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tax evasion
From Teapot Dome to Corruption 2.0
While US presidential history isn't short on scandals, self-enrichment corruption under Trump 2.0 is—to borrow his pet refrain—“like nothing we’ve ever seen before.”
Aug 18, 2026
Does Teapot Dome ring a bell?
Generations of high school history teachers taught Teapot Dome as an outrageous episode of unprecedented and still unsurpassed corruption. A 1960s US history textbook is typical:
Death mercifully claimed [President Warren G.] Harding on August 2, 1923, before the worst of the scandals came to light, that involving the naval oil reserves at Teapot Dome, Wyoming, and Elk Hills, California. These reserves had been transferred to private control on noncompetitive bidding by Secretary of the Interior [Albert B.] Fall, after Harding had moved control of them from the Navy Department to the Interior Department. Fall’s transfer of the reserves, which had raised suspicions, created a furor when it was discovered that Fall had obtained a $100,000 interest-free loan, $233,000 in Liberty Bonds, and a herd of blooded cattle in the transaction. Fall was indicted, prosecuted, and sentenced to a year in prison and a fine of $100,000. The Secretary of the Navy, who was guilty of stupidity in permitting the original transfer, was forced to resign.
“The worst of the scandals”? One hundred thousand dollars in 1923 would be worth about $2 million today. Those Liberty Bonds would be worth $4.5 million. Measured against the Trump 2.0 regime, the scale of this corruption is small potatoes.
A Century of Corruption
To be sure, in the century between Teapot Dome and Trump 2.0 other presidents engaged in less-than-upright behavior. The Internal Revenue Service (IRS) found that Nixon owed substantial back taxes, leading to his famous "I am not a crook" speech (and the Watergate burglary led him to resign). Lyndon Johnson ordered the Federal Communications Commission (FCC) to give preferential treatment to his wife’s radio and TV stations. Over 120 of Ronald Reagan’s appointees resigned because of indictments, convictions, or being under a cloud, until then the largest number of corruption cases of any administration in US history (though nothing stuck to the original “Teflon President”). Bill Clinton invited political donors to sleep in the White House’s Lincoln Bedroom. Republican allegations that Joe Biden engaged in “egregious” corruption never panned out, though his son Hunter did parlay family connections into profitable business partnerships abroad. During Trump 1.0, the president’s main self-enrichment schemes involved millions that government agencies, public officials from Congress, the executive branch, and state and foreign governments, lobbyists, corporate bigwigs, and political campaigns spent at his hotels and golf courses and some modest pay-for-access schemes like hiking Mar-A-Lago membership dues.
“Like Nothing We’ve Ever Seen Before”
Self-enrichment corruption under Trump 2.0, however, is—to borrow his pet refrain—“like nothing we’ve ever seen before.” Here’s a non-exhaustive catalog, limited to self-enrichment schemes involving the president and his family and cronies (many machinations occur behind the scenes). A full treatment of corruption that did not involve direct self-enrichment would include partisan gerrymandering; voter suppression measures; gutting regulation and oversight mechanisms; extorting universities, law firms, and news media; no-bid contracts for campaign donors’ companies; destroying the government registry of anonymous shell companies; and bogus investigations of political opponents and voting rights and civil rights organizations. Such a list would require not an opinion column, but an encyclopedia or a new wing of the Museum of Political Corruption. Some of the bullying efforts did end up enriching President Donald Trump, as when Paramount paid him $16 million (plus $20 million of additional advertising commitments) for the supposedly deceptive editing of a 2024 Kamala Harris interview. Shortly thereafter, the FCC approved Paramount’s $8 billion merger with Skydance, bringing CBS News into the right-wing media ecosystem (A subsequent merger with Warner Brothers is on hold, but could do the same with CNN).
As during Trump 1.0, under 2.0 foreign entities and political groups directed funds to Trump-owned properties. Events like the Saudi-backed LIV Golf tournament held at one of Trump's Florida clubs resulted in massive payouts. Trump continues to rake in millions in name licensing. He leaned on Amazon founder Jeff Bezos to pay tens of millions for a documentary about Melania that bombed at the box office.
When the Trump 2.0 administration facilitates the use of offshore financial paradises to shield corporate profits from taxation, services get cut and the rest of us must pay higher taxes to make up the difference.
Government watchdogs tracked hundreds of major donors who funneled money into inaugural and political action committees, vanity projects like the White House ballroom, and Trump family cryptocurrency ventures. Many received ambassadorial, cabinet, and other high-level appointments. The crypto initiatives—which generated an estimated $2.3 billion for the family and at least $3.8 billion in losses for retail investors—are vehicles for foreign and corporate interests to buy favors, such as regulatory rollbacks, tariff relief, and government contracts. Days before Trump’s second inauguration, the Emirati royal family took a 49% stake—$500 million—in World Liberty Financial. Not long after, the Trump administration green-lit the sale to the UAE of Nvidia AI chips, a deal that netted $187 million for the Trumps and $31 million for the family of Trump's Middle East envoy Steve Witkoff. Shortly before the Trump administration eased sanctions on his family’s businesses, Indian billionaire Mukesh Ambani invested at least $100 million in a struggling Texas startup, America First Refining, which had secretly given Donald Trump Jr. a financial stake.
Emblematic of the mixing of business with Middle East policy—directed by Witkoff and Trump son-in-law, Jared Kushner—himself from a notoriously corrupt family—was Qatar’s “donation” of a pimped-out 747 jet worth $400 million as a new, fancier Air Force One and eventual exhibit at Trump’s planned presidential library. Since 2025, Trump’s adult sons raked in millions from war industry start-ups. A Washington Post investigation found these firms generated “at least $3.2 billion in direct government business since the sons invested and an additional $3.1 billion in future contract options. Some have gained coveted spots on shortlists of preapproved contractors that can bid exclusively on up to nearly $200 billion in future work.”
The Trump Organization pursued over 20 overseas projects, many tied to foreign state investments. A $1.5 billion golf resort in Vietnam that may throw 4,000 farmers off their land drew scrutiny when the US lowered threatened tariffs shortly after the project broke ground. Kushner’s plans to build a multibillion-dollar resort in a protected natural reserve in Albania have backfired in the face of massive public resistance and accusations that the Miami-based businessman who sold Kushner the land may have acquired it with laundered drug money and forged deeds.
Pardons and Profits
Corrupt pardons are another way Trump 2.0 benefits and normalizes bribery. Beneficiaries include money launderer Changpeng Zhou of Binance, who cut a deal with World Liberty Financial (which this month received conditional approval to become a bank); narco and former Honduran President Juan Orlando Hernández, whose pardon likely buttressed a pro-Trump candidate in that country’s election; and New York Mayor Eric Adams, who received various emoluments from the Turkish government and promised to cooperate with Trump on immigration enforcement. Court decisions and public outrage may have killed the proposed $1.776 billion "anti-weaponization" fund to compensate political allies. But the resolution of Trump’s $10 billion IRS lawsuit—clear collusion between the plaintiff and the government he runs—granted him and his family members and companies immunity from all federal tax audits and liabilities for returns filed prior to May 19, 2026, a gift likely worth between $100 and $600 million. While a court struck this down, Trump is appealing.
Under Trump 2.0, insider trading and pump-and-dump schemes proliferated. Trump purchased more than $1 million in Dell stock not long before the Pentagon awarded a $9.7 billion contract to the Texas-based computer company. Three months before White House advisers pressed the Pentagon to loan $620 million to Vulcan Elements, Donald Trump Jr.’s venture capital firm took an undisclosed stake in the North Carolina-based rare earths start-up. Another federally financed rare earths deal that Commerce Secretary Howard Lutnick negotiated with Kazakhstan netted Lutnick and Trump businesses millions in fees and profits. Trump Jr. also invested in a drone manufacturer, Unusual Machines, and received an additional 200,000 shares for serving as an adviser. The day the company announced his appointment, its stock nearly doubled, making him millions of dollars.
During the on-again off-again war against Iran and the on-again off-again trade wars, Trump’s comments and social media messages about impending “deals,” attacks, or tariffs provided ample opportunities for insiders to speculate on oil futures, stocks, and prediction markets. Trump has reportedly traded individual stocks on which he possibly had insider information. Trump Media even pitched a $100,000-per-month data feed —“Truth API” —to deliver banks and trading outfits “the fastest” access to influential Truth Social posts, a bargain for large-scale market cheaters.
And since all that grift doesn’t sate Trump’s infinite need for more wealth, he ratcheted up sales of overpriced caps, watches, gold-colored cell phones, autographed Bibles, gold sneakers, bathrobes, fragrances, pickleball paddles, keychains, fake gold playing cards, and assorted other branded merch, trashing all previous norms about tasteful, dignified, and ethical presidential behavior.
How It Impacts Americans
The New York Times, The Wall Street Journal, The New Yorker, and books such as Barbara McQuade’s The Fix: Saving America from the Corruption of a Mob-Style Government have covered the Trump 2.0 grift in greater detail than is possible here. What they often fail to emphasize sufficiently, however, are the myriad connections between this thievery and harms that average Americans experience.
When the Trump 2.0 administration facilitates the use of offshore financial paradises to shield corporate profits from taxation, services get cut and the rest of us must pay higher taxes to make up the difference. The same is true for billionaires who don’t pay taxes. Tariffs hit Americans in their pocketbooks, as have skyrocketing energy prices resulting from the Iran War and demand from new data centers and crypto farms.
When the Trump regime finally ends —as it inevitably will—how many of us will remember the details of its record-breaking corruption? How many of us will demand accountability?
When Meta’s Mark Zuckerberg agreed to pay Trump $25 million to settle a dispute over the suspension of his Facebook page in the aftermath of January 6, to reinstate the page and eschew fact-checking on the platform, and to donate $1 million to Trump’s 2025 inaugural bash, it exposed Americans to increased disinformation, while depriving them of the tools needed to detect it.
When the president illegally refuses to spend funds Congress appropriated, it undermines government programs, including those that serve the most vulnerable Americans, such as Medicaid and Supplemental Nutrition Assistance Program recipients, veterans, and Social Security disability and retirement beneficiaries.
Probably the worst aspect of Trump 2.0 is the restructuring of government institutions and the entire economy to serve private interests, whether by scrapping regulations that expose us to toxins, financial predators, and dangerous workplaces or by rewriting history to erase painful aspects of our history and the contributions of minorities, women, immigrants, and other groups the regime detests. Elevating loyalty over competence facilitates this reengineering of governance to favor the mega rich and exacerbates domestic and geopolitical tensions.
In 2018, Steve Bannon famously articulated a key Trump stratagem, “to flood the zone with shit.” The intention was to deploy spectacle and disinformation to overwhelm and exhaust the media and citizenry, sow chaos and confusion, deflect and distract from real problems, erase memory, and assure that nobody would hold the powerful to account. Bannon is out, though still bloviating in the manosphere, but the shit flood continues. When the Trump regime finally ends —as it inevitably will—how many of us will remember the details of its record-breaking corruption? How many of us will demand accountability?
Maybe Teapot Dome didn’t ring a bell. How many of us recall our high school history courses, anyway? The New Republic recently summed up the contemporary significance of that ancient scandal: “For a long time, Harding’s administration had a serious claim to the title of ‘most corrupt’... Harding’s ghost must be grateful to Team Trump.”
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Tax Prosecutions Plummet to Lowest Level in Decades as Trump Guts Enforcement Efforts
"Decreasing criminal enforcement... would signal an indifference to cheating and insults the millions of honest filers who pay the taxes they owe," said one tax law expert.
Dec 10, 2025
President Donald Trump's administration has drastically slashed resources for enforcing tax laws, and the result has been a massive plunge in tax-related prosecutions.
A Tuesday report from Reuters found that federal tax prosecutions in 2025 fell to "their lowest level in decades this year," falling by 27% over the last year.
The report noted that the Trump administration has made "deep cuts to the Internal Revenue Service’s criminal investigative unit," and has also reassigned some agents who worked in the unit to focus more on immigration cases.
The Trump administration has even assigned more than 20 IRS agents in the agency's DC office to conduct patrols alongside city police officers as part of the president's purported plan to reduce crime in the capital city, Reuters reported.
Reuters also observed that the US Department of Justice closed its Tax Division, and that "a third or more of the criminal lawyers who worked there quit."
Sources told Reuters that the Trump administration explicitly told DOJ prosecutors earlier this year that tax prosecutions were not a top priority, and one source said that DOJ leadership under the second Trump administration was "very skeptical about white-collar crime and whether we should be doing those cases."
The report added that US attorneys' offices at the moment are unlikely to pick up the slack for enforcing tax laws given that DOJ records show "more than 1,000 lawyers have left US attorneys’ offices this year, roughly double the number who quit or were pushed out in previous years."
David Hubbert, a senior fellow at the Tax Law Center at New York University’s law school, told Reuters that these cuts would likely result in a surge in tax cheating.
"Decreasing criminal enforcement across all types of taxpayers would signal an indifference to cheating and insults the millions of honest filers who pay the taxes they owe," Hubbert explained.
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Musk's SpaceX Likely Paid 'Little to No Taxes' Despite Lucrative Government Contracts
Patriotic Millionaires, an organization that lobbies for higher taxes on the wealthy, said the report was a "reminder of how unfair our tax code is."
Aug 15, 2025
Although Elon Musk's space exploration company SpaceX has benefited over the years from several lucrative government contracts, it has largely avoided paying any taxes to the federal government.
The New York Times reports that SpaceX has "most likely paid little to no federal income taxes since its founding in 2002 and has privately told investors that it may never have to pay any."
The reason that the company has gotten away with paying practically no taxes, writes the Times, is that it takes advantage of a tax benefit commonly referred to as a net operating loss carryforward "that allows it to use the more than $5 billion in losses it racked up by late 2021 to offset paying future taxable income." This tax benefit was initially limited in its scope, but congressional Republicans and US President Donald Trump in 2017 scrapped its expiration date for all companies, thus letting SpaceX and other firms take advantage of it indefinitely.
Danielle Brian, the executive director of the Project on Government Oversight, told the Times that this tax benefit was intended to help struggling firms weather tough times to stay in business, but that it was "clearly not intended for a company doing so well" as SpaceX.
In its review of SpaceX's internal documents, the Times found that SpaceX had paid a small amount of taxes over the years, although none of them were to the federal government.
"In one document, the company said it expected to pay $483,000 in income tax to foreign governments and $78,000 in state income tax in 2021," writes the paper. "Separately, it reported paying $6,000 for income taxes in 2020 and 2021, but did not disclose if the payments were for federal, state or local governments."
What makes SpaceX's tax avoidance particularly noteworthy is its own dependence on the federal government for business. In 2020, the Times found, federal contracts accounted for nearly 84% of the firm's total revenues.
Patriotic Millionaires, a group of wealthy Americans who advocate for higher taxes on the rich, wrote on X that SpaceX's almost total lack of tax payments to the federal government was yet another piece of evidence about the tax system being rigged for the big corporations.
"SpaceX has secured billions in government contracts over the years," they wrote. "In return, it has likely paid... $0 in federal income taxes—and may never have to. Just in case you needed a pre-weekend reminder of how unfair our tax code is!"
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The Ultra-Rich Have Exploited Our Tax System Long Enough—Make Them Pay!
Funny how these same apologists for our richest don’t have much sympathy for ordinary Americans who lack the “wherewithal” to pay for medical care, adequate housing, and other necessities.
Mar 30, 2025
The most gaping loophole in our tax law? The tax-free compounding of gains on investments.
This classic loophole enables the two most lucrative inequality-driving income tax avoidance strategies. The first, buy-borrow-die, allows wealthy Americans to avoid income tax entirely on even billions in investment gains.
These wealthy need only hold on to their appreciated assets until death. What if they need cash before then? They merely borrow against the appreciated assets, typically at very low interest rates.
Are rich Americans, including billionaires, truly unable to pay tax on their investment gains before they sell the assets yielding those gains? Wanna buy a bridge?
The second avoidance strategy, buy-hold for decades-sell, lets wealthy investors pay a super low effective annual tax rate on investments that appreciate at high rates over long periods of time. These investors typically experience decades of compounding gains without taxation.
The effective tax rates involved in this second strategy won’t reach buy-borrow-die’s zero tax, but may in some cases get as low as a 4% effective annual rate. A 4% effective annual tax rate would have an investment with a pre-tax growth rate of 20% per year enjoying an after-tax growth rate of 19.2% per year.
Congressional apologists for the ultra-rich on both sides of the aisle regularly claim that their wealthy patrons should be entitled to endless tax-free compounding of investment gains. Without this tax-free compounding, the argument goes, our richest wouldn’t have the “wherewithal to pay” tax on their investment gains before their assets get sold. U.S. Sen. Ron Johnson (R-Wis.) invoked this tired canard at a recent Senate Finance Committee hearing.
Funny how these same apologists for our richest don’t have much sympathy for ordinary Americans who lack the “wherewithal” to pay for medical care, adequate housing, and other necessities. Average wage earners, under current law, can’t even wait until year-end to pay Uncle Sam their taxes. Those taxes come out of each paycheck, wherewithal to pay or not.
Are rich Americans, including billionaires, truly unable to pay tax on their investment gains before they sell the assets yielding those gains? Wanna buy a bridge?
Let’s start with the easiest case: a publicly traded investment that can be sold in smaller units, an investment in stocks, for instance. Say Rich, a wealthy investor, buys 1 million shares of Nvidia at $100 per share, and those shares, by year’s end, increase in value to $120 per share.
Our investor Rich now has a $20 million gain. If that annual gain faced a 25% tax rate, Rich would have a $5 million tax liability. To raise the cash to pay that tax, Rich could sell off 41,667 of his shares, leaving him with 958,333 shares, now worth just under $115 million.
That doesn’t seem very painful.
Now, let’s say Rich didn’t want to sell any shares. He could instead just borrow $5 million against the shares to pay the tax.
Or what if Rich had bought a parcel of land instead of Nvidia shares and, for whatever reason, having him borrow to pay tax on his annual investment gains didn’t turn out to be feasible?
Still no problem for Rich. For gains on illiquid assets, Rich could defer the payment of tax until he sold the assets, but the tax could be computed as if it accrued annually. How might this work? Say, for example, that Rich’s $100 million parcel of land grew at an annual rate of 10% for 20 years, at which point he sold it at its appreciated value of $672,749,995.
Had Rich paid tax at 25% on his gain each year, his rate of return would have been 7.5% per year, and after 20 years his investment would be worth $424,785,110.
The $247,964,885 difference between his sale price and the value of his investment with its actual rate of return reduced by the tax paid would be his tax liability upon sale. Payment of that amount would leave Rich with the same sum, $424,785,110, had he been able to sell a small share of his parcel each year, to pay the tax on his investment gain.
Put another way, Rich would be left with the same amount using this tax computation as he would if he sold his parcel each year, paid tax on the gain, and reinvested the remaining proceeds in another parcel.
And if Rich died before selling his parcel? His income tax could be determined for the year of his death in the same fashion as if he’d sold the parcel for its fair market value at the time of his death. Or, in the alternative, his inheritors could step into his shoes and pay the same tax when they sold the parcel as Rich would have had he survived and sold it at that time.
The bottom line: If we closed the tax-free compounding of investment gains loophole, some situations might exist where the immediate payment of tax on investment gains could pose a problem. But we can address those situations by deferring payment of the tax until investments get sold and accounting for the tax-free compounding in the determination of the tax.
These problematic situations, in other words, don’t justify leaving a gaping loophole in place.
So the obstacle to shutting down buy-borrow-die and buy-hold for decades-sell has absolutely nothing to do with ultra-rich investors lacking the wherewithal to pay taxes. That obstacle remains the politicians in Washington, D.C. who lack the wherewithal to summon the courage to make our rich pay the taxes they owe our nation.
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'This Is Grim': Trump Admin Moves to Gut Anti-Money Laundering Law
The U.S. Treasury Department will no longer enforce a "beneficial ownership" reporting requirements that are aimed at curbing money laundering and shell company formation.
Mar 03, 2025
The Trump administration announced Sunday it will cease to enforce penalties and fines on businesses that fail to adhere to beneficial ownership financial reporting requirements under the Corporate Transparency Act, an anti-money laundering law passed by Congress in 2021. The announcement was panned by advocates, economists, and other critics who called the move an on-ramp for corruption.
The Corporate Transparency Act, a bipartisan effort, includes a rule that requires many corporations and limited liability companies to disclose information on who owns and controls a business entity (also known as the beneficial owner) to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department.
"Exciting news!" wrote Trump on Truth Social when announcing that the Treasury Department would no longer enforce the reporting rule, which he called "invasive and outrageous."
Garbiel Zucman, a professor of economics, reposted Trump's message on X, and wrote: "Exciting news for tax evasion and money laundering!"
Economist and author Anders Åslund reacted to the update writing, "to oppose corporate transparency is to favor corruption."
Supporters of the Corporate Transparency Act, which has face court challenges, argue that the policy is an important step toward reining in anonymous companies, which are the preferred vehicle for moving around illicit funds.
"God, this is grim," weighed in author Oliver Bullough, who has written a book about global wealth and corruption. "The White House has killed the Corporate Transparency Act, which was itself a tiny first step in the marathon journey of stopping U.S. companies from being the most egregiously opaque shell structures on the planet."
In a Monday statement, Ian Gary, executive director of the Financial Accountability and Corporate Transparency Coalition, called the move a "hollowing out" of the Corporate Transparency Act that runs counter to years of bipartisan work to "end the scourge of anonymous shell companies."
Treasury Secretary Scott Bessent, for his part, said ceasing enforcement is a "victory for common sense," according to a Sunday statement. "Today's action is part of President Trump's bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy," he said. In response, Bullough, argued that Bessent doesn't recognize that fraud "suppresses prosperity, rather than enables it."
According to the announcement, the Treasury Department will issue a proposed rulemaking with the aim of narrowing the scope of the rule so that it solely applies to foreign reporting companies.
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Trump Letting 'Wealthy Tax Cheats Off the Hook' With Mass IRS Firings
"Trump and Musk care far more about hamstringing the agency in charge of making sure their billionaire buddies pay their tax bills than they do about making tax season bearable for millions of taxpayers."
Feb 20, 2025
At the height of tax season, the chronically understaffed Internal Revenue Service is expected to begin firing more than 6,000 employees on Thursday as part of the Trump administration's large-scale and destructive assault on the federal civil service.
Government Executive reported that the terminations "are expected to affect probationary employees ranging from recent graduates to veterans to specialized auditors across all 50 states."
An unnamed IRS employee told the outlet that Thursday's firings are likely just the start.
"They want to keep cutting," the worker said.
The firings come days after one of billionaire Elon Musk's lieutenants reportedly gained access to a critical IRS system containing sensitive taxpayer data, raising widespread alarm. Musk has also taken aim at the agency's popular Direct File program.
On Wednesday, Trump's newly confirmed commerce secretary said the president's ultimate goal is to "abolish the Internal Revenue Service."
Elizabeth Pancotti, managing director of policy and advocacy at the Groundwork Collaborative, said in a statement that Trump and Musk are "gutting the IRS in the middle of tax filing season for one reason, and one reason alone: to let wealthy tax cheats off the hook."
"Trump and Musk care far more about hamstringing the agency in charge of making sure their billionaire buddies pay their tax bills than they do about making tax season bearable for millions of taxpayers," said Pancotti.
Groundwork noted that attacks on the IRS will likely have consequences that run directly counter to the stated objectives of the so-called Department of Government Efficiency, or DOGE.
"Recent research found that for every $1 spent on tax enforcement for the wealthy, taxpayers get an average return of $26," Groundwork observed.
Biden-era investments in the IRS, which Republicansstarved of funding for years, yielded significant revenue from wealthy individuals, as the agency had the resources necessary to ramp up audit rates for the rich.
In a letter to top Trump administration officials earlier this week, Sen. Ron Wyden (D-Ore.) and other senators warned that the mass IRS terminations and hiring freeze could cause a "tax refund trainwreck."
"It is nearly inevitable that this hiring freeze, compounded by layoffs and further reductions in staff mandated as a result of Elon Musk's unprecedented power grab will delay refunds and degrade taxpayer service," the senators wrote. "Millions of Americans plan their budgets around timely refunds every filing season. These reckless decisions on the part of Elon Musk and the Trump administration will likely cause serious financial hardship for people across the country."
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Why Can't We Fund Universal Public Goods? Blame the Tax-Dodging Billionaire Nepo Babies
"In 2024, these billionaire families used their enormous wealth to make record-breaking political contributions to secure a GOP trifecta," reads a new report.
Dec 13, 2024
The children of the richest families in the U.S. are well-known for spending their vast wealth on frivolous luxuries—constructing a replica of a medieval church on their acres of property, in the case of banking heir Timothy Mellon, or starting a brand of T-shirts described by one critic as "terrible beyond your wildest imagination," as Wyatt Koch, nephew of Republican megadonors Charles and David, did.
But a report released by Americans for Tax Fairness (ATF) on Thursday shows how "billionaire nepo babies" don't just waste their families' fortunes. They also benefit from "a rigged system" that allows them to "pass that wealth down over generations without being properly taxed–often without being taxed at all."
In addition, the heirs of the country's biggest fortunes spend vast sums "to elect politicians who protect their unearned wealth and manipulate the country's economy in their favor," said ATF.
Along with Mellon and Koch, the report profiles Samuel Logan of the Scripps media dynasty; Nicola Peltz-Beckham, daughter of billionaire investor Nelson Peltz; Gabrielle Rubenstein, whose family has made its fortune in private equity; and President-elect Donald Trump's son, Eric Trump.
The nepo babies are part of a small group of billionaire families in the U.S. who benefit from tax loopholes that ensure little of their immense wealth ever goes to benefit the public good.
At least 90 billionaires have passed away over the last decade, leaving their beneficiaries $455 billion in collective wealth.
But according to ATF, "$255 billion (56%) of that amount was likely entirely exempt from the capital gains tax because of a special break called 'stepped up basis.'"
"Trump and his allies in Congress are doing their donors' bidding by rigging the system in their favor and pushing a $4 trillion giveaway to wealthy elites and giant corporations."
Without loopholes included the stepped up basis tax cut, the current estate tax on billionaires and centimillionaires would yield enough revenue to fund universal childcare, preschool, and paid family leave for U.S. workers, with hundreds of billions of dollars left over, according to ATF's report.
The wealthy heirs profiled in the report and their families are some of the Republican Party's top donors—contributing hundreds of millions of dollars to candidates including Trump in the hopes of securing even more tax cuts.
Mellon, for example, is Trump's "biggest supporter, giving $140 million to a pro-Trump PAC in 2024 alone," reads the report.
A previous analysis by ATF found that as of late October, just 150 billionaire families had spent $1.9 billion on the 2024 elections.
As the Center for American Progress found earlier this year, Trump's plan to extend the tax cuts that he pushed through in 2017 would cost $4 trillion over the next decade.
"The vast wealth inherited by centuries-old billionaire families is staggering. While these heirs and their billions go undertaxed, enormous sums are squandered on lavish mansions, private jets, and vanity projects instead of funding crucial public investments," said ATF executive director David Kass. "In 2024, these billionaire families used their enormous wealth to make record-breaking political contributions to secure a GOP trifecta. Now, Trump and his allies in Congress are doing their donors' bidding by rigging the system in their favor and pushing a $4 trillion giveaway to wealthy elites and giant corporations—all while advocating for cuts to vital programs that working and middle-class Americans depend on."
The report calls for Congress to pass "proven, pragmatic proposals to unrig the tax system that enjoy high levels of popular support," such as the Ultra Millionaire Tax Act that was proposed by Sen. Elizabeth Warren (D-Mass.) and Reps. Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.) this year. The bill would tax fortunes between $50 million and $1 billion at 2% and wealth above $1 billion at $1 billion.
The small tax on enormous wealth would generate "a whopping $3 trillion over 10 years," said ATF.
The estate tax could also be "restored so that it can play a meaningful role in promoting fairness and equal opportunities" through the passage of the For the 99.5% Act, which was introduced in 2023 by Sen. Bernie Sanders (I-Vt.) and Rep. Jimmy Gomez (D-Calif.).
Under the bill, the estate tax exemption would be lowered to $7 million per couple and the current 40% flat rate would be replaced with a sliding scale that would charge higher rates as a family's wealth grows.
"None of these tax reforms would impoverish the ultra wealthy, nor even inconvenience them in any meaningful way–but they would reduce the concentration of wealth that is so corrosive to society," reads the report. "At the same time, they would raise trillions of dollars that could be used to reduce inequality and improve the lives of families that can only dream of the kind of security and opportunity enjoyed by the nation’s richest clans."
"And if rich families ever did need to tighten their belts a bit to pay their taxes," the report continues, "the economizing might begin by reducing the flow of money funding the extravagant lifestyles of America's Billionaire Nepo Babies."
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Trump Pick to Lead IRS Signals 'Open Season for Tax Cheats'
The nomination of Billy Long, said one lawmaker, indicates "Trump's intention to make the agency less responsive to the American people, while giving a green light to wealthy tax cheats."
Dec 05, 2024
U.S. President-elect Donald Trump's nominee to run the Internal Revenue Service, former Rep. Billy Long, didn't serve on the House committee tasked with writing tax policy during his six terms in office, and his lack of relevant experience is likely "exactly what Trump was looking for," according to one economic justice advocate.
Progressive lawmakers joined advocates on Wednesday in denouncing Trump's selection of Long, who since leaving office in 2023 has promoted a tax credit that's been riddled with fraud and who spent his time in the House pushing to abolish the very agency he's been chosen to run.
As a Republican congressman from Missouri, Long repeatedly sponsored legislation to dismantle the IRS, which under President Joe Biden has recovered at least $1 billion from wealthy people who previously evaded taxes.
He also co-sponsored legislation to repeal all estate taxes, which are overwhelmingly paid by the wealthiest households, but "said almost nothing on the floor regarding taxes, the IRS, and taxation during his 12 years in Congress," said John Bresnahan of Punchbowl News.
Long's limited experience with tax policy "ought to set off alarm bells," said Sen. Ron Wyden (D-Ore.), who pointed to "vastly improved taxpayer service" under the leadership of IRS Commissioner Danny Werfel, who Biden chose to replace Trump's nominee from his first term, Charles Rettig, after Rettig served his full term.
Werfel has "set up a tremendous direct-file system, and begun badly needed crackdowns on ultra-wealthy tax cheats who rip off law-abiding Americans," said Wyden. "If Trump fires Mr. Werfel, it won't be to improve on his work; it'll be to install somebody Trump can control as he meddles with the IRS."
The appointment is likely to commence an "open season for tax cheats," said Lindsay Owens, executive director of Groundwork Collaborative.
"If he's confirmed, taxpayers can expect longer wait times for customer service, a more complicated process to file taxes, and free rein for the rich and powerful to continue rigging the system at the expense of everyone else."
Since leaving office, Long has promoted the Employee Retention Tax Credit (ERTC), a pandemic-era credit that was intended to incentivize employers to continue paying workers during the economic shutdown when the coronavirus pandemic hit the United States.
He has worked to help businesses claim the credit from the IRS, but fraudulent and improper claims have so permeated the program that the IRS stopped processing new claims temporarily. The U.S. House passed a bill to entirely halt ERTC claims, but it has been stalled in the Senate.
"These ERTC mills that have popped up over the last few years are essentially fraud on an industrial scale, conning small businesses and ripping off American taxpayers to the tune of billions of dollars," said Wyden. "I'm going to have a lot of questions about Mr. Long's role in this business, first and foremost why the American people ought to trust somebody involved with a fraud-ridden industry to run an agency that's tasked with rooting out fraud."
Wyden also pointed out that Long has not been named in a "typical nomination like you'd see after every presidential election." Werfel's term was set to go until November 2027, and the IRS typically operates as a nonpartisan agency.
"Replacing Commissioner Werfel with over three years remaining in his term is a terrible mistake," said Rep. Don Beyer (D-Va.). "He has done an excellent job rebuilding the IRS, boosting customer service, and enhancing enforcement aimed at wealthy tax evaders. Removing him will clearly signal Trump's intention to make the agency less responsive to the American people, while giving a green light to wealthy tax cheats to evade their fair share of the tax burden."
"Trump's nominee has clearly stated that he wants to abolish the IRS," added Beyer. "The change Trump proposes in IRS leadership would be a gift to tax cheats and a blow to anyone who believes it is important to rein in deficits."
Sen. Elizabeth Warren (D-Mass.) added that Trump's nomination of Long signals "the weaponization of the tax agency."
"If he's confirmed," she said, "taxpayers can expect longer wait times for customer service, a more complicated process to file taxes, and free rein for the rich and powerful to continue rigging the system at the expense of everyone else."
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Simple Charity Reforms Could Unlock Hundreds of Billions for Nonprofit Sector
An estimated $1.7 trillion in donations, ostensibly earmarked for philanthropy, are currently languishing in private foundations and donor-advised funds—while charities like Feeding America and Habitat for Humanity are under-resourced.
Aug 09, 2024
Thanks to outdated charity tax laws, the U.S. is missing out on hundreds of billions of dollars that could flow toward housing and food security, health research, education, advocacy, and other crucial nonprofit efforts aimed at uplifting the common good—but simple reforms could unlock some of the extreme wealth that is currently "warehoused" in private foundations and donor-advised funds.
This is according to a new Institute for Policy Studies analysis that shows charitable groups currently hold an estimated $1.7 trillion in donations that are "ostensibly earmarked for philanthropy," but are able to "languish in go-between funds" while working charities remain under-resourced.
The foundations and donor-advised funds (DAFs) are able to collect tax breaks while sitting on billions of dollars thanks to provisions in the Tax Reform Act of 1969 that haven't been updated in decades, wrote IPS associate fellow Helen Flannery and associate director of charity reform initiatives Bella DeVaan at Inequality.org, a project of the organization.
"Initially, in the Tax Reform Act of 1969, private foundations were mandated to give away 6 percent of their wealth or the annual net growth from their investments: Whichever was higher," wrote Flannery and DeVaan. "Foundations' tax benefits wouldn't provide license for funds to just grow forever and ever, and they were to be consistently responsive to shifting economic reality. A decade of revisions to payout requirements reflected those principles and eventually created our flat 5% mandate. But that 5% is overdue for re-evaluation, and our elected representatives have fallen asleep at the wheel."
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric."
While the nation's largest foundations give charitable donations at a rate of about 5%, "their gains in the market have averaged 9% over the last five years," they explained.
In other words, said Flannery and DeVaan, the funds "are growing faster than the rate at which they give" while donations to working charities like Habitat for Humanity, United Way, and Feeding America fall behind.
The wealth of DAFs has skyrocketed by 411% in the last decade, with the funds stockpiling an estimated $230 billion in assets in 2023.
IPS noted that billions of dollars in DAF gifts have been directed as dark money contributions—whose donors "might well have second thoughts" if tax laws were reformed to require both boosted payouts and more transparency.
In its policy brief, IPS proposes reforms that would:
- Increase the minimum payout rate requirement to 10% for foundations with assets of $50 million or more, and increase it to 7% for all other foundations;
- Exclude private foundation overhead expenses above 1% of assets from counting towards payout;
- Exclude grants from private foundations to DAFs from counting towards payout;
- Require DAFs to pay out funds within five years of receipt (and provide individual account-level transparency);
- Exclude grants from DAFs to other DAFs from counting toward payout; and
- Generate excise tax revenue from intermediaries that don't meet the new requirements.
The new rules would generate more than $110 billion in additional funding for working charities each year, as well as $339 billion in donations over three years.
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric," wrote Flannery and DeVaan, "or organizations that could and should be with strengthened access to funding."
IPS released the analysis as legislators prepare to overhaul the tax code in 2025.
"We're hopeful that this can be a watershed moment for charity reform akin to 1969," wrote Flannery and DeVaan, along with IPS program director Chuck Collins.
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Democrats' IRS Crackdown on Millionaires Draws in $1 Billion
"This is what happens when you fund the IRS," said one tax fairness group. "Anyone trying to cut IRS funding just wants to protect rich tax cheats."
Jul 11, 2024
As the U.S. Internal Revenue Service announced Thursday that it had recovered $1 billion in unpaid taxes from wealthy individuals, economic justice advocates said the news served as a reminder of a top priority for the Republican Party: ensuring that tax evasion can continue among the richest Americans.
The IRS was able to recover the tax payments "thanks to historic funding from Democrats," said Rep. Bill Pascrell (D-N.J.). "Every single Republican in Congress voted against it and Republicans are hellbent on helping millionaires [to] keep stealing from you."
The Biden administration and Democrats in Congress pushed for the inclusion of $80 billion for the IRS in the Inflation Reduction Act (IRA) in 2022, with the money earmarked to allow the agency to hire more tax evasion enforcement staff and hold wealthy people and corporations accountable for tax avoidance.
When former House Speaker Kevin McCarthy (R-Calif.) took the gavel last year, he said a proposal to repeal the funding would be the "very first bill" introduced by the party, claiming the Democrats aimed to force working Americans to pay more in taxes.
The GOP managed to repeal $20 billion of the funding as part of a deal to suspend the debt ceiling in May 2023.
"Our message for these taxpayers is that now that we are resourced, we can do the job of ensuring that they pay."
Stopping the IRS from cracking down on wealthy tax cheats, said Bobby Kogan, senior director of federal budget policy for the Center for American Progress, "is THE biggest GOP priority."
Under former Republican President Donald Trump's administration, an analysis by Americans for Tax Fairness (ATF) showed last year, the IRS audited low-income Americans at a higher rate than millionaires for the first time.
The IRS said the new funding allowed it to track down and contact 1,600 taxpayers with more than $1 million of income who owed more than $250,000 in tax debt.
"Our message for these taxpayers is that now that we are resourced, we can do the job of ensuring that they pay," said IRS Commissioner Daniel Werfel.
Last month the IRS proposed a rule to stop "partnership basis shifting," which allows a business or individual to move assets to avoid paying taxes. The rule could recover more than $50 billion in revenue over a decade, according to the Treasury Department.
The results announced Thursday come from the agency's spending of $5.7 billion—about 10%—of its IRA funding.
"This is what happens when you fund the IRS," said ATF. "Anyone trying to cut IRS funding just wants to protect rich tax cheats."
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