ProPublica’s bombshell tax investigation reportedly has lawmakers eyeing policy changes. One senator who designed a key corporation tax cut says it wasn’t supposed to let ‘multibillionaires’ avoid tax.

EW   Photo by Tom Williams Pool:Getty Images
Democratic Senator Elizabeth Warren has proposed introducing a wealth tax.

A ProPublica investigation into the tax records of the richest people in the US, which showed that some avoided paying federal income tax even as their wealth grew, has renewed debate in Congress about tax reform, The New York Times reports.

The nonprofit news site ProPublica published a report on Tuesday showing how much the 25 richest Americans – including Jeff Bezos, Elon Musk, Warren Buffett, Bill Gates, and Mark Zuckerberg – paid in tax. The report highlighted how two key tax loopholes benefit billionaires.

Some billionaires had slashed their tax bill via deductions made possible by tax cuts passed during the Trump administration, the ProPublica report said.

Republican Sen. Patrick J. Toomey, of Pennsylvania, told The New York Times that a 2017 corporation tax cut that he helped author was not intended to let the super-rich avoid paying taxes.

“My intention as the author of the 2017 tax reform was not that multibillionaires ought to pay no taxes,” Toomey told the NYT. “I believe dividends and capital gains should be taxed at a lower rate, but certainly not zero.”

Read more: ProPublica’s billionaire tax data shows the importance of closing 2 key tax loopholes. Here’s how.

ProPublica reported that Musk’s wealth grew by $14 billion from 2014 to 2018, but that he only paid $455 million in taxes. Bezos did not pay any income taxes for at least two years between 2006 and 2018, the report said.

Buffett paid minimal tax by holding Berkshire Hathaway stock and not paying a dividend, according to ProPublica’s report. The investor defended himself in a statement to the news outlet, saying his shareholders didn’t want a dividend and that he gave nearly all of his money to good causes.

A Republican-led Congress cut the corporation tax rate from 35% to 21% in 2017 under former President Donald Trump, benefiting company shareholders. The 2017 Tax Cuts and Jobs Act also reduced the tax rate for the top income bracket from 39.6% to 37%.

Democratic Sen. Ron Wyden, chairman of the Senate finance committee, said he was considering new reforms following the report, but did not share details.

Democratic Sen. Elizabeth Warren has pushed for a wealth tax – a 2% tax on a person’s net worth between $50 million and $1 billion. In March, Warren introduced an Ultra-Millionaire Tax Act with Rep. Pramila Jayapal of Washington and Rep. Brendan Boyle of Pennsylvania.

“Raising multibillionaires’ income taxes isn’t enough when these guys don’t grow their fortunes from income,” Warren tweeted Wednesday. “We need a Wealth Tax in American to help fix a tax system that’s rigged for the rich and powerful.”

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Berkshire Hathaway’s Charlie Munger has doubled down on his criticism of ‘disgusting’ bitcoin

BERKSHIRE BUFFETT MUNGER 2021
Warren Buffett and Charlie Munger.

  • Charlie Munger said bitcoin’s development and rise has been “contrary to the interests of civilization.”
  • He said the cryptocurrency is useful to “kidnappers and extortionists.”
  • The criticism comes in a year where more companies have started accepting bitcoin as payment.
  • See more stories on Insider’s business page.

Berkshire Hathaway’s Warren Buffett and his right-hand man, Charlie Munger, are no fans of cryptocurrency, but on Saturday Munger doubled down on his critique of bitcoin.

“Of course I hate the bitcoin success,” Munger said in response to a question during Berkshire’s annual shareholders’ event. “I don’t welcome a currency that’s so useful to kidnappers and extortionists, nor do I like just shoveling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air.”

“I think I should say modestly that I think the whole damned development is disgusting and contrary to the interests of civilization,” he added.

Buffett, who has previously called cryptocurrencies, “worthless,” and “risky” was more evasive.

“We’ve probably got hundreds of thousands of people watching this that own bitcoin, and we’ve got two people short,” Buffett said. “Angering the former group to make a couple of people happy wouldn’t be worth it,” he said.

The pointed remarks come during a headline-grabbing year for cryptocurrencies.

Bitcoin, the world’s largest cryptocurrency, broke consecutive records above the $63,000-level before tumbling below $50,000 last month. It has regained some of its value as it struggles to define its utility from being a potential currency to a store of value, among others.

Despite the volatility, a number of companies and investors jumped in on the action. In February, Elon Musk announced that Tesla would accept bitcoin as a form of payment for all models of its cars in the US.

Yum Brands, which operates KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill, also began accepting cryptocurrencies. So too did Xbox and PayPal. Meanwhile, Twitter’s CEO and founder, Jack Dorsey, teamed up with Jay-Z for a bitcoin endowment in India and Africa.

Coinbase, the largest cryptocurrency exchange in the US, listed on the Nasdaq in April. After a volatile first trading day, it boasted a valuation on a fully diluted basis of about $86 billion by the end of the day.

But Munger and Buffett aren’t alone in their hesitation about crypto.

Peter Schiff, Euro Pacific Capital’s chief economist and global strategist, last week called bitcoin “worthless.”

“I don’t think these bitcoin collections are going to be worth anything when the music stops. People have told me that when the bubble burst in Beanie Babies, they were able to use them to insulate their homes,” he said.

He added: “They could shove them in between the walls, and they made good insulation. You can’t do anything with a bitcoin. Once nobody wants your bitcoin, it’s completely worthless.”

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