A dubious number on the amount of taxes paid by US billionaires was published on President Joe Biden’s Twitter account on Saturday.
“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.”
Look, I think you should be able to be a billionaire if you can earn it, but just pay your fair share.— President Biden (@POTUS) March 18, 2023
I think you ought to pay a minimum tax of 25%.
It’s about basic fairness. pic.twitter.com/oHgreYCdUz
The tweet featured an image of a quotation from Biden that said, “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 it differs with statistics the White House has previously released.
In a fact sheet titled “The Biden Economic Plan Is Working,” published by the White House in February, it was estimated how much tax the US might raise by including unrealized gains, or the prospective profit on unsold assets, as income.
“In a typical year, billionaires pay an average tax rate of just 8%,” the fact sheet stated. The lower number is due to accounting for unrealized profits.
Howard Gleckman, senior scholar at the Brookings Institution Tax Policy Center, told PolitiFact in July, “Using the existing definition of taxable income, really rich people pay an average federal income tax rate in the mid-20s. 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, “The analysis from OMB and CEA economists estimates that the wealthiest 400 billionaire families in America paid an average of just 8.2 percent of their income – including income from their wealth that goes largely untaxed – in Federal individual income taxes between 2010 and 2018. That’s a lower rate than many ordinary Americans pay.”
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! 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!”