A collection of the world’s wealthiest individuals – including billionaires Jeff Bezos, Elon Musk, Warren Buffett, Michael Bloomberg, George Soros, and Carl Icahn – exploited tax loopholes and paid no federal incomes taxes in certain years, according to a jaw-dropping report in ProPublica, which obtained a “vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people.”
Bezos, the world’s richest man, paid nothing to the feds in 2007 or 2011. In fact, Bezos received a $4,000 tax credit in 2011. Musk avoided a federal tax bill in 2018. Soros paid nothing for three consecutive years. Buffett, who’s presented himself as a champion of philanthropy and tax reform, paid just $23.7 million in federal taxes during a period in which his net worth expanded by $24.3 billion. That’s a “true tax rate” of just .1%.
ProPublica examined 2014-2018 in close detail. They found that the 25 billionaires they probed expanded their collective wealth by $401 billion in that four year period. Yet, they paid just 3.4% of that – $13.6 billion – to federal coffers. That falls dramatically short of the 37% tax burden imposed on the nation’s top earners. It’s also significantly less than the percentage paid by most middle-class Americans.
ProPublica concludes:
Taken together, [the IRS data] demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.
ProPublica explains that they do not know who leaked them the IRS records, but they have authenticated their validity.
“Every person whose tax information is described in this story was asked to comment,” ProPublica said, and those who responded “all said they had paid the taxes they owed.”
The revelations come as the U.S. is considering a revamp of its tax code. From a ProPublica Editor’s Note:
Our publication of this tax data comes at a possibly pivotal moment in America’s long, often contentious debate about the fairness of our tax system. The Biden administration has proposed raising a number of taxes to pay for additional trillions of dollars in government spending. So far, the conversation in Washington has been dominated by an issue long seen as central on Capitol Hill: whether to increase the top tax rate from its current level of 37% by a few percentage points. Such a change, as our story shows, would touch the richest hardly at all.
The secret tax files offer new, factual evidence for lawmakers considering such changes: Should the biggest winners in America’s epochal concentration of wealth over the last 40 years be permitted to pay levies of considerably less than 37%?
As America’s wealthiest have perfected accounting techniques that save them billions, calls for a wealth tax have increased. Sen. Elizabeth Warren (D-MA) campaigned on the idea during her 2020 presidential bid. Currently, an increase in personal wealth is taxed only if it’s “realized.” That is, – an increase in the value of an asset, like a stock or a company, is only taxed when that asset is sold. So Americans can sit on their accumulated gains, tax free, until they unload them.
“Our tax system is rigged for billionaires who don’t make their fortunes through income, like working families do. The evidence is abundantly clear: it is time for a #WealthTax in America to make the ultra-rich finally pay their fair share,” tweeted Warren after the release of the report.
ProPublica said they’re going to release a series of articles based on the IRS data.
