Following a leak revealing that some of the wealthiest people in the U.S. have been paying no income tax, IRS is now investigating the questionable data.
According to leaked documents, Elon Musk, founder of SpaceX, and Jeff Bezos, founder of Amazon, have paid little to no income tax for several years. The controversial information was published by non-profit investigative journalism organization ProPublica. However, its original source remains unknown.
As Unilad reports, between 2014 and 2018, the 25 richest Americans’ wealth increased by $401 billion. However, they paid only $13.6 billion in income tax at the time.
According to the Tax Policy Center, as of the 2020 tax year, those earning $518,400 and over have to pay 37% in income tax. Nonetheless, as per ProPublica, the 25 people in question paid only 3.4% of their overall wealth. And it appears to be perfectly legal.
The report claims that Bezos paid no income tax between 2007 and 2011, while Musk skipped paying in 2018.
As per Sky News, the magnates may have been using tax avoidance strategies to lower the percentage of their income taxes. The news outlet notes:
“Tax avoidance measures can include reductions for charitable donations or by taking no wages – taxed at up to 37% – and benefiting instead mainly from investment income at a usual lower rate of 20%”
The list of billionaires not paying income tax also includes Michael Bloomberg, investor Carl Icahn, George Soros, and Warren Buffett.
Since the questionable data has leaked, people are now accusing the U.S. taxing system of favoring the rich.
On June 8, Senator Elizabeth Warren tweeted:
“Our tax system is rigged for billionaires who don’t make their fortunes through income, like working families do.”
Our tax system is rigged for billionaires who don’t make their fortunes through income, like working families do. The evidence is abundantly clear: it is time for a #WealthTax in America to make the ultra-rich finally pay their fair share. https://t.co/MEgLcFptOI
— Elizabeth Warren (@SenWarren) June 8, 2021
The Biden administration announced they are launching an investigation on the case, as the leaked information was confidential.
Treasury spokeswoman Lily Adams said:
“The unauthorized disclosure of confidential government information is illegal. The matter is being referred to the Office of the Inspector General, Treasury Inspector General for Tax Administration, Federal Bureau of Investigation, and the US Attorney’s Office for the District of Columbia, all of whom have independent authority to investigate.”
White House press secretary Jen Psaki commented:
“Any unauthorized disclosure of confidential government information by a person of access is illegal and we take this very seriously.”
As CNN reports, the data from the report was most probably obtained through Internal Revenue Service (IRS) records.
IRS Commissioner Charles Rettig stated that an investigation is now underway.
“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. Upon reviewing the article, the appropriate contacts were made, as you would expect.”
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