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Billionaires Pay Less Tax Than Middle Class: IRS Data

8/28/2025

34 3 Full Breakdown

Summary

Story summary

The wealthiest 400 Americans had an average tax rate of 23.8% from 2018 to 2020, down from 30%.
Anonymized IRS data shows billionaires frequently report losses to lower taxable income.
Billionaires pay lower tax rates than many middle-class earners, indicating a regressive tax system.
Recent legislation extends tax cuts and creates loopholes, favoring the wealthy and affecting low-income Americans.

History

Historical Context

The Tax Reform Act of 1986 marked a significant shift in U.S. tax policy, reducing the top income tax rate from 50% to 28%. This change primarily benefited high-income earners, contributing to growing income inequality. Today, billionaires exploiting tax loopholes to report losses reflect ongoing concerns about a regressive tax system, prompting renewed calls for reform to address economic equity.

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Story summary

The wealthiest 400 Americans had an average tax rate of 23.8% from 2018 to 2020, down from 30%.
Anonymized IRS data shows billionaires frequently report losses to lower taxable income.
Billionaires pay lower tax rates than many middle-class earners, indicating a regressive tax system.
Recent legislation extends tax cuts and creates loopholes, favoring the wealthy and affecting low-income Americans.

1 / 2