The headline of the only article today is really tempting… but it’s not nearly as sexy as I initially thought. It conflates income with wealth (we are taxed annually on income, wealth is only taxed when we die in estate taxes) and creates a “True Tax Rate” that feels misleading, to be honest.
I’m highlighting it not for the content within (it’s thin) but to point out why I think articles like this are not helpful. They reel you in with a great headline but there’s really no meat.
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax [ProPublica] – “ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.”
I wanted to learn some juicy tax loophole but I didn’t see any. “.. it turns out billionaires don’t have to evade taxes exotically and illicitly — they can avoid them routinely and legally.” Bezos didn’t pay taxes because he didn’t realize any gains and his income was offset by investment losses.
They play with a “True Tax Rate” which is based on estimated wealth growth, not income. If we are taxed on capital gains we have yet to realize, I think a lot of non-billionaires would get upset (and rightfully so). Your shares of the S&P 500 index have gone up, you now owe taxes on it now, where are you going to get that money if you don’t sell? Good luck.
“One of the billionaires mentioned in this article objected, arguing that publishing personal tax information is a violation of privacy. We have concluded that the public interest in knowing this information at this pivotal moment outweighs that legitimate concern.” – I’m not so sure I agree with the public interest argument. Show us the strategies you found and if they’re outrageous, the names won’t matter.
It sounds more like putting Elon Musk and Jeff Bezos is a lot more exciting than “so and so billionaire had investment losses.”
In the end, there were no strategies in this article. No tactics. Just outrage that billionaires don’t pay more.
Maybe there will be future articles with more specifics on what people did, rather than just comparisons to lower income Americans, but we’ll have to see.