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Economist Steve Allen Responds to Biden’s State of the Union Address

Allen weighs in on the potential impact of Biden's proposed "billionaire's tax," as well as other economic issues highlighted in the address.

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In his State of the Union address on March 7, President Joe Biden put forward a billionaire’s tax that would set a minimum 25% tax for the nation’s 1,000 billionaires, generating an estimated $500 billion in revenue over the next 10 years, according to ABC News. That would double the average inflation-adjusted income tax rate of 12% that the wealthiest 400 families in the U.S. paid over a roughly 30-year period from 1992 to 2020, the story reports.

Wealthy individuals pay a low tax rate in part due to sophisticated workarounds that allow them to shelter their funds, Steve Allen, a professor of economics in the Poole College of Management.

“People with huge amounts of wealth have crack accountants to try to put their money where they’ll get the highest return,” Allen said. “It’s hard to write a law for all the ways of shopping investments to avoid taxes.”

Read more on ABC News.