HomeHere's how America's richest manage to pay less tax than the poor

Here’s how America’s richest manage to pay less tax than the poor

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An investigation using secret data from the US Internal Revenue Service revealed that the wealthiest in the country pay little to nothing in income taxes. Thus, it was shown that Warren Edward Buffett has only paid 0.1% of his net wealth and both Elon Musk and Jeff Bezos have not paid more than 3.27%.

ProPublica, a nonprofit investigative journalism organization, compared how much in tax the 25 richest Americans paid each year to how much their wealth grew in that same time frame, estimated by Forbes.

Elon Musk, one of the richest men, when compared to Warren Buffett, Jeff Bezos, and Michael Bloomberg, is the highest taxpayer. Of its net wealth, 3.27% goes to the treasury. However, this 3.27% is a negligible amount when compared to the tax paid by the average US citizen.

And this is nothing, the investigation shows that Musk paid nothing in 2018.

On the other side of the coin is Warren Buffet, known for his stance on increasing income tax. The Oracle of Omaha only allocates 0.1% for the Internal Revenue Service (IRS).

For his part, Jeff Bezos, currently the richest man in the world, did not pay a penny in 2007 to the IRS, despite the fact that he was already a billionaire in that period. He demonstrated the same civic behavior in 2011.

Michael Bloomberg, the founder of the eponymous financial news service and a former presidential candidate for the Republican Party, accomplished the same feat in recent years. Billionaire investor Carl Icahn did it twice. George Soros did not pay federal income taxes for three years in a row.

This is in contrast to the average American household, which earns about $ 70,000 a year and pays 14% in federal taxes. The highest income tax rate, 37%, went into effect this year, for couples, on earnings greater than $ 628,300.

Confidential tax records obtained by ProPublica show that the ultra-rich are effectively circumventing the country’s tax system.

For this, American billionaires use tax evasion strategies that are not available to ordinary people. Because their wealth is derived from the dizzying value of their assets, such as stocks and properties, they fall outside the US legal framework and are not part of the taxable portion, unless they are sold.

This research sheds a unique insight into the financial life of the richest US and comparing their income, equity investment operations, gambling profits, and even the results of the audits with taxes paid.

According to Forbes calculations, these 25 people saw their value increase by a total of $ 401 billion from 2014 to 2018. Of this amount, they paid a total of $ 13.6 billion in federal income taxes in those five years as shown by IRS data. This figure equates to a real tax rate of just 3.4%.

Photo by Drew Angerer/Getty Images

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