Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Fact-Check: Taxes on the Rich

by March 7, 2024
March 7, 2024
Fact-Check: Taxes on the Rich

Chris Edwards

In his State of the Union address, President Biden is expected to discuss raising taxes on the rich. As he often does, Biden may claim that the rich pay lower tax rates than firefighters or school teachers or that the rich pay a tax rate of just 8 percent.

A Reuters story on the State of the Union address parrots the White House theme without any independent fact‐​checking: “The average American worker paid about a 25% tax rate in 2022, the OECD reported. White House research found the wealthiest individuals paid about 8% from 2010 to 2018.”

White House “research”? The 8 percent is a concoction by Biden political appointees at odds with data from the US Treasury, Congressional Budget Office (CBO), Internal Revenue Service, and Joint Committee on Taxation. All these official sources find that tax rates on high earners are much higher than tax rates on lower‐ and middle‐​income folks. Let’s look at the Treasury and CBO data.

The first chart shows Treasury estimates for 2024 by income decile and the top 1 percent. The tax rates are all federal taxes (income, payroll, excise, and other) divided by family income. The top 1 percent will pay an average rate of 31.5 percent this year, compared with 10–12 percent in the middle and about 0 percent at the bottom. The rates near the bottom can be negative because of refundable tax credits.

The second chart shows Congressional Budget Office estimates for the low‑, middle‑, and high‐​income quintiles and the top 1 percent. The tax rates are federal income, payroll, and excise taxes divided by household income.

The average tax rate on the top 1 percent has hovered around 30 percent for four decades.

Average tax rates on the low‐ and middle‐​income quintiles have trended downward. Households in the low quintile pay no net federal taxes, while households in the middle quintile paid about 13 percent in recent years prior to 2020. Tax rates plunged in 2020 due to “recovery rebate credits” handed out that year, which were refundable tax credits.

In sum, Treasury and CBO data show that federal tax rates at the bottom average about 0 percent or less, tax rates in the middle average less than 15 percent, and rates at the top average around 30 percent. Average tax rates at the top are twice the tax rates in the middle.

False claims about tax rates on high earners are remarkably persistent given the easy availability of the official data. For further reading on tax rates by income level, see the following blog posts: “Biden Bulldozes Billionaires with New Tax,” “Tax Rates on the Rich,” “Tax Rates by Income Level,” and “Tax Rates by Income Level.”

0
FacebookTwitterGoogle +Pinterest
previous post
Truck Invoice Factoring 101: How It Works And Why It Matters
next post
The Hoax of Modern Finance – Part 11: Valuations, Returns, and Distributions

You may also like

The Case Against Raiding Private Savings To Prop...

February 1, 2024

Owners Have the Right to Choose Who Lives...

June 6, 2024

10 Reasons to Cut Corporate Welfare

March 6, 2025

Repealing Only Two Biden-Era Tax Credits Could Cement...

March 27, 2025

King Biden Issues Another Decree

November 1, 2023

Enhancing Transparency over Emergency Spending Reporting: A Call...

October 12, 2023

Canadian Court: Trudeau’s Use of Emergency Powers to...

January 24, 2024

WSJ Ed Board Knives Fourth Amendment, Betrays Journal’s...

March 26, 2024

Friday Feature: Shorashim Academy

December 15, 2023

‘De-Globalization’ Still Isn’t Happening (At Least Not Yet)

February 6, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • What Traditional Fashion Brands Can Learn from Direct-to-Consumer Models!

      July 31, 2025
    • Skinner v. Louisiana Brief: Prosecutors Must Be Held Accountable for Withholding Exculpatory Evidence

      July 31, 2025
    • US sanctions Palestinian Authority officials after rejecting global push to give it control of Gaza

      July 31, 2025
    • US, UK and a dozen other nations call out Iran attempts to ‘kill, kidnap, harass’ citizens

      July 31, 2025
    • A Good Start: Congress Cuts Funding for USAID and Other Foreign Aid Programs

      July 31, 2025
    • UK property sales rise in June, offering boost to Chancellor Rachel Reeves

      July 31, 2025

    Categories

    • Business (8,637)
    • Investing (2,165)
    • Politics (16,264)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved