Tax Expert Reaction to Bombshell ProPublica Leak Billionaires Paying only 3.4% Tax!

Tax Expert Reaction to Bombshell ProPublica Leak Billionaires Paying only 3.4% Tax!
Billionaires paying little or no tax? How's this possible? Tax expert reacts to this phenomenon.

Forbs, CNN and many different news channels have been reporting the leak by an organization called ProPublica. The leak was about 25 richest Americans who paid only 3.4% in tax. What is really going on here?

Have in mind that this was a leak of private confidential documents. In normal circumstances, someone would probably get sued and go to prison for something like this. However, in this day and age, anyone who goes after the rich is a hero in eyes of the masses.

This tax leak released information on America's wealthiest individuals people like Elon Musk, Jeff Bezos, and Warren Buffett.
How much they paid is exactly how much they were supposed to pay according to rules and regulations. So none of them actually broke any laws.

So what's the problem here? The problem is how journalists calculated the whole thing and what they call ''the true amount of taxes that should have been paid''

Keep in mind that we're all paying our taxes based on income, not net worth.

Over the period of a couple of years, Jeff Bezos added 99 billion to his net worth, due to Amazon stocks going up. At the same time, he paid 1 billion dollars in tax.
So how is this possible? Again, he is not taxed on his net worth or the increase of the net worth but on income that he makes every year.
Also, increasing net worth has little to do with access to cash that an individual has. Most of that is in company's stocks the individual owns.
If people were to be taxed on their net worth this would mean that they'd need to sell a certain portion of their stocks every year. This could seriously hurt the shareholders. This doesn't seem like a fair or good thing to do.

The articles mentioned in the video:

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[jensg.]

It gets really messed up when it comes to private companies. How are they to be valued, and does the state step in as a shareholder in a recession when the previous owner cannot pay the tax due to a lack of cash flow?

[pkREX]

damn got excited for a second thinking I could live in the us
should've known it was just another liberal misunderstanding of net worth

[ilya]

Ironically regular people use some of the mentioned instruments, but small details make a difference. Nobody in the US, poor or rich, is paying unrealized capital gains tax. However, the rich benefit from it a lot more as more money you have, more room to play.

Rich take loans, people take mortgages. To get a mortgage you use your salary + down payment as collateral. Imagine being taxed on receiving 500k for house purchase. However, the rich benefit here more as a mortgage has a lot of strings attached and can destroy your life if not played right, while loans are less percentage of rich wealth and less strings attached.

While the formula is the same, the outcome is different. Smaller accounts mean smaller gains, too expensive to get advisor, accountant, tax pro help. Retirement accounts are full of limitations. Mortgages are full of strings attached. But the same instruments play way different if you get just big enough. A 1% increase of a $1000 account is $10, but the same 1% increase of a $1M account is $10000.

For sure the hardest is to get up from the bottom. Govt contributes greatly to that and most ppl don't have time to fight for their best interest while the rich have a free pass with lobbying, media. Need to pull yourself up from swamp as nobody else is not going to do that for sure.

[dhazelwood]

I mean Jeff Bezos just got 10 Billion for Blue Origins. But don't let that get in the way of your content.

[avin]

YOU'R CHANNEL SHOULD HAVE MORE SUBSCRIBERS THAN WHT U CURRENTLY HAVE.

[zerotaxcpa]

It's a BS. Even farmers and average Joe gained so much past 15 years through land appreciation. Remember- millions of Californians are millionaires ;)

[misterpizzaman]

True, then again Amazon, Facebook, Starbucks etc pay less than 1% taxes, which isn't fair either. How about a contribution percentage and taxes based on that ??

[cmeuret]

It’s people like you that make me hate being a fireman. You don’t have lead poisoning because of whistleblowers. Or, is that overly dramatic people too?