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super-wealthy
The Tax Foundation’ Misleading Math Overstates How Much Billionaires Really Pay
By taking into account corporate taxes while ignoring corporate income, the foundation’s methodology drives up effective income tax rates for the super rich only because these rich happen to own a massive amount of corporate stock.
Mar 04, 2025
An income tax rate of over 100% would be hard for anyone to sustain. At a rate a smidge over 100%, our deepest pockets might be able to get by if they drew down their wealth or borrowed against it. But keeping up, year in and year out, with an income tax rate of over 1,000%, 10 times income? That seems, on its face, totally implausible.
Yet the Washington, D.C.-based Tax Foundation would have us believe Warren Buffett did just that for at least five years running, all while enormously growing his own personal wealth.
This conclusion about Buffett’s tax situation emerges inescapably out of the claims the Tax Foundation makes in a research paper published just after last year’s November election. The paper’s title—America’s Super Rich Pay Super Amounts of Taxes, New Treasury Report Finds—could hardly lay out the Tax Foundation’s case more starkly.
Shareholders don’t pay corporate income tax obligations. Corporations do, from their corporate income.
But did the U.S. Department of the Treasury report the Tax Foundation paper references actually make such a finding? No, not even close.
The Treasury report does analyze the total tax payments of rich and ultra-rich taxpayers relative to their wealth. The report’s writers, all highly respected economists, took into account every tax that impacts a person’s wealth, directly or indirectly. One example: A corporate shareholder bears no personal responsibility for the payment of a corporation’s income tax. But the Treasury report attributes a proportionate share of that corporate tax to shareholders since corporate taxes reduce the value of shareholders’ holdings and, consequently, their wealth.
The Tax Foundation took this Treasury analysis of total tax payments by wealthy taxpayers and proceeded to blindly compare those payments to these taxpayers’ adjusted gross incomes. That comparison enables the Tax Foundation to insist, among other claims, that the nation’s richest 0.0001% of taxpayers are paying 58% of their adjusted gross incomes in taxes.
I didn’t find this specious Tax Foundation logic particularly surprising, given that I’ve commented in the past on the specious logic that runs through other Tax Foundation studies. But this new Tax Foundation paper vividly exposes how accepting the foundation’s logic and applying that logic to real life produces results so absurd that they demand some in-depth illumination.
Which brings us back to Mr. Buffett. Thanks to reporting by the independent news outlet ProPublica and publicly available information on the income tax payments of Berkshire Hathaway, Buffett’s corporate investment base, we have considerable data on Buffett’s adjusted personal gross income, his ownership interest in Berkshire Hathaway from 2014 through 2018, and the income tax payments Berkshire made in each of those years.
We don’t have full information about Buffett’s other tax obligations, but let’s assume those obligations amounted to zero, since any additional payments would only have driven Buffett’s effective tax rate, according to the Tax Foundation’s methodology, even higher.
Warren Buffett’s ownership interest in Berkshire Hathaway—as reported in SEC filings for the years 2014, 2015, 2016, 2017, and 2018—amounted to 20.5% that first year, 19.6% the next, and then 18.7%, 17.9%, and 17.2% the last three.
According to the data service macrotrends, Berkshire Hathaway’s income tax payments minus refunds for those years totaled $7.9 billion in 2014, $10.5 billion in 2015, and $9.2 billion in 2016 before sinking into refund territory in both 2017 and 2018, with $21.5 billion in refunds the first of those two years and $321 million the second.
Applying the Tax Foundation’s methodology would attribute to Buffett a share of Berkshire’s taxes paid—and refunds received—by multiplying his ownership stake in the corporation for each of the years by the corporate tax payment made or refund received for that year. Doing the math, Buffett ends up with a personal tax liability from Berkshire of over $1.5 billion.
That figure tops by more than 10 times Buffett’s adjusted personal gross income of $125 million for that same period, according to a ProPublicareview of IRS records. The bottom line: All these numbers that we get applying the Tax Foundation’s methodology bring Buffett’s effective personal income tax rate to just over 1,200%.
And Buffett would end up having paid taxes at that rate, according to the Tax Foundation methodology, at a time when Berkshire’s income tax payments, net of refunds, were running relatively low. In 2017, the massive hurricanes Harvey, Irma, and Maria had Berkshire’s insurance businesses incurring huge losses. Without those losses, and the tax refunds resulting from them, Buffett’s effective personal tax rate—according to the Tax Foundation methodology—would have topped over 4,000%!
Impossible? Of course. So what sleight of hand is the Tax Foundation playing here? Corporate income tax payments do reduce the wealth of their shareholders. Attributing a share of those tax payments to shareholders, as the original Treasury Department study does, makes eminent sense. But shareholders don’t pay corporate income tax obligations. Corporations do, from their corporate income. The Tax Foundation, for its part, doesn’t attribute corporate income to shareholders. It only attributes corporate tax.
By taking into account corporate taxes while ignoring corporate income, the Tax Foundation’s methodology drives up effective income tax rates for the super rich only because these rich happen to own a massive amount of corporate stock. We can better understand the dynamics at play here by considering the tax situations of business owners far from billionaire status.
Consider this comparison: Taxpayers A and B each own a profitable business that generates $49,999 of income in 2025. They each reinvest all business profits in their businesses, living off the savings they have sitting in tax-exempt bonds. A and B each have $1 of other income. A, who owns his business directly, reports the profits on his personal tax return, along with his dollar of other income, and pays $10,500 in tax. His effective tax rate is 21%.
B, who owns her business through a corporation, reports the profits on the corporation’s tax return, and the corporation pays $10,500 in tax. Since B’s own adjusted gross income is just one dollar, B’s effective tax rate according to the Tax Foundation would be 1,050,000%, 50,000 times A’s effective tax rate.
In its reporting, ProPublica also considered Warren Buffett’s effective income tax rate. Taking his personal federal income tax payments as a percentage of his true economic income, including the $24.3 billion increase in his wealth between 2014 and 2018, ProPublica determined his effective income tax rate to be 0.1%. Quite a far cry from 1,200%.
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What Is the Political Role of White Lotus and Other ‘Eat the Rich’ Media?
Are entertainments like these seriously acknowledging the deep-seated anxieties—and anger—that Americans are feeling today? Or is the entertainment industry just shamelessly exploiting those anxieties and that anger?
Feb 26, 2025
America’s richest have never been richer. Our over 800 billionaires ended 2024 worth a combined $6.72 trillion. Today, almost two months later, Americans make up 14 of the 15 richest people in the world. Just these 14 alone hold a combined net wealth of over $2.5 trillion.
One predictable consequence of numbers like these: Our world’s “super yacht” sector is doing spectacularly well, as the annual Miami International Boat Show this month convincingly confirmed. The star of this year’s show turned out to be a super yacht nearly the length of a football field.
Drivers on America’s highways and byways, meanwhile, are now needing to make room for the newly released latest luxury super car from Rolls-Royce. The new Black Badge Spectre can “sprint from zero to 60 mph in just 4.1 seconds.” The base price: a mere $490,000.
We need more, let’s all agree, than shows and movies that skewer the rich.
Amid all this excess, the fortunes—and power—of America’s most fortunate just keep mounting ever higher. At the expense of the rest of us. The world’s wealthiest billionaire, Elon Musk, has found an particularly lucrative new hobby: axing the jobs of federal employees working at agencies that protect the health and economic security of average Americans.
Researchers and analysts worldwide are, for their part, continuing to carefully track the ongoing—and historic—concentration of America’s wealth. But Hollywood, these days, may actually be tracking this concentration even closer.
The wealth, privileges, and formidable clout of our richest, Hollywood understands, are outraging average Americans. We’ve become a nation hungry for entertainment that expresses that outrage, and Hollywood has been all too happy to offer up that entertaining.
“The popularity of ‘eat the rich’ media—like Saltburn, White Lotus, Parasite, Triangle of Sadness, The Menu, Infinity Pool, The Fall of the House of Usher, and the Knives Out movies—has reached a fever pitch,” as the culture critic Kelsey Eisen puts it.
This “vilification of the rich,” adds Eisen, regularly includes “rich characters undergoing some terrible event—ranging from marital troubles to shipwrecks to even death—as some sort of comeuppance for being wealthy.”
“We do love watching the 1% get their comeuppance, don’t we?” agrees Adrian Lobb, another widely published and perceptive writer on contemporary culture.
Lobb last year interviewed Jason Isaacs, one of the stars of The White Lotus, an Emmy Award-winning comedy drama created for HBO. Isaacs told Lobb that he also “absolutely” loves the joy of the “comeuppance” moments swirling all around us.
“We watch these people who look like they’ve got everything,” Isaacs explains, “and console ourselves with the fact that they’re miserable as hell.”
The White Lotus features “sun, sea, sex” and super-rich secrets, notes the culture analyst Lobb, “with a side order of slaying.” Each season of the series showcases a set of gastronomically obsessed wealthy out to enjoy life at an exotic luxury resort, with no guest, quips writer and filmmaker Alyssa De Leo, “safe from being skewered—figuratively and literally.”
Another skewering of the “successful” takes place, De Leo observes, in the widely acclaimed film Triangle of Sadness, the story of an ultra-wealthy cruise ship that sinks and leaves the survivors “stranded on a desert island” with “the upper-class guests lacking any resources or knowledge of how to survive.”
Still another popular entry in the “comeuppance” genre, the thriller You’re Next, has a wealthy family celebrating an anniversary in a country mansion that masked assailants suddenly besiege. The assailants turn out to be hired guns that some members of the family had retained to ensure and hasten the inheritances they saw as their due.
And atop the genre’s most-watched list sits Squid Game, “one of Netflix’s most important and impactful television shows ever.” This “too-close-for-comfort dystopian thriller,” the Observer’s Brandon Katz celebrates, “cleverly spins socioeconomic inequality into thriller life-or-death games.”
Are entertainments like these seriously acknowledging the deep-seated anxieties—and anger—that Americans are feeling today? Or is the entertainment industry just shamelessly exploiting those anxieties and that anger? Are “eat the rich” films and series, as the arts critic Kelsey Eisen muses, “moving the political conversation forward” or merely “providing soothing, satisfying, and self-congratulatory entertainment”?
Eisen herself sees the answer to that question through the latter prism. She considers “eat the rich” entertainment as “less of a political statement and more of a soothing concession,” as “basically class-anxiety pornography, pure catharsis without a real message or call to action.”
Even so, Eisen readily confesses that she does indeed enjoy watching many of today’s “eat the rich” shows and movies and does see real value “in using art to encapsulate popular sentiments and anxieties and to normalize progressive sentiments.”
So should you dare enjoy “class anxiety-soothing media”? Sure, Eisen concludes. Just be sure that this media “doesn’t soothe you into being too complacent to ever actually do anything” to end that class anxiety.
Amen. We need more, let’s all agree, than shows and movies that skewer the rich. We need, now more than ever, a political movement powerful enough to break the billionaire lockgrip on our future.
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Trump and Musk Are Returning Us to the Age of the Robber Barons
For generations, the ultra-rich have been pushing to overthrow the Progressive Era’s and the New Deal’s utilitarian reforms. They have now found their moment.
Feb 20, 2025
U.S. President Donald Trump, Elon Musk, and their ilk are returning the U.S. to the Gilded Age of robber barons, replete with railroad monopolies and no union protections. They are bringing us back to a time before the Progressive movement had instituted the first real wave of social reforms, which were later widely expanded by New Deal programs. These initial reforms offered workers’ compensation, free school meals for poor children, regulated working hours, and put antitrust laws on the books. They protected the everyday person, white- and blue-collar alike, and were a setback for the ultra-rich. For generations afterward, the ultra-rich have been pushing to overthrow the Progressive Era’s and the New Deal’s utilitarian reforms.
It started with deregulation in the 1970s and was then magnified during Ronald Reagan’s neoliberal presidency. The talking points behind deregulation duped people through bastardizing the concept of “freedom.” The U.S. is a free country, the argument goes, so there shouldn’t be regulation. Yet deregulation, in this sense, is focused on giving businesses and corporations free rein, screwing the rest.
Inevitably, the neoliberals’ free trade policies, the gutting of unions, the reducing of social programs, and the lowering of taxes for the very wealthy led to wide-scale disillusionment. It birthed the Occupy Wall Street and Tea Party movements.
That brings us to today, where there is one option: resistance everywhere.
The Tea Partiers, mostly unwittingly, pushed for the policies of the late 19th-century robber barons, free of any regulation on business and extremely low (if any) taxes, as if these policies would help the average person. The Occupy movement failed in that, while offering an accurate critique of vast wealth inequality, it did not propose any concrete goals. There was the fear that its message would be branded, hijacked, or warped by the mainstream media. Fair point, I suppose. But a protest movement without policy objectives is like a tree falling in an empty forest. Luckily, the forest was not empty.
Sen. Bernie Sanders (I-Vt.) had been voicing the same message for decades. He rose to national prominence shortly after the movement’s demise, and his popularity was, in part, due to the Occupy movement raising the issue of wealth inequality to public consciousness. Unlike Occupy, Bernie had specific utilitarian policy goals.
On the other side, Trump voiced the radical Tea Partiers’ message of the robber barons, with more overt xenophobia and racism.
In 2016, both establishment parties tried to crush their mass movement candidates. The Democratic Party succeeded and had Hillary Clinton run as its presidential candidate. On the other hand, the GOP failed to stop Trump and held their nose, presuming Hillary Clinton would trounce him in the general.
When Trump won, most were surprised. Trump himself was unprepared, and the majority of institutions were unprepared to back him. His policy efforts, such as the Muslim ban and immigrant parent-child separation, were short-lived due to popular and legal pushback and sloppy execution.
During his first term, Trump’s core supporters remained steadfast behind him, but most mainstream institutions did not overtly support or cave to him.
For an unprepared presidency, dawdling along much like a toddler with a flippant mouth, the Covid-19 pandemic was icing on the cake for executive leadership failure. Because of Trump’s anti-vax rhetoric, inept health policies, and spewing of misinformation, the deaths of nearly half-a-million Americans can be attributed to him.
Unsurprisingly, Trump was booted out of office in 2020 and Joe Biden stepped in. Once again, the Democrat establishment coalesced against Bernie’s candidacy.
During Biden’s first three years in office, he was a good president, passing the most important climate change legislation in U.S. history, the Inflation Reduction Act, and the bipartisan infrastructure bill. He supported unionization efforts and tried to eliminate student loan debts. He restored a sense of decency and aid for UNWRA.
As the 2024 election came closer, the Gaza genocide commenced, which Biden wholeheartedly backed. In Biden’s last year in office, when Trump became the clear GOP presidential candidate, he tried to outflank the GOP on the right on immigration, restricting asylum seeker border crossings and attempting to push an anti-immigrant bill that Sen. Mitch McConnell (R-Ky.) crafted. (Of course, Trump killed it to prevent Biden from getting “credit.”)
Throughout the Biden years, inflation increased dramatically, similarly to most of the world. Yet Biden could never adequately explain this phenomenon to the American people and was horrible at communicating his domestic accomplishments.
He and his staff ignored his mental decline, leaving former Vice President Kamala Harris little time to campaign. Simultaneous to Biden’s growing unpopularity, far-right institutions began crafting Project 2025 (now being instituted) for a new Trump administration. When the Dems lost this time, the far-right was prepared with institutional backing. For the most part, the establishment (media, corporations, etc.) caved to Trump and his anti-constitutional, authoritarian executive actions.
That brings us to today, where there is one option: resistance everywhere.
Resist on the streets, in Congress (wake up Jeffries and Schumer!), and the courts, to save a very flawed republic before it’s too late. Before fascistic robber barons steal it away, leaving the American people whistling in the desert wind watching a whiny rich snowflake asshole pretend that the United States is a reality TV gameshow.
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