A few words about the makers and the takers.
That, as you may recall, was the formulation once favored by Fox “News” and other organs of the political right to describe the dynamic between those at the top of the economic pyramid and those at the bottom. The poor — characterized as scavenging animals by more than one conservative — were said to contribute nothing to our society, while mooching off their financial betters.
But it is worth re-examining the whole “makers and takers” paradigm in light of last week’s jarring report from ProPublica, the nonprofit online newsroom. It was based on a trove of IRS information provided by an anonymous source, and it laid out in granular detail the strategies used by the wealthiest people in America to get away with paying little or nothing in taxes.
Take, for instance, Jeff Bezos, Amazon founder and world’s richest man with a net worth estimated by Forbes at $192 billion. We are told that he paid nothing in taxes in 2007 and 2011 and a relative pittance in other years.
Not to pick on Bezos. Elon Musk, Michael Bloomberg, Warren Buffett and other ginormously rich people all reportedly employ the same strategy to avoid taxes. Which is to say, they pay themselves minimal salaries — as little as a dollar a year in some cases — and keep their wealth in the form of stocks, bonds and other financial instruments, which the IRS does not consider income and taxes at a much lower rate.
For comparison, ProPublica says the median American tax rate in recent years is 14 percent. But it calculates Bezos’ “true” tax rate between 2014 and 2018 — i.e., factoring the growth of his assets in with his reported income — at under 1 percent. It says that when people like him need actual cash, they simply borrow against their massive assets. Interest on such loans runs in the single digits, and the proceeds are not considered income and therefore are not taxable.