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Thursday, Jan. 27, 2022

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

Jacob Alabab-Moser, Gigafact

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.

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