President Biden’s Twitter account posted a questionable statistic on Saturday about how much tax Americans billionaires pay.
‘Look, I think you should be able to be a billionaire if you can earn it, but just pay your fair share,’ Biden’s tweet read. ‘I think you ought to pay a minimum tax of 25%. It’s about basic fairness.’
The tweet included a graphic of a Biden quote 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.’
But it is unclear where the 3% figure came from, and contradicts figures the White House has issued in the past.
In February, White House issued a fact sheet called ‘The Biden Economic Plan Is Working,’ which calculated how much tax the U.S. could collect if it counted unrealized gains – a potential profit on an unsold asset – as income.
‘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 told 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.’
Another White House figure from 2021 gave an 8% figure rather than the 3% one Biden recently cited.
‘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,’ the 2021 post read.
In response, Twitter CEO Elon Musk disputed Biden’s tax claim.
‘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 added in another tweet, after asking Twitter’s Community Notes feature to fact-check the statement.
