The richest Americans might complain about the federal government's tax bite, but an investigation by ProPublica reveals a compelling counterpoint. The very rich pay only a "tiny fraction" of their wealth in federal income taxes. And that's in stark contrast to Americans who live paycheck to paycheck, or close to it. The outlet obtained IRS data on the 25 richest Americans and plans to reveal more details in subsequent reports. Highlights of the first one:
- The 25 wealthiest Americans saw their worth rise a collective $401 billion from 2014 to 2018, but they paid $13.6 billion in income taxes over those five years. That translates to what the outlet calls a "true tax rate" of 3.4%.
- By contrast, US households earning the median $70,000 a year paid 14% in federal taxes.
- Four examples: In that time frame, Warren Buffett paid a true tax rate of 0.10%, Jeff Bezos 0.98%, Michael Bloomberg 1.3%, and Elon Musk 3.27%. The story notes that the Buffett stat may be the most surprising because he has called on the rich to pay more in taxes.
- Some of these uber-rich managed to avoid paying a single cent in federal taxes in some years, including Bezos, Musk, Bloomberg, Carl Icahn (twice), and George Soros (three times).
- In 2011, Bezos had a net worth of about $18 billion, but he claimed and received a $4,000 tax credit for his children. That year, he was able to report that he lost money because his annual income was offset by investment losses. Thus, even though he had a vast fortune, he was able to claim a tax credit legally.
- How? "America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people," per the report. "Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by US laws as taxable income unless and until the billionaires sell."
Read the full report
, along with the outlet's rationale
for publishing information some might consider an invasion of privacy. (Read more federal income tax