In a Thursday interview on CNBC show Mad Money with Jim Kramer, Sen. Elizabeth Warren came out swinging against billionaires, saying:
“You know that top one-tenth of 1 percent this year, taxes all in, they’re gonna pay about 3.2 percent of their total worth in taxes to help keep everything running around here. You know what the 99 percent is gonna pay this year? They’re gonna pay about 7.2 percent of their wealth. That’s more than twice as much.”
But Elizabeth Warren’s numbers are very misleading.
According to the available IRS tax data, the very richest people in America–– the top 0.001 percent–– have consistently paid an average federal tax rate of 23.93% over the last ten years. And all Americans making $2 million or more in annual income pay an average effective tax rate of 27%. So what Sen. Warren said simply isn’t true.
Why the smaller percentage for the very richest Americans?
Because more of their income is dividends from capital gains, which is taxed at 20 percent. Warren might argue that it’s unfair for billionaires to pay a lower tax on their capital gains than high-income earners pay on their salaries, but the income from capital gains is money that was already taxed once at the corporate level.
Elizabeth Warren: Billionaires Are Freeloaders
“I want these billionaires to stop being freeloaders. I want them to pick up their fair share. That’s how we make a system that works not just for the rich and the powerful but works for all of us.”
This characterization that Elizabeth Warren made of billionaires as freeloaders is wrong too.