John Locher/AP and Odd Andersen/AFP via Getty Images
ProPublica recently published a bombshell report on how billionaires including Jeff Bezos, Elon Musk, and Warren Buffett pay minimal federal income tax relative to their vast fortunes. Jesse Eisinger, one of the journalists responsible for the story, discussed his key takeaways on the latest episode of The New York Times' "Sway" podcast.
Eisinger explained how some of America's wealthiest people have minimized their incomes and paid zero federal income tax in recent years, argued that philanthropy isn't a substitute for government, and called for changes to the tax system.
Here are Eisinger's 15 best quotes, lightly edited and condensed for clarity:1. "The ultra-wealthy are not in our tax system. They're off in an entirely different universe, one where income is essentially voluntary. The shorthand for what they're doing is 'buy, borrow, die.' You buy, or you build, or you inherit your money. You borrow against it. You don't pay taxes on the gains. And then when you die, there are various ways that you can avoid estate tax."
2. "The means that they have at their disposal — their purchasing power, their political power, their influence, their charitable givings — all emanate from their wealth and, more directly, their wealth growth. We thought that wealth growth is more properly thought of as income for these people. Everybody has said, 'Checkmate, ProPublica, you idiots, we don't tax unrealized gains in this country,' to which we say, 'Yes, that is the point of our article.'"
3. "If you had asked tax experts and wealth experts last week, 'Does Jeff Bezos pay zero in federal income tax? Does Elon Musk pay zero? Does Mike Bloomberg?' — most people would say no. That's a pretty shocking thing."
4. "There is a wealth tax in this country for average Americans. It's property tax. Most people's houses are their font of wealth, and they're taxed every year."
5. "Warren Buffett is really astonishing. He's the king. He has avoided more tax than anyone in America by our measurements." — the famed investor minimizes his income by keeping his fortune in Berkshire Hathaway stock and not paying a dividend, ProPublica reported. He defended himself to the publication.
6. "Elon Musk is outside of the regular tax system. He gets paid when he wants to get paid. He takes income at the time and place of his choosing. If you can imagine arranging your affairs so that you can control when income comes in, that gives you an enormous amount of leeway over your taxable income."
7. "Carl was great. He was incredibly charming and was totally perplexed by the concept of needing to pay taxes. 'If you don't have income, you don't pay taxes.' He was very amusing." — discussing how billionaire investor Carl Icahn declared $500 million of income between 2016 and 2017, but reduced his taxable income to zero by borrowing against his assets to boost his investment returns, then deducting the interest costs of the loans.
8. "What the wealthiest person in the country contributes to American society through a tax system that we all need to contribute to – that's a little bit more newsworthy than a crotch shot." — dismissing a comparison between ProPublica publishing details of Amazon CEO Jeff Bezos' tax returns and tabloids releasing supposedly intimate photos of him.
9. "We don't have any evidence that Warren Buffett borrows. Not all these guys have exactly the same model or do all of this in lockstep with each other. But what we do know is that Buffett takes hardly anything for income, so when he talks about raising tax rates for the rich, it's essentially irrelevant to him. It's really irrelevant for all these guys."
10. "Bloomberg said it's a violation of his privacy, which was an interesting statement for a person who runs one of the most important media companies in America." — on Michael Bloomberg's response to ProPublica publishing details of his tax returns.
11. "We have thousands of people. We're going to be doing stories all year on various aspects of it. And we'll name many, many more people, but only in what we consider to be responsible ways that are in the public interest."
12. "Warren Buffett said to us, 'I'm going to give 99%-plus of my fortune to charity ... that's going to be better for society than paying down the United States debt.' I would like to allocate my tax dollars the way I want, spend them on this and not that. But we collectively have a society, and we have a democracy. And the democracy gets together and makes priorities. And then we influence the democracy through the vote."
13. "There are certain collective functions of government that charities could never do. We do need government to do some things, and government can't do it if it's starved, if the roads and bridges are crumbling, if we think that Social Security and Medicare are going to go bankrupt."
14. "There are whole swaths of the tax system that just simply do not function anymore. We don't have enforcement. We don't have auditing from the IRS. The budget has been gutted. The wealthiest among us could be paying tens of billions of dollars more every year in income taxes — not even talking about a wealth tax —if we had a different kind of income tax system or taxation system in general."
15. "There are two extraordinary things about death in our tax code that are great gifts to the ultra-wealthy." — highlighting the "step-up in basis" which raises the cost base of appreciated assets when they're inherited, and structures such as trusts that let recipients avoid paying inheritance tax.
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