Amazon CEO Jeff Bezos, Tesla CEO Elon Musk, and former New York City Mayor Mike Bloomberg are all among the list of billionaires who have avoided paying any federal taxes for certain years, according to the outlet.
How Little the Top 25 Actually Pay
ProPublica released private tax information on Tuesday of some of the country’s wealthiest people, including Jeff Bezos, Elon Musk, Warren Buffet, and Mike Bloomberg.
The report details just how little they’ve paid in federal taxes and how they have managed to do so.
For example, Musk, the CEO of Tesla and SpaceX, paid $68,000 in federal income taxes for 2015. For 2017, he paid $65,000. For 2018, he paid nothing. ProPublica also noted that, between 2014 and 2018, Musk’s total taxes paid amounted to only 3.27% of his personal wealth — even though his wealth during that same time period grew by nearly $14 billion.
Meanwhile, the outlet reported that Bloomberg, a former mayor of New York City, has paid a “true tax rate” of only 1.30% compared to his wealth growth. Even slimmer than that, Amazon CEO Bezos clocked in at 0.98% and business magnate Buffet paid an ultralow 0.10%.
Like Musk, several of those billionaires have also managed to avoid paying anything in federal taxes for certain years. For example, in 2007 and 2011, Bezos paid nothing. Neither has Bloomberg in recent years.
“Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most,” the reporters behind the ProPublica article said. “The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.”
It’s no secret that there’s a staggering divide between the country’s richest and the median American household, which earns around just $70,000 in wages a year and pays 14% in federal taxes, but ProPublica’s findings demonstrate just how extensive it can be.
By the end of 2018, the top 25 were worth $1.1 trillion. Notably, it takes the wages of 14.3 million ordinary American workers to equal that same amount, yet the top 25 only paid a total of $1.9 billion in federal taxes that year, while the ordinary workers paid $143 billion.
How Billionaires are Avoiding Federal Taxes
As ProPublica reports, the key to how these billionaires pay so little lies in the difference between wages and total income.
For example, wages are a part of income, but just one part. Stocks, bonds, and other investments are also included in total income but are taxed at lower rates.
That’s how people like Bezos can become the richest person in the world while still only receiving a salary of $80,000 a year from Amazon. In fact, in 2018, the top 25 wealthiest Americans reported $158 million in wages, but that was just 1.1% of their total reported income.
Instead, these billionaires retain their wealth by holding shares of companies they own. Two economists from the University of California, Berkeley have estimated that U.S. billionaires are sitting on $2.7 trillion in unrealized gains.
Still, that begs the question: How do these billionaires actually spend money if they’re earning small salaries and hoarding massive amounts in the stock market?
According to ProPublica, the answer lies in loans.
“The tax math provides a clear incentive for this,” reporters for the outlet said. “Take out a loan, and these days you’ll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn’t consider them income. Banks typically require collateral, but the wealthy have plenty of that.”
Further, those billionaires can often deduct the interest they’ve paid on loans from their taxes.
Last year, Musk pledged around 92 million Tesla shares as collateral for personal loans.
Is Publishing Private Tax Info Ethical?
As ProPublica noted, the publishing of this tax information hasn’t been without pushback.
When the outlet asked billionaire Carl Icahn whether it was appropriate that he hadn’t paid any income tax in certain years, he responded, “There’s a reason it’s called income tax. The reason is if, if you’re a poor person, a rich person, if you are Apple — if you have no income, you don’t pay taxes. Do you think a rich person should pay taxes no matter what? I don’t think it’s germane. How can you ask me that question?”
Meanwhile, a spokesperson for Bloomberg said he “pays the maximum tax rate on all federal, state, local and international taxable income as prescribed by law. Taken together, what Mike gives to charity and pays in taxes amounts to approximately 75% of his annual income.”
“The release of a private citizen’s tax returns should raise real privacy concerns regardless of political affiliation or views on tax policy…” the spokesperson added. “We intend to use all legal means at our disposal to determine which individual or government entity leaked these and ensure that they are held responsible.”
While ProPublica didn’t reveal its source, it did say that it believes “the public interest in knowing this information at this pivotal moment outweighs that legitimate concern.”
See what others are saying: (The Washington Post) (Chicago Tribune) (Associated Press)
Google Is Banning “Sugar Dating” Apps as Part of New Sexual Content Restrictions
The change essentially targets apps like Elite Millionaire Singles, SeekingArrangements, Spoil, and tons of other sugar dating platforms.
Sugar Dating Crackdown
Google has announced a series of policy changes to its Android Play Store that include a ban on sugar dating apps starting September 1.
The company’s Play Store policies already prohibit apps that promote “services that may be interpreted as providing sexual acts in exchange for compensation.”
Now, it has updated its wording to specifically include “compensated dating or sexual arrangements where one participant is expected or implied to provide money, gifts or financial support to another participant (‘sugar dating’).”
The change essentially targets apps like Elite Millionaire Singles, SeekingArrangements, Spoil, and tons of other sugar dating platforms currently available for download.
What Prompted the Change?
The company didn’t explain why it’s going after sugar dating apps, but some reports have noted that the move comes amid crackdowns of online sex work following the introduction of the FOSTA-SESTA legislation in 2018, which was meant to curb sex trafficking.
That’s because FOSTA-SESTA created an exception to Section 230 that means website publishers can be held liable if third parties are found to be promoting prostitution, including consensual sex work, on their platforms.
It’s worth noting that just because the apps will no longer be available on the Play Store doesn’t mean the sugar dating platforms themselves are going anywhere. Sugar daters will still be able to access them through their web browsers, or they can just sideload their apps from other places.
Still, the change is likely going to make the use of these sites a little less convenient.
See what others are saying: (The Verge)(Engadget)(Tech Times)
Activision Blizzard CEO Apologizes for “Tone Deaf” Response to Harassment Suit, Unsatisfied Employees Stage Walkout
Organizers of a Wednesday walkout say they “will not return to silence” and “will not be placated by the same processes that led us to this point.”
After a week of growing criticism against its workplace culture, the CEO of Activision Blizzard has finally apologized for how the company first responded to allegations of sexual harassment and assault in its offices.
“Our initial responses to the issues we face together, and to your concerns, were, quite frankly, tone deaf,” CEO Bobby Kotick said Tuesday in a letter to employees. “It is imperative that we acknowledge all perspectives and experiences and respect the feelings of those who have been mistreated in any way. I am sorry that we did not provide the right empathy and understanding.”
In its initial response, Activision Blizzard denounced the disturbing allegations brought forth in a lawsuit by the California Department of Fair Employment and Housing (DFEH) as “irresponsible.” The company added that it came from “unaccountable State bureaucrats that are driving many of the State’s best businesses out of California.”
But many current and former employees soon disputed that claim. In fact, at the time, more than 2,500 had signed their name to an open letter condemning the company for its response, which they described as “abhorrent and insulting” to survivors.
In his letter, Kotick promised employees that Blizzard will take “swift action to be the compassionate, caring company you came to work for.”
As part of a series of new policies, he said the company will now offer additional employee support and listening sessions, as well as potential personnel changes to leadership.
“Anyone found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences will be terminated,” he added.
Kotick also said Blizzard will add “compliance resources” to ensure that leadership is adhering to diverse hiring directives.
Lastly, he promised that the company will remove “inappropriate” in-game content. In a similar statement on Tuesday, Blizzard’s World of Warcraft team said it’s actively working to remove “references that are not appropriate for our world,” though it didn’t specify what those references were.
It now appears that many of the references being removed are of the game’s former Senior Creative Director, Alex Afrasiabi, who is cited in the lawsuit as someone who hit on and made unwanted advances at female employees. Moreover, the suit also directly accuses him of groping one woman.
“Afrasiabi was so known to engage in harassment of females that his suite” during company events “was nicknamed the “[Cosby] Suite” after alleged rapist Bill [Cosby],” the suit claims.
Organizers of a company-wide employee walkout, which was announced Tuesday and occurred Wednesday, still argue that Kotick’s latest message doesn’t address their larger concerns.
Among those are “the end of forced arbitration for all employees,” “worker participation in oversight of hiring and promotion policies,” “the need for greater pay transparency to ensure equality,” and “employee selection of a third party to audit HR and other company processes.”
“We will not return to silence; we will not be placated by the same processes that led us to this point.”
Ahead of the walkout, Blizzard reportedly encouraged its own employees to attend, saying those workers would face no repercussions and “can have paid time off” during the demonstration, according to The Verge.
Frito-Lay Workers End Nearly Three-Week Strike After Securing Higher Wages and a Guaranteed Day Off
Employees also negotiated an end to “suicide shifts,” which are two 12-hour shifts that are only eight hours apart.
Hundreds of Frito-Lay workers in Kansas have put an end to their nearly three-week strike over alleged mandatory overtime assignments that resulted in extremely long work weeks and so-called “suicide shifts.”
The term “suicide shift” refers to working two 12-hour shifts with only eight hours of rest in between. That can be especially hard on employees who claim to have worked up to 84 hours in a single week. For context, that’s 12 hours a day without a single day off.
One of the reasons workers have found themselves taking on more hours and days at plants is because consumer snacking has increased during the pandemic — so much so that Frito Lay’s recent net growth has exceeded every single one of its targets. That’s why at one point, the striking workers asked consumers to boycott Frito-Lay products in a show of solidarity.
The strikes began July 5 and concluded on July 23 following an agreement reached by union leaders and PepsiCo., Frito-Lay’s parent company. Under that deal, all employees will see a 4% wage increase over the next two years. They’ll also be guaranteed at least one day off a week, and the company will no longer schedule workers with only eight hours off between shifts.
Following the agreement, Anthony Shelton, the president of the union representing the workers, said that they’ve “shown the world that union working people can stand up against the largest food companies in the world and claim victory for themselves, their families and their communities.”
“We believe our approach to resolving this strike demonstrates how we listen to our employees, and when concerns are raised, they are taken seriously and addressed,” Frito-Lay said in a statement. “Looking ahead, we look forward to continuing to build on what we have accomplished together based on mutual trust and respect.”
The Long, Bitter Road to an Agreement
When the workers went on strike, they lobbed several very disturbing accusations against Frito-Lay.
In fact, the workers were pushed so hard that according to one employee who wrote in the Topeka Capital-Journal, “When a co-worker collapsed and died, you had us move the body and put in another co-worker to keep the line going.”
While Frito-Lay dismissed this account as “entirely false,” other employees continued to protest conditions in the plants. Many even argued the 90-degree temperatures they had to stand in to protest outside were preferable to the 100-degree-plus temperatures and smokey conditions in the factories.
During the strikes, PepsiCo. actively disputed that its employees are overworked, describing their claims as “grossly exaggerated” and saying, “Our records indicate 19 employees worked 84 hours in a given work week in 2021, with 16 of those as a result of employees volunteering for overtime and only 3 being required to work.”
It also said an initial concession more than met the striking employees’ terms, but the union backing those workers disagreed, and further negotiations were held until the final deal was reached.