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Friday, April 19, 2024

America’s richest 400 families pay a lower tax rate than average taxpayer

  • The richest 400 Americans paid an average 8.2% federal income tax rate, which is "low" relative to other taxpayers, according to a White House report published Thursday.
  • That's due to the tax treatment of investment income, like capital gains and dividends, the report said.
  • The analysis comes as Democrats try to raise taxes on the wealthy to fund up to $3.5 trillion in investments to expand the safety net and mitigate climate change.

A sign featuring Jeff Bezos calls for taxing the rich in front of the U.S. Capitol in Washington, D.C., U.S., on Wednesday, Sept. 15, 2021.Stefani Reynolds | Bloomberg | Getty Images

The wealthiest 400 American families paid an 8.2% average rate on their federal individual income taxes from 2010 to 2018, according to a White House analysis published Thursday.

Those richest 400 families represent the top 0.0002% of all taxpayers, according to the White House report.

Their estimated tax rate, paid on $1.8 trillion of income over the nine-year period, is "low" relative to other taxpayers, according to the report, which was authored by economists in the Council of Economic Advisers and Office of Management and Budget.

By comparison, Americans paid an average 13.3% tax rate on their income in 2018, according to a Tax Foundation analysis. (This figure includes all taxpayers, including the wealthiest. It also doesn't factor annual investment gains, as the White House report does to account for overall wealth.)

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