Guess who? They’re the architects of modern shopping, driving, and digital communication.
And according to Forbes’ widely cited data, they’re eight of the richest people in America.
Between these business moguls is more than $900 billion in wealth. But much of it is wrapped up in real estate, retirement plans and large shares.
Across the U.S., some of the nation’s top earners have a toolbox full of mechanisms to build wealth. And one of them is how to avoid billions of dollars in taxes.
At the federal level, the percentage of taxes Americans owe increases, as salary grows. This funds a plethora of programs and agencies including the military, and veteran and foreign affairs.
And a fixed "payroll tax" is used to fund things like social security, and Medicare. States and local governments collect taxes to fund things like infrastructure and public safety services.
But, by using certain legal methods, some of the nation’s top earners have cracked the code.
He and a team of colleagues obtained a trove of confidential data from the IRS with tax information on the nation’s wealthiest.
"What they do is a technique called buy, borrow, die and by buy, we mean buy or build an asset like Amazon or Tesla, a big company. And then instead of selling that and reaping the gains that way, selling the stock they borrow against their asset. Now, we don't know that Jeff Bezos does this, but Elon Musk does this to the tune of tens of billions of dollars of his stock. And if you borrow, that's a tax free transaction and you're not generating any income, and we don't tax anything but income in this country. So if you avoid income, you avoid taxes. And then when you die, you also can avoid taxes through a variety of loopholes and slip through the estate tax. Buy, borrow, die, and your entire fortune is almost entirely untaxed," Eisinger said.
With these techniques, ProPublica found 25 of the nation’s richest people paid $13.6 billion in federal income taxes on $401 billion in wealth and income between 2014 and 2018.
A "true tax rate" they say, of only 3.4%.
For the average American earning $70,000 a year, 14% of that goes to federal taxes.
"Roughly 99% of us normal human beings pay our taxes because we have no choice in the matter. Billionaires occupy a completely different universe. And the first thing is that they're really trying to avoid income. They don't need income to live, unlike us. The second thing is that their income tax returns are not the kind of simple 1040, you might be surprised to hear. It's a vast empire that they typically have, and they have partnerships and partnerships that own partnerships that flow into other partnerships. And they're constantly getting different returns from those partnerships and companies that they own. And it's all a giant empire that's kind of working together and meshing together to hide income, to create tax losses where losses don't really exist and take advantage of loopholes," Eisinger said. "In recent years, Elon Musk and Jeff Bezos and Michael Bloomberg and George Soros have paid zero in federal income tax. And then if you're in a special kind of industry like real estate or oil and gas, like Donald Trump or the owner of the Miami Dolphins, even Stephen Ross, you can tell the federal government that not only are you not making income, but that you're making losses."
Corporations are using similar methods. In 2020, the Institute on Taxation and Economic Policy found 55 of the largest corporations paid zero dollars in federal taxes, with companies like Nike, FedEx and Salesforce holding onto billions in profits.
Scripps News reached out to Nike, FedEx and salesforce for comment.
FedEx responded "FedEx pays all U.S. federal, state and local taxes owed. As a U.S. based global company we comply with tax laws worldwide and pay our tax obligations in the U.S. and abroad."
And while it eliminated old loopholes, experts say, it opened up new ones. Eisinger says the advantage for corporations and individuals isn’t supposed to go on forever.
"The IRS supposedly says you're not allowed to do that. If you have a business, you're supposed to be making money on that business and you can't write off those losses forever on that. But in fact, billionaires don't care about the IRS. Really. The IRS doesn't really enforce this for the really rich people," Eisinger said.
The IRS' capacity to keep up with a growing tax code and customer service has been widely criticized.
In 2022, a national taxpayer advocate report found only one in eight people who called the IRS received a response, and they spent an average of 29 minutes on hold.
And between 2010 and 2019, the Government Accountability Office found audit rates for individual income tax returns declined, with rates decreasing the most among the wealthy.
Eisinger says these pitfalls play right into the hands of the rich.
"They have been pushing for lower taxes for decades. They've been pushing to eliminate taxes like the estate tax for decades. And they were the ones in 2010 who started to slash the IRS budget," Eisinger said.
President Joe Biden most recently earmarked $80 billion toward the IRS in the Inflation Reduction Act, signed into law last August.
More than halfway through his first term, he’s bringing renewed attention to a previous agenda proposal: a "Billionaire Minimum Tax" most recently mentioned in the State of the Union address.
"Let's finish the job and close the loopholes that allow the very wealthy to avoid paying their taxes," President Biden said.
But the measure has had difficulty gaining traction in Congress, with many experts saying it’s even less likely to gain support, with a Republican-controlled House.
