Amazon CEO Jeff Bezos, the richest man in the world today, did not pay a single cent in federal income tax in 2007 and 2011; Tesla founder Elon Musk, the second richest man in the world, paid zero income tax in 2018; George Soros, spent three consecutive years without paying income tax; billionaire Karl Aiken also managed to do so for two years; Michael Bloomberg, one of the richest people in the United States and the world, paid an almost zero tax rate of 1.3% in 2018; And perhaps most interesting among them is the oracle from Omaha, Warren Buffett, who has previously commented that the richest like him do not pay enough tax. Buffett paid a 0.1% tax rate between 2014 and 2018, “less than ten cents for every $ 100 he earned in those years,” in which his fortune increased by $ 24.3 billion.
The U.S. tax system was designed as a differential system so that wealthy citizens would pay a larger share of their income than those with less money. Because the 25 richest people in the U.S. pay an almost zero “real tax rate”. It should be noted that this is done legally and in accordance with US tax planning rules.
The investigation, published last night, is based on a “large database” of IRS data, which was leaked to the body of journalists without “conditions or conclusions,” they said. Pro-Republicans said they verified the data in the documents against publicly available information, such as legal documents and disclosures to regulators, as well as checking the information with the people whose tax details were disclosed.
The findings come at a critical time in the U.S. where there is a public debate about wealth and fairness in the U.S. tax system. Before the epidemic, the tax and job cuts law lowered the tax rate for the rich and wealthy and created a dynamic that led to an acceleration in the growth of wealth disparities in America. President Biden called for taxes to be raised on the rich in order to share some of their capital with poor and middle-class families.
Focus on the “real tax rate”
Pro-republics focus on what they call the “real tax rate” – the tax that the richest Americans paid each year compared to the estimated growth in their capital at the time. The real tax rate paid by the middle class, on the other hand, is much higher because they accumulate less capital, the Republic claimed. Middle-class people also do not have the option to reduce taxes like the rich through techniques like losing investments or deleting.
An amazing statistic that emerges from the investigation relates to the money Bezos received for his children from the state. In 2011, Amazon’s CEO reported losing money because his investments were larger than his own income. That same year, a U.S. child benefit tax, designed to provide middle-class families with childcare support, gave each child $ 1,000, as long as my son’s income The couple, after adjustments, did not exceed $ 110,000.
Bezos’ adjusted income in 2011 was so low that he received $ 4,000 from the state in tax benefits for his four children. The value of Bezos’ fortune that year reached $ 18 billion.
Overall, between 2006 and 2018, Bezos paid $ 1.4 billion in federal personal taxes for the $ 6.5 billion it reported in revenue. This is while his wealth increased by $ 127 billion during that period. According to a Republican calculation, this reflects a “real tax” rate of 1.1%.
$ 13.6 million out of $ 1.1 trillion
Bezos is not alone in its very low tax rate. From an analysis of Forbes data, Republica found that between 2014 and 2018, the 25 richest people in the U.S. saw their fortune increase by $ 401 billion to a combined value of $ 1.1 trillion, but paid only $ 13.6 billion in federal income tax. Reality of 3.4%, wrote in the Pro-Republic.
By comparison, in those years, Warren Buffett paid $ 23.7 million and reported reported revenue of $ 125 million. This is while his fortune grew by $ 24.3 billion. That means the favorite Oracle from Omaha paid 0.1% “real tax.”
Alon Musk paid $ 455 million in those years for reported revenue of $ 1.52 billion while his capital increased by $ 14 billion, a figure that reflects a real rate of 3.27% “real tax”.
Michael Bloomberg, who tried his luck and used his fortune unsuccessfully about a year ago when he tried to run for the US presidency, predicted revenue of $ 10 billion in 2018-2014, 44.5% of the capital he made, but due to creative tax planning he eventually paid only 1.3% tax .
“Big Tax Story of the Year”
“It looks like the big tax story of the year, if not of the decade,” University of California economist Berkeley Gabriel Zuckman wrote on Twitter about the article. “From public data it has always been clear that the richest billionaires do not pay a lot of tax … but even I am surprised at how low their effective tax rate is really.”
Zuckman, the economist behind Democratic Sen. Elizabeth Warren’s tax bill, is known for an analysis of the U.S. tax system that found that the 400 richest Americans pay a total tax of about 23 percent – or less than the bottom half of U.S. households, who pay a total tax rate Of 24%.
On the other hand, some U.S. tax experts say that ProPublica’s analysis is misleading and confuses different concepts: income versus capital. The amount of taxes on unrealized gains or the “on paper” value of assets of one person or another.
Under Biden’s plan, the high tax rate will rise to 39.6% for people earning more than $ 400,000 a year in taxable income – less than 2% of U.S. households by estimates. The president is proposing to nearly double the tax rate on high-wage Americans Will pay for profits from the sale of shares and other investments.In addition, as part of his bids, inherited capital will no longer be tax-exempt.
Publicica’s research found that while people earning between $ 2 million and $ 5 million a year pay an average of 27.5% tax – the highest of any taxpayer group – when focusing on a group earning over $ 5 million, tax rates can be seen to fall. Thus, the 0.001% of the top taxpayers – about 1,400 people who reported income of over $ 69 million – paid a tax rate of 23%. The 25 richest people paid even less.
The IRS is investigating the leak
U.S. Attorney General Charles Retig said the IRS is investigating the information leak to the public.
“I can confirm the existence of an investigation into allegations that the source of the information in this article came from the IRS,” Ratig said at the start of a Senate Finance Committee hearing on the U.S. IRS budget. “After reading the article, calls were made to the right people. As you would expect and the investigators will investigate. “
At the heart of these discussions are questions about the fairness of the U.S. tax system. Most employees who receive a salary or hourly wage do not have access to the type of tax evasion and techniques that state rich people employ to lower their tax burden, for example.
Wealthy Americans have a variety of tax evasion techniques, a Pro-Republic study reported. These techniques are legal, but the research raises questions about their fairness.