From celebrity entertainers to speed boat rides: the rise of the expensive pandemic wedding

couple, bride and groom at wedding
After a long quarantine, couples are opting for showier weddings.

  • Couples are going all-out on extravagance and luxury after enduring long pandemic lockdowns.
  • Wedding planners have seen revenues soar with the swell of bookings and more expensive requests.
  • Ultra-luxury wedding planners say couples now invite fewer guests, but offer even ritzier experiences.
  • See more stories on Insider’s business page.

From llamas, exotic cars, and speed boat rides to flower arrangements that cost more than a year’s college tuition dangling from ceilings, a wave of unusually lavish nuptials is giving the wedding industry a cash windfall that was badly missed during COVID-19 lockdowns.

“It’s the roaring 20s for weddings,” Alicia Fritz, the owner and a wedding planner at A Day In May said. “In 2020, we were taken away from gathering and celebrating happy moments, and weddings are one of those crucial times where people are truly present, filled with love.”

More couples are getting married in 2021 than in any year since 1984, and the post-vaccine wedding rush is boomeranging professionals in the wedding industry from simply surviving the coronavirus pandemic to raking in skyrocketing inquiries, bookings, and profits from increasingly expensive ceremonies.

“They’re going all out,” Marisa Guerrero, the vice president of Debbie’s Bloomers, said. “They want unique touches and a special wedding different from what they’ve seen in other places.”

Couples are paying a premium on statement-making structures like flower arches and chandeliers, taking photos on llamas, driving away in exotic sportscars, and splurging on unusual wedding buffets like doughnut walls and mac and cheese bars.

With clients on average spending about $5,000 on flower arrangements, almost double the amount compared to 2019, Guerrero said she’s working seven days a week and often up to 12 hours a day to keep up with the torrent of requests. The trend is echoed among other wedding vendors, who told Insider their revenues surged 40% to 50% compared to 2019.

However, those who plan weddings for millionaire and billionaire clients with seemingly bottomless budgets say they haven’t seen costs increases per wedding, which often cost millions of dollars each. Instead, couples often invite fewer guests but give a more lavish and bespoke experience for those who make the cut.

“We’re looking for a once-in-a-lifetime experience,” Alison Laesser-Keck, the creative director of the wedding planning company Alison Bryan Destinations, said.

Some of the big-ticket items weddings have included meals cooked by Michelin-starred chefs, speed boat rides through picturesque slot canyons in Utah, paid-for guest accommodations, and performances by celebrities like Miguel and Janelle Monae. Her clients usually work in finance or entertainment, and some are household names.

“They do well, and they want to treat their guests,” Laesser-Keck said. “It’s about how can we take care of our family and friends, and give them an experience they could never have on their own.”

Sarah Crowell, the lead planner of Mavinhouse Events, said she’s seen an uptick in multi-day weddings, where activities traditionally reserved for only the bridal party – like sunset sailboat rides, brunches, and seaside hikes – are opened up to the entire guest list.

This thriving wedding season is a result of weddings being rescheduled from 2020 and people looking to splurge money they’ve saved on celebrations with family after over a year of quarantining, wedding professionals said.

The deluge of bookings has also allowed some vendors to change their businesses and personal lives.

Angela Lauren, the owner of Angela Lauren Photography, went from struggling to keep her business alive during the pandemic to looking for a house, and Teresa Eoff, the owner of Figure Eight Events, said the extra revenue may launch her company out of her garage studio and into a warehouse space.

Demand can far outpace what companies can handle. Over 90 inquiries per month have rolled into Laesser-Keck’s every month since January.

“We opened up inquiries and within a week we got enough business to last the next two years,” Laesser-Keck said. “The demand for all companies is through the roof.”

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Billionaire Mark Cuban reveals he owns only $500 worth of dogecoin, despite his praise for the meme token

Mark Cuban
Mark Cuban.

Mark Cuban disclosed that he owns less than $500 worth of dogecoin, despite praising the cryptocurrency as the strongest medium of exchange.

The billionaire investor and “Shark Tank” star has previously said his NBA team, the Dallas Mavericks, is the meme-inspired token’s largest merchant after it began accepting dogecoin as payment for tickets and merchandise.

“The Mavs have what we sold in merch,” he said in a tweet on Sunday. “I personally own $494 worth of DOGE.”

Cuban was responding to a Twitter user who asked whether the billionaire’s portfolio includes more of dogecoin, or bitcoin. He has a net worth of $5.8 billion, according to the Bloomberg Billionaires Index.

The entrepreneur told CNBC Make It only last week that dogecoin is the strongest cryptocurrency because of its community, a claim backed by Elon Musk. “The community for doge is the strongest when it comes to using it as a medium of exchange,” Cuban said.

He thinks bitcoin is better as a store of value, rather than a currency. Yet, he said in a March podcast that his crypto portfolio consists of 60% in bitcoin, 30% in ether, and 10% in other unnamed coins.

The tech billionaire has built his fortune through a lifetime of business deals, including the $5.7 billion sale of his streaming site Broadcast.com, and his ownership of the Mavericks.

“Between the Mavs and my personal account, its let than $15k in DOGE,” he tweeted on Sunday, suggesting his team hasn’t sold too much merchandise in exchange for dogecoin.

Read more: A 15-year professional trader breaks down why bitcoin could surge to $45,000 in the next 2 to 3 weeks before dropping to the $32,000 to $35,000 range – and lays out 3 trades for ethereum and 2 altcoins as he predicts similar moves

Earlier this year, Cuban said he and his 11-year-old son owned 3,250 dogecoins that were worth about $1,700 at the time. Dogecoin was then trading around 50 cents per coin, but has plunged 34% since then to around 33 cents as of Monday. Still, the cryptocurrency is up about 7,000% so far this year, according to data from Tradingview.

If Cuban and his son still owned 3,250 dogecoins, their holdings would be worth about $1,100. The investor’s latest disclosure suggests either they sold some coins, or Cuban isn’t counting his son’s coins in his calculation.

Cuban has also said Amazon and Netflix are his biggest holdings, with “close to a billion dollars” in Amazon stock alone. He was asked on Twitter why he chooses to only cheer dogecoin, and not his other investments.

“I don’t pump anything other than Mavs merch,” he tweeted. “BUT, the DOGEsphere is fun. Their memes are great. They have fun. They make fun of themselves. It’s fun to be part of.”

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Billionaires’ wealth gains during the pandemic could easily pay for the whole world to get vaccinated

covid vaccine
A medical assistant administers a COVID-19 vaccine dose to a woman at a clinic in Los Angeles on March 25, 2021.

  • A one-time 99% tax on the pandemic-era gains for the world’s billionaires could pay for vaccines for everyone, according to a new report.
  • The rest of the money collected could give every unemployed worker in the world $20,000.
  • One-off wealth taxes have been suggested as one potential solution for boosting economic recovery and addressing inequality.
  • See more stories on Insider’s business page.

Billionaires around the world added around $5.5 trillion to their wealth during the pandemic – and a 99% tax on those gains could help vaccinate the world.

That’s according to a new report from Oxfam, the Fight Inequality Alliance, and the left-leaning Institute for Policy Studies and Patriotic Millionaires.

The analysis looks at the impact of a potential one-time tax on pandemic-era billionaire gains, using Forbes real-time data to track net worths. The report finds that the world’s 2,690 billionaires added staggering amounts to their fortunes, with their cumulative wealth growing more since March 2020 than in the previous 15 years.

That adds up to a cumulative net worth of $13.5 trillion, which marks a $5.5 trillion, or almost 69%, increase since the pandemic first hit, when they held $8 trillion.

“Billionaire wealth is not earned. Billionaires are profiting from working people’s hard graft and pain. It’s their money ‘earned’ by your sweat ―and it’s high time that sweat began to pay off,” Njoki Njehu, Pan Africa Coordinator of the Fight Inequality Alliance, said in a statement.

Per the report, such a 99% one-off tax would bring in $5.4 trillion, with the billionaires still holding onto $55 billion in pandemic-era gains.

The authors calculate the cost of vaccination at $7 per dose, meaning that vaccinating the entire world would come in at a price tag of $70 billion total, a relatively tiny fraction of the trillions in wealth gained by those billionaires.

Currently, according to Our World In Data, only 1.2% of people in low-income countries have gotten at least one vaccine dose. Nature reports that it will take until 2023 for the poorest countries to get vaccinated at current expected rates.

The report proposes that rest of the money raised by a wealth tax go to unemployed workers. The International Labour Organization found in a report that 220 million people are unemployed worldwide. According to the analysis, it would cost $4.4 trillion to give them all $20,000, well within the amount of money left over after global vaccination.

Wealth taxes have arisen as one solution for combating pandemic inequality

Levying taxes on society’s wealthiest members has been suggested as one potential method to address pandemic inequality – and it’s garnered support from more mainstream bodies and countries.

In April, the International Monetary Fund backed taxes on the wealthy and corporations as one option to help pandemic economic recovery. Argentina took it one step further, enacting its own one-time wealth tax on the top 0.8% of its population. The money from that tax – which brought in $2.4 billion – will go towards housing, public health, and other pandemic-impacted sectors.

“This is the time for a bold and meaningful strike at these inequalities,” Chuck Collins, the director of the program on inequality and the common good at the Institute for Policy Studies, told Insider. “You can’t get a more extreme example of the harms of billionaire wealth excess versus the plight of ordinary people than what we’re seeing right now. And people know that. So, I think bold measures – bold wealth taxes – to reverse inequality would have wide public support.”

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Bill Gates transferred another $2 billion worth of stock to Melinda, taking total transfers since their divorce announcement to about $6 billion

bill and melinda gates
Melinda French Gates and Bill Gates.

  • Bill Gates transferred more than $2 billion worth of stock to Melinda French Gates on Thursday.
  • This included shares in AutoNation and Canadian National Railway, Bloomberg first reported.
  • French Gates has received about $6 billion worth of stock in transfers since the couple’s May divorce announcement.
  • See more stories on Insider’s business page.

Bill Gates transferred more than $2 billion in stock to Melinda French Gates on Thursday, as first reported by Bloomberg.

This takes total transfers from Gates to French Gates since the couple announced their divorce in May to about $6 billion.

Cascade Investment, Gates’ investment vehicle, transferred 3.3 million shares, collectively worth $387 million, of the automotive retailer AutoNation to French Gates, a SEC filing showed, per Bloomberg.

The Microsoft cofounder also transferred 2.8 million shares worth a total of $1 billion of the manufacturer Deere & Co. to French Gates through Cascade Investment, per a SEC filing cited by Bloomberg.

The same day, Cascade Investment transferred 9.5 million shares, valued at more than $1 billion total, of Canadian National Railway to French Gates, per Bloomberg.

Insider contacted Cascade Investment and a Gates representative for comment on the transfers, but did not immediately receive a response.

Gates and French Gates officially divorced last week. Four days after they announced their intention to divorce, in May, Gates transferred $3 billion worth of stock from Cascade Investment to French Gates, including 2.9 million shares of AutoNation, 14.1 million shares of Canadian National Railway, and 293.5 million shares of the media company Grupo Televisa.

Two weeks later, Gates conveyed $850 million worth of Deere & Co. shares to French Gates, according to a SEC filing – this was 7% of Gates’ stake in the company.

Gates and French Gates’ collective net worth is about $152 billion, according to the Bloomberg Billionaires Index.

Gates on Wednesday told CNN that he and French Gates would try to keep working together on their foundation after their divorce.

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‘Whitey on the Moon’ poem garners social media attention on anniversary of moon landing, Bezos’s spaceflight

Jeff Bezos space flight on Blue Origin rocket.
Blue Origin’s New Shepard rocket takes off on July 20, 2021 with Jeff Bezos on board.

  • Billionaire Jeff Bezos launched into space on Tuesday, the anniversary of the 1969 moon landing.
  • Gil Scott-Heron, the revolutionary poet and soul artist, released “Whitey on the Moon” in 1970.
  • The poem resurfaced on social media in response to the billionaire space race.
  • See more stories on Insider’s business page.

Gil Scott-Heron’s poem “Whitey on the Moon” has been used in the past to critique the space race. And the 1970 poem resurfaced this week in response to the recent influx of billionaires launching into the lower regions of space.

On the anniversary of the 1969 moon landing on Tuesday, Jeff Bezos, former Amazon CEO, founder of space company Blue Origin, and wealthiest man in the world, spent a total of 10 minutes and 10 seconds in space alongside his brother, an 18-year-old, and an 82-year-old passenger, according to The Associated Press.

Billionaire Richard Branson, the founder of Virgin Galactic, took to the sky nine days prior with two pilots, Dave Mackay and Michael Masucci.

Scott-Heron, best known for his song “The Revolution Will Not Be Televised,” released “Whitey on the Moon” in 1970 following the 1969 moon landing.

The People’s City Council in Los Angeles posted a video of the artist, who referred to himself as a “bluesologist,” reciting the poem on Tuesday in response to Bezos and Branson’s ventures into space. The tweet went viral, receiving more than 5,600 likes, and it was shared more than 2,400 times.

The 2-minute spoken-word piece references the financial struggles faced by Scott-Heron’s family, including their inability to afford medical bills for his sister as described in the lines:

A rat done bit my sister Nell

(With whitey on the moon)

Her face and arms began to swell

(And whitey’s on the moon)

I can’t pay no doctor bills

(But whitey’s on the moon)

Ten years from now I’ll be payin’ still

(While whitey’s on the moon)

The poet also mentions his struggle to pay for basic necessities of survival such as food and rent amid rising prices, saying taxes are taking his “whole damn check.”

The piece became increasingly relevant to the modern-day, as social media users pointed out the ethical concerns of billionaires focusing their money on spaceflights – rather than helping those in need on earth.

“My first thought with all these space exploration by billionaires,” one user tweeted in response to the viral video.

Watch the spoken-word poem here:

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Billionaire Richard Branson aims to fly to the edge of space as early as July 11, narrowly beating Jeff Bezos

jeff bezos richard branson thumb 4x3
Jeff Bezos (left) and Richard Branson (right) may be in a very tight space race.

After weeks of flying rumors, Richard Branson has finally confirmed that he’s aiming to reach the edge of space before Jeff Bezos.

The two billionaires both founded their own spaceflight companies – Bezos started Blue Origin in 2000 and Branson created Virgin Galactic in 2004 – with the ultimate dream of getting to space themselves. Their personal space race might end next weekend.

That’s because Virgin Galactic announced Thursday that it’s planning to launch Branson aboard its next test flight, as early as July 11. Bezos won’t be climbing aboard his company’s New Shepard rocket until July 20.

“I’ve always been a dreamer. My mum taught me to never give up and to reach for the stars,” Branson said on Twitter. “On July 11, it’s time to turn that dream into a reality aboard the next @VirginGalactic spaceflight.”

richard branson with spaceshiptwo space plane
Richard Branson poses with the SpaceShipTwo, a six-passenger two-pilot vehicle meant to ferry people into space, in Mojave, California, February 19, 2016.

Branson will fly as a mission specialist – an employee playing the role of a future passenger. He’ll be joined by three other mission specialists: Beth Moses, Virgin Galactic’s chief astronaut instructor; Colin Bennett, the company’s lead operations engineer; and Sirisha Bandla, vice president of government affairs and research.

Pilots Dave Mackay and Michael Masucci will ferry the four mission specialists to the edge of space aboard the company’s VSS Unity vehicle – one of its SpaceShipTwo space planes. This will be Virgin Galactic’s first fully crewed flight, though the company has flown humans to the edge of space three times now.

Racing to the edge of space

VSS Unity on its May test flight.
VSS Unity after detaching from its mothership during a May 22 test flight.

There’s some debate about where space begins. Both Branson and Bezos will be flying in a grey area. Neither will enter orbit around the Earth – making these flights “suborbital.”

Bezos’s spaceship should take him just above the Kármán line – an imaginary boundary 62 miles (100 kilometers) above sea level, where some people say space begins. He’ll experience three minutes of weightlessness, then descend back to the ground.

blue origin new shepard rocket launch
A New Shepard rocket lifts off from Blue Origin’s West Texas launchpad.

Virgin Galactic has not shared the planned altitude for Branson’s flight, but the VSS Unity has never flown past the Kármán line. Its most recent crewed test flight, in May, soared 55 miles high.

Both Virgin Galactic and Blue Origin ultimately aim to ferry paying customers to these suborbital heights.

“I truly believe that space belongs to all of us,” Branson said in a statement. “As part of a remarkable crew of mission specialists, I’m honoured to help validate the journey our future astronauts will undertake and ensure we deliver the unique customer experience people expect from Virgin.”

In its press release, Virgin Galactic said it would share a global livestream of next weekend’s flight.

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The world’s biggest luxury giant spent $835 million refurbishing a department store in Paris, and it’s now open to the public. Take a look inside.

The handbag department at La Samaritaine department store in Paris
  • LVMH on Monday unveiled its $835 million refurb of Paris department store La Samaritaine.
  • The luxury conglomerate’s elaborate refurb took seven years.
  • The building also houses a luxury hotel, a beauty salon, a spa, and 12 restaurants.
  • See more stories on Insider’s business page.
La Samaritaine is a large department store located on the banks of the River Seine, close to the Louvre museum. LVMH, the world’s largest luxury conglomerate, bought the building in 2001 and later spent seven years renovating it.

An exterior shot of La Samaritaine department store in Paris
Billionaire Bernard Arnault is CEO and chairman of LVMH. He’s currently the third richest person in the world, according to Bloomberg.

It’s been shut for 16 years after it was deemed unsafe and closed in 2005.

LVMH — run by one of the world’s richest men, Bernard Arnault — spent €750 million ($895 million) refurbishing the space, transforming it into a luxury shopping destination.  

This week, it opened its doors to the public after being painstakingly restored.

The opening of La Samaritaine in Paris
President Macron joins Bernard Arnault.

French President Emmanuel Macron joined LVMH CEO Arnault to open the new store on Monday. 

The retail portion of the building is around 20,000 square feet.

Women's fashion at La Samaritaine department store in Paris
Women’s hats.

There’s also 15,000 square feet of office space, 96 social housing units, and a hotel.

The hotel, called Cheval Blanc Paris, won’t open until September 7.

La Samaritiaine  exterior shot
It has 72 luxury rooms and suites.

According to Bloomberg, prices for a room start at €1,150 ($1,400) per night. 

There are areas devoted to men’s and women’s fashion, beauty, and accessories.

Interior shot of La Samaritaine department store in Paris
Customers can spend an entire day here.

There are more than 600 different brands in the store – from legacy designers to newer brands, which are spread across seven levels. 

The glass roof is one of its most iconic features.

The staircase at La Samaritaine department store in Paris
Light floods into the store through the roof.

According to LVMH, this was rebuilt to match the original design from 1905.

Just below the roof, on the top floor of the building, is one of its bar-restaurants, Voyage.

Space Voyage restaurant at La Samaritaine department store in Paris
The bar closes at 2am.

According to Vogue Business, this bar stays open long after the store closes at 8 p.m..

There are a dozen restaurants in the building.

Restaurant at La Samaritaine department store in Paris
These range from more formal sit-down restaurants to bakeries.

There’s a spa and beauty salon, too.

The beauty section at La Samaritaine
The hair salon.

“We strive to move away from the purely transactional side,” Benjamin Vuchot, chairman and CEO of DFS Group, which operates the building for LVMH, told Vogue Business

In a world where shopping is undergoing tremendous change, we have to find different solutions. Hence the food & beverage, the spa, the hair salon,” he said. 

But luxury shopping is still at the heart of the space, and it’s a place for LVMH to display and sell all the brands that it owns.

Men's department at La Samaritaine department store in Paris
The men’s clothing section in the store.

LVMH owns 75 brands.

An interior shot of La Samaritaine department store in Paris
Champagne bottles lined up in the store.

These include Louis Vuitton, Givenchy, and Dom Pérignon champagne to name a few.

 

The focus is all on shopping in-store – the store’s website is mainly to book beauty or hair appointments.

The handbag department at La Samaritaine department store in Paris
The luxury handbag department.

The department store was initially meant to reopen in 2020, but this was delayed because of the pandemic.

Boutique store at La Samaritaine
Loulou concept store.

With international travel still mostly at a standstill, it could be a while before tourists flock to the building — and tourist spending is vital to the luxury industry. 

 

“We expect it will take one or two years for tourists to really return,” the regional president at DFS Group, Eleonore De Boysson, said at a press conference this week, which was reported by Bloomberg.

The women's fashion department at La Samaritaine department store in Paris
Menswear.

For now, “we want Parisians to reclaim La Samaritaine,” she said

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Unconfirmed report suggests Branson may try to beat Bezos into space – and Virgin Galactic didn’t deny it

jeff bezos richard branson thumb 4x3
Jeff Bezos (left) and Richard Branson (right) may be in a very tight space race.

The billionaire space race appears to be in full swing, and it’s getting close. Jeff Bezos and Sir Richard Branson may both have the edge of space in their sights next month.

Bezos announced on Monday that he plans to fly into space aboard the New Shepard rocket developed by Blue Origin, the aerospace company he founded in 2000. The launch is set for July 20.

The following day, a report from Douglas Messier, who runs the longtime space blog Parabolic Arc, indicated that Virgin Galactic may be racing to launch its own founder, Branson, before Bezos. A “source who requested anonymity” told Messier that the company plans to fly Branson on a test flight of its SpaceShipTwo rocket plane over the July 4 weekend. That would poise Branson to beat Bezos to space by a narrow two weeks.

According to Messier’s source, the company began making those plans in response to Blue Origin setting the date for its first crewed flight. Blue Origin made that announcement on May 5 – long before Bezos shared that he would be on board.

Insider was not able to independently confirm Messier’s report. But in a statement to Insider, a spokesperson for Virgin Galactic did not deny the report’s claims.

“At this time, we have not determined the date of our next flight,” the spokesperson said.

Branson’s flight is “expected in the summer months,” the spokesperson added, as is a separate test flight with four “mission specialists” – employees playing the role of future passengers.

Virgin Galactic has previously stated that the mission specialists would fly before Branson. But as of Wednesday, the spokesperson did not respond to a question about which of the two flights would come first.

“One could easily imagine just sort of swapping the flights, or having Richard Branson fly in one of those four seats, just as a test subject, if you will,” George Nield, a former associate administrator of the Federal Aviation Administration, where he led its Office of Commercial Space Transportation, told Insider.

Branson has “been in some pretty risky things in his career,” Nield added. “And he obviously believes in this program. If he’s comfortable that everything’s good and is willing to go himself, then more power to him.”

“It’s kind of amusing, these billionaires entertaining themselves by being on the first flights of their vehicles,” John Logsdon, the founder of George Washington University’s Space Policy Institute and a former member of the NASA Advisory Council, told Insider. “Starship is supposed to do an orbital test, too. Is Elon [Musk] going to take the bait and fly on that?”

Launching Branson by July 4 is ‘very doable’

Virgin Galactic
A SpaceShipTwo space plane returns to Earth after a supersonic flight.

Virgin Galactic could easily get through the paperwork to fly Branson by July 4, according to Nield.

“To me, it looks absolutely very doable,” he said, though he emphasized that he is not privy to communications between Virgin Galactic and the FAA, which licenses commercial rocket launches.

Virgin Galactic might have to modify its license with the FAA in order to fly Branson. The modification would allow the company to fly “participants” as well as crew members (in this case, pilots and mission specialists). But Nield says that modification would be simple and quick, as long as the data from the last flight doesn’t reveal any major issues.

“The change in the license is just to say: ‘delete paragraph five,'” Nield said. “So it’s not a big deal.”

Branson could even get a new role as a crew member – acting as a mission specialist, for example. Then Virgin Galactic may not have to modify its license at all in order to fly him.

“In my opinion, there is nothing preventing Richard Branson from also flying as a member of the flight crew,” Nield said. “He is an employee of the company, and they can assign him whatever duties they want to. That’s not something the FAA gets involved in. That’s up to the company.”

When Insider asked about the report, an FAA spokesperson declined to comment on whether Virgin Galactic was pursuing a launch next month. Instead, the agency pointed out the “participant” license modification.

It’s not clear how much Virgin Galactic would have to change or speed up its original plans in order to get Branson to space before Bezos.

“If you hurry there’s always the possibility of cutting corners, but the people that are managing the flight have a pretty high incentive not to kill their boss,” Logsdon said.

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The wealthiest Americans avoided billions in taxes by voluntarily doing something most only do out of necessity: borrowing money.

billionaires 03
  • America’s 25 wealthiest people got $401 billion richer from 2014 to 2018, according to Forbes.
  • ProPublica reported the income taxes they paid amounted to just 3.4% of that new net worth.
  • One way the ultra-rich avoid taxes: borrowing money at low-interest rates, according to ProPublica.
  • See more stories on Insider’s business page.

ProPublica reported Tuesday it had obtained a massive trove of IRS documents, revealing that America’s wealthiest individuals have avoided paying billions of dollars in taxes for years, resulting in income tax bills that amount to a fraction of their net worth.

One of the key strategies employed by the ultrawealthy to keep their tax bills low: borrowing money.

Many Americans borrow money only when they have to for large purchases like college tuition or a house, as interest can quickly add up, especially if they’re not able to pay back the loan right away.

But according to ProPublica and independent experts, America’s billionaires have often financed their lavish lifestyles by using their vast fortunes as collateral for loans, which can come with single-digit interest rates.

Borrowing money allows the ultrawealthy to earn minuscule salaries, avoiding the 37% federal tax on top incomes, as well as avoid selling stock to free up cash, bypassing the 20% top capital gains tax rate. Since loans aren’t considered taxable income, the wealthy need only pay back the principal and interest, rather than the higher taxes that would accompany multimillion-dollar incomes and investments.

America’s 25 wealthiest individuals saw their net worth grow by $401 billion from 2014 to 2018, according to Forbes. But they paid a total of $13.6 billion in federal income taxes in that same period, amounting to 3.4% of that newly acquired wealth, ProPublica found.

By contrast, a middle-class American in their 40s who had amassed a “typical amount of wealth for people their age,” saw their net worth grow by $65,000 from 2014 to 2018, but paid $62,000 in income taxes, or 95% of that new wealth, according to ProPublica.

The US does not directly tax individuals’ total wealth, unlike some European countries. Nor does it tax stock holdings until they are sold. And billionaires tend to have a lot of their net worth wrapped up in stocks.

However, ProPublica’s analysis revealed in new detail how America’s tax code allows the ultrawealthy to take advantage of a litany of tax loopholes and wealth-management strategies to increase their wealth without also increasing their tax bills substantially.

To illustrate the gap between wealth and taxes paid by the ultrawealthy, ProPublica created what it called a “true tax rate.” ProPublica defined this as the total federal income tax a person paid, in this case from 2014 to 2018, compared to how much new wealth they acquired in that same time period.

ProPublica did not publish its source data or disclose how it obtained IRS data.

According to ProPublica, the top 25 wealthiest Americans paid a “true tax rate” of 3.4% – a result of tax avoidance strategies that are out of reach for most Americans.

Borrowing, it turns out, is one of those strategies.

In 2014, for example, Oracle cofounder Larry Ellison disclosed he had used 250 million of his Oracle shares as collateral to secure a $9.7 billion personal line of credit.

Elon Musk has similarly put up a massive amount of his equity in Tesla and SpaceX as collateral for loans, rather than sell those shares and pay 20% in capital gains tax to free up the money. From 2014 to 2018, Musk paid $455 million in taxes on a reported income of $1.52 billion, resulting in an effective tax rate of 29.9%. But his wealth grew by $13.9 billion during that time, meaning his “true tax rate,” according to ProPublica’s methodology, was just 3.27%.

Musk replied to ProPublica’s request for comment with: “?”

Investor Carl Icahn also took advantage of borrowing money, paying $0 in federal income taxes despite reporting an adjusted gross income of $544 million, as he had an outstanding loan with Bank of America worth $1.2 billion, ProPublica reported.

“I didn’t make money because, unfortunately for me, my interest was higher than my whole adjusted income,” Icahn told ProPublica, adding that while he does borrow a lot of money, it’s “not at all” meant to lower his tax bill, but rather that he borrows “to win. I enjoy the competition. I enjoy winning.”

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