America’s 400 Top Earners Pay Less Tax Than You
Propublica continues to mine the IRS Files.
Last June, Propublica announced that it was in possession of leaked IRS files detailing the tax affairs of America’s richest people, and that the IRS Files showed that taxes are — as Leona Helmsley famously quipped — for the little people:
The initial reporting described how, for example, private equity raiders were able to debt-finance acquisitions of productive businesses, run them into the ground, pocket hundreds of millions of dollars, and avoid tax as they sprinted away from the wreckage.
A key scam that enables this looting is the “carried interest” loophole, which most normies assume has something to do with not paying tax on the interest you earn from a loan or something. That’s a reasonable assumption, but it’s dead wrong. “Carried interest” is a doctrine invented to make things fairer for 16th century sea-captains, and it has nothing to do with interest on loans.
How does a scam like that persist in the tax code for 500 years? Well, one thing the IRS Files showed is that lobbying for tax-breaks is an incredibly productive investment. Trump’s “big, beautiful tax-cut” underwent a flurry of last-minute revisions that carved out the tax-evasion strategies of individual billionaires and their dynastic offspring.
These can be directly linked to campaign contributions to the GOP lawmakers who introduced them. Like Senator Ron Johnson, who threatened to block the tax cuts unless it was amended to favor three of his major campaign donors: Dick and Liz Uihlein (owners of Uline), and Diane Hendricks (roofing heiress), who gave $20m to Johnson’s campaign and reaped $215m in the first year of the cuts (they’re still getting hundreds of millions on that investment).
You may have noticed the presence of an heiress among the Senator Johnson’s owners: dynastic wealth plays an enormous role in shaping the US tax code and its policies. The American myth of the meritocracy has been extended to people whose “merit” consists of emerging from an…