Billionaires Jeff Bezos and Elon Musk were luckily enough to not pay taxes. According to a report, Amazon founder Jeff Bezos paid no income tax in 2007 and 2011. In the case of Tesla founder Elon Musk's income tax bill came to zero in 2018.
According to an investigative journalism organisation, ProPublica, the world's first and third richest person did not have to pay federal taxes.
It stated America’s billionaires can avail tax-avoidance strategies which a ordinary American cannot avail. "Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell," the report stated.
Between 2006 and 2018, Bezos’ wealth shot up by over $120 billion, while he paid a minuscule proportion in taxes.
In the case of Musk, he paid $68,000 in federal income tax in 2015. In 2017, it was $65,000, and in 2018 he paid no federal income tax. Between 2014 and 2018, he had a true tax rate of 3.27 per cent.
According to Associated Press, overall, the richest 25 Americans pay less in tax -- 15.8 per cent of adjusted gross income - than many ordinary workers do, once you include taxes for Social Security and Medicare. "By the end of 2018, the 25 were worth $1.1 trillion."
The Internal Revenue Service data on the country's wealthiest people, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg, was provided to the organisation by a source.
ProPublica compared the tax data it received with information available from other sources. It reported that "in every instance we were able to check - involving tax filings by more than 50 separate people - the details provided to ProPublica matched the information from other sources.'' Using perfectly legal tax strategies, many of the uber-rich are able to whittle their federal tax bills down to nothing or close to it. Soros went three straight years without paying federal income tax; billionaire investor Carl Icahn, two, ProPublica finds.
The findings are sure to heighten the national debate over the vast and widening inequality between the very wealthiest Americans and everyone else.
ProPublica reports that the tax bills of the rich are especially low when compared with their soaring wealth - the value of their investment portfolios, real estate and other assets.