Nowadays, the super-wealthy like Jeff Bezos, Warren Buffett, and Elon Musk are always talked about.
They aren’t talked about because they’re self-made men who have escalated the success ladder, or done something great for humanity.
These men are often talked about because of two things: their wealth and their taxes. Does Elon Musk pay taxes? What even is Elon Musk’s tax rate?
In this article, Nomad Capitalist founder Andrew Henderson weighs in on the current trend of naming and shaming billionaires for allegedly not paying their fair share. He then discusses what they do pay.
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Survival of the Richest?
Jeff Bezos is one of the tycoons who have become a fan favorite these last few years.
His name has always come up because he’s always in the news. Not only that, but his name is always in the headlines. It could be for his divorce settlement, his company’s unfair wages, or maybe because he wants to get a glimpse of what outer space looks like.
This is his business, but it’s become public property because of how influential he is.
Nowadays, Elon Musk’s tax is in the crosshairs, as some reports say he allegedly paid $0 in Federal Income Tax in one year. How could that be possible?
Let me tell you about some of the beautiful things about our lifestyle. It’s the way that we live as someone who’s no longer attached to one of the countries with the highest taxes in the world.
We’re not tied to any of it, not through physical presence, not through living, not through residence, or second citizenship.
Not to come off as nonchalant or anything, but it’s probably because we don’t have to care about any of it.
We’re talking about this because you might be reading this article from a high-tax legacy brand country, and you want to figure out what it means to be a Nomad Capitalist.
Elon Musk Tax Reports
These days, it’s so hard to keep up with all the reports just popping out here and there.
Although, one report that we’ve read says that Warren Buffett, the Chief Executive and Chairman of Berkshire Hathaway, has avoided the most tax!
Now, this was according to reports from ProPublica. According to the same reports, Warren Buffett paid a tax rate of 0.1% when he accumulated about $24.3 billion between 2014 and 2018.
We think that it’s worth mentioning that it was written that taxes are assessed on income rather than wealth in parentheses. Well, of course they are!
The government has done a lousy job running the economy, especially in the last 30 to 40 years. Now, you’ve got different westerners who have stagnant wages, and this year, there’s an inflation that just keeps on going.
The people are upset, so the politicians have to respond because they want one of two things. First, they want to keep their jobs. Second, they want to ascend to power.
They always find a scapegoat. The fact is that these people aren’t concerned about Warren Buffet nor Elon Musk.
How Western Taxes Work
What if these billionaires generated some more wealth? Well, what if they don’t sell anything? What could be the issue there?
Today, people want to use these same “rules” as a reason to tax the wealthy. Although, why would they even pay their taxes based on their wealth?
If these people didn’t earn any income in the last year, would they still be taxed? We’re talking about the same income tax and how people don’t pay enough. Then some people shift it directly to wealth.
I will say this: I chose to leave the United States long before I figured out the country’s tax component. I left because I felt like there was such a big world out there.
Plus, I also never particularly liked living in the country. Even at a young age, I firmly believed in going where you’re treated best.
I was younger and thought there were many business opportunities in the wider world. There was such a rush traveling worldwide gave me, and I loved the thrill of it all.
So, I decided to make it a lifestyle. Hence, Nomad Capitalist was born. You have to realize what you do about taxes when you’re not actually in the country.
As I’ve been a consumer of living overseas, I’ve benefited from being able to reduce my taxes significantly. Not only that, I’ve even greatly reduced my filings by leaving the United States for good.
Again, I’ll clarify that that’s not necessarily why I left, but it’s a great side benefit.
Vocal Opposition to the Wealthy
We tend to push back on some of the extreme libertarians. We don’t mean extreme in the wrong way. However, we will push back on the very vocal people about this topic.
If Elon Musk is filing his taxes legally, even though people think it’s too low, he’s simply taking advantage of the laws. We’re all for it.
The thing is, people vote for politicians that want to raise taxes. This is the general trajectory of the country these days. It’s the general trend. Our culture is becoming more anti-capitalist and more anti-business.
There was a point in time when you’d point at a guy driving a Rolls-Royce and admire him for building his own company from the ground up.
Today, the country has changed. These people would see a billionaire and point and spit at them. This is our reality today.
So, if you want to live in a country like the United States, you must realize this is the deal here. This is how it works.
There’s no use in voting because the country has literally gone against you.
In some ways, the taxes are always going to go up in the West. This is something that everyone needs to understand. So, if you want to stay in the West, you’ve got to be prepared.
However, this doesn’t have to be the case. We’ll be able to tell you more about the different alternatives you can choose from. So whether you like it or not, your countrymen are always going to want you to pay more.
It’s not even about going where you’re treated best. What it’s about is going where they treat you well enough – because you won’t get that in the United States.
It’s All for the Headlines
I think it’s uncharacteristically fair to go after all these people because the public and the others just want the headlines. They want to go out and claim that Warren Buffett only paid 0.1% of his wealth, and then they want to skew the debate.
Maybe we should look towards those who made these laws.
In one of the electoral debates against Donald Trump and Hillary Clinton, he was criticized for not paying enough taxes. He replied that if he paid so little, what were all these people doing in Office for so long without changing the laws?
We don’t agree with everything that Trump says, but he’s undoubtedly got a point there. There’s some validity in that, don’t you think?
Again, Elizabeth Warren can come and say that they’re going to change the laws, but what most people don’t know is that they’re going to make it so much more miserable.
After all these years, we think it will worsen because the politicians will come and hit back just to make a point. Yes, the politicians make the rules.
So I’m not going to blame Elon Musk, Jeff Bezos, or whomever for paying the taxes they’ve produced.
The Tax Billionaires Need to Pay
Another thing that we’re going to say is that the consensus was that the estimated percentage that Elon Musk tax was 3.27%. This was over the course of four to five years.
It’s not this $24.3 billion number, or whatever his version of the number might be, that counts. The thing that matters is how much income he made.
We don’t know what that particular figure is, but I can tell you that 3.27% is a lot.
The population is, by definition, average. There’s nothing wrong with that, and we’re not upset about it. However, some people can’t understand things that are different.
In some cases, they don’t want to understand generally! So if you’re making $67,000 a year, no matter where your household is, you probably don’t know what it’s like to be the guy making $100,000,000 a year.
It’s hard for some people to understand, so all they see is how little Elon Musk has paid in taxes.
These people are the same ones who get upset that Elon Musk’s tax pays 3.7% of his many millions, which is a lot more considering how he’s not driving on any more roads necessarily.
He’s not sending 27,000 of his children to school. Plus, he’s using the same services in the same measures as me and you. So maybe his companies use some of that and more, but people have to know that his companies are separate.
Elon Musk is an individual, and he can only drive on one road at a time. He can only use one government service at a time, and it does bother me that people go out like they pay their taxes, and so should he.
Fair Tax Estimation in the United States
Do you know what the fairest of tax estimation would be?
You can figure out the proper budget and your family shares, and if you have children, they even get a discount! Yes, a discount, like tickets being given at Walt Disney World!
Maybe the more people in your family, the more you pay is your fair share. Then, we can all use the same services equally, and maybe then, people would want to fight back against the bloated budgets.
However, they don’t. This is not the case.
Just look at the budget deficits they’re running and all the money they’re printing. It’s been all over the Western world recently! The issue isn’t Elon Musk’s tax, his alleged tax rate, or what Warren Buffet paid this year.
It’s in bad taste for all these think tanks to insult people like Jeff Bezos, and for people to do violent things.
Quite frankly, people making violent threats against the wealthy is tiring, and it stokes up the public against them. More and more are gaining hatred against the wealthy, but the reality is that the people we talk to aren’t paying 0%. They’re not even paying 3.27%.
Do you know how much they’re paying? They’re paying 43.27%, and we think it’s too much. Would you think the average person reading this report would realize that the millionaires driving fast cars are paying 43.27% instead of 0.1%? We don’t think so.
Honestly, who knows what all these could lead to? We live in a disorienting and odd time, economically and socially. So my thoughts are that a cultural and a societal change will come, and it’ll come in a very bad way.
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