Jeff Bezos says bottom half of earners should pay zero in income taxes
- Income tax paid by lower earners is “a small amount of money for the government,” Amazon Executive Chairman Jeff Bezos told CNBC’s Andrew Ross Sorkin on Wednesday.
- The bottom half of taxpayers had an adjusted gross income of nearly $54,000 in 2023, according to the Tax Foundation, citing the most recent IRS statistics.
- Bezos’ comments come as a number of Democratic states explore higher taxes on the wealthy, and federal lawmakers have introduced proposals to cut taxes for lower earners.
Amazon Executive Chairman Jeff Bezos on Wednesday called for zero federal income taxes on the bottom half of earners.
The top 1% of taxpayers pay 40% of all the tax revenue, and the bottom half pay 3%, Bezos told CNBC’s Andrew Ross Sorkin on “Squawk Box.”
“I don’t think it should be 3%,” Bezos said. “I think it should be zero.”
The bottom half of taxpayers had an adjusted gross income of nearly $54,000 in 2023, according to the Tax Foundation, citing the most recent IRS statistics. By contrast, households in the top 1% earned at least $676,000 of income that year.
Bezos said the income tax paid by lower earners is “a small amount of money for the government,” and offered the hypothetical example of a healthcare worker who makes $75,000 a year.
“We shouldn’t be asking this nurse in Queens to send money to Washington,” he said. “They should be sending her an apology. It really makes no sense.”
He said he would “advocate” for such a change, but did not offer details on how lawmakers might enact it.
Bezos is the world’s fourth-richest person, with a net worth around $269 billion, according to Forbes.
Tax burden on low earners
Bezos’ comments come as a number of Democratic states explore higher taxes on the wealthy.
Several federal lawmakers have also recently introduced proposals to cut taxes for lower earners. Sen. Corey Booker, D-N.J., proposed the Keep Your Pay Act, which calls for the first $75,000 of income to be tax-free for households filing joint tax returns, with proportional tax relief for single filers and heads of households.
“No income tax on the first $75,000 families earn would be a game changer for working people,” said Booker in a statement announcing the proposed legislation on March 9. “This tax cut would immediately put more money in your pocket every month to deal with the high price of everyday expenses, an unexpected emergency, or to plan for the future.”
The average income tax rate in 2023 was 14.1%, according to a Tax Foundation analysis of IRS data. The top 1% of taxpayers paid an average rate of 26.3%, seven times higher than the 3.7% average rate paid by the bottom half of taxpayers.
There were more than 76 million households in the bottom half in 2023, according to the Tax Foundation. They paid $913 of federal income taxes, on average, that year.
‘A tale of two economies’
While the bottom half of earners have a lower tax burden, their struggles have been more pronounced amid higher inflation and broader concerns about affordability.
The so-called K-shaped economy illustrates Americans’ diverging experiences: Higher-income households continue to benefit from rising markets and wages, while many lower- and middle-income consumers struggle with higher costs and financial strain.
Federal Reserve Bank of New York research shows that the expiration of pandemic-era subsidies for low- and middle-income households created a noticeable divergence in 2023. More recently, sharply higher gasoline prices amid the Iran war are exacerbating the K-shape, researchers found. Lower earners spend a greater share of their incomes on gasoline relative to higher earners.
“I think what’s going on is that it’s kind of a tale of two economies, so you have a bunch of people in this country who are doing really well, but you also have a bunch of people in this country who are struggling,” Bezos said.
