A new report from ProPublica reveals how much the richest American billionaires pay in income tax. Warning: It’s going to upset you.
The news organization obtained a “vast cache” of IRS information for the billionaires and found that they manage to pay far, far less proportionally than the average American, often paying nothing at all.
In 2007 and again in 2011, Jeff Bezos–who now officially has too much money for this planet–paid absolutely nothing in income tax. Elon Musk paid nothing in 2018. Warren Buffett, who is a fairly vocal advocate of taxing the wealthy, paid the least of all of them over the period analyzed by the outlet.
Between 2014 and 2018, those 25 billionaires saw their wealth rise by a collective $401 billion. During that same period, those 25 people paid a total $13.6 billion in federal income tax. On its own, $13.6 billion is an astronomical sum, but it equals a tax rate of only 3.6%.
Compare that to a 12% tax rate for people making minimum wage and that’s where the rage kicks in.
According to this report, Elon Musk didn’t pay any federal income taxes in 2018. Neither did Jeff Bezos in 2007. From 2014 to ‘18, the 25 richest Americans got $401 billion richer—but only paid 3.4% of that in federal income taxes.
We need a #WealthTax.https://t.co/z3fu5TQN0A
— Elizabeth Warren (@ewarren) June 8, 2021
Billionaires are able to avoid paying income tax thanks to a huge number of available loopholes, which are then kept in place by politicians who are susceptible to intense lobbying from these same billionaire business-owners.
ProPublica writes that “billionaires have a palette of tax-avoidance options to offset their gains using credits, deductions (which can include charitable donations) or losses to lower or even zero out their tax bills. Some own sports teams that offer such lucrative write-offs that owners often end up paying far lower tax rates than their millionaire players. Others own commercial buildings that steadily rise in value but nevertheless can be used to throw off paper losses that offset income.”
Take Michael Bloomberg, for instance:
In 2018, he reported income of $1.9 billion. When it came to his taxes, Bloomberg managed to slash his bill by using deductions made possible by tax cuts passed during the Trump administration, charitable donations of $968.3 million and credits for having paid foreign taxes. The end result was that he paid $70.7 million in income tax on that almost $2 billion in income. That amounts to just a 3.7% conventional income tax rate. Between 2014 and 2018, Bloomberg had a true tax rate of 1.30%.
(The “true tax rate,” as the organization determined it, is a person’s tax payments not just as a percentage of their earnings, but also taking into account the growth rate of their wealth.)
The problem with billionaires not paying taxes isn’t even primarily that we need the tax revenue; it’s that they use that wealth to manipulate the political system.
— Ken Klippenstein (@kenklippenstein) June 8, 2021
Check out ProPublica’s full breakdown of each of the 25’s tax payments, if you have some anger to spare.
(image: Britta Pedersen-Pool/Getty Images)
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Published: Jun 8, 2021 05:43 pm