Trump’s Tax Policies Let D.C. Billionaires Pay Less Than Working Residents

August 26, 2025

The National Bureau of Economic Research (NBER) has revealed that America's 400 wealthiest households paid an average effective tax rate of just 24% between 2018-2020, significantly lower than the 30% paid by the general population and 45% by top wage earners. This reduction stems from President Donald Trump's 2017 Tax Cuts and Jobs Act, which decreased the federal corporate tax rate from 35% to 21% and created new loopholes for the ultra-wealthy. The disparity is particularly evident in Washington D.C., home to numerous billionaires including Jeff Bezos, whose effective tax rate has been reported at approximately 1% despite his $161 billion fortune.

Who is affected

The general American population who pay a higher effective tax rate (30%) than the wealthiest Americans
Top wage earners who pay significantly more (45%) in taxes
Washington D.C. residents, particularly working-class citizens who pay proportionally more in taxes
Billionaires with local D.C. ties, including Jeff Bezos, Jacqueline Mars and relatives, and Carlyle Group co-founders (David Rubenstein, Daniel D'Aniello, and William Conway Jr.)

What action is being taken

President Trump is currently pushing for additional measures that would further exempt billionaires from paying taxes while shifting the burden to ordinary Americans
Wealthy individuals are actively exploiting structural gaps in the tax code, including controlling corporations that distribute minimal dividends and operating passthrough firms that report paper losses

Why it matters

The tax disparities create an unequal burden where average Americans and top wage earners pay proportionally more than the ultra-wealthy
The 2017 Tax Cuts and Jobs Act significantly reduced billionaires' effective tax rates from about 30% (2010-2017) to 24% (2018-2020)
Billionaires now pay only about 1.3% of their wealth annually in taxes
The tax system allows the wealthiest households to report only about one-third of their actual economic income as taxable income
These structural gaps significantly reduce tax revenue from those most able to pay

What's next

No explicit next steps stated in the article

Read full article from source: The Washington Informer