American super-rich like Bezos and Musk did not pay a cent in taxes, leaked documents show

A truck from the Patriotic Millionaires campaign group drives past one of Jeff Bezos’ homes.Image REUTERS

According to the research site, this appears from papers from the American tax authorities IRS that ProPublica managed to get hold of. Amazon boss Bezos, currently the richest man in the world, did not have to pay a cent in federal tax in 2007 and 2011. Tesla boss Elon Musk also managed to reduce his taxable income in 2018 so that he did not have to pay anything to the IRS.

Other American super-riches, including Bloomberg, Soros and investor Carl Icahn, have succeeded several times in recent years. Although their wealth grew by hundreds of millions and sometimes even tens of billions year after year, such as through rising stock prices, they contributed only a fraction of that to the treasury. The United States has no capital gains tax, the American tax authorities only levy tax on the sale of shares or assets.

‘Only’ 11 billion paid

The 25 richest Americans saw their wealth increase by no less than 329 billion euros from 2014 to 2018, but settled only 11 billion euros with the IRS over those five years. The net wealth of average Americans increased by 53 thousand euros over that period. This was mainly due to the rise in house prices, but they gained little from it, because the growth of their wealth consisted mainly of wages on which tax had to be paid. On average, they lost another 50 thousand euros to the tax authorities over those five years, the business magazine Forbes calculated.

The biggest tax avoider, according to Forbes, was Warren Buffet, the super-investor who for years has advocated raising taxes for the rich and has pledged to spend most of his assets on charitable causes. He paid 0.1 percent tax over those years, if you include the increase in the value of his shares and other assets. Elon Musk was the “top payer” over those years, with what ProPublica calls the “true tax rate” of 3.2 percent, ie what he pays compared to his wealth growth.

For ordinary Americans, who mainly pay tax on their income from wages, the federal rate is 14 percent.

Jeff Bezos, now worth 154 billion euros, only had a ‘mean’ 15 billion in 2007. In that year, his assets had increased by about three billion, but thanks to all kinds of deductions, the Amazon founder managed to limit his income so that he did not have to pay anything to the IRS. In 2011, he succeeded again: he and his now former wife even received 3.5 thousand euros as child benefit.

George Soros, who once made a fortune speculating against the British pound and now spends much of his fortune on democracy-promoting programs, paid no tax at all for 2016, 2017 and 2018, according to ProPublica. According to a spokesman for the billionaire, this was because he made a loss on his investments in those years. Incidentally, like Buffett, he is a proponent of raising taxes.

The problem, according to ProPublica, is that the super-rich like Bezos, Facebook boss Mark Zuckerberg and Google’s Larry Page all earn next to nothing on paper. Bezos’ annual salary stands at about 65 thousand euros, while the others are generous with a symbolic one dollar.

The US Treasury Department said on Tuesday that it has asked the FBI to investigate how ProPublica obtained the IRS’s papers. White House spokeswoman Jen Psaki also said the government is taking the matter very seriously. According to her, any unauthorized release of such confidential information is illegal.

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