Please note!

This fact brief was originally published as an experiment to test the concepts behind fact briefs.

Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.

FACT BRIEF

Are billionaires effectively taxed at a lower rate than most other Americans?

Thursday, January 27, 2022

By Jacob Alabab-Moser

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YES

The wealthiest billionaires effectively pay income taxes at a lower rate than other U.S. taxpayers. Estimates of just how much depend on what taxes and what income ranges are used for comparison.

Two Berkeley economists found that in 2018, the wealthiest 400 adults paid the lowest overall tax rate of any income segment examined, at 23%. The lower 50% of adults paid an average rate of 24.2%.

ProPublica, in a 2018 report focusing on the 25 richest taxpayers, found that their relatively low rates arose in part from favorable treatment of investment income and deductions for gifts to nonprofits.

Last year, White House economists, citing various sources, estimated that the 400 richest U.S. families paid an average 8.2% rate on income between 2010 and 2018.

This fact brief is responsive to conversations such as this one.

Sources

CBS News America's richest 400 families now pay a lower tax rate than the middle class

Journal of Economic Perspectives How progressive is the US federal tax system?: A historical and international perspective

Emmanuel Saez and Gabriel Zucman Taxing our way back to justice

ProPublica You May Be Paying a Higher Tax Rate Than a Billionaire

White House What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans?

ABOUT THE CONTRIBUTOR

Gigafact

Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.

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About fact briefs published on Gigafact

Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.