Even though federal stimulus payments distributed in the U.S. during the COVID-19 pandemic were supposed to help those struggling economically, 18 billionaires received them.
A ProPublica report based on IRS records obtained by the outlet showed that these 18 ultra-wealthy taxpayers were sent stimulus checks. Three rounds of stimulus payments provided checks up to $1,200 for individuals making less than around $75,000 annually. The asset-heavy billionaires were able to qualify because they reported income under this threshold and “used business write-offs to wipe out their gains.”
ProPublica did not name all 18 billionaires who received the checks. However, they did identify a handful:
· Philanthropist George Soros, worth 8.6 billion
· Buffalo Bills owner Terrence Pegula, worth 5.7 billion
· Renco Group CEO Ira Rennert, worth 3.7 billion
· Minnesota Timberwolves owner Glen Taylor, with 2.8 billion
· Oil mogul Timothy Headington, worth 1.4 billion
· Life Centers of America founder Forrest Preston, worth 1.2 billion
According to Soros’ representatives, he returned his check.
“George returned his stimulus check,” said the spokesperson.
“He certainly didn’t request one!”
Some examples of how business write-offs reduce the taxable income of billionaires include Headington and Rennert’s 2018 income equations.
According to ProPublica, Headington had $62 million in income, but after $342 million in write-offs, his final result was negative $280 million. Rennert earned $64 million in income that was offset by $355 million in deductions, for a final total of negative $291 million.
“The tax code is simply not equipped to tax billionaires fairly, or even ensure they pay anything at all,” said Senate Finance Committee chair Ron Wyden, a Democrat from Oregon.
Billionaires weren’t the only portion of the ultra-rich to report income low enough to qualify them for Coronavirus Aid, Relief, and Economic Security Act stimulus payments. Overall, ProPublica found 270 taxpayers who collectively reported $5.7 billion in income but wrote enough of it off to qualify for checks.
As part of the currently under-negotiation Build Back Better legislation, new rules are proposed to restrict the ability of wealthy taxpayers to report negative income by limiting the use of business losses to wipe out other types of income, like capital gains or dividends. First proposed by House Democrats in September, the measure expected to produce $167 billion in revenue over the next 10 years if passed.
Wyden has also proposed a “billionaire income tax” that would tax increases in wealth. With the existing system, gains are taxed only when they are “realized,” such as when someone sells stock. Investments that rise in value and are kept for leverage aren't currently taxed, said CBS.
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