NEW REPORT: “For the First Time in History, U.S. Billionaires Paid a Lower Tax Rate Than the Working Class” & the “Tipping Point” was the GOP Tax Law

Washington Post: “the tipping point came in 2017, with the passage” of the Republican tax law that every GOP senator voted for — “That bill… was a windfall for the wealthy: It lowered the top income tax bracket and slashed the corporate tax rate”

By 2018, “the rich were already enjoying the fruits of that legislation” while the benefits the tax law’s supporters promised “have largely failed to materialize”

It’s well-documented at this point that the Republican tax law supported by every GOP senator in 2017 was a “lopsided giveaway to corporations” and the wealthy, with little benefit to most Americans.

This week, a new in-depth study on the tax burden of the ultrarich found that in 2018, *for the first time in history* America’s richest billionaires paid a lower effective tax rate than the working class. The analysis found that “the tipping point came in 2017” with the passage of the Republican tax law because it was “a windfall for the wealthy” that lowered the top income tax bracket and slashed the corporate tax rate. By 2018, “the rich were already enjoying the fruits of that legislation” while the benefits the tax law’s supporters promised — higher rates of growth, increased business investment, a shrinking deficit — “have largely failed to materialize.”

“It’s no surprise that Republican senators supported a massive giveaway to giant corporations and the ultrarich, but the fact that billionaires are paying a lower tax rate than working class families as a result underscores how out of touch their priorities are with voters,” said DSCC spokesperson Stewart Boss. “The more we learn about the law that Republicans rammed through, the clearer it becomes that GOP Senators aren’t working for their constituents — they’re working for their wealthy donors and special interest allies in Washington.”

IN CASE YOU MISSED IT

Washington Post: For the first time in history, U.S. billionaires paid a lower tax rate than the working class last year

By Christopher Ingraham
October 8, 2019

Key Points:

• A new book-length study on the tax burden of the ultrarich begins with a startling finding: In 2018, for the first time in history, America’s richest billionaires paid a lower effective tax rate than the working class.

• It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.

• The analysis, which was the subject of a column in the New York Times on Monday, is also notable for the detailed breakdown of the tax burden of not just the top 1 percent but also the top 0.1 percent, the top 0.01 percent and the 400 richest households.

• The focus on the ultrarich is necessary, Saez and Zucman write, because those households control a disproportionate share of national wealth: The top 400 families have more wealth than the bottom 60 percent of households, while the top 0.1 percent own as much as the bottom 80 percent.

• The relatively small tax burden of the super-rich is the product of decades of choices made by American lawmakers… Congress has repeatedly slashed top income tax rates, for instance, and cut taxes on capital gains and estates. Lawmakers have also failed to provide adequate funding for IRS enforcement efforts and allowed multinational companies to shelter their profits in low-tax countries.

• But the tipping point came in 2017, with the passage of the Tax Cuts and Jobs Act. That bill, championed by President Trump and then-House Speaker Paul D. Ryan, was a windfall for the wealthy: It lowered the top income tax bracket and slashed the corporate tax rate.

• By 2018, according to Saez and Zucman, the rich were already enjoying the fruits of that legislation: The average effective tax rate paid by the top 0.1 percent of households dropped by 2.5 percentage points. The benefits the bill’s supporters promised — higher rates of growth and business investment and a shrinking deficit — have largely failed to materialize.

• There is general agreement among economists… that the tax burden of the rich has fallen considerably in recent decades.

Read the full story here.

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