Yep. Investor James Ross paid 102 percent of his taxable income in federal, state and local taxes for 2010. But taxable income is the key phrase, as NYT columnist James Stewart explains:
That doesn't mean Mr. Ross pays more in taxes than he earns. His total tax as a percentage of his adjusted gross income was 20 percent, which is much lower than mine. That's because Mr. Ross has so many itemized deductions. Since taxable income is what's left after itemized deductions like mortgage interest, charitable contributions, and state and local taxes are subtracted, it will nearly always be smaller than adjusted gross income and demonstrates how someone can pay more than 100 percent of taxable income in tax. Mr. Ross must hope that his interest expense will pay off down the road and generate some capital gains.
Still, all of Mr. Ross's itemized deductions are money out of his pocket, which is why he's had to draw on his savings to pay his taxes. Robert Willens, a tax expert and New York attorney, made the argument that taxable income, therefore, may be a better basis for measuring the tax burden. In any event, by either measure Mr. Ross pays a higher rate than Mr. Romney. "I had no idea I was paying such a high rate," he told me when we spoke this week. "I had trouble believing this was possible. I called my accountant, and I said, 'Do you realize I'm paying every penny I have in taxable income? I'm dipping into savings to pay my income tax.' He said, 'It's unfortunate, but at your income level' " -- with high earned income and large itemized deductions that Mr. Ross can't take advantage of -- " 'that's just the way it is.' "
The point of the story is that the tax code is outrageous, whatever income bracket you're in.