Move over Elon Musk: there’s a new high-roller in town who just made a jaw-dropping tax payment. An unidentified multi-billionaire has paid a whopping $7 billion USD in taxes, making it the biggest tax payment in US history. So huge that it caused a stir in the financial world, experts are scratching their heads, wondering who this mystery billionaire could be and how they went under the radar for so long…
When we found out that one mystery Aussie had over $500 million stashed away in super, we thought that was pretty likely to be our biggest “incognito rich person” story of the year. And yet, it seems that not only are there even more billionaires out there than we realised, but some of them manage to remain totally incognito.
Earlier this week, the US Treasury Department found a staggeringly large deposit of $7 billion USD (equivalent to around $10.5 billion AUD) in the “estate and gift” tax category from February 28th, 2023.
Allegedly, this is the most money they’ve ever collected in that tax category since 2005, but potentially in the entirety of US history. Authorities and the world at large have been left wondering who the super-rich person behind this deposit could be and where exactly they got all that cash.
As a quick explainer: estate and gift taxes are paid on assets that are given or passed down from one person to another. Even though the US estate tax was lowered in 2017, the amount of money collected from it has skyrocketed in recent years.
Why? The answer is unfortunate but intuitive: far higher than usual numbers of elderly Americans passed away during the COVID pandemic, and with them came a swollen batch of tax receipts. In fact, the US government has already collected almost $8 billion USD more in estate and gift taxes this year than it did in 2022.
If we do some quick maths, that $7 billion USD tax payment suggests that the estate or gift itself was worth a tidy $17.5 billion USD, or thereabouts.
Whilst we’re talking multi-billionaire s***, watch our guide to the world’s most expensive charter yacht below.
However, if we take into account some tax exemptions and the myriad methods the rich have developed to avoid paying all their taxes, the total figure could be even more than that… much more than that: a whopping $35 billion USD, or around $52 billion Aussie dollars. This would comfortably make whoever owns the estate one of the hundred richest people on Earth.
Who could it be?
Forbes, which usually keeps track of the world’s billionaires, doesn’t have any answers. Economists and tax experts have some thoughts though: it could be a superrich person that Forbes missed, or it could be that a billionaire’s gift was delayed from entering the tax system for some reason.
Another theory is that someone with a giant estate might make a big taxable gift now to avoid an even higher tax bill later on.
All of this brings up some important questions about taxes and wealth inequality: How can someone be so astronomically rich and still fly under the radar? How and why does the remainder of the ultra-wealthy get away with paying so little in taxes?
Countries around the world have a long way to go in making sure the rich are held accountable for their finances, but that’s for another day. Right now, just be sure to cozy up to any elderly relatives – you never know what people are hiding down the bank…