One Weird Trick to Force Billionaires to Pay Taxes

Last month, ProPublica, aided by a trove of tax information on the richest Americans delivered by an anonymous whistleblower, began a series of reports on the staggeringly low to nonexistent tax bills paid by specific billionaires and the tactics they use to achieve that end.

In its most recent release, ProPublica detailed PayPal co-founder Peter Thiel’s use of a Roth IRA, a specialized retirement account in which contributors pay taxes up front but not on distributions, to shelter billions in investment income gains. This involved questionable valuations and other strategies that are either explicitly or implicitly illegal.

ProPublica’s blockbuster reports have prompted a number of congressional inquiries into how to fix the tax system to ensure the wealthy pay the taxes they owe. After the Thiel story, for instance, Sen. Ron Wyden announced he’d renew his efforts to create a legislative fix for the abuse of Roth IRAs as tax shelters. Read Full Article »