How do billionaires pay less tax than you? Elon Musk, Jeff Bezos, and Warren Buffett are three of the richest men in the world. You likely pay more tax as a proportion of your earnings than they do. Warren Buffett once said this but I’m paying about the same percentage of my income to the federal government as my secretary does leak tax returns. Analyzed by ProPublica found that Jeff Bezos paid no federal income tax in 2007 and 2011. While Elon Musk didn’t pay any income tax in 2018. The rich have it different than the rest of us. They make their money holding assets capital. We tax capital very lightly. So why do the ultra-wealthy pay so little tax. As a proportion of their wealth and why can’t politicians seem to do anything about it.
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How do billionaires pay less tax than you?
How do you find the money to buy yachts and private islands?
They can then go ahead and bequeath it to an heir who does not pay tax when that asset is given to them. In the u.s we call that uh the step-up in basis. Almost everywhere schemes like this are being used by the uber-wealthy to avoid paying tax. All perfectly legal in the u.s Joe Biden tried to torpedo the die part of the buy borrow dies strategy but the president’s push simply didn’t get the support it needed in congress.
Another idea to tax a person’s net wealth annually didn’t make it either most scholars. Believe a wealth tax is questionable under our constitution which limits the ability to tax property directly. And that’s why many tech billionaires who have made a fortune during the pandemic may well pay a lower tax rate than you do. And the chances of that changing anytime soon are pretty minimal. Now at the end of the day, the billionaires I think will win the framework of our income tax rules will not be changed in any fundamental fashion.
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