Here is some news that probably won’t surprise you but may definitely infuriate you, let’s just see how it lands: Jeff Bezos and his ilk — which is to say, billionaires including but not limited to Michael Bloomberg and Elon Musk — have recently paid little to nothing in federal income tax despite having obviously made metric fuck-tons of money. That is according to ProPublica, which, on Tuesday, published its analysis of “a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years.” The organization compared these against the estimated wealth growth (courtesy of Forbes) of the nation’s 25 richest people to determine their “true tax rate.” And, well:
The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.
When you break it down by billionaire, the results become even starker: Tesla CEO and crypto guy Musk, for example, reportedly saw his fortune grow by $13.9 billion between 2014 and 2018, reported $1.52 billion in income, and paid $455 million in taxes, for a “true” rate of 3.27 percent. That’s at least better than former presidential candidate Bloomberg — who reportedly saw wealth growth of $22.5 billion, reported $10 billion of it, and paid $292 million in taxes during that period — whose “true” tax rate came in around 1.3 percent. But please hold the phone for the former Amazon CEO, whose wealth reportedly ballooned by about $99 billion in those four years. According to ProPublica, Bezos reported $4.22 billion in income and paid $973 million in taxes, for a “true” rate of 0.98 percent.
And! ProPublica also reports that in 2007 and 2011, Bezos paid no income tax at all. He was not alone in this financial sorcery: Musk, Bloomberg, and George Soros all did the same thing at least once, while Warren Buffett was the most tax avoidant in the club, paying at a “true” rate of 0.1 percent. But since 2006, as Bezos’s wealth swelled into the hundred billions, his tax rate appears to have hovered right around one percent. (Please see the article for a troubling chart.) For the sake of comparison, consider: People in the lowest annual earning bracket — $0–$9,875 for 2020 — see their income taxed at a rate of 10 percent.
As to how the megawealthy achieve these ultralow rates, it typically involves offsetting income with losses on other investments and ventures, plus the aggressive exploitation of tax-law loopholes. And then, as the New York Times points out, overall wealth may also include things like “shares in companies they run, vacation homes, yachts and other investments,” which become “taxable income” only when sold for a profit. So, um, congrats to Bezos on getting a yacht for his yacht, I guess. Truly, space can keep him!