Forbes: Why Is The Effective Tax Rate Of High-Income Taxpayers So Low? (September 29, 2020)

Forbes has published an article, “Why Is The Effective Tax Rate Of High-Income Taxpayers So Low,” which discusses how tax benefits have provided favorable treatment to high-income taxpayers. The article begins as follows:

Our first glimpse of individual income tax returns affected by the Tax Cuts and Jobs Act indicates that the 2017 tax law seems to have benefited higher-income taxpayers the most and, as in prior years, the income tax is not progressive at the high end.

By far the biggest contributor to reducing the taxable income of the highest incomes is capital gains, a large portion of which is taxed at preferential rates. Charitable contribution deductions, qualified dividends (taxed at capital gains rates), and the deduction for state and local taxes also disproportionately benefit the over-$5 million folks compared with the rest of the population.

Click here to see full article: “Why Is The Effective Tax Rate Of High-Income Taxpayers So Low?”

Posted by Elise Kim, Managing Associate Editor, Wealth Strategies Journal.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s