Updates

American Billionaires pay little to no income taxes – including Bezos, Musk And Buffett

Via

News Desk

Updated on July 30, 2021

Comment

See more articles on:

get top stories via email

ProPublica’s new study of more than 15 years of leaked private individual tax data reveals that the richest Americans pay relatively little, if any, federal income tax.

The shocking revelation by the nonprofit investigative journalism group comes as the White House considers fresh measures to combat tax avoidance by the richest people and corporations.

The study exposes the US tax system as income and wealth disparity continue to grow.

While the typical American family earning about $70,000 per year paid 14 percent in federal taxes each year, ProPublica discovered that the 25 wealthiest Americans (according to Forbes) paid a “true tax rate” of only 3.4 percent on asset increase of $401 billion between 2014 and 2018.

ProPublica examined the tax returns of some of America’s richest and most powerful individuals using data from the Internal Revenue Service. It was discovered that Bezos, the creator of Amazon and already a billionaire, did not pay any federal taxes in 2007. He was able to pay no federal taxes again in 2011, when his net worth was $18 billion, and he even got a $4,000 tax credit for his children.

In 2018, Musk made no payments. Bloomberg has had similar experience, as has Soros, who has paid no federal income tax over the last three years. Warren Buffett, a nonagenarian billionaire who is now the fifth wealthiest person in the United States (and the sixth in the world), paid a little, and what he did pay was essentially a rounding error.

Between 2014 and 2018, Amazon founder and CEO Jeff Bezos paid a true tax rate of 0.98 percent while his fortune increased by $99 billion; he reported just $4.22 billion in reported income over the same time.

Once Social Security and Medicare taxes are factored in, the wealthiest 25 Americans pay less in taxes — an average of 15.8 percent of adjusted gross income – than many regular employees, according to ProPublica.

According to a study by the left-leaning organizations Americans for Tax Reform and the Institute for Policy Studies, American billionaires increased their wealth by 55%, or $1.6 trillion, during the pandemic.

ProPublica’s “true tax rate” is a novel and sure-to-be-controversial measure of how much an individual paid in taxes each year compared to Forbes’ calculation of how much their wealth grew during the same time period, implying that ProPublica is counting unrealized capital gains, which are not taxed under current Tax Code.

While the Biden administration is proposing raising the top income tax rate from 37 percent to 39.6 percent for people making over $400,000, ProPublica reports that such changes would have virtually no impact on the wealthiest Americans, many of whom add $400,000 to their wealth in the time it takes a working slob to load H&R Block on their computer. That’s because, among other things, the money made by America’s wealthiest individuals each year—mostly in stock and real estate—isn’t included as income until the assets are sold, which virtually never happens.

ProPublica stated, “The results are stark. “According to Forbes, those 25 people saw their worth rise a collective $401bn from 2014 to 2018.

“They paid a total of $13.6bn in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.”

ProPublica received reams of Internal Revenue Service (IRS) data on the country’s richest individuals, including Warren Buffett, Bill Gates, Rupert Murdoch, and Mark Zuckerberg, from an unknown source.

The Internal Revenue Service (IRS), which is part of the Treasury Department, is the country’s tax-collection agency, and many tax records are classified as confidential papers.

175 billion dollars each year. According to a March study, the wealthiest 1% of taxpayers contribute that much to the tax gap—the difference between federal taxes legally due and those actually collected—every year. According to the study, the wealthiest 1% of taxpayers do not pay taxes on 20% of their earnings. However, ProPublica’s study makes no claims that the billionaires violated the law, and calculates the “true tax” on wealth rather than income, which is a considerably higher figure for the extremely wealthy since unrealized gains aren’t taxed.

According to ProPublica, “America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people.” “Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by US laws as taxable income unless and until the billionaires sell.”

ProPublica compared the tax information it obtained to data from other sources. It said that “in every instance we were able to check – involving tax filings by more than 50 separate people – the details provided to ProPublica matched the information from other sources.”