The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Tag: billionaires

Why Ordinary Americans Pay Taxes — But Billionaires Don’t

After a year of reporting on the tax machinations of the ultrawealthy, ProPublica spotlights the top tax-avoidance techniques that provide massive benefits to billionaires.

Last June, drawing on the largest trove of confidential American tax data that’s ever been obtained, ProPublica launched a series of stories documenting the key ways the ultrawealthy avoid taxes, strategies that are largely unavailable to most taxpayers. To mark the first anniversary of the launch, we decided to assemble a quick summary of the techniques — all of which can generate tax savings on a massive scale — revealed in the series.

1. The Ultra Wealth Effect

Our first story unraveled how billionaires like Elon Musk, Warren Buffett and Jeff Bezos were able to amass some of the largest fortunes in history while paying remarkably little tax relative to their immense wealth. They did it in part by avoiding selling off their vast holdings of stock. The U.S. system taxes income. Selling stock generates income, so they avoid income as the system defines it. Meanwhile, billionaires can tap into their wealth by borrowing against it. And borrowing isn’t taxable. (Buffett said he followed the law and preferred that his wealth go to charity; the others didn’t comment beyond a “?” from Musk.)

2. The $5 Billion IRA

Other billionaires used less conventional ways to avoid income, we found. Tech mogul Peter Thiel amassed a $5 billion Roth IRA, a type of account that shields income from taxes and is intended to help low- and middle-class savers prepare for retirement. Back in 1999, Thiel stuffed low-valued shares of the company that would become PayPal into the account, a maneuver tax lawyers said risked running afoul of IRS rules. (It’s not clear if the government ever challenged the move.) He set himself up to reap billions in untaxed gains. (Thiel did not respond to questions for the original article.)


3. The $1 Billion Parlor Trick: Turning High-Tax-Rate Trading into Low-Tax-Rate Income

Even when tech billionaires do show income on their tax return, they tend to pay relatively low income tax rates. That’s because of the type of income they have: Gains from long-term investments, such as from stock sales, are taxed at a lower rate. But what do you do if you’re making over $1 billion every year, and it’s largely from short-term trading? Do you just accept that you’ll pay the higher rate on all that income? As we reported this week, Jeff Yass, head of one of the most profitable firms on Wall Street, did not meekly accept this fate. Instead, his firm, Susquehanna International Group, found creative ways to transform the wrong sort of income into the right kind, generating tax savings that exceeded $1 billion over just six years. (Susquehanna declined to comment but in a court case that centered on similar allegations, it maintained that it complies with the law.)

4: The Magic of Sports Ownership: Make Money While (Legally) Reporting Losses

The tax code offers business owners a slew of methods to erase income through deductions, none more awesome than buying a sports team, as former Microsoft CEO Steve Ballmer did with the Los Angeles Clippers. It doesn’t matter whether the team is actually profitable and growing in value. It can still be a write-off. (In some cases, we found, owners could effectively deduct a given player’s contract not once, but twice. They’re allowed to take deductions comparable to those for factory equipment that loses value as it ages, even as teams almost inevitably gain in value.) That’s one reason owners tend to pay far lower tax rates than the athletes they employ, or even the people serving beer in the team’s stadium. In our story, we found a Clippers arena worker who made $45,000 a year and paid a higher tax rate than the billionaire Ballmer. (Ballmer said he pays the taxes he owes.)

5. Build, Drill and Save: The Real Estate and Oil Businesses Can Both Be Tax Havens

In certain industries, like real estate or oil and gas, the tax breaks are so plentiful that billionaires can erase their income entirely even as they grow richer. That’s how real estate developer Stephen Ross (who also happens to own the Miami Dolphins) went 10 years without paying any income tax. Ross said that he followed the law. Another mogul, this one in the oil business, managed to tap a near bottomless well of write-offs via one of the biggest oil spills in history. (The mogul’s representatives did not respond to requests for comment.)

6. Even a Billionaire’s Hobbies Can Pay Off at Tax Time

Deductions from hobbies and side projects, which the ultrawealthy can structure as businesses, are another fun option. For some billionaires, it’s race horses: We found that six owners of thoroughbreds at the 2021 Kentucky Derby had taken a combined $600 million in tax write-offs on their horse racing operations. For others, like Beanie Babies founder Ty Warner, it’s luxury hotels. The billionaire splurged on a couple of landmark Four Seasons locations and then went 12 years without paying any income tax. (Representatives for Warner did not respond to requests for comment.)

7. Think Your Taxes are Too High? Change the Tax Laws

Sometimes, it pays to fight for a new tax break. For the billionaires who contributed millions to Republican politicians, the payoff came in the form of Trump’s “big, beautiful tax cut” for passthrough businesses. We found the change sent $1 billion in tax savings in a single year to just 82 ultrawealthy households. Some business owners also boosted their savings with a trick: They slashed their own salaries and categorized the money instead as passthrough income.

8. Why Tech Billionaires Pay Less Than Hedge-Fund Managers

With so many options to reduce taxes, the richest Americans often manage low income tax rates. We analyzed the incomes and taxes of the country’s top 400 earners, those averaging over $110 million in income per year. Overall, the group paid relatively low rates, but certain segments (tech billionaires, heirs, private equity executives) stood out even within this elite population because they were able to draw on the sorts of techniques detailed above. (Also drawing on these techniques were wealthy politicians, like the governors of Colorado and West Virginia.)

9. Brother, Can You Spare a Stimulus Check?

But the real standouts were the billionaires who reported such low incomes that they qualified for government assistance. At least 18 billionaires received stimulus checks in 2020, because their tax returns placed them below the income cutoff ($150,000 for a married couple).

10. Trust This: How Wealthy Families Pass Billions to Heirs While Avoiding Taxes

The holes in the estate tax, we found, are even more remarkable. There are well-worn ways to make sure Uncle Sam doesn’t get his cut of a fortune being passed on to heirs, and the most common is through a trust. How common no one can say, but we found evidence that at least half of the nation’s 100 richest individuals had used estate-tax-dodging trusts. In another story,we followed three century-old dynasties down through the generations, showing how they used trusts to avoid taxes, so that a fortune could pass all the way from the original early 20th century tycoon to, for example, the great-great-granddaughter who recently collected $210 million before her 19th birthday.

Reprinted with permission from Propublica.

How The Supreme Court Became A Corporate Rubber Stamp

Today's six-member supermajority on the Supreme Court has surrendered all claim to being an impartial moral force for blind justice. Instead, the GOP's small network of corporate and right-wing operatives has painstakingly fabricated and weaponized the court as its own political oligarchy. In only a couple of decades, backed by a few billionaires, these anti-democracy zealots have incrementally been imposing on America an extremist political agenda that they could not win at the ballot box.

Their "Eureka!" moment — the startling development that opened the eyes of the moneyed elites and ideologues to the raw power they could grab by politicizing the judiciary — was the Supreme Court's illegitimate Bush v. Gore ruling. In December 2000, that five-person GOP majority abruptly crashed Florida's presidential vote count, storming over both democracy and judicial propriety to install George W. in the White House. Appalled, dissenting Justice John Paul Stevens mocked the five, pointing out that while their trumped-up ruling didn't really establish whether Bush or Gore won, it did make the loser "pellucidly clear: It is the Nation's confidence in the judge as an impartial guardian of the rule of law."

One of those who helped run the court's blatant political power play over the Florida vote was an obscure corporate lawyer who had long been an aggressive, behind-the-scenes Republican monkey-wrencher pushing to restrict voting by people of color, poor people and other Democratic constituencies: John Roberts. Shortly thereafter — surprise! — Bush elevated Roberts to a top federal judgeship, and just two years later moved him on up to America's ultimate judicial power spot, chief justice of the Supremes.

From this lofty roost, Roberts has orchestrated an expansive political docket for the court, handpicking cases created and advanced by far-right interests. He then has manipulated precedents and procedures to produce convoluted decisions that impose plutocratic, autocratic and theocratic domination over the American people's democratic rights and aspirations.

To date, Chief Justice Roberts has cobbled together slim, all-Republican majorities to hand down more than 80 blatantly partisan rulings, fabricating law that We the People have never voted for and don't support.

It's bizarre to have the Supreme Court, the least democratic branch of government, professing to speak in the name of The People. Even as its right-wing core is grinding out an unprecedented level of partisan judgments that We the People clearly do not want — and will not support. Take that abortion right, for example, that the court — now freshly packed with former President Donald Trump's trio of Amy Coney Barrett, Neil Gorsuch and Brett Kavanaugh — will likely move this year to nullify. If they do, it will be a pricey "victory" for those politicos, because they are imperiously thrusting their own agenda over the overwhelming will of the people.

Helloooo, your honors: Some six in 10 Americans have consistently and passionately affirmed that these deeply personal and emotional decisions belong to the women affected, not to unelected ideologues and political opportunists. A court so far out of touch with the people is marching forth with no cloak of legitimacy, squandering its authority to be taken seriously, much less obeyed.

Not only has this band of self-righteous judges been punching their reactionary social biases into court-made law, but they've also been rubber-stamping cases to enthrone corporate supremacy over us and our environment. Throughout Roberts' reign, the court has sided with the U.S. Chamber of Commerce (the chief front group for U.S. corporate giants) a staggering 70 percent of the time! Indeed, three members — Roberts, Samuel Alito and Clarence Thomas — now rank among the five most corporate-friendly justices of the past 75 years.

This aggressive corporatization and partisanship has lifted the Supremes to a new level of public awareness — much to their chagrin. In a Quinnipiac survey last November, more than six in 10 Americans said they believe Supreme Court decisions are motivated primarily by politics, not by unbiased readings of the law. Rather than instilling a modicum of humility, however, the bad reviews have stirred embarrassing outbursts of judicial pique and vitriol. Alito, for example, whined loudly last year that critics are engaged in "unprecedented efforts to intimidate the court or damage it as an independent institution." Likewise, Barrett was so stung that she felt it necessary to go public with a strained denial, pleading for the public to believe that "this court is not comprised of a bunch of partisan hacks."

Note to petulant judges: If you don't want to be called a partisan hack, stop being one. And, Brother Alito, it's not critics who're damaging the third branch "as an independent institution," it's your obsequious fealty to corporate interests and your knee-jerk allegiance to extremist ideologues. You can wear the robe, but you can't hide in it.

Reprinted with permission from Creators.

There’s Rich, Ugly Rich, And Jeff Bezos

When I was just a tyke, cowboy television actors were marketed as role models and heroes for little backyard cowpokes like me, and we could send off a cereal box top to get a certificate making us "Pals of the Saddle" or some-such with Roy Rogers, Hopalong Cassidy or other "heroes."

Cute for a four year-old. Less so for 57-year-old Jeff "Space Boy" Bezos.

Yet there he was in July — the gazillionaire profiteer, labor exploiter, and tax scofflaw who heads the Amazon online retail syndicate — all dressed up and playacting as a heroic conqueror of space. Marketed as some combination of the Wright brothers' innovation and the Apollo 11 moon landing, Little Jeff's trip on his private Blue Origin rocket ship was essentially a very expensive, high-tech carnival ride. The whole thing took only 11 minutes, barely got into suborbital space, achieved no scientific purpose, and did zero to enhance American prestige in the world.

As for personal genius or heroics, Bezos didn't invent or build the spacecraft, didn't have any role in flying it (the trip up and down was fully automated), and didn't face any cosmic unknowns (he didn't even have to wear a spacesuit). All he really did was buy the spacecraft — a cheap bauble for the world's richest man.

But he did get to dress up in a sort of space-style jogging outfit with his name and his Blue Origin corporate logo emblazoned on it. Then, like a little boy getting a cereal-box certificate proclaiming him a cowboy, when the diminutive mega-billionaire floated back to terra firma, he held a fake ceremony at which some former NASA official pinned a set of phony "astronaut wings" on him, custom designed by his own corporation. More pathetically, his corporate lobbyists are said to be appealing to Washington officials to award official astronaut wings to this uber-rich space tourist.

So, there you have the new pantheon of America's flight heroes: the Wright brothers, Amelia Earhart, John Glenn, Neil Armstrong ... and Jeff "Space Boy" Bezos. Did I mention "pathetic"?

I cheered when Bezos, the richest man on Earth, had himself rocketed into space. But then he came back down.

There's nothing irredeemably wrong about being rich — indeed, as Mark Twain put it, "I'm opposed to millionaires, but it would be dangerous to offer me the position." One good role model for handling wealth, rather than letting it handle you, is music superstar Dolly Parton. She donated a cool million bucks to the Vanderbilt University Medical Center in 2020 to help finance its development of the Moderna vaccine that's now preventing millions of people from dying with COVID-19.

Then there's ugly rich, like Amazon kingpin "Space Boy" Bezos, who keeps spending gobs of his unsurpassed net worth on vainglorious purchases that end up revealing his essential worthlessness. Last year, he paid half a billion dollars for a yacht that's three football fields long and still not big enough to float his ego. So, last month, combining cluelessness with callousness, he actually ran a global media campaign to glorify himself for spending untold billions on his ego trip up to the edge of space. Back on Earth, he publicly blurted out that Amazon's underpaid and abused workforce should be applauded, because "you guys paid for all this."

Meanwhile, Wall Street speculators keep bloating Space Boy's personal fortune. On just one day last year, his wealth was jacked up by $8 billion ! One day! For doing nothing — he didn't work longer, harder or smarter. Well, he has been diligent about one task: tax dodging. Even though his wealth now tops $162 billion, he's had years in which he's paid zero income tax for the support of our nation.

But this year, Jeff suddenly became a philanthropist! Increasingly ridiculed as a self-indulgent rich jerk, he loudly announced he was giving $200 million to charitable causes. Wow — how generous. Except ... that's no sacrifice for Jeff, it's pocket change — doling out two big bills means he still has $161.8 billion in his vault.

We don't need his self-serving "charity"; we need a wealth tax to restore a bit of fairness and to support America's common good.

To find out more about Jim Hightower and read features by other Creators Syndicate writers and cartoonists, visit the Creators webpage at www.creators.com.

Warren And Whitehouse Demand Probe Of Tax Avoidance By Ultra-Wealthy

Reprinted with permission from ProPublica

Two prominent members of the Senate Finance Committee are calling for an investigation into tax avoidance by the ultrawealthy, citing ProPublica's "Secret IRS Files" series.

In a letter sent today, Elizabeth Warren (D-MA.) and Sheldon Whitehouse (D-RI) wrote to the committee's chairman, Ron Wyden (D-OR), that the "bombshell" and "deeply troubling" report requires an investigation into "how the nation's wealthiest individuals are using a series of legal tax loopholes to avoid paying their fair share of income taxes." The senators also requested that the Senate hold hearings and develop legislation to address the loopholes' "impact on the nation's finances and ability to pay for investments in infrastructure, health care, the economy, and the environment."

Last month ProPublica began publishing a series of stories about tax avoidance among the ultra-wealthy, based on a vast trove of tax data concerning thousands of the wealthiest American taxpayers and covering more than 15 years. ProPublica conducted an unprecedented analysis that compared the ultra-wealthy's taxes to the growth in their fortunes, calculating that the 25 richest Americans pay a "true tax rate" of just 3.4 percent.

The wealthy pay so little in taxes primarily because they keep their incomes low, the article explained, often borrowing against their fortunes to fund their lifestyles. Amazon's Jeff Bezos, Tesla's Elon Musk, Bloomberg L.P.'s Michael Bloomberg and other billionaires have each paid no federal income taxes in one or more recent years. The tax avoidance techniques described in "The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Taxes" are legal, and routine among the ultrawealthy.

In a subsequent article, ProPublica highlighted how some rich people, such as Peter Thiel, have been able to use Roth individual retirement accounts, intended as vehicles to bolster middle-class savings, to create vast untaxed fortunes. A third article showed how billionaires use a provision in the tax code to reduce their taxes after buying sports teams.

Banks and financial institutions are lending more to the rich than ever, according to a story in The Wall Street Journal last week. The senators called for an investigation of banks and wealth management firms to understand the techniques, strategies and products offered to the wealthy that enable them to avoid paying taxes. Morgan Stanley's wealth management clients have $68 billion worth of loans backed by securities and other investments, more than double the amount they had five years ago, and Bank of America has loans worth over $62 billion, the Journal reported.

In March, Warren introduced a bill, co-sponsored by Whitehouse, that would create a tax on the wealth of the richest Americans. Most Republicans and some Democrats oppose such a measure.

Update, July 14, 2021: In a statement, Wyden said that he agreed with the points raised by Warren and Whitehouse. "The country's wealthiest — who profited immensely during the pandemic — have not been paying their fair share," he said. "I've been working on a proposal to fix this broken system since 2019 and continue to work to get the bill ready for release. I'm also going to work with my colleagues on other ways the committee can tackle this issue."

Billionaire Linked To White Nationalists Backing GOP Senate Hopeful In Ohio

Reprinted with permission from American Independent

Author and venture capitalist J.D. Vance announced on Thursday that he would be running for the Republican nomination for Ohio's open U.S. Senate seat in 2022.

The seat is currently held by GOP Sen. Rob Portman, who is retiring. Vance is the seventh Republican to officially file for the election. Also currently running is serial failed Senate candidate Josh Mandel.

The seat is currently rated as "lean Republican" by the Cook Political Report, while Inside Elections says it is "solid" for the party.

In March, in advance of Vance's official campaign declaration, former Paypal executive and billionaire Peter Thiel donated $10 million to Protect Ohio Values, a super PAC supporting Vance's candidacy. On Wednesday, just before Vance's announcement, the PAC released a digital ad in support of his campaign, which they promoted in an "exclusive" for Fox News.

Over the last few years, Thiel has been a prominent voice within the Republican Party. He was one of the featured speakers at the Republican National Convention in 2016, expressing support for former President Donald Trump's campaign, and donated to him through several super PACs.

According to a 2020 Buzzfeed report, as part of his effort to back Trump, Thiel reportedly hosted a dinner with Kevin DeAnna, a prominent white nationalist who founded the far-right group Youth For Western Civilization, in July 2016.

In an email sent on July 16, 2016, Thiel reportedly told DeAnna, "Really enjoyed meeting you last night." The email also includes the suggestion that Thiel was interested in further meetings with the white supremacist. According to Buzzfeed, DeAnna responded to Thiel, writing, "It was a real honor meeting you and thanks for hosting all of us."

DeAnna, the outlet noted, has written in favor of creating a white "ethno-state" which he said is "the great dream of the White Republic" in a 2013 column.

DeAnna is also a proponent of the racist "great replacement" conspiracy theory, which claims that immigration to America from nonwhites is a plot to replace white people. Writing about the conspiracy on the white supremacist site VDARE in July 2019, DeAnna claimed, "Westerners must wake to this demographic tidal wave lest their culture, people and civilization be extinguished."

More recently, elements of the conspiracy have been voiced by Republicans in Congress.

Thiel has not commented publicly on his reported interactions with white nationalist figures.

In addition to Thiel, the far-right Mercer family has also reportedly donated to the pro-Vance super PAC.

Bryan Lanza, a spokesman for the PAC, told the Cincinnati Enquirer that Bob and Rebekah Mercer made a "significant contribution" to Protect Ohio Values.

The Mercers, who made their money from hedge funds, were also major donors to Trump's 2016 campaign. They helped to finance the right-wing outlet Breitbart, which has frequently trafficked in racism, sexism, and political smears.

Parler, the right-wing social network, was also financed by the Mercers, and Rebekah Mercer co-founded the company. The network was removed from the Apple app store in January after it became clear that some users had utilized it to organize the January 6 attack on the Capitol. It has since been restored.

Published with permission of The American Independent Foundation.

We Need To Tax The Rich — Not Punish Them

Taxes are how we raise the money needed to run government. The rich have the wherewithal to bear most of those costs. These points are especially connected at a time when the rich have gotten so much richer and the government needs to do so much more.

But in making the case to raise taxes on the wealthy, it is counterproductive to portray such a scenario as a kind of just punishment for those who have accumulated wealth. Many on the left can't stop themselves from hurting their cause.

It's true that America's billionaires added $1 trillion to their pile during President Donald Trump's four years. But though the 2017 tax cuts mostly benefited the richest investors, a growing concentration of wealth has been going on for decades. So, raise taxes on these guys because they have the money and not because they are supposedly greedy or otherwise in need of moral teachings.

The pandemic did especially nice things for Silicon Valley companies that helped stay-at-home Americans move their shopping and working online. They didn't create the pandemic. They just happened to be in the right businesses when it hit.

Thus, there was no good reason for the Institute for Policy Studies and others to fulminate against "pandemic profiteers," a list heavy with tech entrepreneurs. The dictionary defines profiteer as one who makes "an excessive or unfair profit, especially illegally or in a black market."

What exactly made Zoom founder Eric Yuan one of the pandemic profiteers? Yuan had no idea when he created his videoconferencing service in 2011 that nine years later, economic shutdowns and social distancing would create a huge market for his invention and make him a billionaire several times over.

Liberals should bear in mind that many of the biggest donors to President Joe Biden's presidential campaign are the very billionaires on whom he wants to raise taxes. They include the top people at the likes of Facebook, Google and Apple. One of them, Google CEO Eric Schmidt, saw his net worth, now $17.4 billion, rise 61 percent in the Trump years.

Also note that several factors influence rich people's view of taxes. Some feel morally obligated to help support the society that has done so much for them. Others consider it very much in their interests to have good roads, ports and internet — things their taxes pay for.

The "fairness" argument does remain valid. The wealthiest Americans have received enormous tax breaks while having the ability, in many cases, to set their own number for taxable income. By contrast, the working stiffs see their taxes automatically deducted every week from their paychecks.

That makes Biden's plan to beef up the IRS to go after tycoons who chisel on their taxes long overdue. IRS Commissioner Charles Rettig has said that tax cheats deprive the government of something like $1 trillion a year.

Just don't blame the honest economic winners in the pandemic for the hardships of others. New York State Sen. Luis Sepulveda, who represents a working-class area of the Bronx, implied as much when he said, "It makes me angry because in the wealthiest city in the world, it's inexcusable to have such a high rate of unemployment in one area."

His largely immigrant constituents did not lose their service jobs because rich people lived elsewhere in the city. They lost them because a deadly virus shut down the businesses that employed them.

So, there's no need here to spin a morality tale about the evils of great wealth. The case for raising taxes on those who could most easily pay them is good. Let's stick to this more sophisticated argument and skip the reproach.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Secret IRS Files Reveal How Wealthiest Avoid Taxes

Reprinted with permission from ProPublica

In 2007, Jeff Bezos, then a multibillionaire and now the world's richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.

Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.

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.

Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.

Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14 percent in federal taxes. The highest income tax rate, 37 percent, kicked in this year, for couples, on earnings above $628,300.

The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.

America's billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.

To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.

We're going to call this their true tax rate.

The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That's a staggering sum, but it amounts to a true tax rate of only 3.4 percent.

It's a completely different picture for middle-class Americans, for example, wage earners in their early 40s who have amassed a typical amount of wealth for people their age. From 2014 to 2018, such households saw their net worth expand by about $65,000 after taxes on average, mostly due to the rise in value of their homes. But because the vast bulk of their earnings were salaries, their tax bills were almost as much, nearly $62,000, over that five-year period.

The Ultrawealthy by the Numbers

Read our full methodology. Credit: Agnes Chang/ProPublica

No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That's perhaps surprising, given his public stance as an advocate of higher taxes for the rich. According to Forbes, his riches rose $24.3 billion between 2014 and 2018. Over those years, the data shows, Buffett reported paying $23.7 million in taxes.

That works out to a true tax rate of 0.1 percent, or less than 10 cents for every $100 he added to his wealth.

In the coming months, ProPublica will use the IRS data we have obtained to explore in detail how the ultrawealthy avoid taxes, exploit loopholes and escape scrutiny from federal auditors.

Experts have long understood the broad outlines of how little the wealthy are taxed in the United States, and many lay people have long suspected the same thing.

But few specifics about individuals ever emerge in public. Tax information is among the most zealously guarded secrets in the federal government. ProPublica has decided to reveal individual tax information of some of the wealthiest Americans because it is only by seeing specifics that the public can understand the realities of the country's tax system.

Consider Bezos' 2007, one of the years he paid zero in federal income taxes. Amazon's stock more than doubled. Bezos' fortune leapt $3.8 billion, according to Forbes, whose wealth estimates are widely cited. How did a person enjoying that sort of wealth explosion end up paying no income tax?

In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of "other expenses."

In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What's more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.

His tax avoidance is even more striking if you examine 2006 to 2018, a period for which ProPublica has complete data. Bezos' wealth increased by $127 billion, according to Forbes, but he reported a total of $6.5 billion in income. The $1.4 billion he paid in personal federal taxes is a massive number — yet it amounts to a 1.1 percent true tax rate on the rise in his fortune.

Compare Bezos' Financial Picture to a Typical American Household



Read our full methodology. Credit: Agnes Chang/ProPublica

The revelations provided by the IRS data come at a crucial moment. Wealth inequality has become one of the defining issues of our age. The president and Congress are considering the most ambitious tax increases in decades on those with high incomes. But the American tax conversation has been dominated by debate over incremental changes, such as whether the top tax rate should be 39.6 percent rather than 37 percent.

ProPublica's data shows that while some wealthy Americans, such as hedge fund managers, would pay more taxes under the current Biden administration proposals, the vast majority of the top 25 would see little change.

The tax data was provided to ProPublica after we published a series of articles scrutinizing the IRS. The articles exposed how years of budget cuts have hobbled the agency's ability to enforce the law and how the largest corporations and the rich have benefited from the IRS' weakness. They also showed how people in poor regions are now more likely to be audited than those in affluent areas.

ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions. ProPublica reporters spent months processing and analyzing the material to transform it into a usable database.

We then verified the information by comparing elements of it with dozens of already public tax details (in court documents, politicians' financial disclosures and news stories) as well as by vetting it with individuals whose tax information is contained in the trove. Every person whose tax information is described in this story was asked to comment. Those who responded, including Buffett, Bloomberg and Icahn, all said they had paid the taxes they owed.

A spokesman for Soros said in a statement: "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." Personal and corporate representatives of Bezos declined to receive detailed questions about the matter. ProPublica attempted to reach Scott through her divorce attorney, a personal representative and family members; she did not respond. Musk responded to an initial query with a lone punctuation mark: "?" After we sent detailed questions to him, he did not reply.

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.

The consequences of allowing the most prosperous to game the tax system have been profound. Federal budgets, apart from military spending, have been constrained for decades. Roads and bridges have crumbled, social services have withered and the solvency of Social Security and Medicare is perpetually in question.

There is an even more fundamental issue than which programs get funded or not: Taxes are a kind of collective sacrifice. No one loves giving their hard-earned money to the government. But the system works only as long as it's perceived to be fair.

Our analysis of tax data for the 25 richest Americans quantifies just how unfair the system has become.

By the end of 2018, the 25 were worth $1.1 trillion.

For comparison, it would take 14.3 million ordinary American wage earners put together to equal that same amount of wealth.

The personal federal tax bill for the top 25 in 2018: $1.9 billion.

The bill for the wage earners: $143 billion.

The idea of a regular tax on income, much less on wealth, does not appear in the country's founding documents. In fact, Article 1 of the U.S. Constitution explicitly prohibits "direct" taxes on citizens under most circumstances. This meant that for decades, the U.S. government mainly funded itself through "indirect" taxes: tariffs and levies on consumer goods like tobacco and alcohol.

With the costs of the Civil War looming, Congress imposed a national income tax in 1861. The wealthy helped force its repeal soon after the war ended. (Their pique could only have been exacerbated by the fact that the law required public disclosure. The annual income of the moguls of the day — $1.3 million for William Astor; $576,000 for Cornelius Vanderbilt — was listed in the pages of The New York Times in 1865.)

By the late 19th and early 20th century, wealth inequality was acute and the political climate was changing. The federal government began expanding, creating agencies to protect food, workers and more. It needed funding, but tariffs were pinching regular Americans more than the rich. The Supreme Court had rejected an 1894 law that would have created an income tax. So Congress moved to amend the Constitution. The 16th Amendment was ratified in 1913 and gave the government power "to lay and collect taxes on incomes, from whatever source derived."

In the early years, the personal income tax worked as Congress intended, falling squarely on the richest. In 1918, only 15 percent of American families owed any tax. The top one percent paid 80 percent of the revenue raised, according to historian W. Elliot Brownlee.

But a question remained: What would count as income and what wouldn't? In 1916, a woman named Myrtle Macomber received a dividend for her Standard Oil of California shares. She owed taxes, thanks to the new law. The dividend had not come in cash, however. It came in the form of an additional share for every two shares she already held. She paid the taxes and then brought a court challenge: Yes, she'd gotten a bit richer, but she hadn't received any money. Therefore, she argued, she'd received no "income."

Four years later, the Supreme Court agreed. In Eisner v. Macomber, the high court ruled that income derived only from proceeds. A person needed to sell an asset — stock, bond or building — and reap some money before it could be taxed.

Since then, the concept that income comes only from proceeds — when gains are "realized" — has been the bedrock of the U.S. tax system. Wages are taxed. Cash dividends are taxed. Gains from selling assets are taxed. But if a taxpayer hasn't sold anything, there is no income and therefore no tax.

Contemporary critics of Macomber were plentiful and prescient. Cordell Hull, the congressman known as the "father" of the income tax, assailed the decision, according to scholar Marjorie Kornhauser. Hull predicted that tax avoidance would become common. The ruling opened a gaping loophole, Hull warned, allowing industrialists to build a company and borrow against the stock to pay living expenses. Anyone could "live upon the value" of their company stock "without selling it, and of course, without ever paying" tax, he said.

Hull's prediction would reach full flower only decades later, spurred by a series of epochal economic, legal and cultural changes that began to gather momentum in the 1970s. Antitrust enforcers increasingly accepted mergers and stopped trying to break up huge corporations. For their part, companies came to obsess over the value of their stock to the exclusion of nearly everything else. That helped give rise in the last 40 years to a series of corporate monoliths — beginning with Microsoft and Oracle in the 1980s and 1990s and continuing to Amazon, Google, Facebook and Apple today — that often have concentrated ownership, high profit margins and rich share prices. The winner-take-all economy has created modern fortunes that by some measures eclipse those of John D. Rockefeller, J.P. Morgan and Andrew Carnegie.

In the here and now, the ultrawealthy use an array of techniques that aren't available to those of lesser means to get around the tax system.

Certainly, there are illegal tax evaders among them, but it turns out billionaires don't have to evade taxes exotically and illicitly — they can avoid them routinely and legally.

Most Americans have to work to live. When they do, they get paid — and they get taxed. The federal government considers almost every dollar workers earn to be "income," and employers take taxes directly out of their paychecks.

The Bezoses of the world have no need to be paid a salary. Bezos' Amazon wages have long been set at the middle-class level of around $80,000 a year.

For years, there's been something of a competition among elite founder-CEOs to go even lower. Steve Jobs took $1 in salary when he returned to Apple in the 1990s. Facebook's Zuckerberg, Oracle's Larry Ellison and Google's Larry Page have all done the same.

Yet this is not the self-effacing gesture it appears to be: Wages are taxed at a high rate. The top 25 wealthiest Americans reported $158 million in wages in 2018, according to the IRS data. That's a mere 1.1 percent of what they listed on their tax forms as their total reported income. The rest mostly came from dividends and the sale of stock, bonds or other investments, which are taxed at lower rates than wages.

As Congressman Hull envisioned long ago, the ultrawealthy typically hold fast to shares in the companies they've founded. Many titans of the 21st century sit on mountains of what are known as unrealized gains, the total size of which fluctuates each day as stock prices rise and fall. Of the $4.25 trillion in wealth held by U.S. billionaires, some $2.7 trillion is unrealized, according to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley.

Buffett has famously held onto his stock in the company he founded, Berkshire Hathaway, the conglomerate that owns Geico, Duracell and significant stakes in American Express and Coca-Cola. That has allowed Buffett to largely avoid transforming his wealth into income. From 2015 through 2018, he reported annual income ranging from $11.6 million to $25 million. That may seem like a lot, but Buffett ranks as roughly the world's sixth-richest person — he's worth $110 billion as of Forbes' estimate in May 2021. At least 14,000 U.S. taxpayers in 2015 reported higher income than him, according to IRS data.

There's also a second strategy Buffett relies on that minimizes income, and therefore, taxes. Berkshire does not pay a dividend, the sum (a piece of the profits, in theory) that many companies pay each quarter to those who own their stock. Buffett has always argued that it is better to use that money to find investments for Berkshire that will further boost the value of shares held by him and other investors. If Berkshire had offered anywhere close to the average dividend in recent years, Buffett would have received over $1 billion in dividend income and owed hundreds of millions in taxes each year.

Many Silicon Valley and infotech companies have emulated Buffett's model, eschewing stock dividends, at least for a time. In the 1980s and 1990s, companies like Microsoft and Oracle offered shareholders rocketing growth and profits but did not pay dividends. Google, Facebook, Amazon and Tesla do not pay dividends.

In a detailed written response, Buffett defended his practices but did not directly address ProPublica's true tax rate calculation. "I continue to believe that the tax code should be changed substantially," he wrote, adding that he thought "huge dynastic wealth is not desirable for our society."

The decision not to have Berkshire pay dividends has been supported by the vast majority of his shareholders. "I can't think of any large public company with shareholders so united in their reinvestment beliefs," he wrote. And he pointed out that Berkshire Hathaway pays significant corporate taxes, accounting for 1.5 percentof total U.S. corporate taxes in 2019 and 2020.

Buffett reiterated that he has begun giving his enormous fortune away and ultimately plans to donate 99.5 percent of it to charity. "I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt," he wrote.

Buy, Borrow, Die: How America's Ultrawealthy Stay That Way

Buy, Borrow, Die: How America's Ultrawealthy Stay That Way www.youtube.com

So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it.

For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and thus, income tax.

The tax math provides a clear incentive for this. If you own a company and take a huge salary, you'll pay 37 percent in income tax on the bulk of it. Sell stock and you'll pay 20 percent in capital gains tax — and lose some control over your company. But take out a loan, and these days you'll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn't consider them income. Banks typically require collateral, but the wealthy have plenty of that.

The vast majority of the ultra-wealthy's loans do not appear in the tax records obtained by ProPublica since they are generally not disclosed to the IRS. But occasionally, the loans are disclosed in securities filings. In 2014, for example, Oracle revealed that its CEO, Ellison, had a credit line secured by about $10 billion of his shares.

Last year Tesla reported that Musk had pledged some 92 million shares, which were worth about $57.7 billion as of May 29, 2021, as collateral for personal loans.

With the exception of one year when he exercised more than a billion dollars in stock options, Musk's tax bills in no way reflect the fortune he has at his disposal. In 2015, he paid $68,000 in federal income tax. In 2017, it was $65,000, and in 2018 he paid no federal income tax. Between 2014 and 2018, he had a true tax rate of 3.27 percent.

The IRS records provide glimpses of other massive loans. In both 2016 and 2017, investor Carl Icahn, who ranks as the 40th-wealthiest American on the Forbes list, paid no federal income taxes despite reporting a total of $544 million in adjusted gross income (which the IRS defines as earnings minus items like student loan interest payments or alimony). Icahn had an outstanding loan of $1.2 billion with Bank of America among other loans, according to the IRS data. It was technically a mortgage because it was secured, at least in part, by Manhattan penthouse apartments and other properties.

Borrowing offers multiple benefits to Icahn: He gets huge tranches of cash to turbocharge his investment returns. Then he gets to deduct the interest from his taxes. In an interview, Icahn explained that he reports the profits and losses of his business empire on his personal taxes.

Icahn acknowledged that he is a "big borrower. I do borrow a lot of money." Asked if he takes out loans also to lower his tax bill, Icahn said: "No, not at all. My borrowing is to win. I enjoy the competition. I enjoy winning."

He said adjusted gross income was a misleading figure for him. After taking hundreds of millions in deductions for the interest on his loans, he registered tax losses for both years, he said. "I didn't make money because, unfortunately for me, my interest was higher than my whole adjusted income."

Asked whether it was appropriate that he had paid no income tax in certain years, Icahn said 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." He 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?"

Skeptics might question our analysis of how little the superrich pay in taxes. For one, they might argue that owners of companies get hit by corporate taxes. They also might counter that some billionaires cannot avoid income — and therefore taxes. And after death, the common understanding goes, there's a final no-escape clause: the estate tax, which imposes a steep tax rate on sums over $11.7 million.

ProPublica found that none of these factors alter the fundamental picture.

Take corporate taxes. When companies pay them, economists say, these costs are passed on to the companies' owners, workers or even consumers. Models differ, but they generally assume big stockholders shoulder the lion's share.

Corporate taxes, however, have plummeted in recent decades in what has become a golden age of corporate tax avoidance. By sending profits abroad, companies like Google, Facebook, Microsoft and Apple have often paid little or no U.S. corporate tax.

For some of the nation's wealthiest people, particularly Bezos and Musk, adding corporate taxes to the equation would hardly change anything at all. Other companies like Berkshire Hathaway and Walmart do pay more, which means that for people like Buffett and the Waltons, corporate tax could add significantly to their burden.

It is also true that some billionaires don't avoid taxes by avoiding incomes. In 2018, nine of the 25 wealthiest Americans reported more than $500 million in income and three more than $1 billion.

In such cases, though, the data obtained by ProPublica shows billionaires have a palette of tax-avoidance options to offset their gains using credits, deductions (which can include charitable donations) or losses to lower or even zero out their tax bills. Some own sports teams that offer such lucrative write-offs that owners often end up paying far lower tax rates than their millionaire players. Others own commercial buildings that steadily rise in value but nevertheless can be used to throw off paper losses that offset income.

Michael Bloomberg, the 13th-richest American on the Forbes list, often reports high income because the profits of the private company he controls flow mainly to him.

In 2018, he reported income of $1.9 billion. When it came to his taxes, Bloomberg managed to slash his bill by using deductions made possible by tax cuts passed during the Trump administration, charitable donations of $968.3 million and credits for having paid foreign taxes. The end result was that he paid $70.7 million in income tax on that almost $2 billion in income. That amounts to just a 3.7 percent conventional income tax rate. Between 2014 and 2018, Bloomberg had a true tax rate of 1.30 percent.

In a statement, a spokesman for Bloomberg noted that as a candidate, Bloomberg had advocated for a variety of tax hikes on the wealthy. "Mike Bloomberg pays the maximum tax rate on all federal, state, local and international taxable income as prescribed by law," the spokesman wrote. And he cited Bloomberg's philanthropic giving, offering the calculation that "taken together, what Mike gives to charity and pays in taxes amounts to approximately 75 percent of his annual income."

The statement also noted: "The release of a private citizen's tax returns should raise real privacy concerns regardless of political affiliation or views on tax policy. In the United States no private citizen should fear the illegal release of their taxes. We intend to use all legal means at our disposal to determine which individual or government entity leaked these and ensure that they are held responsible."

Ultimately, after decades of wealth accumulation, the estate tax is supposed to serve as a backstop, allowing authorities an opportunity to finally take a piece of giant fortunes before they pass to a new generation. But in reality, preparing for death is more like the last stage of tax avoidance for the ultra-wealthy.

University of Southern California tax law professor Edward McCaffery has summarized the entire arc with the catchphrase "buy, borrow, die."

The notion of dying as a tax benefit seems paradoxical. Normally when someone sells an asset, even a minute before they die, they owe 20 percent capital gains tax. But at death, that changes. Any capital gains till that moment are not taxed. This allows the ultrarich and their heirs to avoid paying billions in taxes. The "step-up in basis" is widely recognized by experts across the political spectrum as a flaw in the code.

Then comes the estate tax, which, at 40 percent, is among the highest in the federal code. This tax is supposed to give the government one last chance to get a piece of all those unrealized gains and other assets the wealthiest Americans accumulate over their lifetimes.

It's clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.

Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultra-wealthy's estate planning, showing hundreds of these trusts.

The result is that large fortunes can pass largely intact from one generation to the next. Of the 25 richest people in America today, about a quarter are heirs: three are Waltons, two are scions of the Mars candy fortune and one is the son of Estée Lauder.

In the past year and a half, hundreds of thousands of Americans have died from COVID-19, while millions were thrown out of work. But one of the bleakest periods in American history turned out to be one of the most lucrative for billionaires. They added $1.2 trillion to their fortunes from January 2020 to the end of April of this year, according to Forbes.

That windfall is among the many factors that have led the country to an inflection point, one that traces back to a half-century of growing wealth inequality and the financial crisis of 2008, which left many with lasting economic damage. American history is rich with such turns. There have been famous acts of tax resistance, like the Boston Tea Party, countered by less well-known efforts to have the rich pay more.

One such incident, over half a century ago, appeared as if it might spark great change. President Lyndon Johnson's outgoing treasury secretary, Joseph Barr, shocked the nation when he revealed that 155 Americans making over $200,000 (about $1.6 million today) had paid no taxes. That group, he told the Senate, included 21 millionaires.

"We face now the possibility of a taxpayer revolt if we do not soon make major reforms in our income taxes," Barr said. Members of Congress received more furious letters about the tax scofflaws that year than they did about the Vietnam War.

Congress did pass some reforms, but the long-term trend was a revolt in the opposite direction, which then accelerated with the election of Ronald Reagan in 1980. Since then, through a combination of political donations, lobbying, charitable giving and even direct bids for political office, the ultrawealthy have helped shape the debate about taxation in their favor.

One apparent exception: Buffett, who broke ranks with his billionaire cohort to call for higher taxes on the rich. In a famous New York Times op-ed in 2011, Buffett wrote, "My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice."

Buffett did something in that article that few Americans do: He publicly revealed how much he had paid in personal federal taxes the previous year ($6.9 million). Separately, Forbes estimated his fortune had risen $3 billion that year. Using that information, an observer could have calculated his true tax rate; it was 0.2 percent. But then, as now, the discussion that ensued on taxes was centered on the traditional income tax rate.

In 2011, President Barack Obama proposed legislation, known as the Buffett Rule. It would have raised income tax rates on people reporting over a million dollars a year. It didn't pass. Even if it had, however, the Buffett Rule wouldn't have raised Buffett's taxes significantly. If you can avoid income, you can avoid taxes.

Today, just a few years after Republicans passed a massive tax cut that disproportionately benefited the wealthy, the country may be facing another swing of the pendulum, back toward a popular demand to raise taxes on the wealthy. In the face of growing inequality and with spending ambitions that rival those of Franklin D. Roosevelt or Johnson, the Biden administration has proposed a slate of changes. These include raising the tax rates on people making over $400,000 and bumping the top income tax rate from 37 percent to 39.6 percent, with a top rate for long-term capital gains to match that. The administration also wants to up the corporate tax rate and to increase the IRS' budget.

Some Democrats have gone further, floating ideas that challenge the tax structure as it's existed for the last century. Oregon Sen. Ron Wyden, the chairman of the Senate Finance Committee, has proposed taxing unrealized capital gains, a shot through the heart of Macomber. Sens. Elizabeth Warren and Bernie Sanders have proposed wealth taxes.

Aggressive new laws would likely inspire new, sophisticated avoidance techniques. A few countries, including Switzerland and Spain, have wealth taxes on a small scale. Several, most recently France, have abandoned them as unworkable. Opponents contend that they are complicated to administer, as it is hard to value assets, particularly of private companies and property.

What it would take for a fundamental overhaul of the U.S. tax system is not clear. But the IRS data obtained by ProPublica illuminates that all of these conversations have been taking place in a vacuum. Neither political leaders nor the public have ever had an accurate picture of how comprehensively the wealthiest Americans avoid paying taxes.

Buffett and his fellow billionaires have known this secret for a long time. As Buffett put it in 2011: "There's been class warfare going on for the last 20 years, and my class has won."

Doris Burke, Carson Kessler and Ellis Simani contributed reporting.

Proposed Tax On ‘Ultra-Millonaires’ Could Raise Trillions In Revenue

Reprinted with permission from American Independent

Three congressional Democrats unveiled a plan Monday to raise $3 trillion in new revenue over the next decade. By taxing only those worth more than $50 million, the proposal would not raise taxes on 99.95 percent of Americans.

Sen. Elizabeth Warren of Massachusetts, Rep. Pramila Jayapal of Washington, and Rep. Brendan Boyle of Pennsylvania introduced the Ultra-Millionaire Tax Act of 2021, which would establish a two percent annual tax on the net worth of those taxable assets of $50 million to $1 billion. Those worth more than $1 billion would pay a three percent annual tax.

"The hyper concentration of wealth among a tiny number of multimillionaires and billionaires is a crisis for American capitalism and the American Dream," Boyle said in a press release. "Wealth inequality is at its highest level since the Gilded Age. The wealth share of the richest 0.1 percent has nearly tripled since the late 1970s. It is time for the ultra-millionaires to pay their fair share so that critical government programs can be bolstered to help the everyday American."

The sponsors circulated an analysis by University of California, Berkeley, economics professors Emmanuel Saez and Gabriel Zucman that predicted the wealth tax would affect only 100,000 families and would raise $3 trillion in new federal revenue between 2023 and 2032.

The proposal comes as Republicans in Congress are making a big deal about the growing national debt they helped rack up and using the budget deficit as an excuse to oppose President Joe Biden's priorities, such as COVID-19 relief.

"For too long, Congress has maxed out America's credit card with no plan to pay off our debts. The disastrous impacts of this reckless spending and growing debt, like high inflation, will hurt low and fixed income families the most. We must do better," tweeted Florida Sen. Rick Scott on February 16.

"Eventually USA $28 Trillion debt bill becomes due," warned Rep. Mo Brooks of Alabama on Thursday. "Friday #Socialist #Democrat debt junkies to borrow & spend ANOTHER $2 Trillion."

This wealth tax could either offset some of those previous expenses or enable new spending without increasing the debt.

According to the Saez-Zucman analysis, the richest Americans would be asked to pay about 4.3 percent of their wealth each year on average, compared to an estimated 3.2 percemt in 2019.

A Data for Progress poll, taken in 11 states between July and September 2020, found widespread public support for the idea of a two percent wealth tax on those with a $50 million-plus net worth.

Among all voters surveyed, 62 percent preferred adopting the idea, compared to 26 percent who preferred the current system. Even in the deep-red state of Mississippi, voters preferred the wealth tax 55 percent to 30 percent.

The proposal comes as Republicans are trying to change their image as the party looking out for the very rich.

"The uniqueness of this party today is we're the workers' party, we're the American workers' party," claimed House Minority Leader Kevin McCarthy in a Feb. 8 Punchbowl News interview.

Sen. Ted Cruz of Texas tweeted Friday, "The Republican Party is not just the party of country clubs, the Republican Party is the party of steel workers, construction workers, pipeline workers, police officers, firefighters, waiters and waitresses." He also tweeted Friday, "The Republican Party is not the party of the country clubs, it's the party of hardworking, blue-collar men and women."

Still, not a single Republican lawmaker has co-sponsored the Ultra-Millionaire Tax Act so far.

In addition to the three lead sponsors, it is co-sponsored by Sens. Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Brian Schatz (D-HI), Ed Markey (D-MA), and Mazie Hirono (D-HI).

Published with permission of The American Independent Foundation.