ANALYSIS | How the richest people avoid paying taxes

Musk, Bezos and Zuckerberg tax data leaked 0:53

(CNN) -

This is good, huh.

Jeff Bezos, Michael Bloomberg, Warren Buffett and Elon Musk enter the Internal Revenue Service (IRS).

But none of them, in several years, appear to have paid federal income taxes.

And how about this one: the rich get richer… because they don't always pay their fair share to the community fund.

This is US tax law.And now we have a map of how it is exploited by the wealthiest people thanks to an explosive report from ProPublica, an investigative journalism nonprofit organization, which claims to have obtained the records of years of Tax returns of the richest people in the country from an anonymous source.

Read it here.

His first report (he promises there will be more) is on the richest of the rich, who in certain years report losses that can wipe out their income tax bills.

This should sound familiar: Former President Donald Trump did the same.

Jeff Bezos will travel to space in his own rocket 0:40

But that doesn't mean it shouldn't be a scandal that Bezos, the richest person on Earth - who has used his vast wealth to start a spacecraft company that will take him into space, where he will also be the richest person - in In recent years, it has told the federal government that it does not owe income taxes, according to ProPublica.

ProPublica also reports that Musk, the second richest human being on Earth, whose wealth has grown many billions in recent years and who also has a space company with exciting projects, told the government that he owed no income taxes. in 2018.

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The scandal is that these actions are perfectly legal

Bloomberg and Buffett, who have supported raising tax rates for the wealthy, have had income tax bills worth $ 0. (Buffett, at least, has long acknowledged this, claiming he was paying a tax rate. lower tax rate than your secretary).

Elizabeth Warren proposes tax on large companies 0:46

During his run for the 2020 Democratic presidential nomination, Bloomberg became embroiled in a discussion with Senator Elizabeth Warren of Massachusetts about whether the government should tax extreme wealth in addition to income.

How can this happen?

The report looks at how this may be happening and the reasons are many.

First, US tax law focuses on income, and much of the great wealth is tied to company stocks or other investments that have real value but are not taxable from year to year.

I am a foreigner, do I owe taxes for investing in the US?

5:56

Wealth vs.

income

ProPublica quotes estimates from Forbes, but this is an imperfect assessment.

It claims that Bezos earned $ 99 billion in wealth between 2014 and 2018. But his income was much lower: he reported $ 4.22 billion and paid $ 973 million in income taxes in those years.

So he paid more than 20% of his declared income.

The thing is, his wealth skyrocketed at the same time.

This is something that manifests itself on a smaller scale for the average US homeowner or 401 (k) plan holder, whose wealth grows without being taxed by the federal government every year.

The difference is in the scale.

Also, ordinary Americans are likely to pay property taxes and use mortgages to buy their homes.

Tax evasion strategies

The report shows how the wealthy finance their lifestyles with loans against assets, such as real estate or stocks, rather than the real value of an asset.

In this way they pay less to the bank in interest than they would pay to the government in income taxes.

Investor Carl Icahn gave an interview about his tax returns to ProPublica and gave this insightful response:

"There's a reason it's called an income tax," he

said

.

"The reason is that if you are a poor person, a rich person, if you are Apple ... if you have no income, you do not pay taxes."

He added: 'Do you think a rich person should pay taxes no matter what?

I don't think it's relevant.

How can you ask me that question?

But in these cases, the loans act as income.

Other forms of taxes

It is also true that since much of their wealth is tied to stocks, they do pay taxes through their companies.

However, the corporate tax rate of 21% is much lower than the top rate of 37% on income over $ 523,000 for individuals.

Bezos has backed the corporate rate hike (Trump and the Republicans cut it in 2017), but as CNN reported, Amazon is unlikely to pay anything close to either rate.

Even on the income that the super-rich do report, often in the form of capital gains, they sometimes pay a lower rate than Americans who make much less money.

Jeff Bezos is once again the richest man in the world 0:40

Taxes are very much a part of policy discussions right now.

President Joe Biden wants to raise corporate tax rates and income taxes for the rich, though he faces a tough road in the US Senate, where Republicans can block him.

• Biden has a "fundamental conviction" to raise taxes on corporations and the wealthy.

  It could cost you

Globally, and apart from this conversation about individual income tax, Biden and his Treasury Secretary Janet Yellen are pushing for a global corporate minimum tax and other industrialized G-7 nations agreed to a scheme this week.

Biden wants to establish a global minimum tax 0:56

The idea is that if all countries had a corporate tax rate of at least 15%, it would prevent companies from avoiding taxes.

All of this fuels growing frustration over extreme inequality and what governments should do to make sure everyone pays their fair share, which is increasingly difficult when so much wealth is leaking from the treasury and more and more people think that government It should do more to improve the daily lives of the inhabitants.

Why did they post this?

It is illegal? 

Less interesting to the world at large, but really interesting to journalists like me, is ProPublica's separate story on how it obtained the tax documents and why it decided to selectively publish them.

Technically, publishing a person's tax information is against the law, although ProPublica argues that the public interest in an informed tax debate justifies the risk. The post quotes the spokesperson for at least one of the people whose taxes it dissects (Bloomberg) promising some sort of legal action, but against whoever or whatever leaked the documents rather than against ProPublica.

ProPublica does not seem to know who the source of the documents is and even suggests that it could have been a foreign actor, such as China or Russia, that has shown interest in stoking class resentment in the United States.

That means the reports must be viewed in the context of the mystery of where they came from.

It is remarkable that none of the billionaires mentioned in the story deny the accuracy of the tax returns and some argue that they were simply following the rules.

Others did not respond, according to ProPublica.

• Personal data should not be bought and sold, says specialist

When White House press secretary Jen Psaki was asked about the ProPublica report on Tuesday, she told reporters: “Any unauthorized disclosure of confidential government information by a person with access is illegal and we take it very seriously.

He said the IRS commissioner has referred the matter to investigators.

Sunlight> secrets

Given the status these men have in society, the deference that their wealth bestows on them, and the fact that many of them have published their opinions on tax policy, either supporting or opposing higher income taxes, corporate taxes and property taxes, I respect ProPublica's decision.

Corporate scandals Tax evasion Taxes