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ProPublica Releases Years of Data Showing Just How Little the Top 25 Richest Americans Have Paid in Taxes

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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)

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Biden and Other G7 Leaders To Endorse a Global Minimum Corporate Tax of 15%

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The leaders are hoping to prevent companies from moving their headquarters to countries with lower tax rates, but their plan will likely face substantial hurdles both internationally and from the U.S. Congress.


Global Tax Minimum

President Joe Biden and other G7 leaders announced on Friday that they are endorsing a global minimum corporate tax rate of 15%. 

Their plan seeks to effectively end company strategies of moving headquarters to countries with cheaper tax rates, even if most of their business is located elsewhere. Coupled with the tax minimum, the leaders have also announced a tax plan that links companies to where they do business rather than where they are headquartered.

Should it become widely adopted, the plan could prove to be a significant threat to the so-called tax-cutting “arms race,” where countries push for lower and lower corporate tax rates to attract businesses; however, the plan will undoubtedly face challenges of its own. For example, Ireland — a country with a 12.5% corporate tax rate — has said such a policy would be detrimental to its economic success. 

The Wall Street Journal has also reported that China is unlikely to support the plan, though it noted that such support isn’t completely off the table. While China already has a higher corporate tax rate of 25%, its special administrative region of Macau has a noticeably lower rate of 12%.

Even England itself, which is backing the global tax rate, is looking to exclude London’s financial services companies from the overhaul. 

As the White House noted in a press release, “This U.S. priority is a critical step towards ending the decades-long race to the bottom that pushes nations to compete over who can offer the lowest tax rate to large corporations at the expense of protecting workers, investing in infrastructure, and growing the middle class.”

The G7, or Group of Seven, is an informal alliance between many of the world’s top economies, composed of the United States, Japan, Germany, France, the United Kingdom, Italy, and Canada. Leaders for each met in person Friday to discuss not only the global tax rate but also issues such as coronavirus aid, climate change, and cybersecurity.

Following this weekend’s summit, the G7 hopes to push its global tax minimum before the G20, which is composed of 19 countries and the European Union. 

Congress Would Need to Sign Off

While only an endorsement, any official implementation of a global tax rate in the U.S. would require congressional approval.

That could prove difficult considering people like Sen. Pat Toomey (R-Pa.) have called the plan “crazy.” 

“Certainly the whole fact that they had to try to persuade all these other countries to make sure they raise their taxes is a confession of the damage we’re doing to our own country,” Toomey added. “They certainly wouldn’t have the votes to approve a treaty of this kind that they’re contemplating.”

Biden’s plan to raise domestic corporate tax rates from 21% to 28% has also faced major opposition from Republican lawmakers. This week, the president indicated that he would be willing to decouple the tax hike from his infrastructure plan, but talks with Republicans have since fallen through.

See what others are saying: (CNBC) (Fox Business) (The Guardian)

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Man Sparks Debate After Boasting About His 14-Year-Old Working at Burger King Every Day

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Many Twitter users said kids should enjoy childhood since they have their entire adult lives to work, while others argued that working young teaches beneficial life skills.


Viral Facebook Post

A father’s Facebook post celebrating his 14-year-old son for working every day at Burger King has triggered a heated debate regarding children in the workforce.

The post in question, written by a man named Chris Crawford, featured two images of his son in his uniform.

“HUGE shout out to this kid of mine, 14 years old and has a [[art time] job at Burger King,” he wrote.

“Not only does he work every day he can, including weekends when most kids are out enjoying their summer, he goes in early and stays late almost every time he works, he loves every minute of it,” the father continued.

“Making his own money, saving for a car, being responsible in his decisions, becoming a respectable young man!!! I couldn’t be more proud of him! Some of y’all lazy, grown ass people out there should take notes !!! #prouddad,” he concluded.

That post was shared on Twitter by a user who wrote, “god this is depressing.” 

Users Speak Out Against Working at a Young Age

Many were quick to agree with that Twitter user, accusing the father and others like him of romanticizing exploitation and advocating for child labor.

Another user wrote, “Capitalism has literally brainwashed people to think this is a heartwarming story.”

Meanwhile, others noted that there is more to life than work and said kids should be enjoying their childhood because they have the rest of their adult lives to have jobs.

Many even shared regrets they have about working from a young age because of all the experiences they missed out on. One person said, “All I got from it was an unhealthy relationship with work that I carry to this day.

Others Show Support for Working as a Teen

However, not everyone was outraged by the young teen working.

In fact, others applauded the child for having a “go-getter attitude,” arguing that he is setting himself up for bigger and better opportunities in the future by gaining good experience at a young age.

Some even said that working young helps teach money management, people skills, self-sufficiency, and more beneficial life tools, though many have pushed back that there are other ways to teach such skills.

See what others are saying: (The Daily Dot) (Indy 100)

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Weekly Unemployment Hit Another Pandemic Low, but Consumer Price Inflation Saw Its Biggest Jump Since 2008

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The Federal Reserve believes the Consumer Price Index hike is only temporary and related to unique factors brought about by the pandemic.


CPI on the Rise

While the past week marked the sixth straight round of pandemic-era lows for the number of initial unemployment claims, additional data shows that prices on the consumer side are climbing at their fastest rate since the summer of 2008.

Year over year, the Consumer Price Index rose 5% in May. The core CPI, which excludes volatile food and energy costs, also rose at its fastest rate since 1992, jumping 3.8%.

Just looking at the numbers and nothing else, that could be pretty concerning given the fact that last month beat out 13 years worth of data tracking back to just before the U.S. was hit by the 2008 financial crisis.

But the Federal Reserve doesn’t seem all that concerned. In fact, it believes the CPI jump is based on mainly temporary factors related to the pandemic. That includes supply bottlenecks and other shortages brought by the reopening of the economy. 

Economists have also noted that year over year values are currently stilted since so much of the economy was shut down this time last year. By comparison, that yields a large and alarming figure if looked at without context.

Because of that, the Fed said prices will likely come down as the year continues.

Still, that explanation hasn’t completely shaken fears that a high CPI could potentially cause long-term damage if it fails to subside. 

“The stakes are high on both Wall Street and Main Street,” The New York Times reporter Jeanna Smialek said in a Thursday article. “Inflation can erode purchasing power if wages do not keep up. A short-lived burst would be unlikely to cause lasting damage, but an entrenched one could force the Fed to cut its support for the economy, potentially tanking stocks and risking a fresh recession.” 

Sixth Straight Week of Pandemic-Era Low Unemployment Claims

Initial unemployment claims fell to yet another pandemic low, this time dropping to 376,000. 

Meanwhile, continuing claims dipped as well, falling from 3.65 million the previous week to 3.5 million this past week. 

Despite the U.S. currently experiencing an ongoing labor shortage, multiple weeks of continuing declines indicate that the job market is gradually working its way back down to pre-pandemic levels of around 200,000 claims a week.

See what others are saying: (Business Insider) (The New York Times) (CNBC)

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