Political Fact Checks

Do the Richest Americans Pay Less Tax Than Everyone Else?

The claim is that the richest Americans pay a smaller share of their income in tax than ordinary workers. Warren Buffett made it about himself in 2011, and the economists Emmanuel Saez and Gabriel Zucman made it about billionaires in 2019. This page sets the rates from tax records, and from studies on both sides, against each other, measure by measure.

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What this covers

Federal taxes in the United States, with a section on state and local taxes and one comparison abroad. The page does not decide whether the rich should pay more. It shows what they pay under each definition of income and where the definitions part company.

The short answer

It depends what you count as income. On the income they report to the Internal Revenue Service (IRS), the rich pay far higher rates than everyone else. In 2023 the top 1 percent paid 26.3 percent of it in federal income tax, against 14.1 percent for all taxpayers. Count the rise in value of unsold stock, and the 400 wealthiest families paid about 8 percent in federal income tax over 2010 to 2018, by a White House estimate. Counting every tax, economists reading the same IRS records still disagree on whether those families pay less than everyone.

Two answers, and why both are correct

Ask how much tax someone pays and you need two numbers: what they paid and what you divide it by, the denominator. Federal individual income tax is recorded on returns, and the Internal Revenue Service (IRS) publishes it by income group every year. Most of the fight is about what to divide by.

The IRS divides by reported income, the income on the tax return, which it calls adjusted gross income: wages, interest, dividends, business profits and the gains on assets sold that year. The Congressional Budget Office (CBO) counts payroll, corporate income and excise taxes as well as the individual income tax. Stock that rose in value and was not sold is not income to the IRS, and CBO’s income measure largely leaves it out too. Nobody has received anything, so nothing is taxed.

For most people that omission changes little. Their income is wages, and wages are taxed as they arrive. For the wealthiest families it matters greatly, because gains on assets they have not sold are a large share of their income.

For example, Jeff Bezos’s Amazon salary was about $80,000 a year, the nonprofit newsroom ProPublica reported. Between 2006 and 2018 he reported $6.5 billion of income and paid $1.4 billion in federal taxes. That is about 21 percent of his reported income. Over the same years his wealth rose by $127 billion. Divide the same $1.4 billion by that and the rate is 1.1 percent.

The same question, three denominators

How to read it: each bar is a federal income tax rate, in percent, for a group at the very top. The blue bar divides by the income reported to the IRS; the two orange bars count gains on assets not sold. The table below sets out each denominator.

Sources: IRS Statistics of Income, Table 4.1, tax year 2023; White House Council of Economic Advisers (CEA), September 2021; ProPublica, June 2021.

The chart’s values
Group	Federal income tax divided by	Years	Rate
Top 1 percent of tax returns	Adjusted gross income (IRS)	2023	26.3%
400 wealthiest families	Growth in wealth plus taxes (CEA)	2010–2018	8.2%
25 richest Americans	Growth in wealth (ProPublica)	2014–2018	3.4%

A note on the word “rich”

The groups in the chart are not the same size. The top 1 percent of tax returns in 2023 was 1.53 million returns with reported income of $675,602 or more. The top 0.001 percent was 1,531 returns above $78.6 million. The Council of Economic Advisers (CEA) estimate covered 400 families ranked by wealth, most of them billionaires, and ProPublica’s 25 people. A statement about “the rich” that is true of 1.5 million households can be false of 400, and the reverse.

What the richest pay on the income they report

Measured against the income people report, federal income tax rates rise with income except at the top 0.001 percent. The latest tables from the Internal Revenue Service (IRS), for tax year 2023, were published in 2026. They count 153.1 million returns. Those returns carried $15.2 trillion of reported income and $2.14 trillion of income tax.

Average federal income tax rate by income group, 2023

How to read it: each bar is the average federal income tax rate paid by that slice of taxpayers in 2023; the table below gives every value. The rate is total income tax after credits divided by reported income. Refundable credits reduce the tax only as far as zero, and the part paid out as cash is not counted.

Source: IRS Statistics of Income, Table 4.1, tax year 2023 (Publication 1304, March 2026).

The chart’s values
Group of taxpayers	Average federal income tax rate, 2023
Bottom 50 percent	3.7%
All taxpayers	14.1%
Top 25 percent	17.8%
Top 10 percent	20.9%
Top 5 percent	23.0%
Top 1 percent	26.3%
Top 0.001 percent	23.6%

The bottom half of taxpayers, everyone reporting less than $53,801, paid 3.7 percent. The top 1 percent paid 26.3 percent, seven times the bottom half’s rate. The top 0.001 percent are the 1,531 returns all above $78.6 million. They paid 23.6 percent, less than the top 1 percent as a whole.

The reason is the composition of their income. Wages are taxed at up to 37 percent. Long-term capital gains and dividends are taxed at a top rate of 20 percent, or 23.8 percent with the surtax on investment income. The very richest earn most of their reported income that way. In 2023, capital gains taxed at those lower rates made up 55 percent of the top 0.001 percent’s reported income, against 26 percent of the top 1 percent’s.

The top 1 percent paid a larger share of the tax than of the income. They reported 20.6 percent of all reported income. They paid 38.4 percent of all federal income tax, $823 billion. The bottom half reported 12.3 percent of income and paid 3.3 percent of the tax. The top 1 percent’s 1.5 million returns paid almost as much as the bottom 95 percent’s 145 million returns put together.

These figures cover the individual income tax only, 49 percent of federal receipts in fiscal 2024. The Treasury counted $2.43 trillion of it, out of $4.92 trillion. Payroll taxes, the next largest source, fall on wages. That is why Buffett could write in 2011 that the mega-rich “pay practically nothing in payroll taxes” while the middle class is “hit with heavy payroll taxes to boot.”

Counting every federal tax

By the Congressional Budget Office’s count, the highest earners pay most of the federal bill. Its latest report on the distribution of household income, for 2023, allocates four federal taxes to households: individual income, payroll, corporate income and excise taxes.

In 2023, households in the highest-income fifth paid 70 percent of federal taxes, up from 55 percent in 1979. The top 1 percent’s share rose over the same years from 14 to 26 percent. Their share of income rose in that time from 9 to 16 percent. That income is counted before taxes and before government benefits meant for people with low income and few assets.

The 400 richest, counting what they did not sell

The 8 percent figure for the 400 wealthiest families comes from two Biden White House economists. Greg Leiserson at the Council of Economic Advisers (CEA) and Danny Yagan at the Office of Management and Budget published it in September 2021. They put the federal individual income tax of the 400 wealthiest families, the Forbes 400, at 8.2 percent for 2010 to 2018. The income they divided by included the growth in the families’ wealth.

The arithmetic is public. They estimated $149 billion of federal income tax paid by the 400 over the nine years. They started from Internal Revenue Service figures for the 400 highest-income returns, extended past 2014 by estimate. Then they scaled them down by 0.63, because the highest-wealth families are not the highest-income ones. Warren Buffett, for example, was on the 2015 Forbes list with $11.6 million of reported income, which did not place him in the top 14,000 returns that year.

For income they took the change in the Forbes 400’s combined wealth, $1.62 trillion. They added back the federal income tax and an estimated $46 billion of state and local taxes, for $1.82 trillion. Varying the scaling assumption moved the 8.2 percent between 6 and 12 percent.

The authors listed what the figure leaves out. It is the individual income tax only; corporate, estate and foreign taxes are excluded. It omits consumption, which means the income denominator is too small and the 8.2 percent is, by their own account, higher than a fully comprehensive rate would be. And it rests on Forbes’s wealth estimates, which the authors say are surely measured with error.

Yagan republished the work in the Oxford Review of Economic Policy in 2023, with the method updated and the years extended to 1992 through 2020. The baseline came out at 9.6 percent, or 12.0 percent after adjusting for inflation. Its nominal range, before adjusting for inflation, was 6.7 to 14.6 percent. The original 2010 to 2018 window recomputed to 8.0 percent.

ProPublica went further in June 2021, using leaked tax returns for the 25 richest Americans. It divided their federal income tax over 2014 to 2018, $13.6 billion, by the growth in their Forbes wealth, $401 billion. It called the result, 3.4 percent, their “true tax rate.” Their wages in 2018 came to $158 million, 1.1 percent of the income they reported. The rest came mostly from dividends and sales of investments, which are taxed at lower rates than wages.

Buffett’s rate by ProPublica’s measure was 0.1 percent. That was $23.7 million of tax on $24.3 billion of wealth growth. The investor Carl Icahn paid no federal income tax in 2016 or 2017, on a total of $544 million of reported income. He had a $1.2 billion loan from Bank of America, among others, and could deduct the interest.

ProPublica’s denominator is wealth growth alone, with no taxes added back, and its group and years differ, so its figure is not the same measure as the CEA’s. The comparison ProPublica offered instead was with ordinary households: from 2006 to 2018, it calculated, typical Americans of Bezos’s age paid $160 in taxes for every $100 their wealth grew. Bezos paid $1.09 per $100.

The Buffett claim, as he made it

In the New York Times on 14 August 2011 Buffett wrote that his 2010 federal tax bill was $6,938,744. The bill counted income tax plus the payroll taxes paid by him and on his behalf. That was “only 17.4 percent of my taxable income,” he wrote. He added that it was lower than the 33 to 41 percent paid by the other 20 people in his office.

That comparison is on taxable income, the ordinary measure, which subtracts exemptions and deductions from reported income. Buffett’s explanation was that the mega-rich pay income tax at 15 percent on most of their earnings and practically nothing in payroll taxes. His comparison does not hold for the top 1 percent as a group, whose 26.3 percent rate is above the 14.1 percent for all taxpayers.

Where the two sides disagree

Put the Internal Revenue Service (IRS) and the Council of Economic Advisers (CEA) side by side, and the disagreement comes down to definitions:

whether gains on assets not sold are income;
whether the corporate tax counts against the shareholders;
whether government benefits such as Social Security count as income, and refundable credits against taxes.

The strongest case that the richest pay too little

Income is what you can spend, and a billionaire whose stock rose $10 billion can spend against it, by borrowing, without ever selling. Tesla reported in 2020 that Elon Musk had pledged about 92 million shares, worth about $57.7 billion on 29 May 2021, as collateral for personal loans. Oracle disclosed in 2014 that Larry Ellison had a credit line secured by about $10 billion of his shares. Loans are not income and are not taxed.

If the borrower holds the stock until death, the gain is never subject to income tax, because heirs inherit at market value under the step-up in basis. The law professor Edward McCaffery has summed up the sequence as “buy, borrow, die”. On this view the IRS measure is blind to the main way the very richest get richer. And a rate on the sliver of income they choose to realize, by selling assets, says nothing about their real burden.

The strongest case that they pay their share

A significant share of those gains on assets not sold is stock in companies, and the companies pay corporate income tax on their profits every year. The Tax Foundation, a tax policy nonprofit, replied to the CEA the day after its estimate came out. It argued that an income measure which counts corporate profits as they accrue to shareholders must count the corporate tax on those profits too. The CEA, it said, counted the income and not the tax.

Saez and Zucman’s own figure for the top 400 does count the corporate tax. Their 2018 estimate of everything the 400 paid at every level of government came to 23 percent of income. In the Tax Foundation’s breakdown from their data, about 9 percent is individual income tax and roughly 10 points corporate tax. Estate tax is a point, and sales tax 2.3 points.

Yagan makes the corporate-tax point in his 2023 paper. He combines a 10 percent individual rate with the 21 percent corporate rate set in law. Because of deductions, he says, the rate companies actually pay is likely no higher. The all-in federal income tax on corporate income then comes to about 29 percent. On this view a 400-family rate of 8 percent describes one tax rather than the tax system.

Saez and Zucman then turn that 23 percent into the best line for the case that the richest pay too little. They estimated that working and middle-class Americans paid 25 to 30 percent of pre-tax income in 2018, all taxes at all levels, above the top 400. They wrote that 2018 was the first year in which billionaires paid a lower rate than the working class.

A 2025 working paper by Akcan Balkir, Saez, Yagan and Zucman, not yet peer-reviewed, tested that claim on IRS records. It matched the Forbes 400 to their individual, business, estate and gift tax returns for 2010 to 2020. Counting the corporate tax fully against shareholders, it put the top 400’s total tax rate for 2018 to 2020 at 24 percent of their economic income. That income is their labor income plus their share of business profits. For the whole population it found 30 percent.

The economist David Splinter reworked the same estimates in August 2025. He spread Forbes families’ wealth over more tax returns and took out what he counts as double-counted capital gains. He counted government benefits as income and refundable credits against taxes, and added missing state income taxes. He put the top 400 at 38 percent against 25 percent for everyone. Both start from the same IRS-based estimates, so the distance between 24 and 38 percent comes from definitions.

State taxes, and how the United States compares

Federal taxes are progressive, taking a larger share of income as income rises. State and local taxes, on the national average, are regressive and do the opposite.

The Institute on Taxation and Economic Policy, a tax policy nonprofit, published the seventh edition of Who Pays? in January 2024, covering non-senior taxpayers at 2023 incomes. It finds the poorest fifth paying 11.4 percent of their income in state and local taxes, and the top 1 percent 7.2 percent. The middle fifth pays 10.5 percent. In 41 states the top 1 percent pay a lower rate than any other group.

Sales and excise taxes are the most regressive part. They come to 7 percent of income for the poorest fifth and 1 percent for the top 1 percent, because spending takes a smaller share of income as income rises. Florida is the most regressive, with the poorest fifth paying 13.2 percent of their income and the top 1 percent 2.7 percent. Six of the ten most regressive states have no broad income tax.

The institute’s income measure is its own, and so are its assumptions about incidence, meaning who in the end bears each tax. It says its analysis reaches broadly similar conclusions to official incidence studies by state agencies in Minnesota, Texas, Connecticut and Maine.

Abroad, the United States is a low-tax country that leans on the income tax. The Organisation for Economic Co-operation and Development (OECD) published Revenue Statistics 2025. It put total American tax revenue at 25.6 percent of gross domestic product in 2024, against an OECD average of 34.1 percent. That ranked the United States 31st of 38 members.

Compared with the OECD average, the United States takes a larger share of its revenue from taxes on personal income: 40.0 percent against 23.7 percent in 2023. It takes none from a value-added tax, which brings in 20.5 percent on average.

The trend

The top 1 percent’s share of federal income tax rose from 33.2 percent in 2001 to 38.4 percent in 2023. It peaked at 45.8 percent in 2021. Their share of reported income rose over the same period from 17.4 to 20.6 percent. The bottom half’s share of the tax fell from 4.9 to 3.3 percent.

The top 1 percent’s average rate in 2023, 26.3 percent, was below the 26.8 percent of 2017, the year before the 2017 tax law took effect. The rising share of tax paid at the top therefore reflects a rising share of income at the top, taxed at a slightly lower rate.

The Internal Revenue Service also published a series for the 400 highest-income returns, for 1992 to 2014. Buffett quoted it in 2011: the 400 paid 29.2 percent of their taxable income in federal income tax in 1992 and 21.5 percent in 2008. By 2014, after the top rate on capital gains rose in 2013, their rate was back up to 28.1 percent.

The verdict: what the evidence shows

It depends what you count as income. On what people report to the Internal Revenue Service (IRS), the top 1 percent paid 26.3 percent in federal income tax in 2023, far above all taxpayers’ 14.1 percent. In the Congressional Budget Office’s count for 2023, which adds payroll, corporate and excise taxes, the highest-income fifth paid 70 percent of all federal taxes.

Measured against an income that includes gains on assets not yet sold, the very top pays far less. The White House economists put the 400 wealthiest families at about 8 percent in federal income tax for 2010 to 2018. That figure does not count the corporate tax on the profits behind those gains.

Counting every tax still does not settle it. From the same IRS-based estimates, one 2025 study put the top 400 at 24 percent of their economic income for 2018 to 2020, below the 30 percent everyone paid. A reworking of those estimates put them at 38 percent, above the 25 percent it found for everyone. The gap comes from definitions, and no dataset can choose between them.

Three common claims, against the evidence

Claim“The top 1 percent pay 40 percent of federal income taxes.”

CloseThe top 1 percent paid 38.4 percent in 2023 and 45.8 percent in 2021, by Internal Revenue Service (IRS) figures. That is the federal income tax alone, about half of federal receipts.

Claim“Billionaires pay a lower tax rate than their secretaries.”

Depends on the measureBuffett said it of himself in 2011: 17.4 percent against 33 to 41 percent in his office. For the top 400, studies of the same IRS records find a lower rate than everyone pays, or a higher one, depending on definitions.

Claim“The 25 richest Americans paid a 3.4 percent tax rate.”

True on its own termsProPublica’s figure, for 2014 to 2018, divides taxes by growth in wealth, not income. Over 2006 to 2018 Bezos paid about 21 percent of his reported income in tax, and 1.1 percent of his wealth growth.

What would change this conclusion

The answer would change with:

• Internal Revenue Service (IRS) figures in which the top 1 percent’s average federal income tax rate fell to the all-taxpayer average or below it

• Administrative data on the wealth and taxes of the 400 wealthiest families, rather than Forbes estimates and a scaling factor, putting their federal income tax at or above 20 percent of an income that includes gains on assets not sold. Yagan’s nominal range is 6.7 to 14.6 percent

• IRS statistics for the top 400 on several published definitions of income and tax, showing their total rate above the national average under every one, or below it under every one

Sources

Internal Revenue Service, Statistics of Income. Individual statistical tables by tax rate and income percentile: Table 4.1 (tax years 2001 to 2023) and Table 4.3 (tax year 2023). Publication 1304, March 2026. Source for the IRS figures by income group: returns, adjusted gross income, income tax, the income floors, average rates and shares of each group, and the capital gains taxed at preferential rates. irs.gov

Internal Revenue Service, Statistics of Income. The 400 Individual Income Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992–2014. December 2016. Source for the series’ years and the 400 returns’ income tax as a share of taxable income in 1992, 2008 and 2014. irs.gov

Internal Revenue Service, Statistics of Income. Individual Income Tax Returns 2014 (Publication 1304), Section 5: Explanation of Terms. Source for what taxable income subtracts from adjusted gross income. irs.gov

Congressional Budget Office (2026). The Distribution of Household Income, 2023. Source for the four federal taxes it allocates to households, the shares of federal taxes paid by the highest-income fifth and the top 1 percent in 1979 and 2023, and the top 1 percent’s share of income before transfers and taxes in those years, with what that income leaves out. cbo.gov

U.S. Treasury, Bureau of the Fiscal Service. Monthly Treasury Statement, receipts by source, fiscal year 2024. Source for individual income taxes of $2,426.1 billion out of total receipts of $4,918.7 billion, and for social insurance and retirement receipts as the next largest source. fiscaldata.treasury.gov

Leiserson, G. and Yagan, D. (2021). “What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans?” White House Council of Economic Advisers, 23 September 2021. Source for the 8.2 percent estimate, its inputs and range, the authors’ stated limits, the Buffett example, the tax rates on wages and capital gains, the note that other official measures largely exclude unrealized gains, and what a realized gain is. bidenwhitehouse.archives.gov

Yagan, D. (2023). “What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans?” Oxford Review of Economic Policy, 39(3): 438–450. Author’s version, April 2023. Source for the 1992 to 2020 estimates and their range, the recomputed 2010 to 2018 rate, and the all-in rate on corporate income. eml.berkeley.edu

Eisinger, J., Ernsthausen, J. and Kiel, P. (2021). “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.” ProPublica, 8 June 2021. Source for the 3.4 percent “true tax rate” of the 25 richest Americans, the figures for Bezos, Buffett and Icahn, the comparison with typical Americans, the pledged shares and credit lines, the wages of the top 25, Icahn’s description as an investor, McCaffery’s phrase, and its description of itself as a nonprofit newsroom. propublica.org

Saez, E. and Zucman, G. (2019). The Triumph of Injustice. W.W. Norton. Figures from the authors’ presentation slides: the top 400’s 23 percent and the 25 to 30 percent for working and middle-class Americans in 2018, all taxes at all levels of government. eml.berkeley.edu

York, E., Watson, G. and McBride, W. (2021). “Latest White House Report Tells Incomplete Story on Average Tax Rates for Wealthy.” Tax Foundation, 24 September 2021. Source for the corporate-tax objection to the CEA estimate, the breakdown of Saez and Zucman’s 23 percent, and the Tax Foundation’s description of itself as a nonprofit working on tax policy. taxfoundation.org

Balkir, A. S., Saez, E., Yagan, D. and Zucman, G. (2025). “How Much Tax Do US Billionaires Pay? Evidence from Administrative Data.” NBER Working Paper 34170, August 2025. Not peer-reviewed. Source for the top 400’s total tax rate of 24 percent of economic income in 2018 to 2020, against 30 percent for the whole population. nber.org

Splinter, D. (2025). “Comment on How Much Tax Do Billionaires Pay?” August 2025. Source for the reworked estimate of 38 percent for the top 400 against 25 percent for everyone, and the adjustments behind it. davidsplinter.com

Buffett, W. E. (2011). “Stop Coddling the Super-Rich.” The New York Times, 14 August 2011. Source for his 2010 tax bill and rate, his office’s rates, the payroll-tax quotations, and the IRS figures for the 400 highest-income returns in 1992 and 2008. nytimes.com

Institute on Taxation and Economic Policy (2024). Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, 7th edition, January 2024. Source for the state and local tax rates by income group (non-senior taxpayers, tax law as of 1 January 2024, 2023 incomes), the state counts and rankings, ITEP’s comparison with state agencies’ studies, and its description of itself as a non-profit tax policy organization. itep.org

Institute on Taxation and Economic Policy (2025). “Why Does Tax Incidence Matter and How Do We Measure It?” The ITEP Guide to State and Local Taxes. Source for what tax incidence means. itep.org

OECD (2025). Revenue Statistics 2025: The United States (country note). Source for the tax-to-GDP ratios and ranking for 2024 and the tax structure for 2023. oecd.org

Cite this article TruthBased.org. “Do the Richest Americans Pay Less Tax Than Everyone Else?” Updated November 2026. https://www.truthbased.org/do-the-richest-americans-pay-less-tax-than-everyone-else