GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
you’ve got the option to read more about oureditorial guidelinesand our products and servicesreview methodology.
But is it really true that some billionaires really pay no income tax?
If so, how do they do itand is it the sign of an unfair system?
Read on to explore more.
Do Billionaires Really Pay $0 in Income Tax?
Most Americans want to avoid paying taxes as much as legally possible.
This applies as much to billionaires as to gig workers hustling just to get by.
But it is true that some billionaires end up paying $0 in income tax.
The same was true in 2018 with Musk.
According toProPublica, however, these two are far from alone.
Bloomberg paid just 1.3%, while Bezos true tax rate in those years was less than 1%.
How Is That Possible?
The rich, on the other hand, generate most of their earnings through capital growth.
This is obviously an option that most rank-and-file workers cant accept.
When the value of these assets grow, the money isnt actually taxed unless a sale is made.
Thus, the rich can keep getting richer without paying taxes because their assets rise in value.
Meanwhile, if they need cash flow to fund their day-to-day living, they can borrow against these assets.
The same applies to applying capital losses on stocks or other investments to any realized gains.
More From GOBankingRates
Share This Article:
