ChatGPT Suggests That Taxing the Rich Fully According to Their Bracket Would Be Fairer and Have Many Benefits for the Country

     According to articles in GO Banking Rates by Andrew Lisa and Laura Beck, when asked, ChatGPT confirmed that increasing the effective tax burden for the wealthy, which simply means making them pay the percentage in their tax bracket rather than investing instead to get that lowered down to capital gains rates (20% max) and dividend rates (15%). 

     According to Chat GPT:

“Despite progressive tax brackets, effective tax rates (what people actually pay after deductions) show that the wealthiest often pay less than their tax bracket — especially if their income comes from investments taxed at lower rates (e.g., capital gains, dividends, carried interest).”

     The poor simply do not have the option to legally avoid taxes by storing their excess income in a different format. You have to have the disposable income to get those tax reduction benefits. The wealthy are supposed to pay more, but often end up paying less. Add in that many wealthy individuals also do not even file taxes with the IRS as required, which is another way they are stealing money from the government! Fewer IRS workers and less emphasis on pursuing these tax cheats in the Trump administration only means more wealthy people will get away with this bold and perverse method of tax evasion.

     Very wealthy individuals utilize the Buy-Borrow-Die strategy, which involves borrowing money against their stock holdings, living off those loans, and then passing their assets to heirs largely tax-free when they die. Basically, work is taxed at a higher rate than wealth is taxed if this strategy is employed. Chat GPT calculated from data gathered by ProPublica that the wealthiest U.S. individuals paid a tax rate of just 3.4% on their wealth growth. If it were taxed as work, they would be paying the 37% marginal rate, so that is a nice fricking discount. Overall, the wealthy end up paying a slightly higher rate, as noted below.

“First, ChatGPT corrected a common misconception I had. Based on actual data from PolitiFact and ProPublica investigations, the 25 wealthiest Americans currently pay an average federal income tax rate of 16% under existing law.”

     The average middle-class American pays an overall tax rate of 15-22%. If the billionaires paid an equivalent overall tax rate of, say, 20% it would raise hundreds of billions ($500 billion to $1 trillion annually) for the U.S. government.  

     Beck’s article summarizes:

“ChatGPT noted that this extra revenue could stabilize the economy by boosting the spending power of everyday Americans.” Basically, reducing inequality in a way that helps everyone, not just those at the bottom.”

“Middle-class families can’t defer taxes on wages or borrow against stocks tax-free,” ChatGPT pointed out. This creates a fundamental unfairness where people who work for their money get taxed immediately, while people whose money grows through investments can delay or even avoid those taxes entirely.”

     The billionaires are not breaking the law. They are simply reaping the benefits available to them by the system and doing so at the expense of all other taxpayers and at the expense of the country.

     If the wealthy paid that 20% rate for all their income, it would mean a massive revenue increase for the federal government ($500 billion to $1 trillion annually). It would result in paying down the national deficit and reducing the debt interest payments over time. The tax code would be fairer:

“With fewer loopholes and income-type preferences (like lower capital gains rates), the tax code would become simpler and more equitable.”

     There could be some economic and behavioral reactions to looking for new loopholes and runarounds. Wealthy individuals could: 1) shift income offshore, 2) increase tax avoidance, 3) reduce investment (if capital gains are taxed higher), and 4) lobby aggressively to reinstate preferential treatment. Tax avoidance is a common practice among the wealthy. I was at a library book sale in the 2010s, and I saw a textbook from Trump University with the title of 'How to Avoid Paying Taxes,' or something similar.   

     ChatGPT closed by summarizing its report with the following word-for-word synopsis.

If the rich paid the same effective rate as the poor:

·        Massive new federal revenue

·        Potential for big public investments or deficit reduction

·        Greater tax fairness

·        Possible economic tradeoffs from investment shifts or tax planning

 

     

 

References:

 

I Asked ChatGPT What Would Happen If the Upper Class Paid Taxes at the Same Rate as the Lower Class — Here’s What it Said. Andrew Lisa. GO Banking Rates. July 24, 2025. I Asked ChatGPT What Would Happen If the Upper Class Paid Taxes at the Same Rate as the Lower Class — Here’s What it Said

I Asked ChatGPT What Would Happen If Billionaires Paid Taxes at the Same Rate as the Middle Class. GOBankingRates. Laura Beck. July 23, 2025. I Asked ChatGPT What Would Happen If Billionaires Paid Taxes at the Same Rate as the Middle Class