Coming Up Short: Robert Reich Doesn't Know What an Effective Tax Rate Is
Three Numbers, Three Lies: Inside Reich's Viral Bezos Tweet
There is a particular sort of dishonesty available only to a man with credentials. The ordinary liar must hope his audience does not check. The credentialed liar trusts that his audience will not check, because surely a Cabinet secretary, a Berkeley professor, the subject of a Netflix documentary on inequality, would not say something obviously false. Robert Reich understands this. He has built a career on it.
Consider the post he published on 𝕏 in May 2026, which travelled, as such things do, to several million readers. "Effective tax rate paid by Jeff Bezos from 2014 to 2018: 0.98%. Effective 2025 federal tax rate paid by Amazon: 1.4%. Typical tax rate paid by the average American: 14.5%. Just thought I should point that out."
Three numbers, presented in parallel, presented as comparable, presented as damning. And every one of them is wrong in a different way. The 0.98% is definitionally false. The 1.4% is structurally misleading. The 14.5% is statistically inflated. The juxtaposition is not analysis. It is the rhetorical equivalent of a magician’s patter, designed to keep the audience watching one hand while the other does the work.
Begin with Bezos. The 0.98% number comes from a 2021 ProPublica report based on illegally leaked IRS data. The figure is not an effective tax rate in any sense that an accountant, a tax attorney, or a federal judge would recognize. ProPublica invented a new metric, which it labelled the “true tax rate,” and which it constructed by dividing federal income taxes paid by the Forbes estimate of how much a billionaire’s net worth grew during the same period. From 2014 to 2018, ProPublica’s own figures show that Bezos reported $4.22 billion in income and paid $973 million in federal taxes. Divide $973 million by $4.22 billion and you get 23%. That is the actual effective federal income tax rate Bezos paid on his actual reported income during those years. It is a perfectly normal rate for a high earner. It is roughly what a senior partner at a Manhattan law firm pays. It is buried in the ProPublica article, available to anyone willing to read past the headline.
To arrive at 0.98%, ProPublica had to substitute a different denominator. Instead of dividing taxes paid by income earned, it divided taxes paid by the appreciation in Bezos’s Amazon shares, an appreciation he had not sold, had not received, had not pocketed, and could not spend. His shares went up on paper. ProPublica decided that paper appreciation should count as income for the purpose of the numerator, even though no jurisdiction on earth, no statute in the United States Code, and no provision of the Sixteenth Amendment treats it as income. The National Taxpayers Union Foundation called this construction “at best policy analysis malpractice, and at worst deliberately dishonest.” The American Enterprise Institute pointed out the obvious: “Except it’s not a true tax rate. First, this suggests that the only taxes they’ve paid are income taxes, when in reality they’ve paid a slew of other taxes: capital gains, property, sales, etc. Second, wealth is not income.”
Reich knows this. He is not a layman. He is a Yale-trained lawyer who served in three administrations and chairs the Goldman School of Public Policy at Berkeley. He understands what an effective tax rate is. He understands what ProPublica did to construct its number. He selected the 0.98% figure anyway. And he presented it without the qualifier “true tax rate,” without the methodology, and without the actual 23% rate sitting one paragraph away in the original source.
Consider also what has happened since the ProPublica window closed. Between 2020 and 2021, Bezos sold approximately $15.7 billion in Amazon stock, paying federal long-term capital gains tax of 20% plus the 3.8% net investment income tax on the gain. In 2024 he sold an additional $13.6 billion, paying an estimated $2.7 billion in federal taxes on the transaction according to a Forbes analysis. Between the 2017 Tax Cuts and Jobs Act and 2025, his cumulative Amazon stock sales totalled roughly $36.7 billion, producing federal tax payments in the billions even by the accounting of the Institute on Taxation and Economic Policy, a left-leaning shop that has no incentive to flatter him. The man Reich presents as paying 0.98% is, in the years following Reich’s chosen window, one of the largest individual taxpayers in the United States. None of this appears in the tweet.
Turn to Amazon. The 1.4% figure for the company’s 2025 federal tax rate is technically a thing one can calculate, but it requires choosing a particular numerator and a particular denominator in a way that no serious corporate tax analyst would defend. Amazon’s actual reported federal income tax provision for fiscal 2025 was $19.1 billion on $97.3 billion in pre-tax income, an accounting effective tax rate of roughly 19.6%. That figure appears in the company’s 10-K, filed with the Securities and Exchange Commission, audited by an independent accounting firm, and signed under criminal penalty by the chief financial officer.
How does Reich get to 1.4%? By isolating current-year cash federal income taxes paid in a single year, ignoring the deferred tax liability the company has booked, and then dividing that one slice by total revenue or pre-tax US income in a way that makes the ratio look small. The actual mechanism producing the low cash payment in 2025 was the One Big Beautiful Bill Act’s accelerated depreciation provisions, which allow companies to write off capital investment in the year it is made rather than over multiple decades. The tax is not avoided. It is deferred. It will be paid in future years when the depreciation runs out.
This is not a loophole. It is a deliberate feature of the tax code, enacted on a bipartisan basis, designed to encourage exactly the activity Amazon engaged in. In 2025 the company invested $340 billion in the United States, more than any other American firm for the seventh consecutive year according to the Progressive Policy Institute. That money went into data centers, fulfillment centers, AI infrastructure, and wages. Amazon currently supports approximately 2 million US jobs, 1 million direct and 1 million indirect. Oxford Economics found that within five years of an Amazon facility opening in a county, on average 6,000 more small businesses emerge, 12,000 fewer people are unemployed, and 10,000 more workers join the labor force. Reich’s tweet treats the tax provision that enabled this investment as evidence of corporate criminality. He attacks the company for using the incentive Congress designed.
Now turn to the third number, the one that goes least examined because it sounds the most modest. The 14.5% figure for the “typical American” comes from Tax Foundation analysis of IRS Statistics of Income data for tax year 2022. It is the average federal individual income tax rate across all filers. It is not the rate paid by anyone in particular, and it is certainly not the rate paid by the median taxpayer. According to the same IRS data, the bottom 50% of taxpayers, those earning under $50,339 in 2022, paid an average effective federal income tax rate of 3.7%. The next decile paid roughly 7% to 10%. The 14.5% average is inflated by the very wealthy households Reich claims pay nothing. The top 1% paid an average effective rate of 26.1%. The top 10% paid 21.5%. Reich is, in effect, using the high tax rates paid by the rich to construct the “typical” baseline that he then uses to indict the rich for paying too little.
The American tax system is the most progressive in the developed world. The Tax Foundation’s analysis of IRS data for 2022 shows the top 1% paid 40.4% of all federal income taxes on 22.4% of all income, the top 10% paid 72%, the top 50% paid 97.1%, and the bottom 50% paid 2.9%. The top 1% paid more federal income tax in 2022 than the bottom 95% combined. In 1980, when the top marginal rate was 70%, the top 1% paid 19% of income taxes. In 2022, with a top marginal rate of 37%, the top 1% paid 40.4%. The Tax Cuts and Jobs Act, which Reich called a giveaway to the rich, increased the share of taxes paid by the top 1% to a peak of 46% in 2021. The Heritage Foundation has documented this trajectory across half a century. Reich has spent that same half century insisting that the opposite is true.
There is a phrase for what Reich does in the 𝕏 post. It is not analysis, and it is not advocacy, both of which can be honest. It is a particular kind of laundered demagoguery in which numbers are stripped of their definitions, juxtaposed for emotional effect, and presented under the authority of a credentialed academic who knows precisely what corners he is cutting. The 23% rate is in the source he relies on. He chose not to mention it. The $19.1 billion is in Amazon’s 10-K. He chose not to mention it. The 3.7% bottom-half rate is in the same Tax Foundation report that produced his 14.5% average. He chose not to mention it. Each omission, considered individually, might be a slip. Considered together, they constitute a method.
The simplest test of intellectual honesty in public argument is whether a writer presents the strongest version of the data he is invoking. Reich did not. He presented three numbers that, placed side by side, looked like a scandal, and he trusted that his readers would not pull the thread. Most did not. Some are pulling it now.
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Alexander Muse is a Fellow at the John Milton Freedom Foundation and publishes daily political analysis at amuseonx.com. Primary sources cited in this piece are linked inline; campaign finance figures are drawn from FEC filings, polling data from publicly released crosstabs, and legal claims from filed pleadings. Corrections are posted to the original URL with a dated changelog. Readers who identify errors are invited to contact the author directly.
I'm an Accountant. There's a saying that Reich clearly proves. "Figures lie and Iiars figure." Enough said. 😉
The late and deeply missed Scott Adams always cautioned about this type of numbers legerdemain. He said to disregard any claim based exclusively on percentages without the underlying numbers and conversely, do the same with claims that provide only a number without provide per centum or per capita. I think he was a very perspicacious man. And Reich is an inveterate liar and charlatan.