I Asked ChatGPT How Much the Average Millionaire Pays in Taxes — Here’s What It Revealed
Written by
Nicholas Morine
Edited by
Zuri Anderson
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While many Americans might have aspirations of becoming a millionaire, only 3.8 million — or 1.1% of the U.S. population — have managed to meet this wealth marker, per Empower.
And while approximately one out of 100 Americans might have notched that life goal on their belt, the fact is that the U.S. tax system, as a progressive tax system, also levies a higher effective tax rate on these richer citizens.
So, how much are millionaires paying in taxes, exactly? GOBankingRates turned to OpenAI’s latest ChatGPT 5.2 model to get some definitive answers.
A Tale of Two Millionaires: Net Worth Versus Annual Income
As ChatGPT pointed out, there are two ways of categorizing a millionaire: Those who hold assets resulting in a net worth exceeding $1 million, and the somewhat rarer category of those who earn $1 million or more annually. Concerning the latter cohort, Realtor.com suggests that number rests at ~800,000 Americans.
The more common category of those holding long-term wealth to accrue $1 million-plus in net worth was suggested by ChatGPT to have earnings mostly garnered through capital gains on investments. Using a combined calculation of capital gains taxes, net investment income tax (NIIT), and a very broad assumption on state and local taxes pulled from the Institute on Taxation and Economic Policy (ITEP), the AI model suggested that these millionaires enjoy a combined effective tax rate of 26.45%.
The bottom line, per year, is that so-called “long-term capital gains” millionaires submit just over $264,000 in taxes, according to OpenAI’s LLM.
On the other hand, those pulling down a cool $1 million or more in annual income are harder-hit by taxes, per IRS guidelines.
In a much more basic calculation employing only looking at W-2 wage income, ChatGPT predicted that this second sort of hypothetical millionaire would end up paying just over $425,000 in taxes. This is based on raw income taxes of almost exactly $320,000; Social Security Administration taxes of $11,439; Medicare taxes of $21,700, and a the aforementioned loose state/local tax bill of $72,000 (for an effective tax rate of ~42.51%).
State and Local Tax Calculation for a Hypothetical Millionaire, Explained by ChatGPT
Critically reflecting on the model’s projections, the most nebulous factor in these calculations is likely the attempt to corral a correct number when it comes to average state or local income taxes, as ChatGPT underscored.
“A truly ‘average state income tax’ for a millionaire is slippery because: Some states have no broad income tax, some have high top brackets, local income taxes exist in some places, and state/local burdens include sales + property too.
“What we can source cleanly as an average is ITEP’s weighted national average effective state+local tax rate by income group,” it added, proceeding to incorporate those numbers into its estimate.
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