Transcript of The richest people in the county have the smallest effective tax rate
More Perfect Union
0:00Is it right that those making under0:02$184,500,0:05their effective payroll tax rate is0:07roughly 12.4%?0:09>> That's right. The statutory rate is0:116.2%, but consensus view is that the0:13employee pays0:16basically the employer cost is passed on0:18to the employee and so the employee0:20basically faces a rate of 12.4%.0:22>> 12.4 for anybody earning under 184,500.0:26What is the effective payroll tax for0:28someone making a million dollars a year?0:30>> So they would pay the 12.4% on that0:33first $185,000 roughly and then would0:36not pay additional0:38tax on the on labor income above that0:40amount and so that math would work out0:42to about 2.2%.0:45>> Okay, so 12.4% for someone under0:49184,500.0:51A millionaire would be about 2.2.0:54What if you're a billionaire like Trump0:57or Musk, your Social Security tax would0:58be effectively on my understanding?1:01>> Very, very much smaller.1:03>> .00021:04>> Yes.1:05>> That just doesn't make sense to me. I1:08mean the richest people in the country1:10have the smallest effective tax rate.1:13That does not seem to me like a very1:14fair system, especially when we are now1:17six years away from retired workers1:19facing this 24% cut in their Social1:22Security benefits.
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