A new ProPublica story begins (emphasis mine):
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.
What?!?!? That’s bad. Tax data are supposed to be private — and zealously guarded — and yet “thousands” of people’s information got out.
The journalists are, of course, mum on how it happened:
The tax data was provided to ProPublica after we published a series of articles scrutinizing the IRS. . . . ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions.
The agency needs to get to the bottom of this and punish those responsible.
Meanwhile, on the main thrust of the story, while I do think the IRS could do a better job of auditing rich people, the big reason the ultra-wealthy don’t pay more taxes on a year-to-year basis is that — as the story itself notes — they’re not taxed every time their assets increase in value. Instead, they’re taxed on the overall gain when they sell the assets. It would be hard to own a company if you had to pay zillions of dollars every time the stock went up, regardless of whether you had enough cash to pay the tax, though there have been various proposals over the years for such “mark-to-market” taxes.
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