-to-nail-down factors -- starting with how you define rich.
"Virtually no one thinks of themselves as wealthy," said Joseph Henchman, a policy analyst at the Tax Foundation. "They're thinking about what others should pay in taxes."
Most people would say millionaires and billionaires are rich. That's easy.
Where to draw the line lower down the income scale is much harder.
A recent Pew survey asked people what it takes to be wealthy in their community. Of those surveyed, 39% answered between $100,000 and $250,000 for a family of 4. Another 30% said it takes $250,000 or more.
One frequently used definition of rich is the top 1% of federal tax filers -- those with adjusted gross incomes of at least $343,927 in 2009.
They earned nearly 17% of all AGI in the country and paid more than a third (37%) of all federal income taxes collected by the government. (Is that too much? Too little? Take the poll.)
Or to look at it another way: The group's average effective tax rate -- AGI divided by income taxes paid -- was 24%, more than twice the national average.
A much wealthier subset of that group -- the top 0.1% -- had an AGI of at least $1.43 million. They paid 17% of income taxes collected.
But using AGI as a proxy for rich and measuring only what's paid in federal income taxes has its limits.
For one thing, AGI doesn't give the fullest picture of income. Some wealthy individuals pay little or nothing in federal income taxes because their income is from sources not included in AGI such as tax-free municipal bonds.

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