For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate—what they actually pay—fell from almost 30 percent in 1995 to just under 17 percent in 2007, according to the IRS. And for the approximately 1.4 million people who make up the top 1 percent of taxpayers, the effective federal income tax rate dropped from 29 percent to 23 percent in 2008.(Remember, states and cities levy taxes, too. Fat Cats aren't necessarily getting off that easy.)
The Bloomberg Business Week report highlights various strategies for deferring or reducing federal tax, including transfer taxes. The description of intentionally defective grantor trusts should stir the interest of any self-respecting billionaire.