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.