The 25 richest Americans have frequently paid little or no income tax in recent years, according to a published report Tuesday based on detailed tax data for the period.
Tesla’s (TSLA) - Get Tesla Inc Report Elon Musk, former New York Mayor Michael Bloomberg, Amazon.com (AMZN) - Get Amazon.com, Inc. Report founder Jeff Bezos, and activist investor Carl Ichan have all managed to pay zero income tax in at least one year of the past 15, ProPublica reported, citing detailed data it analyzed from unnamed sources. Billionaire investor George Soros managed to pay no income tax three years in a row.
In one year when Bezos paid no income tax, 2011, he even claimed and received a $4,000 tax credit for his children, according to the report. From 2006 to 2018, Bezos saw his wealth rise $127 billion, according to the report. Over the period he reported $6.5 billion in income on which he paid $1.4 billion in federal taxes. When compared with his overall gains, that amounts to a 1.1% “true tax rate on the rise in his fortune,” ProPublica reported.
Topping ProPublica's list is Berkshire Hathaway's undefined Warren Buffett. The Oracle of Omaha reportedly had income of $125 million from 2014 to 2018, and paid $23.7 million in taxes, for a "true tax rate" of 0.10%, the report says.
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Over the same period typical American households, whose wealth is largely based on their homes, paid more in taxes than the valuation gains in their real estate, according to the report.
Even if Congress manages to pass the tax increases proposed by President Biden, a large majority of the nation’s ultra rich would see minimal changes, according to the report.
While the means of tax avoidance employed by the wealthy are perfectly legal, they belie comments from George Soros, Buffett and others that the rich should pay more in taxes.
Ultra wealthy individuals can escape taxes by avoiding income and capital gains altogether and instead borrowing against their substantial assets the report noted. They can even write off the interest on the loans in many cases.