The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax

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https://www.propublica.org/article/...ds-reveal-how-the-wealthiest-avoid-income-tax

ProPublica has obtained a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing.

by Jesse Eisinger, Jeff Ernsthausen and Paul Kiel

June 8, 5 a.m. EDT
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"Many of the ultra wealthy pay NO income taxes for entire years - Soros three times, Bezos and Icahn twice, Musk and Bloomberg once. Bezos one year even claimed a S4000 child credit."


"As a percentage of their gains in wealth, Buffett has paid 0.1% (10 cents on every S100), Bezos 1.1%, Bloomberg 1.3%, the 25 richest as a group just 3.4%. Even on just their income, the richest pay less than 16%, far below the 37% top rate."


"The 25 richest Americans are collectively worth $1.1 trillion. It takes 14.3 million average wage earners to tally the same weatth. The average eamer group paid literally 70 times as much in income taxes in 2018 as the 25."


What a country! I wonder how ours stacks in comparison?
 
And how much tax in absolute terms have these people paid?

And you do realise that the net worth of these people is largely determined by the values of the companies they own and they cannot realise that value without being taxed?
 
To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.

We’re going to call this their true tax rate.

The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. 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%.

It’s a completely different picture for middle-class Americans, for example, wage earners in their early 40s who have amassed a typical amount of wealth for people their age. From 2014 to 2018, such households saw their net worth expand by about $65,000 after taxes on average, mostly due to the rise in value of their homes. But because the vast bulk of their earnings were salaries, their tax bills were almost as much, nearly $62,000, over that five-year period.
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...But their wealth grew in the main due to the indicative value of their stock holdings growing? I don't get how representing that as a 'true tax rate', then comparing that as a %age to mr average's tax bill is valid.
 
This is some of the laziest journalism I've ever seen. If you own shares and they increase in value, your not going to be taxed on that increase until you sell the shares. This applies to everyone, not just the rich.
 
Tom_ed1987 said:
...But their wealth grew in the main due to the indicative value of their stock holdings growing? I don't get how representing that as a 'true tax rate', then comparing that as a %age to mr average's tax bill is valid.
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I admit I overlooked that part.
 
Quartz said:
And how much tax in absolute terms have these people paid?
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That's irrelevant.

To illustrate why, here's an example.

£200M is distributed as follows:

1 person gets £100M and pays 1% tax - the country gets £1M tax revenue from that £100M.
2000 people get £50K each (£100M total) and pay 20% tax - the country gets £20M tax revenue from that £100M.

The one person is paying a lot more tax in absolute terms (£1M) than each of the 2000 people (£10K each) but the country is getting a lot more tax per £100M from them (£20M) than from the one person (£1M)

And you do realise that the net worth of these people is largely determined by the values of the companies they own and they cannot realise that value without being taxed?
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Very relevant. Generally, taxes are on income rather than assets and there are very good reasons for that.

I've no doubt that most wealthy people dodge paying tax in various ways, usually by hiring an expert or experts to do it for them. I think that the distribution of wealth is too extreme, with too large a percentage of wealth in the hands of too small a number of people. But comparing income tax payments as this article does is very misleading.
 
1. I'm wealthy.
2. I should employ really good tax experts, lawyers, and other professionals to help me retain as much of my wealth as I can, certainly from a legal point of view and subvjectively from an ethical point of view unless I'm a total ass clown.
3. ????
4. PROFIT!!!
 
Isn't the point that even the super rich should stump up the same percentage of tax to income as the rest of us? Equating 1% of one persons income to 20% of 2000 just shows how much the country loses out on tax evasion. Why not allow the 2000 to pay 1% while the super rich pay 20%, it's a win win for the common man and the taxman.
 
eddiemcgarrigle said:
Isn't the point that even the super rich should stump up the same percentage of tax to income as the rest of us? Equating 1% of one persons income to 20% of 2000 just shows how much the country loses out on tax evasion. Why not allow the 2000 to pay 1% while the super rich pay 20%, it's a win win for the common man and the taxman.
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There are tax people losing their mind over your misuse of the word 'evasion'. Well, actually they're probably not; more shaking their head.
 
I'm not sure what's worse, the poor understanding of tax law by the publishers of the article, or the fact that people like the op fall for this nonsense.
 
What a garbage article

It's always the same when communists bash rich people. They somehow don't grasp the difference between "asset rich" and "cash rich"

The former is nice, but you can't do anything with it unless you turn it into the latter. At which point you get taxed.

Their heads would explode if they saw the "true tax" % of these people in the years where their assets actually went down in value! :cry: :rolleyes:
 
Dolph said:
I'm not sure what's worse, the poor understanding of tax law by the publishers of the article, or the fact that people like the op fall for this nonsense.
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Question: How come Bezos paid no federal income tax in 2007? Legal loophole?
 
If you're rich enough, you don't need to pay tax like regular people because your income is derived from sources that aren't taxed in the usual way; they are taxed, but via a different process which attracts a lower rate. This is not exactly news.
 
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