President Joe Biden’s Twitter account posted a questionable statistic on Saturday about how much taxes America’s billionaires pay.
“Look, I think you should be able to become a billionaire if you can earn it, but just pay your fair share,” Biden’s tweet read. “I think you should pay a minimum tax of 25%. It’s about basic fairness.”
The tweet included a graphic of a quote from Biden that read: “Do you know the average tax billionaires pay? Three percent. No billionaire should pay less tax than someone who works as a teacher or firefighter.”
But it’s unclear where that 3% came from, and it contradicts figures the White House has released in the past.
In February, the White House released a fact sheet called “Biden’s Economic Plan Is Working,” which calculated how much tax the US could collect if unrealized gains — potential profit on an unsold asset — were counted as income.
“In a normal year, billionaires only pay an 8% tax rate,” the fact sheet reads. Accounting for unrealized gains is the reason for the low statistic.
“Using the current definition of taxable income, the really wealthy pay the average federal income tax rate in the mid-20s,” Howard Glickman, a senior fellow in the Center on Tax Policy at the Brookings Institution, told PolitiFact in July. “If you were to include unrealized gains in your denominator, as the White House does, the average price would drop a lot.”
Another White House number from 2021 gave a number of 8% instead of the 3% that Biden cited recently.
Analysis by economists at OMB and CEA estimates that America’s 400 richest billionaire households paid an average of just 8.2 percent of their income — including income from their largely untaxed wealth — in federal individual income taxes between 2010 and 2018. A lower rate than many average Americans pay,” the 2021 publication reads.
In response, Twitter CEO Elon Musk disputed Biden’s tax claim.
“I paid 53% in taxes on my Tesla stock options (40% federal and 13% state), so I have to raise the average!” South African businessman wrote. “I also paid more income tax than anyone else in the history of Earth in 2021 and will do so again in 2022.”
“I’d be curious to hear how these other ‘billionaires’ are so good at avoiding taxes!” Musk added in another tweet, after asking Twitter’s Community Notes feature to validate the statement.
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