Home » Earn hundreds of billions of money, pay zero taxes, and the richest Americans fancy tax avoidance |

Earn hundreds of billions of money, pay zero taxes, and the richest Americans fancy tax avoidance |

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Original title: Earn hundreds of billions of dollars, pay zero taxes, and American richest people fancy tax avoidance

Beijing Commercial Daily reporter Tao Feng Zhao Tianshu

As President Biden’s tax reform is in full swing, a report investigating the taxes of the wealthy in the United States caused an uproar. Warren Buffett’s tax rate has been only 0.1% for many years, the world’s richest man Bezos, Tesla CEO Musk even failed to pay a penny in some years… In the past, the rich may have their own ways to avoid taxes, but they face the trend. The mandatory “tax for the rich” may only be called “excuses” no matter how many excuses.

The effective tax rate is very low

The richest person in the United States pays the least taxes? According to Reuters, on June 8, local time, the U.S. news website ProPublica released a report revealing how the wealthiest Americans are aggressively avoiding taxes.

According to confidential tax documents obtained by the website from the Internal Revenue Service (IRS), during the period 2014-2018, the 25 wealthiest individuals in the United States paid a total of $13.6 billion in federal income taxes.

However, the taxes they paid were only a fraction of the wealth they had acquired during this period. According to “Forbes” statistics, the wealth of these 25 people has increased by US$401 billion in the past five years.

Based on these two figures, the actual tax rate they pay is only 3.4%. In contrast, they pay less taxes than ordinary Americans. According to statistics, in recent years, the median average salary of American families is about 70,000 US dollars, and 14% of the federal income tax is paid every year.

In this list, many famous American bigwigs and even the world‘s richest man are on the list.

According to records, the CEO and chairman of Berkshire Hathaway, the stock god Buffett, avoided tax the most. Between 2014 and 2018, Buffett’s wealth increased by approximately US$24.3 billion, and he reported paying US$23.7 million in taxes, with a true tax rate of only 0.1%.

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Amazon CEO Bezos, whose net worth rose by $99 billion, followed closely behind with an effective tax rate of 0.98%; billionaires, former New York Governors Bloomberg and Musk’s effective tax rates were 1.3% and 3.27%, respectively.

In this way, the tax rate of an ordinary worker in the Tesla Gigafactory in the United States has greatly exceeded the tax rate of CEO Musk.

In addition to paying less tax, in some years, some people didn’t even pay a penny. Records show that Bezos did not pay income tax in 2007 and 2011, while Musk’s income tax bill in 2018 was zero. In addition, investor George Soros has not paid federal income tax for three consecutive years.

Manipulation

The wealth of the rich has exploded, and the market is obvious to all. So, how did they avoid large taxes under the “full view”?

Yang Shuiqing, an assistant researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, analyzed that unlike ordinary people who pay wage income taxes, most of the wealthy people apply capital gains tax, which is usually based on the appreciation of stocks and real estate. Unless these assets are sold, these assets will not be Treated as taxable items.

Take Bezos as an example. In 2007, he did not pay a penny of income tax that year. In the joint tax filing with his wife McKinsey at the time, Bezos reported an income of $46 million, the main source of which was interest and dividends from external investments. In this way, he can offset every penny earned with investment losses such as debt interest payments and “other expenses”.

In addition, the rich have a strategy that is to reduce wages to a minimum, which can also reduce taxes. Their wealth growth mainly comes from dividends, stocks, bonds and other investments, and these income tax rates are much more cost-effective than wages.

Many rich people have emphasized that their salary is only “1 U.S. dollar.” Carl Icahn, an investor known as the “Wolf King” on Wall Street, told ProPublica: “I didn’t make any money because, unfortunately for me, the interest rate is higher than my entire adjusted income.”

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Icahn ranks 40th in the United States with a fortune of $14.9 billion and did not pay federal income tax in 2016 and 2017. He also added, “It is called income tax for a reason. Whether you are a poor or rich person, if you have no income, you will not pay tax because you have no income.”

In addition to the above methods, ProPublica pointed out that there is another method that can be used to avoid taxes, that is, borrowing money. If you borrow a loan, the interest rate you need to pay is only in the single digits, and you don’t have to pay taxes. The reason is that the loan must be repaid, so it will not be classified as income by the IRS.

Musk seems to know this well. Last year, he just pledged about 92 million shares for his personal loan. In June of this year, these stocks were valued at approximately 57.7 billion U.S. dollars.

Regarding ProPublica’s “accusations”, the rich have also expressed their views. Buffett has responded in a detailed 23-page statement to defend himself.

As for other wealthy people, both Bezos and Amazon declined to comment on this matter, and Musk only answered a question mark “?”. However, according to the Associated Press, several people including Buffett, Bloomberg and Icahn said that they have already paid the taxes owed.

Wealthy tax

Since the outbreak of the epidemic, the polarization between the rich and the poor in the United States has intensified. At the end of April this year, Biden announced a “Wealth Tax Plan”. The main measures include raising the maximum personal income tax rate from 37% to 39.6%, and increasing the maximum personal income tax rate for capital gains and dividend income of more than $1 million. 20% increased to 39.6% and so on.

But before the final plan is released, the leak of this report will undoubtedly have a greater impact. The Associated Press pointed out that ProPublica’s findings could exacerbate the “huge and growing” inequality between the wealthiest people in the United States and everyone else.

The White House has noticed this. News spokesperson Jen Psaki responded at the press conference that day that the IRS will take all measures to investigate tax evasion, including submitting the matter to the Department of Finance, the FBI and the Department of Justice.

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U.S. Treasury Secretary Warren emphasized the necessity of “the rich man’s tax.” She said: “Our tax system is manipulated by billionaires. They are not like working families to make a fortune through wage income… Now is the time for the United States to levy a’wealth tax’.”

However, the “rich man’s tax” may not be possible for a while. At present, there are differences between the Democratic Party and the two parties on how to increase taxes and how much tax increases should be imposed on the wealthy class.

The Democrats point out that tax increases for the rich can fund infrastructure projects, while the Republicans oppose any plans related to tax increases. In addition, within the Democratic Party, progressive Democrats strongly support tax increases for the rich, while moderate Democrats have reservations about this.

Georgia Democrat David Scott (David Scott), chairman of the House Agriculture Committee, said recently that he was skeptical of the White House’s plan to impose an inheritance tax on the wealthy.

Regardless of the outcome of the “wealthy tax”, Yang Shuiqing pointed out that large companies and the rich will always find ways to avoid taxes. Since increasing taxes on the rich was a slogan that Biden put forward during the election campaign, many people have already begun tax avoidance after Biden won the election in November last year.

A chief wealth strategist in New York stated at the end of last year that her clients are increasingly selling assets and stocks, and even considering increasing charitable donations.

Right now, the secret is not over yet to be continued. ProPublica said that they have obtained a large number of IRS documents and will gradually reveal the fiscal and tax details of these top wealthy Americans in the next few months.

Massive information, accurate interpretation, all in Sina Finance APP

Editor in charge: Wang Xiang

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