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As the April 15 deadline to file federal income taxes arrived, some pushed it until the last minute.
President Joe Biden distorts income tax rates for the richest Americans
If Your Time is short
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Biden has repeatedly claimed the wealthiest Americans have an income tax rate of 8%.
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Under the current tax code, the top 1% of taxpayers pay an effective tax rate of 25% on the income the government counts.
In a recent speech touting his economic policies, President Joe Biden took aim at the tax rates of the wealthiest Americans.
During the president’s Jan. 25 stop in Superior, he said, "There are a thousand billionaires now and you know what their average tax rate is? 8%."
Biden has used this figure before, but it’s inaccurate because it uses a hypothetical calculation and doesn’t refer to the current tax code.
PolitiFact in 2022 fact-checked the same claim and rated it False. Here is what we previously found.
What is the average federal income tax for the richest Americans?
When we asked the White House in 2022 about the 8% figure, it told PolitiFact that it comes from a White House report that considered what would happen if the United States were to tax unrealized gains on stocks.
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Currently, if people see their stock shares rise in value over time, those gains are not taxed unless and until the shares are sold. If the shares are never sold, then they are never taxed, and under current law, they may be passed on to the next generation with little or no taxation.
The White House report found that if you include unrealized gains in the income calculations of the 400 richest U.S. families, then their taxes paid would account for just 8.2% of their income.
Economists and policymakers have long debated whether the government should tax unrealized gains. But Biden made it sound as if 8% was the standard rate today, not what would happen under a potential future proposal.
Featured Fact-check
IRS data from 2020 shows that the top 1% of taxpayers paid an average federal income tax rate of 25.99% — about three times more than the White House’s estimate.
Our ruling
Biden said "There are a thousand billionaires now and you know what their average tax rate is? 8%."
The wealthiest Americans currently pay an effective tax rate of more than 20% of their income, not 8%.
Again, we rate Biden’s statement False.
Our Sources
PolitiFact, "Joe Biden's dubious math on the federal income tax burden," July 6, 2022.
Fox 9 Minneapolis, "President Joe Biden speaks in Wisconsin," Jan. 25, 2023.
White House, "What is the average federal individual income tax rate on the wealthiest Americans?" Sept. 23, 2021.
White House, "New OMB-CEA report: Billionaires pay an average federal individual income tax rate of just 8.2%," Sept. 23, 2021.
Tax Foundation, "Summary of the latest federal income tax data, 2023 update," Jan. 26, 2023.
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President Joe Biden distorts income tax rates for the richest Americans
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