The Biden administration claimed that billionaires in America pay only 8.2% of their incomes in taxes. That claim was recently debunked by a new study by economists from UC Berkeley. The Wall Street Journal’s Richard Rubin explains:
The study, conducted with access to anonymized Internal Revenue Service data, attempts to create a comprehensive estimate of income and taxes for the very small group of people on the Forbes 400 list of the wealthiest Americans. It finds that they paid 23.8% of their economic income in taxes from 2018 to 2020. Of those taxes, 37% come through corporate taxes, with the bulk of the rest from individual income and payroll taxes.
That 23.8% estimate is far higher than the Biden administration’s frequent claim that U.S. billionaires paid just 8.2%—a figure that used a different broad income definition but didn’t include corporate taxes. Democrats pointed to such numbers to argue the ultrawealthy paid a much lower rate than average Americans and should be taxed more.
The study’s authors concluded:
Our paper analyzes the results of a match of the Forbes 400 group to administrative data, including individual income, business, estate, and gift tax data. Top 400 individuals have a total effective tax rate of 23.8% in 2018–2020, down from about 30% earlier in the decade. This is lower than the average tax rate for the full US population and substantially lower than the total effective tax rate for top labor income earners.
As shown in Figure 3(f), the United States is not unique in that respect: effective tax rates at the top of the wealth distribution are also lower than the average in other countries. In the Netherlands, a country where the macroeconomic tax rate is 45% of national income, Bruil et al. (2025) find an effective tax rate of less than 20% for the top 0.0002%. In France, Bach et al. (2023) find that billionaires have very low individual income tax rates, of about 2% of economic income (vs. 11% of economic income for the US top 400). Future work can analyze the effects of various tax reforms on top effective tax rates across countries.
Read the entire study here.
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