At least 18 billionaires got federal stimulus checks, report says
At least 18 billionaires — and hundreds of other ultra-wealthy individuals — received federal stimulus checks even though the payments were aimed at helping poor and middle-income households weather the pandemic's economic crisis, according to a new report from ProPublica.
About 270 wealthy people received payments in the first round of stimulus checks directed by lawmakers in 2020, despite having a total of $5.7 billion in income, according to the the report, which cited a trove of IRS data on thousands of the nation's wealthiest individuals ProPublica said it had obtained.
These rich taxpayers received stimulus checks after tapping complex tax deductions to reduce their net incomes to less than zero, qualifying them for the checks, the report noted. Under the law, the 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.
Included among the billionaires who received stimulus checks are philanthropist George Soros, worth $7.5 billion, according to the Bloomberg Billionaires Index, and financier Ira Rennert, worth $3.7 billion, the report noted. Rennert didn't respond to questions, ProPublica said.
A representative for Soros said he received a check from the U.S. government as part of the CARES Act. "He did not request the funds or take any other action to obtain them. He promptly returned the check," the representative said in an email to CBS MoneyWatch.
To be sure, the bulk of stimulus payments were directed to households that legitimately qualified for the checks, but the fact that billionaires received the aid underscores how differently the U.S. tax system works for the ultra-rich. The 270 wealthy people who got the checks most certainly didn't request the payments — the IRS automatically directed the aid to anyone it determined qualified by income.
It may seem mind-boggling that a billionaire could qualify for a $1,200 check from a stimulus program with an income threshold of $75,000 per single taxpayer. But because these billionaires tapped write-offs, deductions and other loopholes to minimize their incomes, they appeared to the IRS to have net incomes of less than zero, making them eligible for the payments.
"This disgrace is why we need real tax reform," the Institute on Taxation and Economic Policy, a left-leaning think tank, said on Twitter about the findings.
The ProPublica report comes as some Democratic lawmakers are pushing for a tax on billionaires, arguing that the nation's wealthiest citizens should pay more as a matter of fairness. During the pandemic, the collective net worth of America's roughly 700 billionaires surged by $2 trillion, thanks to a rise in stock prices and the values of other assets, according to Americans for Tax Fairness, a left-leaning group.
The billionaires tax would place a new levy on asset gains, whether a billionaire has sold the asset or not. Under current law, a gain is only taxed if it is "realized" when its owner sells the asset and books the profit. Unrealized gains — stocks or other investments that rise in value and that the investor holds onto and leverage — aren't currently taxed.
But the finding that at least 18 American billionaires received stimulus checks earmarked for middle-income families reveals how differently the current tax system works for the wealthy.
Most people pay taxes on earned income, such as their salaries or earnings from gig work, which is reported to the IRS on W2 or 1099 statements. The ultra-wealthy, however, have a host of accounting tricks and deductions they can use to reduce their reported income, such as by using business losses to offset income. Those valuable deductions can effectively minimize their tax liabilities — and, apparently, help them qualify for stimulus checks.
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