Tax Day 2024 finds the highest-income individuals, most profitable corporations, richest families and wealthiest investors all paying lower tax rates than they paid last century.
A steady reduction over the past 50 years in the tax obligations of those best able to pay has worsened economic inequality, harmed public services and driven up public debt. Creating a fairer tax system in the future begins by looking to the fairer tax system of the past. These are some of the findings of a new report released on Tax Day, April 15, by Americans for Tax Fairness.
We determined through original research that individuals with incomes over $1 million paid an average tax rate between 40-60 percent in the 35 years after World War II (1945-80), while the rate these days is only about half that, or 26 percent. But that’s just part of a larger trend, one that allows huge corporations and billionaires to go tax-free for years on end.
The average corporate tax rate in 2021 was less than 10 percent; while in the 1950s, ‘60s and ‘70s it averaged about 35 percent. Corporate dividends were taxed at the same rate as wages until the early part of this century, when the rate was cut nearly in half.
The estate tax has in recent years been rendered ineffective at curbing family economic dynasties, as families that used to pay taxes on income they passed down to the next generation can now hand over $27 million (and rising each year) tax-free, along with sheltering billions more in special trusts.
