Several of America’s wealthiest individuals paid no federal income tax in some years, according to a report from ProPublica, which has obtained 15 years worth of IRS data on the tax returns of the likes of Jeff Bezos, Warren Buffett, Elon Musk, and Michael Bloomberg. Bezos paid zero in federal income tax in 2007 and 2011. The same was true for Musk in 2018. While Buffett and Bloomberg apparently paid some federal income tax, they exploited the tax code to pay very little.
ProPublica used this information to calculate what it calls a person’s “true tax rate,” by comparing their publicly reported wealth growth for that time period to the amount that they paid in taxes during that same amount of time. (Wealth concentrated in assets such as stocks are not subject to income taxes until they are sold.) For example, ProPublica reported that the data shows that the 25 richest individuals in the United States “saw their worth rise a collective $401 billion from 2014 to 2018,” while only paying $13.6 billion during that time, a true tax rate of 3.4 percent.
Here’s what ProPublica found when looking at data on Buffett’s tax returns:
No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich. According to Forbes, his riches rose $24.3 billion between 2014 and 2018. Over those years, the data shows, Buffett reported paying $23.7 million in taxes.
That works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.
When asked for comment, Buffett responded in a lengthy statement: “I continue to believe that the tax code should be changed substantially. I hope that the earned-income tax-credit is greatly expanded and additionally believe that huge dynastic wealth is not desirable for our society.”