Wednesday, May 18, 2022

Report: America’s 400 wealthiest families pay 8.2% in income tax

23 September (WNN) — According to a recent White House analysis, America’s 400 wealthiest households paid an average federal income tax rate of 8.2% on an income of $1.8 trillion between 2010 and 2018.

Senior White House economist Greg Leiserson and chief White House economist Danny Yagan wrote the report based on data from the Internal Revenue Services, the Federal Reserve’s Consumer Finance Survey and estimates from Forbes magazine.

It comes as President Joe Biden has proposed a tax increase on the wealthy and corporations to spend in areas such as health care and childcare.

America’s wealthiest 400 families are taxed at preferred rates and have been able to avoid taxes on investment gains, reducing their tax burden by a maximum of 37%.

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Investment gains are a primary source of income for wealthy families. A “step-up basis” tax preference allows wealthy households to pass investment gains to their heirs without capital gains income on their tax returns.

Biden’s budget proposes eliminating the “step-up basis” for the highest-income Americans to ensure that all investment gains are subject to income tax.

“Two factors that contribute to this lower estimated tax rate are the lower rate of tax on capital gains and dividends and the permanent loss of wealth families from paying tax on investment gains taken out of taxable income,” the report said. The ability to escape is involved.”

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The New York Times said the White House estimates that the salary of the wealthiest American in taxes is much lower than other analyses, due to the inclusion of the value of stock portfolios as income.

An estimate by the Tax Policy Center put the average effective tax rate for the top 1,400 American households at 24% in 2015, compared to 14% for all taxpayers.

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Nation World News Desk
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