Investigative Report Shows How Richest People in U.S. Avoid Income Tax
The new report from the nonprofit ProPublica takes a detailed look at more than 15 years of data, including info on Jeff Bezos and Elon Musk.
In the COVID-19 era, the already-omnipresent issue of income inequality was made even more urgent as many Americans struggled to make ends meet while others easily rode out the pandemic from a position of unaffected privilege. Now, as part of an ongoing project, a new investigation adds some specifics to the greater discussion surrounding wealth and the names so often associated with it in the press.
On Tuesday, ProPublica—an NYC-based nonprofit focused on investigative journalism within the public interest realm—reported it had obtained a “vast cache” of IRS information showing how billionaires including Jeff Bezos, Elon Musk, and others “pay little in income tax compared to their massive wealth.” In some instances, documents show, paying “little” actually means paying nothing at all.
As Jesse Eisinger—a senior reporter and editor at ProPublica—explained in an NPR interview on Tuesday, this week’s story will be followed by additional stories of this variety throughout 2021. Per Eisinger, ProPublica has records on “thousands of the wealthiest individuals” spanning more than 15 years.
“This is entirely legal and sort of one of the points of the story is that they don’t need exotic, illegal, evasive techniques,” Eisinger told Rachel Martin on Morning Edition. “This is not about tax evasion. It’s about legal routine tax avoidance through regular means. … The system has been built up so the ultrawealthy can easily avoid taxation.”
Warren Buffett, Bill Gates, Rupert Murdoch, Mark Zuckerberg, and others are also mentioned in the investigative report. Among the key reported findings highlighted by ProPublica are that the two richest people in the world (i.e. Bezos and Musk) have both had years where they didn’t pay federal income tax, Bezos took a tax credit for his children in 2011 despite being a several-times-over billionaire, and the determination of what the nonprofit is calling the “true tax rate.”
The “true tax rate,” pulling from first-of-its-kind analysis, comes from ProPublica’s study of the top 25 wealthiest Americans. The nonprofit compared how much these individuals’ wealth grew with how much they paid in taxes, ultimately reporting that they paid taxes equal to 3.4 percent of their wealth gain from 2014 to 2018.
Asked by Martin on Tuesday to pinpoint the implications of the findings in the new ProPublica report, Eisinger gave his assessment of what it could signal to the average person.
“The implications are that our federal budgets have been constrained for decades,” he said. “Periodically, people are worried that social security and medicare will go bankrupt. Our roads and bridges are crumbling. And we have a group of the wealthiest individuals not paying their fair share. That should make everybody, you know, give everybody pause.”
