Billionaires Without Taxes
According to a ProPublica report released on Tuesday, some of the world’s wealthiest men pay a small percentage of their growing fortune in taxes, and in some cases, pay no taxes at all.
ProPublica reported the 25 wealthiest Americans watched their net worth climb a combined $401 billion from 2014 to 2018. However, those people paid just $13.6 billion in federal income taxes during those five years, which “amounts to a true tax rate of only 3.4%,” according to the report. In comparison, the median American household earned roughly $70,000 a year and paid 14% of it in federal taxes.
Unlike the average joe, whose income comes from traditional wage income, billionaires often lessen their tax burden by using “tax-avoidance strategies beyond the reach of ordinary people,” according to ProPublica. And, according to the research, their wealth is generally built on the growing value of stock and real estate, which is not taxed until the assets are sold.
Many Americans are upset that they must pay more in federal taxes than billionaires like Elon Musk, George Soros, or Carl Icahn. When ProPublica asked if it was fair that he had paid no income tax in certain years, Icahn was baffled. Ichan said, “There’s a reason it’s called income tax. The reason is if, if you’re a poor person, a rich person, if you are Apple — if you have no income, you don’t pay taxes.”
Do you think wealthy people should pay taxes no matter what? Or do you think the current amount of taxes they pay is fair?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.