ICYMI: NEW REPORT: WEALTHIEST 400 HOUSEHOLDS PAY EFFECTIVE INCOME TAX RATE OF JUST 8 PERCENT

FOR IMMEDIATE RELEASE: September 23, 2021
PRESS CONTACT: [email protected]

ICYMI: NEW REPORT: WEALTHIEST 400 HOUSEHOLDS PAY EFFECTIVE INCOME TAX RATE OF JUST 8 PERCENT

Build Back Better Agenda would ensure wealthiest Americans making over $400,000 a year and big corporations finally pay fair share

Washington, D.C. — A new analysis today from top White House economists underlines how the current tax system rewards wealth, not work. The report estimates that the wealthiest American households – whose net worth range from $2.1 billion to $160 billion – pay on average an effective federal income tax rate of just over 8 percent. Recent polling has shown that the provisions in the Build Back Better Agenda that would ensure the wealthiest Americans making over $400,000 a year and big corporations finally pay their fair share remain deeply popular with the American public.

“It is clear that for too long, the wealthiest Americans and the largest corporations have reaped the benefits from a tax code that rewards wealth, rather than work,” said Building Back Together Executive Director Danielle Melfi. “That’s why the American public firmly supports the Build Back Better Agenda, and is counting on leaders in Congress to pass urgently needed reforms to ensure that we put everyday people first, and build back better for working and middle class families.”

Read more on the report from The New York Times:

“President Biden is leaning into his push to increase taxes on the rich as he seeks to unify Democrats in the House and Senate behind a $3.5 trillion bill that would expand federal efforts to fight climate change, reduce the cost of child care, expand educational access, reduce poverty and more.”
“White House economists published on Thursday a new analysis that seeks to show a gap between the tax rate that everyday Americans face and what the richest owe on their vast holdings.”
“The analysis suggests that the wealthiest 400 households in America — those with net worth ranging between $2.1 billion and $160 billion — pay an effective federal income tax rate of just over 8 percent per year on average.”
“The White House economists — Greg Leiserson, senior economist at the Council of Economic Advisers, and Danny Yagan, the chief economist at the budget office — wrote that their calculation of low tax rates for the very wealthy flows from two types of preferential treatment for certain income in the tax code. The federal government taxes income from wages at a higher rate than income from investments, and most wealthy households report a significantly larger share of their income from capital gains and dividends than typical taxpayers do.”
“Mr. Biden has proposed changing both those tax treatments. He would raise the capital gains rate to match the rate paid on wage income. And he would eliminate the stepped-up basis provision for wealthy heirs.”

Read the full analysis by Senior Economist Greg Leiserson (Council of Economic Advisors) and Chief Economist Danny Yagan (Office of Management and Budget), here.

###