So rich Americans like Jeff Bezos and Elon Musk don’t pay much in income tax. The gist of the issue as reported by ProPublica reads, “(Regarding IRS data on the matter), it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. 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.”
Well so what? This is something we should, as American taxpayers, already know. Because all of us do it. Come tax time, all of us look for ways to avoid paying taxes. We write off as much as we can, we exaggerate how much we contributed to charity, we hide money in retirement or education savings plans, we sell valuable items in cash but write receipts for one dollar, we gift stocks and cash to move earnings around, etc. We do a lot of creative things to avoid paying our fair share.
The fact is, there’s no such thing as a fair share and you and I already know this. Because you and I haven’t been made part of that decision. Once your money goes to government, it’s they who decide how to divide it up. Your share may go to military budgeting while your neighbors goes to studying a rare worm in Asia. I know I’m being basic here but the point is being made that yours and mine and your neighbor’s money isn’t all being used evenly to pave roads, educate children, or anything else we can agree is a fair use. And this is why all of us do our best come tax time to avoid paying as much as possible. We know if the money stays with us, the earners, we can use it more wisely than government.
There’s something of a conflict of values when it comes to income. Americans have this lift yourself up by the bootstraps, make your own way, pave your own path, cheer squad mentality about having your own business and becoming successful. But don’t become too successful that you stay in business long enough to become the villain. I don’t know what the financial cutoff point is but once you reach a certain level of income, you’re expected to suddenly give all your tightened bootstraps and cleared path away. It’s like when someone wins the lottery, people come out of the woodwork asking for donations and get really pissed if you don’t give anything away. It seems that a high level of income, regardless of how it’s obtained, is cause for the less fortunate to complain. I don’t understand this. Shouldn’t we use these people as examples of what’s possible?
There’s nothing different about being rich come tax time other than having the ability to hire better accountants to avoid more taxes. Feel free to be jealous about this if you’d like. But you can’t hate the player, hate the game. The rich are taking advantage of everything you can too because it’s legal and in the tax code.
We all do it. Stop being a hypocrite. Maybe later, we’ll talk about how these rich people have actually benefited everyone through opening jobs, creating opportunities, etc.