A major IRS document leak revealed that billionaires George Soros and Warren Buffett, who advocate for higher taxes on the wealthy, paid little to nothing in federal income taxes in recent years.
The trove of documents was leaked to nonprofit investigative outfit ProPublica and was detailed in a lengthy story that was released on Tuesday morning. The revelation sparked liberal calls for increased taxes on the rich and launched an investigation to determine whether an Internal Revenue Service employee leaked the records to the news organization.
Among those that paid no federal income taxes in recent years was liberal investor and political donor Soros, who paid no income taxes for three years between 2016 and 2018, ProPublica reported. As of Wednesday, Soros’s net worth sat at $8.6 billion. He has repeatedly called for increased taxation on the wealthy, including a U.S. wealth tax.
‘SECRET’ TAX RECORDS OF WEALTHIEST AMERICANS LEAKED TO MEDIA
In 2019, Soros and some other wealthy business leaders signed a letter that claimed a 2-cent tax on every dollar of assets over $50 million and a 1-cent tax on the dollar for assets over $1 billion would create $3 trillion in increased tax revenue for the United States over a 10-year period.
A spokesman for Soros, who is known for backing Democratic candidates and liberal causes, defended his tax returns and pointed out that the reason no taxes were paid during those years was that Soros incurred losses on investments.
“Between 2016 and 2018 George Soros lost money on his investments, therefore he did not owe federal income taxes in those years. Mr. Soros has long supported higher taxes for wealthy Americans,” the spokesman said.
Another billionaire who paid very little in federal income taxes is Buffett, who has a net worth of $109 billion.
Collectively, the top 25 richest people saw their net worth increase by $401 billion from 2014 to 2018. According to the tax documents, that group paid a total of $13.6 billion in federal income taxes in those five years. The federal government taxes income but not wealth.
Buffett paid $23.7 million in taxes from 2014 to 2018 on taxable income of $125 million. During that time, his wealth grew by $24.3 billion, according to the tax documents.
Buffett, like Soros, has also been an advocate for increased taxes for the wealthy. He has supported raising taxes on the 1%, although has not endorsed a full-sail wealth tax as Soros has. He is also the namesake of the so-called “Buffett rule,” which was part of a tax plan proposed by the Obama administration that would have mandated the wealthiest individuals be taxed at the same rate as the middle class.
Buffett paid so little in taxes because much of his wealth is derived from unrealized gains in his stake in Berkshire Hathaway. Berkshire also doesn’t pay quarterly dividends, like many companies do, to stockholders.
Buffett responded to the ProPublica report in a letter, writing, “I can’t think of any large public company with investors so united in their reinvestment beliefs: A 50 to 1 vote against dividends is simply unheard of.”
He also added that the U.S. government “has benefited” from Berkshire’s reinvestment policy. Buffett said that in both 2019 and 2020 (years not covered by ProPublica) the company paid some 1.5% of the total corporate income receipts for the U.S. government.
The legendary investor also said that while he has already started giving his riches away, after his death he plans to donate 99.5% of his fortune to charity. “I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt,” he wrote.
In the missive, Buffett made it clear he continues to think that the tax code should be substantially revised, adding that he thinks “huge dynastic wealth is not desirable for our society.”
IRS Commissioner Charles Rettig addressed the leak during a Capitol Hill hearing about the IRS budget. He said that an investigation is underway.
“I can confirm that there is an investigation with respect to the allegations that the source of the information in that article came from the Internal Revenue Service,” Rettig said. “Upon reviewing the article, the appropriate contacts were made as you would expect, and the investigators will investigate.”
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The Treasury Inspector General for Tax Administration would lead such an investigation. A TIGTA spokesperson would neither confirm nor deny the existence of the investigation when contacted by the Washington Examiner, although the spokesperson said TIGTA “takes all such allegations seriously and takes action as appropriate.”
