Is There Anything Wrong With the ProPublica Story About the Taxes of the Rich?

From The Poynter Report with Tom Jones:

The big buzz in the media world on Tuesday was a story by ProPublica’s Jesse Eisinger, Jeff Ernsthausen and Paul Kiel with this provocative headline: “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.”

The story reveals how some of America’s wealthiest people — such as Warren Buffett, Jeff Bezos and Elon Musk — pay little in income tax compared to their rising fortunes.

ProPublica looked at the 25 wealthiest Americans and wrote, “According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.”

To be clear, those featured in the ProPublica story are not believed to have done anything illegal. And Internal Revenue Service Commissioner Charles Rettig said the IRS is already investigating how ProPublica was able to obtain such records. (ProPublica says they came from an anonymous source.) As The Wall Street Journal’s Richard Rubin wrote, “Taxpayer information is confidential, and there are potential criminal penalties for IRS employees or others who release such information….”

So if Buffett, Bezos and the like aren’t doing anything illegal, you might ask why it’s a story. Why should anyone, even if they are super wealthy, have their taxes exposed? Is this nothing more than just juicy gossip about the lifestyles of the rich and famous?

The main ProPublica story says, “Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.”

ProPublica’s top brass also addressed the reason for writing about this in a separate story titled “Why We Are Publishing the Tax Secrets of the .001%.”

ProPublica editor-in-chief Stephen Engelberg and president Richard Tofel wrote, “Many will ask about the ethics of publishing such private data. We are doing so — quite selectively and carefully — because we believe it serves the public interest in fundamental ways, allowing readers to see patterns that were until now hidden.”

ProPublica says it isn’t just looking into the taxes of one individual who might be working the system to his advantage, but of many in various industries — and that shows a widespread problem with how the tax system works. ProPublica writes, “We also believe that disclosure of specific figures about the tax returns of people like Jeff Bezos, Michael Bloomberg, Warren Buffett and Elon Musk will deepen readers’ interest and understanding of this complex and arcane subject.”…

ProPublica admitted that it’s possible that not everything in their database is accurate, but that every name mentioned in the piece was given a chance to respond before publication. It added, “We have gone to considerable lengths to confirm that the information sent to us is accurate.”

The wealthy figures in the story would likely prefer that their taxes were not exposed, but this doesn’t damage them in any real way except for (possibly) slight embarrassment. However, ProPublica does show, in detail, why we should at least examine how taxes work for the rich. And that gives its investigation journalistic value.


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