ProPublica investigative news agency has released a report on U.S. federal tax payments by 25 more or less well-known billionaires. All 25 combined had a wealth increase of $401 billion in the five years 2014-18, and paid federal taxes of $13.6 billion on that increase in wealth, or about 3%. Median U.S. household income was about $70,000/year, and the median household paid 14% on those earnings. Couples with earnings higher than $628,000/year paid a 37% rate on the amount above that.
The ultra-wealthy are no more required by tax law than others to report all that wealth accretion as income as long as it remains stored in the form of investment holdings, usually stocks. But ProPublica also ascertained the actual realized income of the billionaires in those five years, with the following results:
Warren Buffett paid $24 million, or 20%, on legally taxable reported income of $125 million. But what ProPublica calls his “true tax rate,” based on his total increase in wealth over 2014-18, was 0.1%. Jeffrey Bezos paid $973 million or 22% on legally taxable income of $4.22 billion. There were years outside the 2014-18 period in which he paid no federal tax at all, namely 2007 and 2011. Bezos’ “true tax rate,” according to ProPublica, was also below 1% for 2014-18.
Sir Michael Bloomberg paid $292 million or 29% on $10 billion in legally taxable income. His “true tax rate” was 1.3%. Elon Musk paid $455 million, or 30%, on $1.52 billion legally taxable income. His “true tax rate” was “higher” than most, at 3.27%.
