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Twenty-five Wealest Americans Pay Lower Income Tax Rates Than Many Ordinary Workers

Video Source: YouTube, NBC News

Paul Wiseman and Mercy Gordon

Washington (AP) — The rich are really different from you and me. They are good at dodging tax collectors.

Amazon founder Jeff Bezos did not pay income tax in 2007 and 2011. Tesla founder Elon Musk had zero income tax in 2018. Tuesday’s report from the non-profit research journalism organization ProPublica..

Overall, ProPublica finds that the 25 wealthiest Americans, including social security and Medicare taxes, have less taxes than many regular workers, with an average adjusted total income of 15.8%. The findings are likely to raise national debate about the vast and growing inequality between very wealthy Americans and others.

An anonymous source that provided ProPublica with a large amount of Internal Revenue Service data on the wealthiest people in the country, including Warren Buffett, Bill Gates, Rupert Murdoch, and Mark Zuckerberg. ProPublica compared the tax data it received with information available from other sources. “In all cases, including tax filings by more than 50 individuals, we were able to confirm that the details provided to ProPublica were consistent with information from other sources.”

By using a fully legitimate tax strategy, many ultra-rich people can reduce federal taxes to zero or near.

A spokesman for Solos, who supports a tax increase for the wealthy, told ProPublica that billionaires were losing money on their investments from 2016 to 2018 and were not obliged to pay federal income tax during that time. He responded to ProPublica’s first comment request with a punctuation mark “?” And did not answer detailed follow-up questions.

Federal tax law is intended to be progressive. In short, rich people pay steadily higher tax rates as their income rises. And in fact, ProPublica found that people who earn between $ 2 and $ 5 million a year pay an average of 27.5%. This is higher than any taxpayer group.

But when income exceeded $ 5 million, the tax rate fell. The top 0.001% of taxpayers (1,400 who reported revenues in excess of $ 69 million) paid 23%. And the 25 wealthiest people were paying even less.

Wealthy people either use charitable donations or avoid wage income (which can be taxable up to 37%) and instead benefit primarily from investment income (usually 20% taxable). By doing so, you can reduce the amount of tax.

President Joe Biden has proposed a tax increase for wealthy people in search of income to fund his spending plans. Mr. Biden wants to raise the maximum tax rate for people with taxable income of $ 400,000 or more to 39.6%, which is estimated to be less than 2% of US households. Currently, the maximum tax rate that workers pay on salaries and wages is 37%.

Biden has proposed doubling the tax rate paid by high-income Americans on profits from stocks and other investments. Moreover, under his proposal, inherited capital. Gains are no longer tax exempt.

The president will have to get parliamentary approval for the proposal, but it will also raise taxes on businesses. This will affect wealthy investors who own corporate stocks.

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ProPublica reports that HNWIs pay taxes particularly low compared to the surge in value of their investment portfolios, real estate and other assets. People don’t have to pay taxes to increase their wealth until they get cash and, for example, sell stocks or homes to make a profit.

Using Forbes magazine calculations, ProPublica noted that between 2014 and 2018, the wealth of the 25 wealthiest Americans increased by a total of $ 401 billion.

Chuck Ma, senior director of the left-wing budget policy priority center, said Biden’s proposal faces fierce opposition from Congressional Republicans and businesses, but how wealthy have benefited in the last few years. Given that it is, he suggested that it was “modest.” Many of them pay relatively little tax.

“If the current situation is less focused on being radical, the solution always seems to be radical,” Ma said.

Democrats such as Senator Elizabeth Warren and Senator Bernie Sanders have proposed to tax wealth as well as the income of the wealthiest Americans.

On Tuesday, Warren tweeted in response to a ProPublica report:

“Our tax system is being tampered with for millionaires who don’t make money on income, like double-income families. The evidence is clear enough: America’s #WealthTax, but the ultra-rich are ultimately It’s time to pay a fair share. “

Gabriel Zucman, an economist at the University of California, Berkeley, states that he is a leader in financial inequality and that there are three ways to ensure that the wealthy pay more. Tax the profits of wealth, whether or not they are cashed to realize profits. Or a tax increase on corporate profits.

ProPublica data reveals that “the wealthiest people in the country who made huge profits during the pandemic are not paying fair taxes,” said Ron, head of the Senate Finance Committee. Senator Wyden said Tuesday’s hearing on the IRS budget with Commissioner Charles Lettig began.

Weiden has proposed legislation to strengthen tax revenue enforcement for wealthy individuals and businesses that use cleverness and loopholes to avoid tax payments. It also allows high-income earners to pay taxes on capital gains. Eliminating the ability to postpone until it is realized, as a result, wealth will be taxed in the same way as wages.

Rettig said the IRS is investigating a tax data leak to ProPublica and will be prosecuted for any violations of the law. (ProPublica reported that it did not know the identity of the source that provided the data.)

“We will know about the ProPublica article,” Rettig said. “We handed it over to the appropriate external and internal investigators.”

The Democratic Party, which now controls the White House and Congress, is concerned with the tax gap, the multi-billion dollar difference between the taxes Americans pay to the government and the taxes they pay, and the relationship between economic inequality. Note. According to experts, the top 10% of income earners, unintentionally or unintentionally, occupy most of the gap by underreporting their debt as tax avoidance or overt tax exemption. That is.

The tax gap is being watched as a potential source for regaining some of the income to help pay Biden’s proposed spending on infrastructure, families and education. Democrats are pressing the IRS to boost and make tax revenue enforcement more equitable, tracking large corporations and wealthy individuals who operate the system.

At a hearing on Tuesday, Mr. Weiden told Lettig that “it seems that wealthy people are always neglecting their obligations” is wrong.

“Partnership partners are more likely to be hit by lightning strikes than being audited,” Weiden said.

Rettig replied, “We have been defeated.”

Democrats argue that the main reason for the widening tax inequality is that large US companies have held earnings abroad and wealthy individuals haven’t paid a fair share. They have a long IRS. He argues that he is short of staff and money and is more willing to pursue modest taxpayers than talented businessmen and businesses.

Government funding has been cut by about 20% since 2010. Mr. Byden’s new spending proposal includes an additional $ 80 billion over a decade to strengthen IRS audits for high-income individuals and businesses. Is included and aims to recover an estimated $ 700 billion.

Many of the gaps are due to the use of shelters abroad. The government is losing an estimated $ 40 to $ 120 billion annually from offshore tax evasion. Mr Biden’s tax plan includes measures to prevent corporations from hiding their profits in countries with low tax rates. Last weekend, a group of seven wealthy democracies, including the United States, backed at least 15% of the world’s smallest corporate tax to prevent multinationals from hiding their profits in low-interest countries and evading taxes. I agreed to do.

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Source: Associated Press, NBC news



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