America’s billionaires have managed to pay minimal federal taxes or even evade them altogether for 15 years, an investigation by the independent news agency ProPublica revealed.
The founder of Amazon and the richest man in the world, Jeff Bezos, did not pay a single penny of income taxes in 2007, when he was already part of the elite of American billionaires. Four years later he repeated the same formula and evaded his fiscal responsibilities.
In 2018, the world’s second-richest person and Tesla founder Elon Musk also paid no taxes. Businessman and politician Michael Bloomberg repeated this pattern in recent years. Billionaire investor Carl Icahn did it twice. While the investor and philanthropist George Soros did not fulfill his fiscal responsibilities three years in a row.
The agency’s journalists had access to a large amount of data from the Internal Revenue Service, which is the federal agency of the United States government in charge of tax collection and compliance with tax laws, which allowed them to analyze the financial life of entrepreneurs such as Warren Buffett, Bill Gates, Rupert Murdoch, and Mark Zuckerberg.
The analysis “destroys the fundamental myth of the US tax system: that everyone pays their fair share and the richest Americans pay more,” they explain from ProPublica. The financial statements of billionaires show that they are capable of meeting their tax obligations, since they represent a small part of their fortunes that grow year after year.
According to the news agency, the average American is forced to pay the federal government a percentage of his income, which increases if his income increases. In recent years, the average American household made about $ 70,000 a year and paid 14% in federal taxes. The highest income tax rate, 37%, went into effect this year for couples with earnings over $ 628,300.
“The confidential tax records obtained by ProPublica show that the ultra-rich are effectively circumventing this system,” they say.
What did you find?
The independent news agency used the data it had access to to compare how much the 25 richest Americans paid in taxes per year with their wealth growth over the same period. “The results are tough,” they state in ProPublica.
Warren Buffett was the biggest tax evader. “That is perhaps surprising, given his public stance as an advocate for higher taxes for the rich.” The Berkshire Hathaway CEO’s wealth increased by $ 24.3 billion between 2014 and 2018, at which time data shows he only paid $ 23.7 million in taxes.
This equates to a 0.1% tax rate, which is less than 10 cents for every $ 100 you added to your wealth.
There is the case of Jeff Bezos, who did not pay taxes in 2007, one of the years when Amazon shares doubled considerably. That year, the businessman reported income of $ 46 million, largely from interest payments and dividends on foreign investments. He was able to offset every penny he earned with parallel investment losses and various deductions, such as interest expense on debts and the vague general category of “other expenses.”
In 2011 his wealth remained stable at $ 18 billion and he filed a statement reporting that he had lost money, his income that year was more than offset by investment losses. What’s more, because according to the tax law, she earned so little that she even claimed and received a $ 4,000 tax credit for her children.
Tax evasion is most surprising when you examine from 2006 to 2018, when Bezos’ wealth increased by $ 127 billion, but he reported $ 6.5 billion in revenue. The 1,400 million tax payment is equivalent to a tax rate of 1.1% on the increase in your fortune, they explain from ProPublica.
Tesla owner Elon Musk followed suit in 2018. With the exception of one year in which he exercised more than $ 1 billion in stock options, his tax bills in no way reflect his wealth.
In 2015, he paid $ 68,000 in federal income taxes. Two years later it was $ 65,000. In 2018 he evaded this responsibility. Between 2014 and 2018 it had a tax rate of 3.27%.
Faced with the investigation, a Soros spokesperson said in a statement: “Between 2016 and 2018 George Soros lost money on his investments, therefore he did not owe federal income taxes in those years. Mr. Soros has long supported higher taxes for wealthy Americans. “
Bezos’ personal and corporate representatives, consulted by ProPublica, declined to receive detailed questions on the matter. The agency attempted to contact Scott through his divorce attorney, a personal representative, and members of his family; she did not answer.
Elon Musk responded to an initial query with a single punctuation mark: “?” After detailed questions were sent to him, he did not respond.
One of the billionaires mentioned in the article objected, arguing that posting personal tax information is a privacy violation.
