On Saturday, a dubious figure regarding how much tax American wealthy pay was posted on the Twitter account of President Joseph Biden. In Biden’s tweet, he said, “Look, I think you should be able to be a billionaire if you can earn it, but just pay your fair share.” “I think you ought to pay a minimum tax of 25%. It’s about basic fairness.”
An image of a quotation from Biden that read: “You know the average tax billionaires pay? Three percent. No billionaire should be paying a lower tax than somebody working as a schoolteacher or a firefighter.”
Yet the source of the 3% number is unknown and differs from statistics the White House has previously released. The White House published a fact sheet titled “The Biden Economic Plan Is Working” in February that estimated how much revenue the United States might raise by including unrealized gains, or the future profit on unsold assets, as income.
Look, I think you should be able to be a billionaire if you can earn it, but just pay your fair share.
I think you ought to pay a minimum tax of 25%.
It’s about basic fairness. pic.twitter.com/oHgreYCdUz
— President Biden (@POTUS) March 18, 2023
The Biden Economic plan is working
“In a typical year, billionaires pay an average tax rate of just 8%,” the fact sheet read. Factoring in unrealized gains is the reason for the lower statistic.
“Using the existing definition of taxable income, really rich people pay an average federal income tax rate in the mid-20s,” Brookings Institution Tax Policy Center senior fellow Howard Gleckman informed PolitiFact in July. “If you want to include unrealized gains in your denominator, as the White House does, the average rate would go way down.”
In contrast to the 3% figure Biden just referenced, another White House estimate from 2021 provided an 8% figure. According to data by OMB and CEA economists, between 2010 and 2018, the 400 wealthiest billionaire families in America paid an average of just 8.2 per cent of their income in federal individual income taxes, including income from their wealth that is mostly exempt from taxation. The 2021 article stated It’s a lower rate than much ordinary American pay.
Elon Musk’s response to tax assertion
Elon Musk, the CEO of Twitter, responded by disputing Biden’s tax assertion. “I paid 53% taxes on my Tesla stock options (40% Federal & 13% state), so I must be lifting the average!” the South African entrepreneur wrote. “I also paid more income tax than anyone ever in the history of Earth for 2021 and will do that again in 2022.”
“Would be curious to hear how these other ‘billionaires’ are so good at avoiding taxes!” Musk further added in another tweet after asking Twitter’s Community Notes feature to fact-check the statement.
