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What did this data show? In 2014, the top 400 taxpayers each reported more than $126,833,000 in adjusted gross income. As a group, this small group of taxpayers, representing just 0.0000027% of total filers that year, declared 1.3% of income reported on all US tax returns. In contrast, in 1993, the top 400 taxpayers accounted for only 0.5% of reported income in all returns.
Collectively, these 400 taxpayers reported income of $127.1 billion and paid $29.4 billion in federal income tax, an effective tax rate of 23.1%.
The top 400 taxpayers in 2014 reported $82.8 billion in capital gains, or 10% of the capital gains reported on the 149 million tax returns. They also reported $5.7 billion in income from S-Corp and Partnerships, known as midstream companies, or nearly 5% of total income from this source on all tax returns nationwide.
That Trump suspended the report in 2017 was no surprise, given his determination to cut taxes for wealthy people like himself. Later that year, the President’s tax reform bill reduced the corporate tax rate from 35% to 21%, increasing the value of stocks held by the wealthiest Americans and allowing owners of intermediary companies to exclude 20% of this income from tax.
In short, Trump’s tax bill has been a boon to the nation’s 400 highest-income taxpayers (as well as tens of thousands of their friends further down the rankings).
If Trump hadn’t shut down the report, we could have gotten some clear data on the outsized impacts of these tax cuts on the Top 400 in the report the IRS would have released this year.
But it’s not too late. President Biden can and must restore that relationship. Compiling reported income and taxes paid on 400 tax returns is no big deal, especially considering how important the data could be in the fight to fund public investment priorities.
Exposing what little taxes the wealthiest Americans contribute to the common good could fuel increased public support for raising taxes on those at the top to pay for things like child tax credits, child care expansions , climate change mitigation — and maybe even more resources for the IRS to crack down on wealthy tax cheats.
