IRS leak shows how little Bezos, Musk, Soros and wealthiest Americans pay in federal income tax
A report published by ProPublica suggests that some of the world's richest individuals are paying a lower rate of federal income tax than working class Americans.
A new report from ProPublica has exposed how little some of the world’s richest individuals have paid in federal tax in recent years, even as their wealth increased to record levels.
The report, based on what the publication describes as “a vast cache of IRS information”, suggests that the richest Americans often pay very little in federal income tax and sometimes nothing at all.
The report reads: “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.”
Who is named in the ProPublica IRS tax report?
The report relates to the tax information of the 25 richest Americans, who “saw their worth rise a collective $401 billion from 2014 to 2018.” This group includes the likes of Jeff Bezos, Elon Musk, Warren Buffett, Carl Icahn, Michael Bloomberg and George Soros.
Bezos, found of Amazon, is currently the world’s richest person but has paid less than 1% tax in what ProPublica termed their ‘true tax rate’. In the last five years he has paid roughly $973 million in taxes on a wealth growth of $99 billion.
Furthermore in 2007, at which point he was still a multi-billionaire, Bezos “did not pay a penny in federal income taxes.”
Similarly, Musk paid no federal income taxes in 2018 despite enjoying a wealth increase that has seen him become the planet’s second-richest person in recent years. Across the five-year period Musk has paid a 3.27% true tax rate on a wealth growth of $13.9 billion.
Buffett is considered one of the most successful investors of all time but the increase in value of his shares and other investments is not typically ‘actualised’ until it is sold, allowing him to pay a tiny proportion of his total wealth in taxes.
Buffett’s true tax rate works out at just 0.1%, equating to just $23.7 million in tax payments on his $24.3 billion wealth growth. Although he is currently ranked as the world’s sixth-richest man, more than 14,000 US taxpayers reported higher income than him in 2015.
How has this information been made public?
It is no secret that the super-rich are able to shield their wealth from the IRS by exploiting loopholes that limit or remove their tax liability. The US emphasises taxing labour income, rather than wealth itself, meaning that value accrued on properties, companies they own, yachts and any other investments are not considered taxable.
However the enormous scale of the tax manipulation detailed in the ProPublica report has shocked many. White House spokesperson Jen Psaki agreed that there needed to be greater measures put in place to “ensure that corporations and individuals at the highest income are paying more of their fair share.”
However she added that the IRS would be investigating the source of the information that the ProPublica report was founded on. She told reporters: “Any unauthorized disclosure of confidential government information by a person with access is illegal, and we take this very seriously.”
The report did not identify the specific source of the information, but confirmed that ProPublica had gone to “considerable lengths to confirm that the information sent to us is accurate.”