IRS Data Trove Shows How The Super Wealthy Pay Such Little Taxes: Report

THOMAS CATENACCI CONTRIBUTOR

• The super wealthy — including billionaires Jeff Bezos, Elon Musk and Michael Bloomberg — have skirted large amounts of taxes for years, according to a large trove of federal tax data obtained by ProPublica.
• The 25 richest Americans’s wealth increased to a total of $401 billion while paying $13.6 billion, or just 3.4% of their wealth, in taxes between 2014 and 2018, according to the “secret” trove obtained by ProPublica.
• “We know that there is more to be done to ensure that corporations, individuals who are at the highest income, are paying more of their fair share,” White House Press Secretary Jen Psaki said. “Hence it’s in the president’s proposals, his budget and part of how he is proposing to pay for his ideas.”

The super wealthy — including billionaires Jeff Bezos, Elon Musk and Michael Bloomberg — have skirted large amounts of taxes for years, according to a large trove of federal tax data obtained by ProPublica.

The 25 richest Americans’s wealth increased to a total of $401 billion while paying $13.6 billion in taxes between 2014 and 2018, according to the “secret” trove of data obtained by ProPublica. While the billionaires paid a high amount in taxes over that period, it totaled just 3.4% of their total wealth.

ProPublica calculated the individuals’ “true tax rate” — or percentage of wealth taxed — using Forbes’ net worth estimations.

But the amount paid in income taxes is determined by how much income a person earns, not their total net worth. The richest Americans’ wealth increased as their assets, including property and stocks, shot up in value.

Warren Buffet, one of the nation’s most successful investors, paid $23.7 million in taxes between 2014 and 2018, roughly 19% of the reported $125 million he earned. In that same five-year period, Amazon CEO Jeff Bezos paid $973 million in income taxes, or 23% of his $4.2 billion income, while Michael Bloomberg’s income taxes totaled $292 million, 2.9% of his $10 billion income, ProPublica reported.

Buffett, Bezos and Bloomberg paid 0.1%, 0.98% and 1.3% of their wealth in taxes during that period, according to ProPublica.

Tesla CEO Elon Musk, meanwhile, paid $455 million in income taxes, which was 29% of the $1.52 billion he earned, ProPublica reported.

“?,” Musk texted ProPublica when asked about his income taxes.

Buffett, Bezos and real estate mogul Carl Icahn told ProPublica they paid the taxes they owed.

“Between 2016 and 2018 George Soros lost money on his investments, therefore he did not owe federal income taxes in those years,” a spokesperson for investor George Soros said in a statement to ProPublica. “Mr. Soros has long supported higher taxes for wealthy Americans.”

Buffett noted in in a lengthy statement to ProPublica that while a low percentage of his wealth has been taxed, it will be taxed once he dies.

“After the run-off period following my death, about 99.5% of what I have will go to some combination of taxes and disbursements to various philanthropies,” Buffet said “The split will depend on future U.S. tax policy.”

He said he was in favor of altering the nation’s tax code to prevent “huge dynastic wealth.” Buffett also said his money would be better spent by charities than by the government, but that it would ultimately be up to Congress to determine where his wealth went.

The top U.S. tax rate is set at 37%, according to Bankrate. However, wealthy Americans have notoriously been able to exploit loopholes in the tax code to legally avoid paying the entirety of that percentage.

For example, the majority of income earned by the ultra-wealthy isn’t from their salary, according to ProPublica. Instead, they make the majority of their income from dividends and selling stocks, bonds and other investments taxed at lower rates.

Source of ProPublica’s federal tax data cache

ProPublica didn’t name the source of the data dump because they were unaware of their identity, the outlet said in an editor’s note. The anonymous source was motivated to share the information with ProPublica because of the site’s previous reporting on tax-related issues.

“Any unauthorized disclosure of confidential government information by a person with access is illegal and we take this very seriously,” White House Press Secretary Jen Psaki said during a press briefing Tuesday.

Psaki added that the IRS, Treasury Department and FBI will investigate the matter. She wouldn’t comment on the data specifically, but said tax avoidance by the wealthy is an issue.

“We know that there is more to be done to ensure that corporations, individuals who are at the highest income, are paying more of their fair share,” Psaki said. “Hence it’s in the president’s proposals, his budget and part of how he is proposing to pay for his ideas.”

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