Bezos calls for zero federal income tax for lower earners
Bezos said the bottom half of U.S. earners should pay zero federal income tax, a move that would erase about $65 billion in annual revenue.
Jeff Bezos put a dollar figure on one of Washington’s most disruptive tax ideas: make the bottom half of U.S. earners owe zero federal income tax. Using 2023 IRS income data as a guide, that would reach roughly 81.5 million of the 163.1 million individual returns processed by the IRS and would open a revenue hole of about $65 billion a year, before any broader economic effects are counted.
Bezos made the case during a live CNBC interview from Blue Origin’s rocket facility in Merritt Island, Florida, telling Andrew Ross Sorkin that lower earners should be relieved of a burden that can crowd out rent, groceries and the cash needed to start a business. He cited a nurse in Queens earning $75,000 a year as the kind of worker he believes should not be paying federal income tax, and he said he planned to take the idea directly to President Donald Trump.
The scale of the tradeoff is what gives the proposal its force. Federal individual income taxes brought in about $2.2 trillion in fiscal 2023, the largest single source of federal revenue. If the bottom half of filers, who paid just over 3% of all federal income taxes that year, were taken to zero, Washington would forfeit roughly the same share of that $2.2 trillion. That leaves policymakers with a hard question: replace the lost money with higher taxes elsewhere, or absorb it through spending cuts.
The distribution of the tax burden is already sharply tilted toward the top. Bezos said the top 1% pay about 40% of federal income-tax revenue, while the bottom half pay about 3%. Tax Foundation data for tax year 2023 show the top 1% paid 38.4% of all federal income taxes, while the bottom 50% paid just over 3%. The same data put the bottom half’s average adjusted gross income at nearly $54,000, with the top 1% threshold at about $676,000.
That makes Bezos’s pitch less a billionaire thought experiment than a stress test for the tax code. The bottom half of filers already includes many households that owe no federal income tax because of credits and deductions, but formalizing that at the national level would shift the burden upward or force a smaller federal budget. In an economy Bezos described as split between winners and strivers, the arithmetic is clear: zero for one side means someone else must make up the difference.
Know something we missed? Have a correction or additional information?
Submit a Tip
