About 270 wealthy people received payments in the first round of stimulus checks led by lawmakers in 2020, despite total income of $ 5.7 billion, according to the report, which cites a wealth of data from the IRS. out of thousands of the country’s richest individuals ProPublica said he had obtained.
These wealthy taxpayers received stimulus checks after using complex tax deductions to reduce their net incomes to less than zero, qualifying them for the checks, the report notes. Under the law, full payments of $ 1,200 per single taxpayer and $ 2,400 for married couples were only available to single people earning less than $ 75,000 or couples with incomes below $ 150,000. $.
Billionaires who received stimulus checks include philanthropist George Soros, worth $ 7.5 billion, according to the Bloomberg Billionaires Index, and financier Ira Rennert, worth $ 3.7 billion. dollars, according to the report. Rennert did not answer questions, ProPublica said.
A representative for Soros said he received a check from the US government under the CARES Act. “He did not ask for the funds or take any other action to obtain them. He quickly returned the check, ”the rep said in an email to CBS MoneyWatch.
Granted, the bulk of the stimulus payments went to households legitimately qualified for checks, but the fact that billionaires received the aid underscores how the U.S. tax system works differently for the ultra-rich. The 270 wealthy people who received the checks certainly did not ask for the payments – the IRS automatically directed the help to anyone it deemed qualified based on their income.
It may seem mind-boggling that a billionaire can claim a check for $ 1,200 from a stimulus program with an income threshold of $ 75,000 per single taxpayer. But because these billionaires used depreciation, deductions, and other loopholes to minimize their income, they appeared to the IRS to have less than zero net income, making them eligible for payments.
“This shame is why we need real tax reform,” the Institute on Taxation and Economic Policy, a left-wing think tank, said on Twitter.
The ProPublica report comes as some Democratic lawmakers push for a, arguing that the country’s richest citizens should pay more for the sake of fairness. During the pandemic, the collective net worth of some 700 billionaires in the United States jumped $ 2 trillion, thanks to rising stock prices and the value of other assets, according to Americans for Tax Fairness, a left-wing group.
The billionaire tax would impose a new capital gains levy whether or not a billionaire sold the asset. Under current law, a gain is only taxed if it is “realized” when its owner sells the asset and recognizes the profit. Unrealized gains – stocks or other investments that increase in value and which the investor keeps and operates – are currently not taxed.
But the discovery that at least 18 billionaires in America have received stimulus checks aimed at middle-income families reveals how the current tax system works differently for the wealthy.
Most people pay taxes on earned income, such as their wages or income from working together, which is reported to the IRS on W2 or 1099 returns. The ultra-rich, however, have a multitude accounting tips and deductions they can use to reduce their reported income, for example using business losses to offset income. These valuable deductions can actually minimize their tax obligations – and, apparently, help them qualify for stimulus checks.