THE OTHER AMERICA: Inequality, Taxes, and the Very Rich


Effective tax rates are lower than statutory rates for wealthy people because they receive much income from capital, capital income receives preferential treatment, and recognition of capital income is often voluntary. I calculate taxes paid as a percentage of wealth using linked estate- income data. Single itemizers with wealth of at least $2 million in 2007 paid less than 3 percent of wealth in annual taxes, with the richest paying the smallest fraction. Changes enacted in the Tax Cuts and Jobs Act of 2017 favor those at the top. The estate tax remains one tool that may curb extreme wealth accumulation

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Carleton College: Digital Commons

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