The journalistic investigation has found that the top 25 Americans pay less in taxes than the typical worker. For instance, In recent years, the average American household earned around $70,000 per year and paid 14% in federal taxes.
The US Internal Revenue Service (IRS) is looking into a tax data breach following a report published by ProPublica on Tuesday, which, based on the leaked classified records, revealed that billionaires Elon Musk, Jeff Bezos and Warren Buffett are among the wealthiest Americans who have paid no federal income tax in some years, Commissioner Charles Rettig said during a Senate Finance Committee hearing on the agency’s budget.
“We will find out about the ProPublica article,” Rettig said, adding that the IRS has “turned it over to the appropriate investigators, both external and internal,” and that he “absolutely” intends to prosecute the beforementioned breach.
However, the commissioner was not qualified to comment on the scope of the data leaked from the system.
Senate Finance Chair Democrat Ron Wyden of Oregon said the disclosures put a new light on the rich not paying “their fair share,” and that he will produce a proposal to fix that – an apparent reference to his plan to tax investment gains on an annual basis.
In turn, White House spokeswoman Jen Psaki said on Tuesday that the media leak of wealthiest Americans’ tax returns was illegal and is under investigation.
“Any unauthorized disclosure of confidential government information by a person with access is illegal and we take this very seriously. The IRS Commissioner said today that they are taking all appropriate measures including referring the matter to investigators,” Psaki said during a press briefing.
Data Shows Lowest Taxes Paid by the Wealthiest Individuals
ProPublica obtained and released private IRS documents from the country’s wealthiest individuals, covering the period between 2006 and 2018, on Tuesday. By comparing tax returns with wealth gains reported by Forbes, ProPublica discovered that Bezos, Buffett, and other high-net-worth Americans paid minimal effective taxes, or, at some points, none at all.
The report revealed that that Amazon CEO Jeff Bezos paid no income tax in 2007 and 2011, while Tesla CEO Elon Musk in his turn paid no income tax in 2018. According to the report, George Soros, an investor, spent three years without paying federal income tax between 2016 and 2018. And Carl Icahn, a fellow investor, did not pay federal taxes in 2016 and 2017.
According to the documents, Warren Buffett, the CEO and chairman of Berkshire Hathaway, has avoided the most taxes in recent years. Buffet’s fortune increased by $24.3 billion between 2014 and 2018, although he paid just $23.7 million in taxes.
It revealed a so-called true tax rate of 0.1%, or less than ten cents for every $100 Buffet added to his fortune during that time period.
As for outgoing Amazon CEO Bezos, between 2014 and 2018, his fortune increased by an estimated $99 billion, with a total reported income of $4.22 billion. And Bezos paid $973 million in taxes during that time period, equating to a genuine tax rate of 0.98%.
In a combined tax return with then-wife MacKenzie Bezos in 2007, when Bezos paid no income tax, the Amazon founder declared $46 million in income, the majority of which came from interest and dividend payments from investments.
He was able to offset losses from other investments and deductions from his earnings. In 2011, his tax return reportedly revealed that he had lost money, but he claimed a $4,000 tax credit for his children.