Study Finds Wealthiest Americans Pay Lower Tax Rate Than Average

Recent studies from the National Bureau of Economic Research and University of California, Berkeley economists reveal that the 400 wealthiest Americans pay a lower effective tax rate than the average citizen, around 24% compared to 30% for others. This disparity stems largely from how the ultra-rich earn income primarily through corporate profits and long-term capital gains, which are taxed at lower rates than wages, and the fact that unrealized capital gains remain untaxed until assets are sold. Legislative changes, including the 2017 Tax Cuts and Jobs Act and President Trump's 2025 "big, beautiful bill," have further reduced their tax burdens by lowering rates and increasing estate-tax exemptions. The top 400 richest individuals now control about 4.1% of U.S. wealth, equivalent to roughly 20% of the nation's GDP, a sharp rise from 1982. Some economists, such as Emmanuel Saez and Gabriel Zucman, advocate for a wealth tax targeting the ultra-rich to increase tax progressivity and address growing inequality. Meanwhile, discussions suggest that if billionaires were taxed at rates similar to the upper middle class, government revenue could significantly increase, highlighting the impact of current tax loopholes and strategies used by billionaires.