Biden says he's 'sick and tired' of the wealthiest not paying their fair share in taxes: 'It's time for it to change'

• Biden said Wednesday he was tired of the wealthy and corporations not paying a fair share of taxes.

• Then, White House economists released a report that showed just how little the wealthiest pay.

• America's 400 wealthiest families pay an average of 8.2% in income tax, the report found.

• See more stories on Insider's business page.

President Joe Biden has set his sights on hiking taxes on America's richest families and biggest corporations to offset the cost of ambitious infrastructure spending.

A new White House report provided data to back up his frustrations. A blog post by the economists Greg Leiserson and Danny Yagan said they found that the 400 wealthiest families in America paid about 8.2% in income taxes every year. That's a lot less than the average rate in America, which, according to the Tax Policy Center, was around 14.3% in 2015, The New York Times reported. Leiserson and Yagan said that lower rate was because they looked at income not just from salaries but from assets like stocks that accrue capital gains and are often untaxed.

On Wednesday night, Biden tweeted: "I'm sick and tired of the super-wealthy and giant corporations not paying their fair share in taxes. It's time for it to change."

His tax plans amount to an unwinding of Trump-era tax cuts. Most recently, House Democrats put forward a proposal to fund their infrastructure plans that would tax capital gains. They estimated it would bring in $2.9 trillion. Biden has said that hikes would level the "playing field" but "the superwealthy are still going to be able to have their three homes."

In 2021, the lowest tax bracket in the US - which is for people who earn taxable income between $0 to $9,950 - has a 10% federal income-tax rate. The White House report looked at Americans who earned between $2.1 billion to $160 billion in 2018. It used data from the IRS, the Survey of Consumer Finances, and wealth estimates by Forbes, and found the average rate of 8.2%.

That low rate for the wealthiest Americans is because many of them see a large chunk of their income generated from assets, not salaries - which is generally not the case for the majority of taxpayers. The left-leaning Center on Budget and Policy Priorities found in 2019 that "a critical tax advantage for wealthy households is that much of their income doesn't appear on their annual tax returns because the tax code doesn't consider it 'taxable income.'"

That's because, according to the CBPP report, capital-gains taxes - which tax the sales of assets like stocks - are "effectively voluntary." Your stocks could net a whole lot of money every year, but those gains won't be taxed unless you sell them off. Capital gains are also taxed at a far lower rate than regular income, with a top rate of 20%.

Under the most recent proposal from House Democrats, the capital-gains rate would increase to 25% - far lower than Biden's initial proposal to nearly double the rate to 43.4%. That Biden proposal was meant to bring capital gains more on par with the top income-tax rate of 37%.

The White House methodology is also in line with a different tax proposal on the rich: Sen. Elizabeth Warren's outright wealth tax, which would levy a 2% tax on households with a net worth of $50 million to $1 billion and a 3% tax on those with a net worth beyond $1 billion - that would include any assets racking up gains.

Read the original article on Business Insider