Economist Gabriel Zucman’s analysis reveals that for the first time, U.S. billionaires have a lower effective tax rate than working-class Americans, sparking a renewed debate on wealth tax.
By Alexandra Jacobo, Nation of Change
Economist Gabriel Zucman’s analysis reveals a troubling milestone: U.S. billionaires now pay a lower effective tax rate than working-class Americans, marking the first time this disparity has been recorded. This revelation, published in The New York Times, highlights the growing chasm between the ultra-rich and the average worker, sparking renewed calls for comprehensive tax reform.
Zucman’s research illustrates a historical shift in tax burdens. For the first time, America’s wealthiest individuals pay a lower effective tax rate than the working class. In 2018, the average tax rate for billionaires was 23%, while working-class Americans paid an average of 24%. This reversal is attributed to the unique tax mechanisms that billionaires employ to minimize their taxable income, predominantly through stock holdings and tax-free loans.
Jeff Bezos and Elon Musk exemplify this phenomenon. Although both report modest salaries, they leverage their vast wealth in company stock to access loans that fund acquisitions and luxury purchases. By borrowing against these assets, they generate significant cash flow without triggering taxable events, thereby keeping their effective tax rates extremely low.
Recent Posts
Biden Administration Moves To Reclassify Marijuana: A Major Shift In U.S. Drug Policy
May 17, 2024
Take Action Now President Biden’s Department of Justice takes historic steps to reclassify marijuana, aiming to end a ‘failed approach’ and…
‘Worse Than Iraq’: Three Former Biden Officials Explain Why They Resigned Over War In Gaza
May 16, 2024
Take Action Now “There’s just this blind unwillingness to recognize the U.S. does have all the power here – this notion that it’s not really…
Reflections On Student Activism
May 16, 2024
Take Action Now William Hartung, Democracy Versus Autocracy on America’s Campuses By William D. Hartung, Tom Dispatch I’ve spent most of my…
A Whistleblower’s Return To The World.
May 15, 2024
Take Action Now This was to be my first trip abroad in a very long time, certainly the first time since being released from prison. By Jeffrey…