The Joint Committee on Taxation has revealed that the ultra-wealthy in the United States are shouldering the highest burden of taxes, with the top 1% of earners paying an average tax rate of around 30%. This is double or more than what the bottom 80% of the population pays. In fact, the top 5% of earners contribute a substantial 46% of the country’s tax base.
When focusing solely on individual income taxes, the top 1% of earners are responsible for paying 45% of the total collected, with the top 0.01% paying nearly 23%. This stark contrast highlights the progressivity of the federal tax system, with the burden falling heavily on the wealthiest individuals.
While some argue that the ultrawealthy do not pay their fair share, attributing this claim to President Joe Biden, it is important to note that such statements may not fully represent the true picture. Unrealized capital gains, for example, are not currently taxed as income and therefore distort the narrative around tax contributions.
Amidst calls for increased taxes on billionaires, including a proposed 25% minimum tax, the debate around tax fairness and progressivity continues to be a hot topic. As policy proposals evolve, it remains crucial to consider the complexities of taxation and its implications for different segments of the population.
