July 28, 2021

Jeff Bezos, Elon Musk … How billionaires evaded tax in the United States

Billionaires and followers of tax optimization? In the midst of the international debate on raising taxes for multinational companies, an investigation by the independent organization ProPublica affirms that several American billionaires have managed to completely evade income tax for several years. It is not a question of fraud but of tax optimization which makes it possible to reduce the tax in a perfectly legal way, specifies ProPublica, an organization based in New York. On its website, it declares that it wants to “denounce the abuse of power and the betrayal of public trust”.

According to this survey, Amazon boss Jeff Bezos paid no federal taxes in 2007 and 2011. He saw his fortune grow by $ 100 billion, but he received “only” $ 4.22 billion. income and paid tax of $ 973 million (or 23% on average). ProPublica claims, for example, that he applied for and succeeded in obtaining a tax credit of $ 4,000 for his children in 2011, a year in which he reported in his tax return investment losses greater than his annual income.

Elon Musk, at the head of Tesla, escaped tax in 2018. But Jeff Bezos and Elon Musk are on the podium of the three richest men in the world.

Limited offer. 2 months for 1 € without commitment

Businessmen Michael Bloomberg and Carl Icahn as well as philanthropist George Soros have also managed to pay no federal taxes in some years, the report continues. As relates The world, over the period 2014-2018, the fortune of another billionaire, Warren Buffet, increased by 24.3 billion dollars, but he declared only 125 million in income because his holding, Berkshire Hathaway, does not pay dividends. With a derisory taxable income, he paid only a tax of 23.7 million dollars. According to ProPublica, in the end, the tax rate for these billionaires is only 3.4%.

Thousands of tax returns obtained

Questioned by AFP, the teams of Jeff Bezos, Elon Musk, Michael Bloomberg, Carl Icahn and George Soros did not react immediately. Responding to ProPublica, a spokesperson for George Soros cited losses on investments between 2016 and 2018 to justify the lack of federal tax. Michael Bloomberg and Carl Icahn also said they had paid the taxes they had to pay.

To reach these conclusions, the organization claims to have got its hands on thousands of tax returns from wealthy Americans to the IRS, over more than fifteen years. “Put end to end, they demolish the foundations of the American tax myth: that everyone pays their fair share and that the richest pay most,” write the authors of the survey.

In total, over the period 2014-2018, the top 25 American billionaires paid $ 13.6 billion (11.2 billion euros) in federal income tax while, during this time, their fortunes have grew by $ 401 billion, reports The world, for a cumulative heritage of $ 1,100 billion in 2018, the equivalent of what 14.3 million of their “average” compatriots have. That year, however, those millions of average Americans paid $ 143 billion in cumulative federal tax, 75 times more than the $ 1.9 billion paid by the 25, accuses ProPublica.

Upcoming proposals

Jeff Bezos, however, showed in April his support for the tax hike desired by US President Joe Biden to finance his infrastructure investment plan.

“The richest people in the country, who made huge profits during the pandemic, have not paid their fair share,” said Democratic Chairman of the Senate Finance Committee Ron Wyden on Tuesday, saying he would do so. “a proposal” in this sense. While Joe Biden plans to increase the marginal income tax rate from 37% to 39.6%, tax capital gains as income for millionaires, and tax inheritances more heavily, he does however no wealth tax.

Following the revelations from ProPublica, Senator Elizabeth Warren again called for the creation of such a tax. “Our tax system is rigged for billionaires who don’t make their fortunes with their income, as working families do. The proof is clear: it’s time for a wealth tax in America to finally make the ultra-rich pay their fair share. share, ”she tweeted.

ProPublica also developed in its survey a “true tax rate”, namely the tax rate paid by each billionaire in comparison with the increase in his wealth, the official tax rate not being measured by this. way. The result is a derisory level, at 0.10% for example for Warren Buffett between 2014 and 2018, against a background of an explosion in his wealth thanks to the rise in stock prices.

L’application L’Express

To follow the analysis and decryption wherever you are

Download the app

Download the app

The US Treasury Department said the disclosure of these private documents was illegal, and that it was investigating, along with other authorities, the leaks.


Opinions

Ideas and debates

Normalienne and associate of philosophy, Marylin Maeso is a specialist in Albert Camus.Pair Marylin Maeso

Chronic

Pierre Assouline, journalist, writer, member of the Académie Goncourt and columnist for L'ExpressPierre Assouline

Economy

Robin RivatonRobin Rivaton

Renaissance

A survey published this week tells us that 48% of those under 35 want to live in Paris.By Cécile Maisonneuve, President of La Fabrique de la Cité