26 billionaires paid a fraction of the average US tax

  • A new analysis by Americans for Tax Justice finds that many billionaires have paid less than 5% in taxes in recent years.
  • That’s because the fortunes of high-income earners in America often come from their assets, not their salaries.
  • Because of this, they pay income taxes that are often much smaller than increases in their wealth.

Last month, Americans prepared to sit down and pay their taxes. Many of them may owe money to the government, especially if they cash out money from the big cabinet reshuffle and They get paid more.

One group has always seen fortunes growbut not necessarily their tax rates: Billionaires in America.

According to a new analysis from Left-leaning Americans for Tax Justice (ATF) of IRS data obtained by ProPublica and wealth data from Forbes, 26 of the richest people in America have paid a federal average.

Income tax

4.8% from 2013-2018, based on ATF’s calculation of

effective tax rate

on wealth growth.

Effective tax rates on wealth growth for these billionaires varied. For example, Jeff Bezos’ effective tax rate on wealth growth was 1.1%. For Bill Gates, it was 10.7%. The following table shows the actual tax rates of 14 billionaires on reported income compared to how much their wealth actually grew.

To calculate the effective tax rate on wealth growth for these billionaires, the ATF used tax paid data from the ProPublica IRS issue covering January 1, 2013 to December 31, 2018. This was then divided by wealth increases estimated by Forbes between February 14, 2013 and February 8, 2019, excluding Buffett who covered wealth growth from February 12, 2014 and February 8, 2019.

The numbers show that billionaires tax only a small percentage of their increases in wealth. Many of the richest Americans derive most of their wealth from their assets – things like stocks and bonds. These are only taxed when they are sold as

capital gains

. Even then, they are taxed at a lower rate of capital gains.

For example, this meant that from 2013 to 2018, Elon Musk reported income of about $1.5 billion, according to an analysis by American for Tax Fairness. He paid $411 million in taxes on that income — an effective tax rate of 27%. But according to an ATF analysis of the billionaire’s data from Forbes, his fortune has already grown by nearly $20 billion over a similar period. This means that the effective tax rate on his wealth growth was actually 2.1%.

Low tax rates revealed by ATF and ProPublica are perfectly legalAnd, as the data indicate, lasted for years. For example, inequality researchers Emmanuel Saez and Gabriel Zucman Found That the average tax rate in 2018 for the 400 richest families was 23%, while The median American wage is 28%..

White House He also made his own accountsWhen accounting for unrealized capital gains—those assets that grow in value but haven’t sold—the 400 richest families in America paid an average tax rate of 8.2% from 2010 to 2018.

The Biden administration has repeatedly tried to reform the tax code and cut some of the provisions that lead to those lower tax rates. In the now stalled Build Back Better plan, President Joe Biden Originally suggested Raise the top individual tax rate from 37% to 39.6% for taxpayers with incomes over $400,000. he is also wanted to raise

capital gains tax

Rate for Americans who earn a million dollars or more.

However, you experience tax increases heavy resistance From centrist Senator Kerstin Senema, a key vote in a majority of Democrats. Another pivotal mediator, Senator Joe Manchin, announced later Better rebuild the “meta”.

In March, Biden released another plan to tax billionaire fortunes. called it “Minimum Billionaire Income Tax“Where families will pay a minimum 20% tax rate on income that includes unrealized capital gains. Mansion almost straight Poured cold water on the motion.

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