US EditionRichest 400 Paid Lower Effective Tax Rate Than Average Americans, NBER Study Finds
The study attributes the lower rate to preferential taxation of capital gains and business income, with the top 400 billionaires paying 24% versus 30% for all U.S. taxpayers.
- Economists Saez, Zucman, and their team found that between 2018 and 2020, the wealthiest 400 Americans experienced an effective tax rate averaging 24%, which is lower than the approximately 30% rate faced by other taxpayers.
- This lower tax rate results from the 2017 Tax Cuts and Jobs Act signed by President Trump, which decreased the average tax burden on the wealthiest Americans from approximately 30% to 24% and raised the exemptions related to estate taxes.
- The study attributes this disparity to the tax treatment of capital gains and business income, which are taxed at lower rates than regular earned income that faces a top rate of 37%.
- Economist Saez explained that the wealthiest individuals’ income primarily comes from the earnings of the companies they own and emphasized that implementing a wealth tax is the most effective method to focus efforts on taxing the ultra-rich and enhancing progressivity at the highest levels of income.
- These findings imply that ultra-wealthy Americans are taxed less heavily relative to their economic income, suggesting the need for policy reforms like a wealth tax, though opposition from billionaires and concerns about economic effects remain.
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The Michigan ChronicleBillionaires Pay Lower Effective Tax Rates Than Average Americans, New Data Show
BLACKPRESSUSA NEWSWIRE — A new study by the National Bureau of Economic Research (NBER) reveals that America’s wealthiest billionaires pay a lower share of their income in taxes than most workers and even less than the national average.
Billionaires Face Lower Tax Rates Than Most Americans
America's wealthiest citizens are paying a lower share of their income in taxes than the rest of the country, according to a new study by economists at UC Berkeley. Researchers found that billionaires—specifically the top 400, as listed by Forbes —had an average effective tax rate of 24% between...
America’s billionaires pay lower tax rates than you do, study finds
The rich are different from other people — and that also applies to the share of their income they pay in taxes, according to a new study from University of California, Berkeley, economists. The individuals who make up the Forbes 400 list, topped by Tesla CEO Elon Musk with a fortune of $244 billion, paid an average effective tax rate of 24% from 2018 to 2020, compared with a 30% rate for all other U.S. taxpayers, the researchers said in a new …
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