The Myth of “Tax Cuts for Billionaires”
10th April 2025
The US income tax system is still a progressive tax system, where those with the most income pay not only the most taxes but also the highest tax rates.
I went to the IRS website (You can Google IRS TAX STATS) and found the breakdowns for income taxes paid for several years. Let’s look at 2020, Trump’s last full year in office…
The richest Americans — those with incomes over 2 million dollars in 2020 — paid an effective tax rate of 26.68%.
The middle class — those with incomes between 75,000 and 200,000 dollars — paid an effective tax rate of 10.12%.
The poorest — those with incomes less than 25,000 dollars — paid an effective rate of 1.04%.
How does this compare to, say, Obama’s last year? Let’s look at 2016…
The poorest Americans paid an effective tax rate of 1.7%. Between 2016 & 2020, their effective tax rate went down by almost half, from 1.7% to 1%.
The middle class paid an effective rate of 11.69% in 2016. Their taxes also went down, but not nearly by almost half. They went from an effective tax rate of 11.69% in 2016 to 10.01% in 2020.
And the richest? They got a break too. But a tiny one. Their effective tax rate went from a rate of 27.0% to 26.67%.
It is a fact (whether you like it or not) that those who pay most of the taxes will benefit most from tax relief.
If I am paid $1,000,000 a year and pay tax at a 20% rate, I will owe $2oo,00 in tax. If my tax rate is changed to 19%, I’ll get to keep $10,000 more of my own money.
If you are paid $50,000 and pay tax at a 10% rate, you will owe $5,000 in tax. If your tax rate is changed to 9%, you will get to keep $500 more of your own money.
This is the hard truth of plain mathematics that proglodytes can’t stand.