Do Billionaires Really Pay Just 1% in Taxes?

In a speech delivered in Osawatomie, Kansas, President Obama had this to say about income inequality:

In the last few decades, the average income of the top one percent has gone up by more than 250%, to $1.2 million per year. For the top one hundredth of one percent, the average income is now $27 million per year. … Today, thanks to loopholes and shelters, a quarter of all millionaires now pay lower tax rates than millions of you, millions of middle-class families. Some billionaires have a tax rate as low as 1%.

Can that be true? Anything’s possible under the US tax code, that’s for sure, but billionaires paying just a 1% tax rate? Even Warren Buffett’s pays more than that, though his tax rate is less than his secretary’s.

The Congressional Research Service found that 94,500 millionaires pay an effective federal tax rate that is less than that paid by 10.4 million moderate-income taxpayers, according to this news report at CNN Money.

The difficulty is that getting any more granular than that treads on personal privacy. An official at the Tax Policy Center told CNN Money that the President’s claim about the 1% effective tax rate is “definitely possible but hard to verify.”

What is verifiable is that among the 400 federal tax returns reporting the highest incomes, there were 30 that paid federal income tax at a rate lower than 10%.