Some of the richest men in the world – Jeff Bezos, Elon Musk, Warren Buffett, Carl Icahn, Michael Bloomberg, and George Soros – only pay a tiny fraction of their growing wealth in taxes, and in some cases pay no taxes in a given year. according to a report on Tuesday.
ProPublica relying on confidential IRS data it has received from thousands of wealthy people, reported that the value of the 25 richest Americans “grew by a total of $ 401 billion from 2014 to 2018”.
But those people paid just $ 13.6 billion in federal income taxes over those five years, which is “a true tax rate of only 3.4%,” the article says.
In contrast, the average U.S. household was making around $ 70,000 a year over the past few years, paying 14% of that in federal taxes. Couples in the highest income tax bracket paid a rate of 37% on incomes greater than $ 628,300, the report said.
ProPublica pointed out that unlike most other people whose income comes from conventional wage incomes, billionaires often benefit from “tax avoidance strategies out of the reach of the common man.”
And their wealth is often based largely on the rising value of stocks and real estate, which are not considered taxable unless those assets are sold, the report said.
ProPublica did not disclose how it obtained the tax information cited in the article, but said the outlet “made significant efforts to confirm that the information sent to us was correct”. CNBC has not independently verified the information in the report.
The article states that Buffett’s “true tax rate,” based on ProPublica’s calculations, was only 0.1%, or $ 23.7 million, in taxes he paid over the five-year period on the $ 24.3 billion asset growth had paid.
During that time, Buffett, CEO of Berkshire Hathaway, taxable income of $ 125 million.
Bezos, who was the founder of Amazon became the richest person in the world, paying a little less than 1% of ProPublica’s true tax rate, or $ 973 million on $ 99 billion in wealth growth over the five-year period. Bezos’ actual taxable income during that time was $ 4.22 billion, the report said.
In 2007, Bezos “did not pay a cent in federal income tax,” and in 2011 he also avoided any federal income tax liability, the article says.
The second richest person in the world Tesla According to ProPublica, CEO Elon Musk paid a real tax rate of 3.27%, or $ 455 million, on asset growth of $ 13.9 billion.
Musk, who had actual taxable income of $ 1.52 billion during the five-year period, did not pay federal income taxes in 2018, according to ProPublica.
Bloomberg, former New York City mayor and founder of Bloomberg LP, paid a real tax rate of 1.3%, or $ 292 million, during the period considered by ProPublica. His actual taxable income was $ 10 billion, the report said.
Soros, an investor, did not pay federal income taxes between 2016 and 2018, due to losing money on his investments, his spokesman told ProPublica.
Another investor, Icahn, paid no federal income tax in 2016 and 2017, years when his adjusted gross income totaled $ 544 million, the article says.
Icahn told ProPublica that he had tax losses in both years for taking hundreds of millions of dollars in deductions from the interest he paid on loans.
When asked if it was fair that he did not pay income tax in certain years, Icahn said he was confused by the question, ProPublica reported.
“There’s a reason it’s called income tax,” Icahn was quoted as saying in the article. “The reason is if you are a poor person, a rich person if you are Apple – If you have no income, you don’t pay taxes. “
He added, “Do you think that a rich person should pay taxes no matter what? I don’t think it makes sense. How can you ask me this question? “