A new study shows that America’s richest billionaires paid a lower effective tax rate than the working class in 2018, a first in U.S. history in the wake of President Trump’s tax cut.
A new book-length study by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, found that the average tax rate paid by the richest 400 families in the country was lower than the rate paid by the bottom half of American households in 2018, The Washington Post reported.
The wealthiest 400 families had a 23 percent tax rate, compared to the bottom half of households, which had a 24.2 percent tax rate.
The richest 400 families had a 47 percent tax rate in 1980 and a 56 percent tax rate in 1960, while the working class’s tax rate has remained relatively stable, according to the Post.
The Hill reports:
Saez and Zucman analyzed Americans’ effective tax rates since the 1960s, including federal income taxes, corporate taxes, state and local taxes, and “indirect taxes,” which refer to licenses for businesses and motor vehicles, the Post reported.
The economists decided to examine the top 400 families because they have more money than the bottom 60 percent of households.
The wealthy’s taxes have declined over time from various actions by lawmakers, but the 2017 Tax Cuts and Jobs Act significantly lowered taxes for this group.