TM:

Fair is subjective, but in your example the person would pay considerably less than $390,000. The rate of tax is based on AGI. Not total income. There a many ways a person earning $1,000,000 can reduce AGI.


A quick Internet search shows that on average, millionaires pay an effective tax rate of about 17%

WARNING C&P TO FOLLOW


There are two important things to note from this chart. The first, and most visually apparent, is that the tax rates of the rich are far more closely linked to the capital gains taxes than income taxes. Salaries and wages, the source of income taxed at the blue line, represented only 6.5 percent of these filers’ income. Nearly two-thirds of their income comes from capital gains, and this is why you see a much tighter coupling between the orange and red lines.

The second thing to note is that the overall tax rates are really not that high. Contrary to concerns about socialism or a government takeover, the richest Americans, those earning an average of $345 million in 2007, paid about 16.5 percent in federal income taxes.