The rich really are different from you and me: They’re better at dodging the tax man.
Amazon founder Jeff Bezos paid no income tax in 2007 and 2011. Tesla founder Elon Musk’s income tax bill came to zero in 2018. And financier George Soros went three straight years without paying federal income tax, according to a report out Tuesday from the nonprofit investigative journalism organization ProPublica.
“Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most,” ProPublica reported. “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.”
Overall, the richest 25 Americans pay less in tax — 15.8% of adjusted gross income — than many ordinary workers do, once you include taxes for Social Security and Medicare, ProPublica found.
“According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018,” ProPublica said. “They paid a total of $13.6 billion 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%.”
An anonymous source delivered to ProPublica reams of Internal Revenue Service data on the country’s wealthiest people, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg.
ProPublica compared the tax data it received with information available from other sources. It reported 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.’’
Using perfectly legal tax strategies, many of the uber-rich are able to whittle their federal tax bills down to nothing or close to it. Soros went three straight years without paying federal income tax; billionaire investor Carl Icahn, two, ProPublica finds.
The findings are sure to heighten the national debate over the vast and widening inequality between the very wealthiest Americans and everyone else.
ProPublica reports that the tax bills of the rich are especially low when compared with their soaring wealth — the value of their investment portfolios, real estate and other assets.
Read the full report online:
