What did that data show? In 2014, the top 400 taxpayers each reported more than $126,833,000 in adjusted gross income. As a group, this tiny sliver of taxpayers, representing just .0000027 percent of total filers that year, reported 1.3 percent of income reported on all U.S. tax returns. In contrast, in 1993, the top 400 taxpayers accounted for just 0.5 percent of income reported on all returns.
Collectively, these 400 taxpayers reported $127.1 billion in income and paid $29.4 billion in federal income taxes, an effective tax rate of 23.1 percent.
The top 400 taxpayers in 2014 reported $82.8 billion in capital gains, an astounding 10 percent of the capital gains reported on all 149 million tax returns. They also reported $5.7 billion in income from S-Corp and Partnerships, known as pass-through businesses, almost 5 percent of the total income from this source on all the nation’s tax returns.
That Trump suspended the report in 2017 was hardly a surprise, given his determination to lower taxes on wealthy people like himself. Later that year, the president’s tax reform bill slashed the corporate tax rate from 35 percent to 21 percent, making stocks owned by the wealthiest Americans worth far more and allowing owners of pass-through business to exclude 20 percent of that income from taxation.
In short, the Trump tax bill was a bonanza for the nation’s 400 highest-income taxpayers (as well as tens of thousands of their pals a bit further down in the rankings).
If Trump hadn’t ended the report, we would have been able to get clear data on the outsized impacts of these tax cuts on the Top 400 in the report the IRS would have published this year.
But it is not too late. President Biden can, and should, reinstate this report. Compiling the income reported and taxes paid on 400 tax returns is not a heavy lift, especially when considering how important the data could be in the fight to finance public investment priorities.
Exposing how little in taxes the richest 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, expanded day care, climate change mitigation — and maybe even more resources for the IRS to crack down on wealthy tax cheats.