Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year

Approximately 76 million American households could potentially see their federal income tax obligations eliminated if Amazon founder Jeff Bezos's proposal comes to fruition.

In a recent interview with CNBC, Bezos advocated that the bottom 50% of earners in the U.S. should incur no income tax, emphasizing that working-class Americans should not face added financial strain, especially since they currently contribute a minimal percentage to overall tax revenues.

"The bottom half of income earners in this country pay only 3% of the taxes," Bezos stated. "I think it should be zero."

To illustrate his point, Bezos referred to a hypothetical nurse based in Queens earning $75,000 annually: "Why is that nurse paying more than $1,000 a month in taxes?"

He further remarked, "To me, it's kind of absurd that we're doing this. We shouldn't be asking this nurse in Queens to send money to Washington. They should be sending her an apology. It really makes no sense."

Although Bezos did not provide specific figures for his calculations, it is important to note that U.S. workers are generally obligated to pay federal income tax, as well as Social Security, Medicare, and, in most states, state income taxes. These obligations can accumulate into substantial amounts.

The U.S. tax system operates on a progressive model, whereby higher income earners typically pay a greater percentage of their income in federal taxes. By 2023, individuals in the bottom half of the income distribution (with earnings below approximately $54,000) accounted for about 12% of total adjusted gross income while contributing only 3% of federal income taxes, according to IRS data analyzed by the Tax Foundation. The average federal income tax payment for households in this category was about $913 annually. However, when refundable tax credits are considered, the bottom 40% of taxpayers effectively paid no federal income tax on average.

Bezos, who has maintained a friendly rapport with President Donald Trump, expressed intentions to promote this idea among political figures, asserting that exempting lower income earners from federal income tax would represent only a "small amount of money for the government."

"It is part of our job as citizens and as business leaders to share our ideas," he stated. "And this one would actually help people."

Bezos—with a net worth of $280 billion—says even if his tax bill was doubled, it wouldn't help

Bezos's concern for tax burdens may seem surprising given his estimated net worth of over $280 billion, positioning him as the fourth richest individual globally. While he claims to pay "billions of dollars" in taxes, his tax history has been a topic of considerable criticism.

A ProPublica investigation released in 2021 revealed that Bezos—similar to several other affluent billionaires—has utilized tax strategies that significantly minimized his tax obligations in certain years. In both 2007 and 2011, he paid no federal income tax whatsoever, largely due to investment losses exceeding his reported income. An examination of Bezos's wealth accumulation in relation to his reported income and taxes paid between 2014 and 2018 allowed ProPublica to estimate his effective tax rate at just 0.98%.

However, Bezos expressed a willingness to engage in a debate regarding what constitutes a fair tax responsibility for high earners. Notably, the top 1% of taxpayers represented nearly 21% of total adjusted gross income in 2023, while contributing roughly 38% of all federal income taxes.

"We can argue about what the fair share is. That's a policy debate, that's okay," Bezos remarked. "But the vilification is the thing that's just the distraction."

Nonetheless, addressing tax loopholes or increasing taxes on the wealthy would not resolve what Bezos perceives as a broader governmental expenditure issue. He referenced inefficiencies in New York City's educational system as an illustration.

"If we ran Amazon the way New York City runs their school system, your packages would take six weeks to arrive. We'd have to charge you a $100 delivery fee. And then when the package did finally arrive, it'd have the wrong item in it anyway.

"You could double the taxes I pay, and it's not gonna help that teacher in Queens. I promise you," he concluded.

New York City Mayor Zohran Mamdani responded via social media, stating: "I know a few teachers in Queens who would beg to differ."

Bezos plans to give away 'most of his wealth' in his lifetime—but his ex-wife MacKenzie Scott already has a head start

While Bezos has not officially joined the Giving Pledge—a philanthropic effort initiated by Warren Buffett, Bill Gates, and Melinda French Gates encouraging billionaires to donate a majority of their wealth during their lifetimes or in their wills—he has indicated a commitment to giving away a significant portion of his fortune within his lifetime.

He also acknowledged the challenges associated with effective philanthropy, echoing sentiments shared by other billionaires, including Buffett and Elon Musk, who assert that dispensing large sums of money wisely is often more complex than it seems.

In contrast, Bezos's ex-wife, MacKenzie Scott, has already made substantial philanthropic strides. Since 2020, she has donated over $26 billion to organizations focused on diversity, equity, and inclusion, education, and disaster relief. In comparison, Forbes estimates that Bezos and his current wife, Lauren Sánchez Bezos, have contributed approximately $4.7 billion throughout their lives.

Bezos argued during the interview with CNBC that the longer-term societal benefits of businesses like Amazon and Blue Origin might ultimately overshadow traditional philanthropy. He urged aspiring entrepreneurs to focus on developing products and services that enhance people's lives.

"Everybody out there who's a potential entrepreneur make sure you focus on that," Bezos stated. "You will be creating value for society if you're successful at pleasing your customers."