Billionaire Musk Paid '0' Federal Income Tax in 2018

US Investigative Media Releases Tax Records of Top 25 Billionaires
Paid Only 3.4% Tax on Asset Growth from 2013 to 2018
Wealth Tax Debate Intensifies

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] It has been revealed that Elon Musk, CEO of Tesla, did not pay federal income tax in 2018.

On the 8th (local time), the American investigative news outlet ProPublica disclosed the federal income tax payment status of the top 25 billionaires in the U.S. through IRS tax refund records. ProPublica did not reveal how it obtained this information.

According to ProPublica, Musk reported income of $1.52 billion from 2014 to 2018 and paid $455 million in federal income tax. During this period, his assets increased by as much as $13.9 billion. ProPublica claimed that Musk’s effective income tax rate was only 3.27%.

Jeff Bezos, founder of Amazon, did not pay federal income tax in 2007 and 2011. Bezos’s assets increased by $99 billion, but the taxes he paid amounted to only $933 million, less than 1% of the asset increase.

Billionaire hedge fund investor George Soros also did not pay federal income tax for three consecutive years from 2016 to 2018.

Warren Buffett, chairman of Berkshire Hathaway, saw his assets increase by $24.3 billion over five years, but the actual taxes he paid amounted to only $23.7 million, or 0.1% of the asset increase.

ProPublica pointed out that the top 25 billionaires paid an average income tax rate of 15.8%, which is lower than most workers.

The report analyzed that through legal tax avoidance strategies, the 25 billionaires paid only $13.6 billion in federal income tax over five years from 2013 to 2018. During this period, their asset values surged by $401 billion. ProPublica claimed that the tax burden relative to the increased assets was only 3.4%.

In particular, the higher the income, the lower the income tax rate. Those earning between $2 million and $5 million paid an average tax rate of 27.5%. Among 1,400 individuals reporting income exceeding $69 million, representing the top 0.001%, the tax rate was only 23%.

ProPublica analyzed that billionaires were able to reduce their income tax by donating or by shifting income from labor income, which is taxed up to 37%, to stock investment-related income, which is taxed at 20%.

A major foreign media outlet reported that this revealed many billionaires pay almost no taxes even as their wealth increases.

The billionaires whose tax information was disclosed expressed discomfort. Former Mayor Michael Bloomberg said he donates about 75% of his income and vowed to hold those responsible for the tax information leak accountable by all means. Soros’s side stated that the income tax reduction was due to losses in investment funds. Musk responded to questions about his tax records with question marks.

The White House claimed the information disclosure was illegal but also stated that it showed the need for increased taxes on the wealthy.

White House Press Secretary Jen Psaki said at a briefing that "Unauthorized disclosure of government confidential information is illegal and a very serious issue," but also argued that "greater efforts are needed to ensure corporations and individuals bear a more equitable share of the burden."

President Joe Biden is proposing to raise the top income tax rate on the wealthy from the current 37% to 39.6% to fund infrastructure investment plans.

This content was produced with the assistance of AI translation services.