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Billionaires Pay Lower Effective Tax Rates Than Average Americans, New Data Show

BLACKPRESSUSA NEWSWIRE — A new study by the National Bureau of Economic Research (NBER) reveals that America’s wealthiest billionaires pay a lower share of their income in taxes than most workers and even less than the national average.

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By Stacy M. Brown
Black Press USA Senior National Correspondent

A new study by the National Bureau of Economic Research (NBER) reveals that America’s wealthiest billionaires pay a lower share of their income in taxes than most workers and even less than the national average.

The analysis, conducted by economists Akcan S. Balkir, Emmanuel Saez, Danny Yagan, and Gabriel Zucman, used administrative data from 2010 through 2020, matching Forbes’ list of the 400 richest Americans with individual, business, estate, and gift tax returns. It found that the top 0.0002 percent of households—roughly the “Forbes 400”—paid an average total effective tax rate of 24 percent from 2018 to 2020. That compares with 30 percent for the overall U.S. population and 45 percent for top labor income earners. The authors define the effective rate as all taxes paid relative to “economic income,” which includes labor income, business profits, and capital gains. The report concludes that billionaires “appear less taxed than the average American” when all sources of wealth are considered.

Why the Wealthiest Pay Less

The findings point to structural features of the U.S. tax code. C-corporations owned by billionaires distribute relatively little in dividends, which minimizes individual income tax unless the stock is sold. Passthrough businesses—such as partnerships and S corporations—often report negative taxable income despite high profits, further limiting tax bills.

The researchers found that between 2010 and 2017, billionaires’ effective tax rates averaged about 30 percent, but that fell to 24 percent in the years after Donald Trump’s Tax Cuts and Jobs Act of 2017. The law slashed the federal corporate rate from 35 percent to 21 percent and expanded provisions like full expensing of investment, allowing companies to reduce taxable income even with high book profits.

Estate and gift taxes also make little difference. Decedents in the Forbes 400 paid just 0.8 percent of their wealth in estate tax when married and 7 percent when single. Annual charitable giving by the group equaled 0.6 percent of wealth and 11 percent of economic income in 2018–2020.

The Corporate Tax’s Outsized Role

Corporate taxes remain a major source of government revenue from billionaires. About 9 percentage points of the top 400’s 23.8 percent effective rate comes from corporate tax. By contrast, their individual income taxes amounted to just 11 percent of economic income. When measured against wealth instead of income, the richest Americans paid only 1.3 percent of their holdings in taxes annually in 2018–2020—down from 2.7 percent in 2010–2013.

International Comparisons

The United States is not alone in seeing ultra-rich households taxed at lower rates. Similar studies show billionaires in the Netherlands pay less than 20 percent of economic income, while in France, the top 0.0002 percent paid 26 percent in 2016. Still, U.S. billionaires’ individual income tax rates—about 11 percent of economic income—are higher than those in parts of Europe, where personal holding companies allow greater avoidance.

The researchers caution that the effective rate at the very top is heavily dependent on how economic income is defined, but across multiple approaches, the results remain consistent: the richest households are taxed at lower rates than most Americans. “Ultra-high-net-worth individuals appear less taxed than the average American,” the authors wrote.

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State of Preschool Yearbook Provides an Annual Snapshot of State-Funded Preschool 

By National Institute for Early Education Research Georgia’s state-funded pre-k program for 4-year-olds was recognized as the largest state-funded preschool program in the nation to meet all 10 quality benchmarks, and the first universal program to do so. Georgia’s recognition is the top finding in the National Institute for Early Education Research’s new 2025 State of Preschool Yearbook. The yearbook provides an annual snapshot of state-funded preschool across the country. Forty-four states and the District of Columbia fund preschool programs. “Georgia is proud to be a leader in quality early childhood education as we work to ensure all Georgians have the opportunity to succeed, including our youngest learners,” said Georgia Governor Brian P. Kemp. “Having strategically invested in our Pre-K classrooms, we are both meeting all 10 NIEER benchmarks of excellence and giving Georgia students a […]

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By National Institute for Early Education Research

Georgia’s state-funded pre-k program for 4-year-olds was recognized as the largest state-funded preschool program in the nation to meet all 10 quality benchmarks, and the first universal program to do so. Georgia’s recognition is the top finding in the National Institute for Early Education Research’s new 2025 State of Preschool Yearbook. The yearbook provides an annual snapshot of state-funded preschool across the country. Forty-four states and the District of Columbia fund preschool programs.

“Georgia is proud to be a leader in quality early childhood education as we work to ensure all Georgians have the opportunity to succeed, including our youngest learners,” said Georgia Governor Brian P. Kemp. “Having strategically invested in our Pre-K classrooms, we are both meeting all 10 NIEER benchmarks of excellence and giving Georgia students a strong start on the path of lifelong learning.”

Only five additional states meet all 10 of NIEER’s research-based benchmarks for quality —Alabama, Hawaii, Michigan, Mississippi, and Rhode Island—in this year’s report. None of those programs has the reach of Georgia Pre-K. NIEER’s benchmarks measure essential preschool quality indicators, including teacher qualifications, class sizes, early learning standards, and program assessments.

“Other states should take note: Georgia proves that state-funded preschool with well-qualified teachers, pay parity with K-12, small classes, and strong continuous improvement systems can be scaled as a universal program,” said NIEER director Steve Barnett. “With new initiatives to support quality, Georgia can expect increased enrollment, but leaders should also actively promote increased enrollment.”

Nationally, state support for preschool education hit record highs in enrollment and funding in 2024-2025. The pace of growth slowed, however, compared to the prior year, and many states continue to lag behind pre-pandemic enrollment levels.

Preschool enrollment increased by 44,000 children nationally, reaching almost 1.8 million, including 37% of U.S. four-year-olds and 9% of three-year-olds. California, Colorado, Michigan, Minnesota, and Missouri contributed the most to increased enrollment, adding more than 52,000 new seats.

States spent nearly $14.4 billion on preschool in 2024-2025. Including federal and local dollars, total spending was almost $17.7 billion. Three states each spent more than $1 billion last year: California ($4.1 billion), New Jersey ($1.2 billion), and New York ($1 billion). Together, these three states account for45% of all state preschool spending. Texas adds almost another $1 billion.

Spending increased by $434 million, or 3%, adjusted for inflation. Twenty-eight states increased preschool funding, including Michigan and New Jersey, which each added more than $100 million.

“Not only does preschool access vary by which state a child happens to live in, but so does the quality of that preschool experience,” said Allison Friedman-Krauss, lead author of the report. “Only high-quality early care and education programs support children’s development enough to result in lasting academic and other gains that ultimately deliver savings for taxpayers.”

A record six states met all 10 of NIEER’s recommended quality standards, with Alabama doing so for the 20th consecutive year.

Georgia joined this list this year after improving its teacher-to-child ratio from 1:11 to 1:10 and lowering maximum class sizes to 20. Several states met 9 of 10 benchmarks, including New Mexico, which is working toward universal access for both three- and four-year-olds. Once New Mexico requires all lead teachers to have a bachelor’s degree in early childhood education, it will be on par with Georgia in terms of both quality and quantity.

Not all states moved forward. Twenty states enrolled fewer preschoolers in 2024-2025 than the prior year, with enrollment dropping by more than 1,000 children in Arizona, Florida, NewYork, Ohio, Oklahoma, and Wisconsin. Seventeen states spent less on preschool than the prior year, adjusted for inflation, with Arizona, North Carolina, Oregon, and Texas seeing the largest percentage declines.

Additional information about the State of Preschool Yearbook, including individual state profiles and maps, graphs, and state rankings, can be found at www.nieer.org.

The 2025 State of Preschool Yearbook was supported with funding from the Heising-Simons Foundation and the Gates Foundation.

The National Institute for Early Education Research at theRutgers Graduate School of Education, New Brunswick, NJ, supports early childhood education policy and practice through independent, objective research and the translation of research to policy and practice

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Which features on the 2026 Volkswagen Golf GTI Autobahn are actually worth having?

Ask Roosevelt right now on AutoNetwork and get an instant answer based on my review. #AskRoosevelt #AutoNetwork #VolkswagenGolfGTI #GTIAutobahn

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Ask Roosevelt right now on AutoNetwork and get an instant answer based on my review.
#AskRoosevelt #AutoNetwork #VolkswagenGolfGTI #GTIAutobahn

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Panoramic Roof & Rear Seats: The Ultimate EV Comfort! #shorts

Seeking a compact EV with quiet luxury and ample rear seat comfort? This GT trim presents a compelling option, often a deciding factor for small SUV buyers. #AutoNetwork #CompactEV #ElectricSUV #RearSeatComfort #GTTrim

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Seeking a compact EV with quiet luxury and ample rear seat comfort? This GT trim presents a compelling option, often a deciding factor for small SUV buyers. #AutoNetwork #CompactEV #ElectricSUV #RearSeatComfort #GTTrim

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