Tax Leak
Federal officials are investigating the release yesterday of a sweeping set of tax filings from some of the wealthiest Americans. Published by ProPublica, the leak included returns from Amazon CEO Jeff Bezos, Tesla CEO Elon Musk, Berkshire Hathaway CEO Warren Buffett, and others.
The report claims the top 25 richest Americans saw their wealth increase by $401B between 2014 and 2018, while paying about $13.6B total, or 3.4%—a term the report refers to as a "true" tax rate. For comparison, households with a median average income of $70K pay about 14% in taxes.
Critics argued such individuals typically have large stakes in the companies they own, which rise in value—thereby increasing wealth—but generate no income. Known as unrealized gains, this rise in value is not taxable until shares are sold, a rule which applies to all Americans when their assets appreciate. Upon selling, this rise in value would become taxable.
Investigators are probing whether the confidential documents were leaked from inside the IRS, which would be a crime. ProPublica did not disclose who provided the returns, and said it would use the data to publish a series of articles covering specific tax mechanisms used by the ultrawealthy in the near future.
