Billionaires paid less in taxes than the working class last year for the first time in U.S. history, a study found.
Economists Emmanuel Saez and Gabriel Zucman found in their book-length study “The Triumph of Injustice” 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.
Saez and Zucman, economists at the University of California at Berkeley, 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.
Some economists have criticized the study, which is based in part on their previous work alongside noted economist Thomas Piketty, which they say overestimates the wealth disparity in the country.
Jason FurmanJason FurmanBillionaires paid lower tax rate than working class for first time in US history: study Economy adds 130K jobs in August, falling below expectations Homelessness and the high cost of living MORE, an economist at Harvard, told the Post that the study is misleading because it doesn’t include refundable tax credits, thus making tax burdens appear higher than they really are.
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.
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