The wealthiest 400 families in the United States are paying an average income tax rate of just 8.2%, according to a new analysis from the Biden administration. President Joe Biden and Democrats are pushing to raise taxes on the richest Americans as they look for ways to pay for their ambitious agenda, making its way through Congress as a $3.5 trillion budget reconciliation package.
The analysis estimated billionaires paid 8.2% of their income between 2010 and 2018, including on forms of income that go largely untaxed — lower than the rates paid by most Americans. It notes in that final year of analysis, those families had at least $2.1 billion in wealth, according to Forbes.
The analysis by economists from the Office of Management and Budget and the White House Council of Economic Advisers drew from publicly available data and says the disparity is driven largely by how the tax code treats income generated from wealth — such as income from stocks, whose worth increases over time — rather than wages, which are immediately taxed. [Continue reading…]