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Wealth: Leak shows ultra-rich paid little tax

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A trove of IRS records revealed how little the wealthiest Americans pay in taxes, said Jesse Eisinger in ProPublica.org. From 2014 and 2018, the nation’s 25 richest people “saw their worth rise a collective $401 billion.” But they paid only $13.6 billion in federal income tax—a “true tax rate” of 3.4 percent. Instead of taking large salaries, they ballooned their wealth tax-free as their companies’ value rose. Jeff Bezos paid only $937 million in taxes as he gained $99 billion; Mike Bloomberg, whose wealth grew $22 billion, paid a similar rate. “No one avoided as much tax as Warren Buffett,” who paid the government “less than 10 cents for every $100” he accumulate­d.

This was all legal, said Binyamin Appelbaum in The New York Times. “The federal income tax is designed to be progressiv­e,” but the wealthiest Americans pay little while living and spending “lavishly by borrowing against the value of their assets.” Elon Musk, for example, “has pledged shares of Tesla stock worth $57.7 billion as collateral for personal loans.” Therefore, he has “little need for convention­al income,” and he paid nothing in federal income taxes in 2018. The Biden administra­tion has proposed raising the top tax rate on reported income and helping the IRS crack down on cheating. But that doesn’t address “how much money the rich have been saving by following the rules.”

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Sheltered from taxes
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