The effective tax rate for America's wealthiest 0.0002% — roughly the billionaires on the Forbes 400 list — fell from 30% to 24% after the 2017 GOP tax overhaul, according to a new study from the National Bureau of Economic Research.
Billionaires Dodge More Taxes After GOP Cuts
Congress extended those cuts last month under what President Donald Trump called his "big, beautiful bill."
Rates Out Of Balance
By comparison, the average effective tax rate for the U.S. population sits at 30%, while the top wage earners pay closer to 45%. For the 100 richest Americans, however, the rate is only 22%, highlighting an imbalance in the system, reported The Hill.
The study, authored by University of California economists Emmanuel Saez and Gabriel Zucman, found the 2017 Tax Cuts and Jobs Act was a turning point. "The tax rate of the top 400 fell significantly at the end of our sample," the researchers wrote, linking the drop directly to the GOP legislation.
Rising Wealth Share
In 1982, the wealth of the top 0.0002% equaled about 2% of U.S. gross domestic product. By 2025, it had grown to 20% of GDP, with nearly three-quarters of the increase driven by the top 100 individuals, according to Saez and Zucman.
Shift In Taxation
Taxes on wealth, measured as a share of holdings rather than income, dropped from 2.7% before the 2017 cuts to just 1.3% afterward. The U.S. does not tax wealth directly, though the Supreme Court has recently signaled interest in reviewing proposals for a federal wealth tax.
Much of the reduction stems from business structures. Many billionaires report low private business income, with pass-through entities generating paper losses that offset other taxable gains. The law's corporate tax cut, from 35% to 21%, delivered major savings to the billionaire class.
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Breakdown Of Rates
Zucman and colleagues calculated that of the top 400's effective tax rate of 23.8%, about 9% come from corporate taxation, underscoring how policy shifts reshape liabilities at the very top.
Impact On Lower Earners
The Congressional Budget Office found that extending the cuts in July shifted wealth from lower-income Americans to the affluent. Cuts to health care and other social programs reduced resources for poorer households, while tax savings accrued most heavily to the top 10%.
The United Nations reported in 2018 that the 26 richest people worldwide held as much wealth as the poorest half of humanity, about 3.8 billion people.
Emerging Class Structure
Scholars argue these dynamics mark the rise of a new global class. Economic historian Robert Brenner and sociologist Dylan Riley described the trend in 2022 as "politically engineered upward redistribution," a system where policy consistently favors the wealthiest.
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