ProPublica’s in-depth analysis of the tax evasion tactics used by the ultra-wealthy reveals significant benefits for billionaires. The millionaire tax planners never responded to our attempts to reach them.
BUILD, DRILL AND SAVE: THE REAL ESTATE AND OIL BUSINESSES CAN BOTH BE TAX HAVENS
Because certain industries, like real estate or oil and gas, offer favorable tax advantages, billionaires can fully erase their incomes as they accumulate wealth. Stephen Ross, the developer of residential homes and owner of the Miami Dolphins, lawfully avoided paying income taxes for a decade. The largest oil disasters in history have not stopped an oil sector mogul from reaping the rewards of an endless supply of tax write-offs.
YOUR TAXES ARE TOO HIGH? CHANGE TAX LAWS
Taking care of a new tax benefit often pays well. The rich, who give Republican politicians millions of dollars in donations, benefited greatly from Trump’s “huge, magnificent tax cut” for pass-through firms. 82 highly wealthy households were able to save $1 billion in taxes annually thanks to changes! Some millionaires raised their savings by cutting their pay and designating their income as pass-through.
EVEN BILLIONAIRE’S HOBBIES PAY OFF AT TAX TIME
Deducting expenses from interests and side projects that are organized as businesses—as is the case with billionaires who own racehorses—is another great method to save taxes. Six owners of thoroughbred horses entered in the Kentucky Derby in 2021 received a total of $600 million in tax write-offs related to their horse-racing enterprises. Beanie Babies creator Ty Warner’s 12 years of tax-free living were made possible by his opulent visits at renowned Four Seasons hotels.
TRUST HOW WEALTHY FAMILIES PASS BILLIONS TO HEIRS AND AVOID TAXES
Because of inheritance tax loopholes, the US government will not get a share of a fortune bequeathed to heirs through a trust. 50% of billionaires obtain income from trusts. The original early 20th-century tycoon exploited three centuries-old trusts to avoid paying taxes on the wealth that was passed. A great-great-granddaughter earned $210 million from the family trusts before she turned 19.
WHY TECH BILLIONAIRES PAY LESS TAX THAN FINANCE MANAGERS
American billionaires benefit from low income tax rates and multiple tax reduction alternatives. Some groups (private equity heirs, CEOs, and IT giants) may analyze the earnings of individuals with $110 million in annual revenue and low tax rates using the various techniques mentioned above. Wealthy politicians, such as the governors of Colorado and West Virginia, also employed these tactics.
CONCLUSION
It matters how much a member of the billionaire class’s fortune grows annually. For the rest of us to survive, we require incomes. Because they don’t need money, the wealthy shun it. Avoiding revenue results in avoiding taxes. Billionaires pay a lot less in taxes than the average individual does. As a result, Jeff Bezos, Elon Musk, Donald Trump, Michael Bloomberg, and Carl Icahn were all spared from paying any federal income taxes. They accumulate wealth over time and allow the price of Amazon stock to climb.
The revenue of Berkshire Hathaway is increased by Warren Buffett. You must never sell in order to avoid taking any money. If they don’t sell, how do these things exist? They take out loans against their wealth, which is tax-free. The USA’s ultra-wealthy increased their fortune by $400 billion between 2014 and 2018, yet they contributed around $14 billion in taxes. When linked to their wealth growth, the extremely rich paid a pitiful 3.4% in federal income taxes, compared to the average person’s effective rate of 15%.
