Billionaires like Jeff Bezos, Elon Musk and Warren Buffet, among the richest people on the planet, pay income taxes to the American tax authorities that amount to a fraction of their enormous fortunes. Sometimes, nothing. This is what the IRS files, the Internal Revenue Service, obtained from ProPublica, «the nonprofit editorial staff that investigates abuses of power», as stated on the website where the investigation “The Secret IRS Files” is published, indicate. According to the documents obtained, it appears for example that in 2007, Jeff Bezos, then a “mere” multi-billionaire and now the richest man in the world, did not pay a cent in federal income taxes. The same thing happened in 2011.
Tesla founder Elon Musk, the second richest man in the world, also managed to pay nothing in federal income taxes in 2018. Michael Bloomberg, the billionaire media mogul and former New York mayor, has done the same thing in recent years. The billionaire financier Carl Icahn has succeeded twice, while George Soros, another billionaire financier also known for his philanthropic activities, has also succeeded in the feat for three years in a row.
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The ProPublica investigation
By obtaining extensive documentation relating to the tax returns of thousands of rich and super-rich Americans, ProPublica has shed an unprecedented light on the financial lives of some of the giants of the US economy, such as Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. The data indicates not only the incomes and taxes of the super rich, but also their investments, stock exchanges, up to the profits from gambling winnings.
Taken as a whole, says ProPublica, the investigation into the “secret files of the US tax authorities demolishes the myth of the American tax system: that whoever is called to pay the fair and the richest pay more. The IRS data, on the other hand, indicate that the richest can – in a perfectly legal manner – pay to the tax authorities only a tiny fraction of their immense wealth, which continues to grow year after year ».
The super rich bypass the system
Many Americans, reports ProPublica, live off their salary, with minimal savings capacity. These citizens are required to pay the federal government a percentage of their income, which increases as their income increases. In recent years, the average American family has earned about $ 70,000 a year, paying a 14% rate in federal taxes. The higher rate, introduced this year, amounts to 37% for couples, on incomes above 628 thousand dollars. The tax returns obtained by ProPublica show that the super rich have in fact managed to circumvent this system. US billionaires have tax avoidance strategies at their disposal that are beyond the reach of ordinary people. Their wealth comes from the skyrocketing value of their assets, such as stakes or real estate. These earnings are not covered by US law as taxable income, unless or until the goods are sold.