How Do Wealthiest People Avoid Income Tax?
Several of the world’s most prominent billionaires paid minimal to no federal income tax in some years, ProPublica reported on Tuesday, citing confidential Internal Revenue Service records it had reviewed.
In 2007, Jeff Bezos, then a multimillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
It’s probably not surprising that rich people go to great lengths to avoid paying any more taxes than they absolutely have to, but a new ProPublica investigation, reveals in brutal detail how they get away with paying virtually nothing. Using over 15 years of tax returns from the ultra-rich, the investigation calculates the amount of taxes the 25 richest Americans paid contrasted with how much their net worth grew each year, to get what it calls their “true tax rate.”
As per the data reviewed by ProPublica, even though Warren Buffet’s wealth between 2014 and 2018 rose by $24.3 billion, he is reported to pay a “true tax rate” of 0.1% which is $23.7 million in taxes. The media outlet has also stated that the confidential data was provided to ProPublica after it published a series of articles examining the IRS. The news organisation also denied having any knowledge about the identity of the source and did not ask for the information that was received.
While Bezos, Musk, Buffet are yet to respond to the revelation, as per Bloomberg report, IRS Commissioner Charles Rettig said at a Senate Finance Committee hearing on June 8 that his agency is probing into the source of the information published by ProPublica. Rettig said, “I can confirm that there is an investigation with respect to the allegations that the source of the information in that article came from the Internal Revenue Service. I share the concerns of every American for the sensitive and private nature and confidential nature of the information the IRS receives.”