A single adult without kids making $18,000 would have paid more.
On Sunday night, the New York Times revealed that it had obtained Donald Trump’s tax returns, and revealed that the president (whose net worth Forbes estimates at $2.5 billion) claimed to owe only $750 in federal income taxes in both 2016 and 2017.
Obviously, the federal income tax is a tax on income, not wealth, but still — it seems odd that someone that rich would have only a $750 income tax burden. Mark Mazur, the director of the Tax Policy Center (America’s leading nonpartisan tax think tank) and a former assistant secretary for tax policy at the Treasury Department, told me that according to TPC’s models, about half of American tax units* paid more than $750 in federal income taxes in 2016 and 2017.
The $750 number was especially striking to me given that I’ve done a little bit of volunteer tax preparation for low- and middle-income people, and prepared more than a few returns with a net amount owed higher than $750. So I knew that you didn’t necessarily need to make a lot of money to have an income tax burden that high — and I was curious exactly how much you had to make in 2017 to pay as much in taxes as Trump.
Taxes in the US depend heavily on your family structure, so I modeled three scenarios: a married couple with two kids; a single parent with two kids; and a single adult with no kids. I assumed that each tax unit took the standard deduction, rather than deducting mortgage interest, charitable donations, and other deductions, as this is the best practice for most middle-class people.
I further assumed that families took advantage of the child tax credit and earned income tax credit where possible. I also double-checked each result with TAXSIM, a computer program from the National Bureau of Economic Research that replicates the federal tax code for every year from 1960 to 2023.
Here’s what I found:
Married couple, two kids
A married couple with two children would have had to earn $53,450 or more in 2017 to pay $750 or more in federal income taxes that year.
The married couple standard deduction was $12,700, and each of the household’s four members would have received a $4,050 personal exemption, so the couple’s taxable income was $24,550. That puts them in the 15 percent tax bracket, with a tax liability of $2,750. They wouldn’t qualify for the EITC, which was only available to households with 2 kids making under $45,007. But they would qualify for the child tax credit of $1,000 for each child, resulting in a net tax liability of $750.
Single parent, two kids
The single parent situation is trickier, because a single father or mother at the break-even point with Trump would receive a small EITC. But assuming the single parent files as a head of household, she would have needed to earn $44,706 or more in 2017 to pay $750 or more in federal income taxes that year.
The head of household standard deduction (reserved for single adults with a “qualifying person” like a child or parent whom they take care of) was $9,350, and the single parent would get three $4,050 personal exemptions, one for herself and each of her kids. That puts her taxable income at $23,206, in the 15 percent bracket, for a tax burden before credits of $2,813. Her EITC would be $63, and she would get $1,000 each in child tax credit benefits from her children, for a final burden of $750.
Single adult, no kids
A single adult with no children would have had to earn $17,900 or more in 2017 to pay $750 or more in federal income taxes that year.
This is the simplest calculation, as there are no applicable tax credits at all (I’m assuming here the taxpayer did not have higher education expenses that would qualify for an American Opportunity or Lifelong Learning credit). The single adult standard deduction was $6,350, and the taxpayer would’ve gotten a single personal exemption of $4,050, for a taxable income of $7,500. That’s still in the first, 10 percent tax bracket, for a tax burden of $750. The EITC was only available to childless people with incomes below $15,010 in 2017, so this taxpayer wouldn’t have been eligible.
Tl;dr: You don’t have to make a whole lot of money to pay more in taxes than Donald Trump
That’s a lot of math, but the basic takeaway is this: $750 is not a whole lot of money to pay in federal income taxes. It’s more than many people pay, because the US has a highly progressive income tax that largely exempts the bottom half (42.9 percent, to be exact) of the income distribution. It’s normal for low-income, working-class people to pay $750 or less.
But it’s highly unusual for someone like Trump — who has a college degree, has served as a senior executive and investor for years, who has a net worth in the billions or at least hundreds of millions depending on whom you ask — to only pay $750. And given the upward income skew of who actually votes in America, relative to non-voters, it seems highly likely that most people voting on November 3 will have paid more in taxes in 2016 and 2017 than Donald Trump did.
That’s worth keeping in mind for political reasons. People don’t like feeling like they’ve been cheated — and hearing that they paid more in taxes than a billionaire might trigger that feeling.
*A “tax unit” is the Tax Policy Center’s term for “an individual, or a married couple, that files a tax return or would file a tax return if their income were high enough, along with all dependents of that individual or married couple.” As TPC explains, “A tax unit is therefore different than a family or a household in certain situations. For example, a cohabiting couple constitutes one household but if the individuals are not legally married, they would file separate tax returns and thus be considered two tax units.”
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Author: Dylan Matthews
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