What is the average federal individual income tax rate on the wealthiest Americans?

This article estimates the average federal individual income tax rate paid by the 400 wealthiest American families using a comprehensive measure of Haig–Simons income, which includes changes in wealth plus individual taxes, from 1992 to 2020. Utilizing publicly available data from the IRS Statistics of Income, the Survey of Consumer Finances, and Forbes magazine, the study finds a baseline average federal individual income tax rate of 9.6 percent nominal and 12.0 percent inflation-adjusted on this income measure. The analysis accounts for the fact that unrealized capital gains—appreciation in assets not yet sold—constitute a significant portion of income for the ultra-wealthy and are typically untaxed until realization or death. Sensitivity tests varying assumptions and including state, local, foreign taxes, and charitable deductions yield tax rate estimates ranging roughly from 6.7 to 17.9 percent nominal. The paper highlights limitations due to data constraints and excludes corporate, estate, and other taxes, noting that combining individual and corporate tax rates would yield higher effective tax rates on wealth.