|An analysis by ProPublica based on I.R.S. documents showed billionaires like Jeff Bezos and Elon Musk benefited from tax code loopholes and a focus on taxing income over wealth.|
Adding insult to injury was the Trump administrations tax breaks for the wealthiest Americans, with most American tax paying voters not caring.
America is essentially an oligarchy, when power and money reign.
The 25 richest Americans, including Jeff Bezos, Michael Bloomberg and Elon Musk, paid relatively little — and sometimes nothing — in federal income taxes between 2014 and 2018, according to an analysis from the news organization ProPublica that was based on a trove of Internal Revenue Service tax data.
The documents reveal the stark inequity in the American tax system, as plutocrats like Mr. Bezos, Mr. Bloomberg, Warren Buffett, Mr. Musk and George Soros were able to benefit from a complex web of loopholes in the tax code and the fact that the United States puts its emphasis on taxing labor income versus wealth.
Much of the wealth that the rich accrue — like shares in companies they run, vacation homes, yachts and other investments — isn’t considered “taxable income” unless those assets are sold and a gain is realized. Even then, there are loopholes in the tax code that can limit or erase all tax liability.
Taxable money is often hidden in overseas bank accounts.
Administration officials said on Tuesday that federal authorities were investigating the disclosure of private tax information, which can constitute a criminal offense.
The rare window into the tactics of the nation’s top billionaires comes as President Biden is trying to overhaul the tax code so that corporations and the rich pay more. Mr. Biden has proposed raising the top marginal income tax rate to 39.6 percent from 37 percent, which would reverse the reduction ushered in by former President Donald J. Trump’s 2017 tax cuts.
Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, said the private tax data highlighted the relatively modest approach that Mr. Biden is proposing considering the extent to which the tax code rewards wealth and punishes labor.
The report highlights the techniques that the wealthy often use to reduce their tax bills, including taking advantage of a complex web of loopholes and deductions that are perfectly legal and can significantly minimize tax liability. That includes borrowing huge sums of money backed by enormous stock holdings. Loans are not taxed and the interest that the executives pay on the borrowed money can often be deducted from their tax bills.
In 2007, Mr. Bezos, the chief executive of Amazon, paid nothing in federal income taxes even as his company’s stock price doubled. Four years later, as his wealth swelled to $18 billion, Mr. Bezos reported losses and received a tax credit of $4,000 for his children, according to ProPublica. An Amazon spokesman did not immediately respond to a request for comment.
Mr. Buffett, the chief executive of Berkshire Hathaway who has long said publicly that the tax code should hit the rich harder, paid just $23.7 million in taxes from 2014 to 2018, when his wealth rose by $24.3 billion.
Again, taxpaying voters have not demanded change, while politicians give lip service.