Challenges in Tax Assessment for Billionaires

Calculating the tax burden for the very wealthy is complex due to the nature of their income sources. While personal income tax rates for typical taxpayers can be easily assessed by summing taxes paid and dividing by income, billionaires often derive much of their wealth from corporate profits rather than direct income. This means that their taxable income reported can be significantly lower than their actual wealth. For example, income that lies within corporations and is not distributed as dividends may never appear on personal tax returns, complicating effective tax rate calculations.