I think Americans should celebrate success no matter which of our citizens achieves it.*ProPublica released a report Tuesday on how the ultra-rich have legally avoided taxes during the past decade that caught the attention of the news channels. I begin the coverage with CNN's IRS documents show Bezos, Musk and Buffett pay almost no taxes.
*This includes rich people like Elon Musk and Jeff Bezos, but that doesn't preclude taxing them more so they pay their fair share back to the country that helped them succeed.
Here's a good one. Jeff Bezos, Michael Bloomberg, Warren Buffett and Elon Musk all walk into the IRS. But none of them, in various years, seem to have paid federal income taxes.That the wealthy avoid taxes is not news. So do millions of other Americans. I've twice mentioned that my father went to what what was then the only Catholic High School in Utah, but never revealed that he was also an accountant who ran his own business preparing taxes and keeping other small business's books in between working for defense contractors, so I know first hand about this legal practice. That means the law needs to be changed, as the ultra-wealthy are not making their money through taxable income. What is new is the level of detail.
Or how about this one: The rich get richer ... because they don't always pay their fair share into the community chest.
This is US tax law. And now we have a map of how the wealthiest people exploit it thanks to a bombshell report from ProPublica, the investigative journalism nonprofit, which claims to have obtained years of tax returns for the wealthiest people in the country from an anonymous source. Read it here.
Its first report (it promises more to come) is on the richest of the rich, who in certain years claim losses that can wipe out their income tax bills. This should sound familiar; former President Donald Trump did the same thing.
But that doesn't mean it shouldn't be a scandal that Bezos, the richest person on Earth -- who has used his vast wealth to start a spaceship company that will take him into space, where he will also be the richest person -- has in multiple recent years told the federal government he owed no income taxes, according to ProPublica.
ProPublica also reports that Musk, the second wealthiest human on Earth, whose wealth has grown many billions in recent years and who also has a passion project space company, told the government he owed no income tax in 2018.
Follow over the jump for more news clips about the ProPublica report.
NBC News interviewed Jesse Eisinger, another of the report's authors, in ProPublica Reporter Explains How Ultra Wealthy Americans Avoid Taxes.
A ProPublica analysis of tax returns from the 25 wealthiest Americans showed they paid little income taxes compared to their fortunes. ProPublica did not reveal how they got the tax data, but said they “went to considerable lengths to confirm that the information” is accurate. Senior editor and reporter at ProPublica Jesse Eisinger, explains how the ultra wealthy avoid taxes.Eisinger emphasized the point about how the ultra-wealthy are not getting their wealth and income from sources that current law considers taxable. He repeated that point in front of a more critical audience at CNBC, which uploaded the interview as ProPublica's Eisinger on his reporting about ultra-wealthy tax avoidance.
ProPublica published a story Tuesday based on what they are calling never before seen data obtained from the IRS that sheds light on the taxes paid by American business titans like Warren Buffett, Bill Gates and Mark Zuckerberg. Jesse Eisinger, senior reporter ProPublica who wrote the story, joined "Squawk Box" on Wednesday to discuss his reporting.I'm not surprised that Andrew Ross Sorkin challenged Eisinger more than the interviewer at NBC News did or CNN did his co-author Paul Kiel. As I quoted TVTropes in Who watches Cable News? (Teaser), "CNBC is watched by people who think they own the country," so they are going to cover the story in a way that appeals to their viewers. On the other hand, I was slightly surprised by Jim Cramer's reaction in 'These revelations make me sick' — Cramer suggests a surtax for billionaires.
Some of the world’s richest men — Jeff Bezos, Elon Musk, Warren Buffett, Carl Icahn, Michael Bloomberg and George Soros — pay just a tiny fraction of their increasing wealth in taxes, and in some cases pay no taxes in a given year, according to a report Tuesday.
ProPublica, citing confidential IRS data it obtained on thousands of wealthy people, reported that the 25 richest Americans “saw their worth rise a collective $401 billion from 2014 to 2018.”
But those people paid a total of just $13.6 billion in federal income taxes for those five years, which “amounts to a true tax rate of only 3.4%,” the article noted.
In contrast, the median U.S. household in recent years earned around $70,000 annually and paid 14% of that in federal taxes. Couples in the highest income tax rate bracket paid a rate of 37% on earnings higher than $628,300, the report said.
ProPublica pointed out that billionaires, unlike most other people whose earnings come from conventional wage income, often benefit from “tax-avoidance strategies beyond the reach of ordinary people.”
And their wealth is often largely based on the rising value of stock and real estate that is not considered taxable unless those assets are sold, the report noted.
CNBC's Jim Cramer discusses why he thinks the U.S. should create a surtax for billionaires.If I understand Cramer correctly, he's saying he's not a socialist, but he is in favor of government saving capitalism from itself using the tax code. Surprised or not, I support this position, which was FDR's during the Great Depression and New Deal. I hope it catches on with CNBC's viewers.