A report from ProPublica, an investigative newsroom, reveals that the richest 25 people in the United States have a “true tax rate” of almost nothing.
The nonprofit organization received IRS data from an unidentified source.
“Looks like the biggest tax story of the year, if not the decade,” Gabriel Zucman, economist at the University of California at Berkeley, said. “From public data, it was always clear that the top billionaires don’t pay much tax… But even I am surprised at how low their effective tax rate is.”
According to CBS News, the true tax rate is the amount of taxes that were paid by the wealthiest Americans annually versus the estimated growth in their wealth during that time.
“It’s unfair to calculate the fairness element based on the total net worth,” Mark Steber, Jackson Hewitt’s chief tax information officer, said. “They didn’t say they paid fair taxes based on income – they said it was based on their worth.”
“How about the business owner or farmer who doesn’t have a lot of income but has a net worth going up — are they not paying enough because the value of their farmland went up? It’s a slippery slope.”
President Joe Biden is looking to raise the tax rate by 39.6% for people earning $400,000 a year or more in taxable income.
The data leak is being investigated.
“I can confirm that there is an investigation with respect to the allegations that the source of the information in that article came from the Internal Revenue Service,” Charles Rettig, IRS Commissioner, said. “Upon reviewing the article, appropriate contacts were made, which you would expect and the investigators will investigate.”
Zucman is the economist behind Senator Elizabeth Warren’s wealth tax proposal. His analysis of the U.S. tax system found that the 400 richest Americans pay a total tax rate of about 23%.
“The punchline is that the U.S. tax system is severely regressive at the very top-end,” Zucman said. “Which might not be totally optimal.”
The organization was able to gain access of tax information on Elon Musk, Jeff Bezos, Warren Buffet, and others.