The 26 billionaires paid an average effective tax rate of just 18.2% on their reported income- far below the top statutory tax rate of 39.6% in effect for all but one of the six years and closer to the average 13.3% rate paid by Americans of all income levels in 2019. ![]() Elon Musk paid a mere 2.1% tax rate.Īs highlighted by ProPublica in its report this year, the ultrawealthy pay a remarkably low tax rate even on their sources of income that are now taxed. Notable names that paid less than a 2% tax rate based on their wealth growth include: Warren Buffett (0.1%), Jeff Bezos (1.1%), Mark Zuckerberg (1.1%), Charles and David Koch (1.3% and 1.4%, respectively), and Michael Bloomberg (1.8% ). So including the increased value of unsold assets when figuring the share of income paid in federal income taxes provides what ProPublica in a separate report last year dubbed a “true tax rate.” That report identified six billionaires paying no taxes some years or very low tax rates-this ATF analysis expands the list to 26. Among their other advantages, those gains can be used to secure low-interest loans that fund lavish lifestyles without owing income tax. Īt the scale enjoyed by billionaires, growth in the value of assets-even if those assets are not sold-can be as good as money in the bank, which Elon Musk is putting to good effect in his purchase of Twitter. As is usual among the ultra-wealthy, that taxable income-in this case, $132.2 billion-is far smaller than their leap in fortunes. The taxes paid were not based on wealth growth, which under current law is not taxed, but rather on “taxable income”: wages, private business earnings, dividends, interest, profits from the sale of stocks and other investments, and other sources. The 26 billionaires’ collective wealth grew by $500 billion between 20 while their total federal income taxes were just $24 billion. This revelation underscores the need to tax billionaires and other ultra-wealthy Americans more effectively, as proposed in plans from President Biden and Congressional Democrats. Twenty-six of the richest people in America paid an average federal income tax rate of just 4.8% over six years (2013-18) when the growth in their wealth is counted as income, according to Americans for Tax Fairness (ATF) using IRS tax-payment information recently released by ProPublica and billionaire wealth growth data from Forbes. ![]() IRS Data from ProPublica Reveals Some of America’s Richest Paid Next to Nothing On Their ‘True Income’ in 2013-18
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