Several US billionaires including Jeff Bezos and Elon Musk have been exposed for exploiting flawed tax system to pay little or no income tax.
Bombshell report by New York-based journalism nonprofit ProPublica published on Tuesday June 8th shows that several US billionaires paid zero income tax in some years.
The report shows world’s richest man Amazon CEO and found Jeff Bezos paid no income tax in 2007 and 2011.
World’s second richest man Tesla and SpaceX CEO Elon Musk also avoided paying any income tax in 2018.
The two multibillionaires Bezos and Musk are worth $177 billion/Ksh 17.7 trillion and $152 billion/Ksh 15.2 trillion respectively.
Other wealthy Americans who also paid nothing to the Internal Revenue Service (IRS) in some years included former New York City mayor Michael Bloomberg (has a net worth of $59 billion), activist investor Carl Icahn ($14.8 billion), and philanthropist and financial giant George Soros ($8.6 billion).
ProPublica says the billionaires did nothing illegal in their tax declarations, but only employed tax-avoidance strategies beyond the reach of ordinary people.
The billionaires also benefited from the way taxable income is defined in the US tax code, since it does not take into account the growing value of assets like stock and property, and only taxes proceeds from sales of those items.
The shocking report comes even as President Joe Biden weighs new proposals to address tax avoidance by the country’s wealthiest individuals and companies.
Biden pledged to tax wealthy American more during the presidential campaign last year. He said that he would make sure US richest citizens pay their equal share of tax.
The then Democratic nominee said he would raise taxes only on citizens making over $400,000/Ksh 43 million a year while cutting taxes for everyone making less than that.
If Biden’s tax plan comes into action, wealthy Americans making over $400,000 a year would be hit with a 62% tax rate.
Days ago, finance ministers from the world’s richest nations G-7 also endorsed a global minimum corporate tax rate of at least 15%, one of several tax proposals aimed at ensuring profitable multinationals pay their fair share.
Democratic Senator Elizabeth Warren of Massachusetts is also leading an initiative aimed at making super rich Americans pay more tax.
Warren commented on ProPublica article on Twitter to express her frustrations with how US billionaires are exploiting the country’s flawed tax system.
“Our tax system is rigged for billionaires who don’t make their fortunes through income, like working families do. It is time for a #WealthTax in America to make the ultra-rich finally pay their fair share,” Warren tweeted.