Some of the wealthiest Americans, including Democrat megadonor George Soros, have in recent years paid little or no federal income tax, according to Internal Revenue Service information obtained by ProPublica.
The report: ProPublica received the treasure trove of “confidential tax records” from an anonymous source who claimed to have been motivated by the investigative journalism nonprofit’s prior reporting on tax enforcement and the IRS.
- Jeff Bezos, The Washington Post owner and current world’s richest man, paid nothing in federal income taxes in 2007 and 2011.
- Despite his public stance advocating for higher taxes on the rich, liberal centibillionaire Warren Buffet managed to avoid more taxes than any of his super-rich peers, according to ProPublica.
- For three consecutive years, between 2016 to 2018, Soros – who has spoken out against economic inequality – did not pay federal income taxes.
How does it happen: As columnist David Leonhardt explained in The New York Times on Wednesday, extremely rich Americans can avoid taxes because in the U.S. they are only taxed on “realized gains,” such as the sale of stock or their salaries.
- “But the wealthy often live off unrealized gains — in the form of stocks and other assets that grow more valuable over time. The wealthy borrow against these assets to pay for houses, islands and private planes and then use a variety of strategies to avoid paying taxes on the debt repayment,” Leonhardt wrote.
- Sometimes, the extravagantly wealthy will employ a strategy tax expert Edward McCaffery calls “buy, borrow, die” – in other words, they wait until death to repay a loan.