Jeff Bezos is calling for a dramatic rewrite of the US tax code, arguing that the bottom half of American taxpayers should pay no federal income tax at all. Speaking Wednesday in an interview with CNBC International's Andrew Ross Sorkin, the Amazon founder said he would “advocate” for reducing the federal income tax burden on lower-income households from roughly 3% of total tax collections to zero.
“I think it should be zero, and not 3%,” Bezos said after Sorkin noted that the top 1% of taxpayers contribute about 40% of all federal income tax revenue, while the bottom half account for roughly 3%.
To illustrate his point, Bezos cited a healthcare worker earning $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.”
Bezos argued that the amount collected from lower earners is relatively insignificant to the federal government, while the impact on household finances can be meaningful at a time when many families are grappling with high living costs.
“I think what's going on is that it's kind of a tale of two economies,” he said. “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.”
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Inflation and Affordability Remain the Bigger Issue
The proposal comes amid growing concern over a widening economic divide. According to media reports, research from the Federal Reserve Bank shows that the expiration of pandemic-era support programs deepened disparities between higher- and lower-income households in 2023. More recently, rising gasoline prices linked to the Iran conflict have added pressure, with lower-income Americans spending a larger share of their income on fuel.
Data compiled by the Tax Foundation using the latest IRS statistics show that the bottom half of taxpayers reported adjusted gross income of roughly $54,000 in 2023 and paid an average of $913 in federal income taxes. Their effective tax rate was 3.7%. By comparison, the top 1% earned at least $676,000 and paid an average federal income tax rate of 26.3%.
Bezos' comments come as several lawmakers push tax relief for working Americans. Cory Booker has proposed the “Keep Your Pay Act,” which would exempt the first $75,000 of income from federal income tax for many households.
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