They’re the biggest billionaires in America behind brands like Amazon, Tesla, and Bloomberg. Their personal fortunes are enormous. But, it turns out their tax bills, in some cases, are not. Not even close.
Newly revealed records show exactly how the ultra-rich can work the system to pay nothing in income tax in certain years. The report was produced by the nonprofit news organization ProPublica.
Jesse Eisinger is a senior reporter and editor at ProPublica. He said, “What we’ve shown is that actually the system is upside down, that the ultra-wealthy pay less in tax than the average person.”
In 2018, for example, ProPublica found Elon Musk paid no federal income tax. Neither did Jeff Bezos, in 2007 or 2011, the same year he claimed a $4,000 child tax credit. And renowned investor Warren Buffett avoided the most tax of any of the billionaires ProPublica looked at.
CNBC Wealth Reporter Robert Frank said, “As shocking as it is, nothing that they did is illegal. Everything that they did is in keeping with our tax code and the basic reason is, we tax income, not wealth.”
Rich people often grow their fortunes through stocks, real estate, or companies, so they don’t have to pay taxes until they sell, and they can offset their income in other ways, too. This means it’s legal to be worth a lot and pay a little.
Frank said, “This will start a debate that is well-needed in America.”
ProPublica points out some years, the billionaires did pay hundreds of millions in taxes, depending on their investments.
Bezos and Musk did not respond to NBC News’ request for comment. But Buffett, who’s long called for more taxes on the rich, tells ProPublica more than 99% of his money will eventually go to philanthropies and taxes.
The organization is not disclosing how it obtained the data and NBC News has not independently verified the documents it used.
The report is adding fuel to the fire for Democrats like Senator Elizabeth Warren, who is pushing for a wealth tax. She said, “What this shows is it’s only hard-working middle-class families that actually pay income tax.”
As for worries about what all this means for privacy, ProPublica said the public interest in pushing this information outweighs legitimate concerns.