Wealthiest Americans Paying Little To No Income Tax

CBS4's Elise Preston shows how they're dodging the taxman.

Video Transcript

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- Welcome back. It's Your Money. The majority of us see the line item right in our own paychecks, but the wealthiest Americans are legally paying little to no income tax.

- Yeah, a lot of people don't like this. That's according to a report in ProPublica, which obtained IRS data on the ultra rich like Amazon founder and former South Florida resident Jeff Bezos. CBS 4's, Elise Preston, shows us how the other half dodges the taxman.

ELISE PRESTON: When most of us get paid, so does Uncle Sam.

SAMANTHA SMITH: You're really taxed a lot. You're taxed more than you should be probarbly.

ELISE PRESTON: But non-profit investigative journalism organization ProPublica obtained never before seen IRS information and found the 25 richest Americans sometimes pay little or no federal income taxes. That includes Warren Buffett, Elon Musk, Michael Bloomberg, and Jeff Bezos. Now the richest person in America. He paid no federal income tax in 2007 and 2011.

JESSE EISINGER: The way their wealth builds they are outside of the system.

ELISE PRESTON: The ultra rich can trim their tax bills through charitable donations or by avoiding wage income.

JESSE EISINGER: They choose when to take income. Sometimes they don't take income at all. They don't take wages, and it's only taxed when they sell, and they often don't sell. They borrow to fund their lifestyles.

ELISE PRESTON: None of this is illegal, which begs the question, does Congress needs to change the law?

ANDREW MAK: I do believe they should, yeah. I believe they should overhaul the whole tax system.

SAMANTHA SMITH: It is ridiculous that the wealthy are not paying taxes, and we're paying all of the taxes.

ELISE PRESTON: President Biden has proposed higher taxes on the rich, including raising the capital gains tax. Both Warren Buffett and Michael Bloomberg responded to ProPublica saying they supported an increase in taxes on the wealthy and donate much of their wealth. At Elise Preston, CBS News, New York.

- The IRS is investigating the source of those leaked tax documents.