“It’s time to tax billionaires,” said one advocacy group. “This interactive look at how the ultra-rich manage to pay less taxes than regular folks is all the proof you should need.”
Story originally published in Common Dreams
ProPublica‘s latest exposé of inequitable taxation shows that the 400 most lavishly paid people in the U.S. don’t pay the highest income tax rates—a finding that progressives say demonstrates the need to overhaul the nation’s tax code and make the ultra-wealthy pay their fair share.
“In theory, our tax system is designed to tax the rich at higher rates than everyone else,” ProPublica noted Wednesday. “That’s not the way it works at the loftiest incomes.”
“The data reveals a system where the very highest earners, on average, pay far lower tax rates than the merely affluent do,” the news outlet reported. “And even among the top 400, some groups have it better than others: Tech billionaires pay rates well below even other business owners.”
A cache of Internal Revenue Service (IRS) data obtained last year by the nonprofit newsroom revealed which 400 people in the U.S. had the highest incomes from 2013 to 2018. Ten of the top 15 were tech billionaires whose income usually came from selling stock. Hedge fund managers made up a fifth of the top 400, while the founders and executives of private equity firms and the heirs to massive fortunes were also well represented.
Cracking the list required an average income of $110 million per year—orders of magnitude higher than the annual earnings of members of the top 5% (at least $198,000) and the top 1% (at least $485,000).
A typical American who makes $40,000 annually would have to work for 2,750 years to bring in what the lowest-earning member of the top 400 made in one. Meanwhile, each of the top 11 had an average yearly income of more than $1 billion—a sum it would take a typical American 25,000 years to amass.
And yet, these 400 people who raked in at least $110 million per year tended to pay federal income taxes at a lower rate than other millionaires. On average, the top 400 paid an effective income tax rate of 22% from 2013 to 2018—just slightly higher than people who earned $200,000 to $500,000 per year.
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