Whether it comes to monarchy or democracy, success or failure, or even billionaires and their share of paying taxes – certainly they all under the one roof when it comes to paying taxes. The majority of the population, however, are aware that these billionaires pay a small percentage of tax from their wealth which is completely different from how an average citizen pays taxes. A recent report from ProPublica sheds light on its most surprising and disparaging aspect.
These billionaires absolutely pay nothing in federal taxes. However, nothing gets labelled under the banner of being illegal. To name a few, these include the Amazon CEO, Jeff Bezos, popular Elon Musk, Michael Bloomberg and Warren Buffett.
According to ProPublica’s analysis of tax records, the top 25 billionaires of the US had a worth of $1.1 trillion as of 2018. This is equivalent to the amount earned by 14.3 million average US wage earners.
Quick Tidbits from the Report
- For 2 years, in 2007 and 2011, Jeff Bezos’ had zero contribution toward federal taxes. Between 2006 and 2018, his wealth had a hike of $127 billion with his reported income being $6.5 billion, with a cumulative tax bill of $1.4 billion. His true tax rate amounted to 0.98%,
- Elon Musk didn’t have to pay a single amount in 2018 to federal taxes. However, this third-richest man paid $68,000 in 2015 and $65,000 in 2017 as part of taxes.
- Elon’s wealth was bombarded by a whopping $13.9 billion in the five years from 2014 to 2018, his income being $1.52 billion and $455 million being the taxes.
- Warren Buffett’s wealth grew by $24.3B in a span of 4 years between 2014-18, with his reported income being $125M and $23.7M the taxes. So his true tax rate comprised a mere 0.10% , followed by that of Bezos.
- On the other hand, within the same time frame, Michael Bloomberg’s true tax rate was 1.30% with $4.22B as the income and $973M being the taxes paid.
The Reason behind escalation from such high taxes
The Federal Government states that taxes can be applied only on the incomes that comprise wages, dividends from stocks, interest from bonds and moves forth from the sale of financial instruments. For example, Elon extracted value from company (Tesla) shares but didn’t sell them. This was possible with the help of collateral loans. Since taxes can be imposed on loans. So he had a good escape!
That was one of the good reasons to cite. However, the public and political parties are yet to be aware of the clear picture of these US men managing this escalation.
Is this a Fair Practice?
Surely these businessmen have got all the brains. Warren Buffett terms the current taxation scheme as a ”class war” and declares his victory over the class war. But he still believes that there must be some modifications with more aggressive laws being incorporated in the tax law in the US.