The nonprofit news outlet obtained various documents revealing that the top 25 richest Americans gained $401 billion from 2014 to 2018 while paying very little in income tax.
Jeff Bezos, now the world's richest man, did not pay any federal income tax in 2007 or 2011, according to newly leaked IRS documents published in the first part of a bombshell ProPublica investigation. Elon Musk, Tesla founder and second richest man in the world, similarly didn't pay income taxes in 2018, according to ProPublica. Michael Bloomberg reportedly was able to not pay taxes in recent years, the outlet reported.
According to ProPublica, George Soros "paid no federal income tax three years in a row" between 2016 to 2018. Carl Icahn did not pay income taxes twice.
The list goes on.
The new scathing report now raises questions about the fairness of America's tax system which has been created to ensure that everyone pays their fair share, including the country's richest who are expected to pay the most.
President Biden has called for higher taxes on the rich as a means to help some of the country's poorest and middle-class families who have suffered the most especially during the pandemic.
But what ProPublica is calling the "true tax rate" sheds light on just how much the wealthiest Americans have actually paid in income taxes annually compared to the estimated growth of their wealth.
To put it plainly, according to ProPublica, the non-profit news organization is using the information to argue that these multi-billionaires are paying significantly less in income taxes than what they are actually worth.
Jeff Bezos paid $473 million in personal federal income taxes out of $4.22 billion of declared income between 2014 and 2018, during a time where his wealth increased by $99 billion, ProPublica reported. This makes his true tax rate 0.98%, according to the outlet.
Similarly, Musk, who served as the CEO of Tesla and SpaceX grew his wealth exponentially by $13.9 billion between 2014 and 2018, but he reported $1.52 billion as income and paid $455 million in taxes.
In other words, according to ProPublica, Elon Musk paid a "true tax" of 3.27% during that period. Musk's "true tax" rate measures the taxes he paid in proportion to what his total wealth was valued at, including unsold stocks.
Asked about whether it was appropriate that he had paid no income tax during certain years Icahn told ProPublica that he was perplexed by the question.
“There’s a reason it’s called income tax,” he said. “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.”
Icahn added, “Do you think a rich person should pay taxes no matter what? I don’t think it’s germane. How can you ask me that question?”
"In no way were any of my activities even remotely questionable or designed for the purpose of tax avoidance," Icahn fired back in a separate statement where he denied any "tax avoidance."
ProPublica requested comments from every person whose tax information was disclosed. Icahn, Buffet, and Bloomberg all responded saying that they had paid taxes they owed.
Buffet, who is 90, says in his written statement that following his death "about 99.5% of what I have will go to some combination of taxes and disbursements to various philanthropies."
He added, "I do believe the tax code should be changed substantially. I hope that the earned-income tax-credits is greatly expanded and additionally believe that huge dynastic wealth is not desirable for our society."
A spokesperson for Bloomberg wrote that he "scrupulously obeys the letter and spirit of the law." The letter added that when Bloomberg ran for President he, "proposed raising taxes on himself to make, in his word, 'a fairer, more progressive tax system that asks wealthy Americans like me to pay more."
A spokesperson for Soros said that, “between 2016 and 2018 George Soros lost money on his investments, therefore he did not owe federal income taxes in those years. Mr. Soros has long supported higher taxes for wealthy Americans.”
Some tax experts have called the calculations "unfair" and argue that the analysis is comparing income versus wealth –– and that the IRS doesn't levy taxes on unrealized gains or what person's assets add up to.
Meanwhile, the middle class pays a much higher true tax rate because of their lower wealth accumulation, according to ProPublica. But experts argue that using legal strategies to reduce tax bills is any person's right, CBS News reported.
Under Biden's new plan, the top tax rate would rise to 39.6% for people who earn over $400,000 annually or more in taxable income or salary. That averages to fewer than 2% of U.S. households.
The IRS Commissioner Charles Rettig says the agency is investigating how the data was leaked to ProPublica.
"Upon reviewing the article, appropriate contacts were made, which you would expect and the investigators will investigate," Rettig said at the start of a Senate Finance Committee hearing on the IRS' budget.
