I re­ceived an of­fi­cial re­sponse from Replit and my open-source

pro­ject will be back up soon; please see the bot­tom of the blog

post for an up­date. The

rest of the con­tent here will re­main as a his­tor­i­cal ar­ti­fact.

Hi, my name is Radon. I grad­u­ated col­lege last year and now work as a soft­ware en­gi­neer in DevOps/Infrastructure. In my free time, I also main­tain a num­ber of open-source

pro­jects.

While I was in col­lege, I in­terned at the startup Replit. This blog post is the story of how Replit is us­ing le­gal threats and their ven­ture-cap­i­tal fund­ing to bully me into shut­ting down an open-source pro­ject they don’t like.

Replit makes a we­bapp you can use to run code on­line in dif­fer­ent pro­gram­ming lan­guages. This is noth­ing new (just Google “run python

on­line” for proof), so Replit’s value propo­si­tion is ex­tra fea­tures like shar­ing your work, in­stalling third-party pack­ages, and host­ing we­bapps.

I worked for Replit in Summer 2019, where I was asked to re­build Replit’s pack­age man­age­ment stack and make it open-source. If you like read­ing about tech stuff, here’s the post I wrote for Replit’s

blog, and here’s the code on GitHub.

I took a job else­where in Summer 2020, but still chat­ted with them oc­ca­sion­ally by email when they reached out to tell me about some­thing cool Replit had de­vel­oped.

The as­pect of Replit that I re­ally en­joyed was how it sup­ported lots of dif­fer­ent pro­gram­ming lan­guages. (I wrote an­other blog post for

Replit

about how they do that.) That got me think­ing: how many pro­gram­ming lan­guages could you pos­si­bly cram into a sin­gle web­site?

To ex­plore that ques­tion, I put to­gether my own lit­tle we­bapp that could run code on­line. After about a day, I had some­thing that worked. (If you’re won­der­ing why it was so fast—it turns out you only need

30 lines of code to let peo­ple run Python code in a we­bapp! This may be why there are so many web­sites for run­ning Python on­line…)

After it was work­ing, I started adding as many dif­fer­ent pro­gram­ming lan­guages as I could. As you can see from this ex­cerpt of my pro­jec­t’s ver­sion his­tory, I got a lit­tle overex­cited:

I even­tu­ally ended up with 216 lan­guages, in­clud­ing all 38 lan­guages

from

Replit,

all 100 lan­guages from Yusuke Endoh’s “Quine

Relay”, and a good deal more be­sides. You might ask: Why did I spend so much time adding ob­scure pro­gram­ming lan­guages to a we­bapp no­body was go­ing to use? Well, let me put it this way: Is it the weird­est 2020 hobby you’ve seen?

One day, I got an email from Replit let­ting me know about a new fea­ture they re­leased. I fig­ured this was a good time to share my open-source pro­ject with them, in case they wanted to take in­spi­ra­tion from any of my work:

At first, I got a pos­i­tive re­sponse. But then, 30 min­utes later, out of nowhere, Replit ac­cused me of un­eth­i­cal be­hav­ior and steal­ing their de­sign:

Now, none of the ideas I used in my open-source pro­ject were “internal de­sign de­ci­sions”: they’ve all been pub­lished pub­licly on Replit’s blog (I knew this be­cause I’d been asked to write some of those blog posts dur­ing my in­tern­ship). And my pro­ject also was­n’t any more of a Replit clone than any of the other web­sites on the first few pages of Google re­sults for “run python on­line”, most of which look ex­actly the same:

But I fig­ured I might have missed some­thing, so I asked for de­tails:

Unfortunately, Replit re­fused to pro­vide any specifics on what they were say­ing I had done wrong, re­it­er­ated their pre­vi­ous state­ments, and threat­ened me with a law­suit:

And then just to put a cherry on top, Replit sent me an­other email re­mind­ing me that they just raised $20 mil­lion from their in­vestors

last

month, and they weren’t afraid to use it against me. The “me” in ques­tion be­ing one of their pre­vi­ous in­terns who just grad­u­ated from col­lege a year ago, and who is­n’t run­ning any kind of com­mer­cial op­er­a­tion what­so­ever.

I’d like to point out two things about this email:

* The re­mark about “commits like this”—this is ac­tu­ally mis­lead­ing.

There’s only one com­mit in my pro­ject that men­tions Replit, and it’s

the one I al­ready showed you ear­lier, from my third day of cod­ing,

when I’d just added all 38 lan­guages that Replit sup­ported, be­fore

mov­ing onto the 178 other lan­guages I wanted to add.

* The re­mark about me be­ing a “demanding” in­tern—I’m not ac­tu­ally

sure what this is meant to im­ply, es­pe­cially since Replit had just

tried to re­cruit me ear­lier that day (see the screen­shot of their

first email). But I’ll leave it alone be­cause it’s not re­ally

rel­e­vant to the is­sue at hand.

Naturally, I took down my pro­ject right away, gave it some time for feel­ings to cool, and sent Replit an apol­ogy. I fig­ured some­thing might have been lost over email, so I asked to get on a call:

Unfortunately, Replit ig­nored this email, so I sent them an­other one fol­low­ing up. This one got a re­sponse, but not the one I was hop­ing for:

Just in case Replit did­n’t un­der­stand that I was­n’t OK with this sit­u­a­tion, I sent three fol­low-up emails ex­plain­ing as such over the next few weeks, all of which were ig­nored.

In other words, Replit stands by its threat: if I re-pub­lish my open-source pro­ject, then they will sue me with “top lawyers”.

Replit claimed that my open-source pro­ject was:

In de­vel­op­ing my pro­ject, was I mak­ing a clone of Replit?

In de­vel­op­ing my pro­ject, did I make use of any trade se­crets of

Replit?

Was it un­eth­i­cal for me to de­velop an open-source pro­ject that’s

sim­i­lar to Replit, af­ter work­ing for them?

Questions 1 and 2 have a fair num­ber of tech­ni­cal de­tails, so I’ve put them in a sep­a­rate post. The TL;DR is:

My pro­ject is­n’t any more sim­i­lar to Replit than the 15 other

(commercial!) ones you can find on Google by search­ing “run python

on­line” or “online pro­gram­ming en­vi­ron­ment”.

Every sim­i­lar­ity be­tween my pro­ject and Replit can be ex­plained by

look­ing only at GitHub repos­i­to­ries and blog posts that were

pub­lished on­line by Replit it­self, mak­ing them ob­vi­ously not any

kind of se­cret.

Q: Was it un­eth­i­cal for me to de­velop an open-source pro­ject that’s sim­i­lar to Replit, af­ter work­ing for them?

In my opin­ion, the an­swer to this ques­tion is no, for a num­ber of rea­sons:

* Riju is en­tirely non-com­mer­cial. Unlike Replit, I did­n’t seek

fund­ing from any source—ad­ver­tis­ing, do­na­tions, fundrais­ing,

sub­scrip­tions, what­ever. I have no in­ter­est in run­ning a busi­ness,

and never re­ally wanted Riju to be­come too pop­u­lar, since I was

the one pay­ing the server bill.

* Riju was­n’t steal­ing cus­tomers from Replit. Based on my an­a­lyt­ics

data, there were 38 vis­its to Riju dur­ing the month of February.

(Half of those were prob­a­bly me.) Meanwhile, Replit had over 7

mil­lion

users.

There’s ob­vi­ously no sense in which Riju was com­pet­ing with Replit.

* Riju was­n’t built as a com­peti­tor to Replit, ei­ther. Since the

ar­chi­tec­ture was lim­ited to run­ning on a sin­gle server, any­one could

bring the en­tire sys­tem down just by typ­ing in a fork

bomb—and one of my

friends did, just to see what would hap­pen. (The sys­tem crashed.) If

I were de­sign­ing a prod­uct to com­pete with Replit, I cer­tainly

would­n’t have picked an ar­chi­tec­ture that could only scale to

toy-pro­ject size.

* Replit’s core value propo­si­tion is­n’t let­ting you run code on­line

(you can do this in dozens of places for free), it’s the fea­tures

they of­fer on top of run­ning code. Riju cat­e­gor­i­cally lacked all of

these fea­tures, in­clud­ing: hav­ing a user ac­count, sav­ing your work,

shar­ing your work, pub­lish­ing we­bapps, per­sis­tent work­spaces,

dis­cus­sion fo­rums, in­te­gra­tion with GitHub, etc. etc.

* I had no bad in­ten­tions to­wards Replit when de­vel­op­ing Riju, and

was­n’t try­ing to hide any­thing. As proof of these claims, I of­fer

the fact that I had the pro­ject pub­lic on my GitHub from the

be­gin­ning, and the fact that Replit found out about the pro­ject

be­cause I openly shared it with them of my own vo­li­tion, ex­tend­ing

an of­fer for them to take in­spi­ra­tion from my work.

* Riju was never in­tended to be a prod­uct, it was in­tended to be a

per­sonal play­ground / art piece. As proof of this claim, I of­fer the

fact that I spent dozens of hours adding lan­guages like

Hexagony and

SNOBOL rather mak­ing it so you could

save your work(!).

I’m not a busi­ness per­son. I’m just an open-source dev who likes to build weird things for fun. (If you doubt my track record of build­ing things that don’t make money, just check out the list on my

This is the story of how I ac­ci­den­tally dis­cov­ered what ap­pears to be a siz­able SEO scam.

Some highly-ranked on­line tools for edit­ing or “cleaning” HTML seem to be se­cretly in­ject­ing links into their out­put to push them­selves and af­fil­i­ated sites up the search en­gine rank­ings. This scam is highly suc­cess­ful and ap­pears to have gone un­de­tected so far.

Tools which I sus­pect of do­ing this are all made by the same peo­ple:

Sites that have fallen vic­tim to this in­clude BoingBoing, the of­fi­cial German Football Association and Kaspersky. The de­li­cious irony here is that the af­fected Kaspersky ar­ti­cle is about “staying safe from hack­ers”.

So here’s a blow-by-blow ac­count of how I made this dis­cov­ery, along with the ev­i­dence I un­cov­ered.

It all be­gan with a mys­tery con­cern­ing a prod­uct that I’m build­ing. The prod­uct is an on­line score­board, and de­spite hav­ing (what I be­lieve) is a solid SEO strat­egy, I have been un­able to con­quer that cov­eted top spot in the search en­gine re­sults page. For the last 12 months, a com­peti­tor called “Scorecounter” has al­ways been ahead of me.

Now, due to the na­ture of my prod­uct, peo­ple are shar­ing links to it and em­bed­ding it in their web­sites, which means that over time I am ac­cu­mu­lat­ing a lot of in­bound links. Over time my SEO rank­ing should be­come un­beat­able. The com­peti­tor does not have a sig­nif­i­cant vi­ral­ity like me, yet is con­sis­tently bet­ter at me than SEO. What trick are they us­ing? 🤔

So last night I drank 2 glasses of red wine and in­stead of delet­ing the pro­duc­tion data­base (like last time) I de­cided to get to the bot­tom of it. I paid for an Ahrefs sub­scrip­tion and had a look at the “backlink pro­file” of Scorecounter. Ahrefs is an ex­cel­lent tool for SEO re­search and op­ti­miza­tion. This is what I found:

Scorecounter had 3600 in­com­ing links which it had ac­cu­mu­lated in a very short time. Impressive!

Then I be­gan to look at the pages that con­tained the links and this is where I grew sus­pi­cious.

For in­stance, I saw a blog post from the German Football Association con­tain­ing a link to Scorecounter. The word that was linked was “score” — yet hav­ing a link here made ab­solutely no sense in the con­text of the ar­ti­cle. What was go­ing on? 🤔

Here are some more ex­am­ples of links I found on ran­dom do­mains (you need to search for “score” on the page).

RICE University (The link has now been re­moved)

Intuit Quickbooks (The link has now been re­moved)

There are pages and pages of these (take a look for your­self if you have an Ahrefs ac­count).

So I wrote to some of these sites and asked them why they had these links in their pages. Were they all sell­ing links?

I re­ceived the fol­low­ing re­ply from an on­line news por­tal:

Thanks for reach­ing out. No, we do not sell links at any cost.

I was ac­tu­ally us­ing an HTML cleaner (html-on­line.com/​ed­i­tor/) since last year, which was work­ing fine as in­tended in the ini­tial months but a few weeks back I re­alised that the tool has sud­denly started se­cretly in­ject­ing links to the HTML con­tent.

For a few posts, I was not able to spot it, but when I learnt about it, what­ever post I could have re­call, were cleaned man­u­ally. It ap­pears, un­for­tu­nately, some of them are still there, as you pointed out. I will to­day sim­ply find-re­place this link from the en­tire data­base for safer side.

So that was the se­cret: the cre­ators of Scorecounter also made an on­line HTML ed­i­tor which in­jects links for cer­tain key­words. The beauty of this scam is that by in­ject­ing links to their own HTML ed­i­tor, they have cre­ated a bril­liant pos­i­tive feed­back loop: the higher the ed­i­tor rises in the search rank­ings, the more peo­ple use it and the more se­cret links they can in­ject.

Now if you are feel­ing very mag­nan­i­mous, you could ar­gue that the ed­i­tor is a freemium tool, and that added links are how you pay for the free ver­sion. Well, I’m not feel­ing mag­nan­i­mous and nei­ther will Google, I sus­pect.

Apart from boost­ing the HTML Editor it­self and Scorecounter, I found a third prod­uct that was en­joy­ing the lime­light:

Ruwix.com is made by the same peo­ple and is all about the fa­mous puz­zle cube. Again it’s very easy to find a large num­ber of back­links to Ruwix.com on ran­dom sites us­ing Ahrefs. Each of these is a non-se­quitur in the text into which it’s jammed, which shows me that the au­thors of these ar­ti­cles had no idea what was go­ing on. Take a look (you need to search for “Rubiks” on the page):

an ar­ti­cle about Sex and the City

and my per­sonal fa­vorite: a blog post on Kaspersky.com.

UPDATE: Kaspersky has re­moved the link (props for the quick re­ac­tion), but thank­fully I made a screen­shot 😅

To see how preva­lent this in­jec­tion is, try this Google search; “Learn how to solve a Rubix Cube with the be­gin­ner method”. There are over 600 hits on a wide range of sites. Amazingly, the link even made it into a re­search pa­per (It’s on page 24, at the bot­tom of the References sec­tion)!

Digging around in the back­links I dis­cov­ered that there is a whole net­work of tools which are all part of the same op­er­a­tion. All have sim­i­lar back­link pro­files. They in­clude:

Doing a Google search for “HTML Editor” re­veals that these tools oc­cupy the top three po­si­tions of the search re­sults. This demon­strates how im­mensely suc­cess­ful this scam has been.

It’s true that the terms of at least one tool con­tain the fol­low­ing:

We show ads and might place ran­domly a link to the end of the cleaned doc­u­ments.

I sin­cerely doubt that this dis­claimer is enough to pre­vent a mas­sive Google penalty. We’ll know soon enough.

That’s all for now. Follow me on Twitter to keep up­dated.

Our net­work is all about greater ef­fi­ciency. With our strate­gi­cally placed points of pres­ence (POPs), you can scale on-de­mand and de­liver seam­lessly dur­ing ma­jor events and traf­fic spikes. Get the peace of mind that comes with truly re­li­able per­for­mance — wher­ever users may be brows­ing, watch­ing, shop­ping, or do­ing busi­ness.

How Apple Could Help Us Reclaim Our AttentionWe be­lieve tech­nol­ogy should help us live well. It can and should be de­signed to help us be in­ten­tional, to do the things that truly mat­ter. Yesterday, iOS 15 was in­tro­duced to the world. It’s an ex­cit­ing up­date, and in­cludes mean­ing­ful steps to­wards more com­pre­hen­sive tools for dig­i­tal well­be­ing, like modes and bet­ter no­ti­fi­ca­tions. Apple could do a lot more to help us be more in­ten­tional. Computers were sup­posed to be a bi­cy­cle for the mind­Some­where along the way, ads got in the way. And with ads came the im­per­a­tive to max­i­mize en­gage­ment. Which led to a tril­lion-dol­lar in­dus­try built on ex­tract­ing hu­man at­ten­tion. For so­cial me­dia com­pa­nies with an ad-based busi­ness model, . Even when it comes at the ex­pense of our shared well-be­ing, democ­racy, and ca­pac­ity for solv­ing the world’s hard­est prob­lems.. The core of Apple’s DNA is about em­pow­er­ing world-chang­ing cre­ativ­ity. Its busi­ness is not built around ads. Our life­time-value is higher for Apple if we get to live mean­ing­ful and cre­ative lives and solve the worlds hard­est prob­lems. As the provider of iOS and the AppStore, Apple makes the rules for that ecosys­tem. We be­lieve Ap­ple can and should give users more aware­ness and con­trol over how they’re be­ing ma­nip­u­lat­ed­With “Ask app not to track” Apple re­cently changed the game of pri­vacy, at the dis­may at the global ad­ver­tise­ment in­dus­try. We think they could go even fur­ther: To lead the in­dus­try to­wards tech­nol­ogy that is truly re­spect­ful of hu­man at­ten­tion.

To align the in­cen­tives for de­vel­op­ers with the users best in­ter­est.

To change the course of tech­nol­ogy once more.is about mak­ing tech­nol­ogy that changes hu­man be­hav­ior. Apps that are us­ing per­sua­sive de­sign could be re­quired to list all the tech­niques they use, as part of the App Store re­view process.Ap­ple could then show an on­board­ing screen that pro­vides the user with rel­e­vant in­for­ma­tion around this app, and the op­tion to turn some of these tech­niques off.If apps use cer­tain per­sua­sive de­sign tech­niques, Apple could re­quire de­vel­op­ers to of­fer less dis­tract­ing set­tings in or­der to pass the app re­view. Infinite feeds could be turned into fi­nite pages (see be­low)Au­to­play could be turned off via a sys­tem set­tingTh­ere could even be an op­tion to hide the most dis­tract­ing parts of an app, like Facebooks video tab, Instagram Explore, and non-friend sto­ries in SnapchatInstead of in­fi­nite feeds, the user could choose to in­stead use sim­ple pages with a lim­ited num­ber of con­tent pieces on them.Time-on-site is one of the main met­rics that ad-based busi­nesses are op­ti­miz­ing for. In con­trast, ‘Time well spent’ is a dif­fer­ent kind of met­ric meant to bet­ter ac­count for what re­ally mat­ters to you. After en­gag­ing with a cer­tain app, do you feel like it made your life bet­ter? Was it time well spent?At the end of an app ses­sion of 15 min­utes or more, an ac­tion­able no­ti­fi­ca­tion could ask you if this was time well spent.A time well spent wid­get could show your most re­cent ses­sions and let you rate your ex­pe­ri­ence.to help you re­flect on your us­age and maybe even make sug­gested changes to your screen time set­tings.Ap­ple could ag­gre­gate data and show the av­er­age time peo­ple spend on any given app, and how well spent peo­ple re­port this time.

Apple could high­light those apps that peo­ple truly en­joy. Time Well Spent could be the ba­sis for the AppStores ed­i­to­r­ial process.Ap­ple could in­tro­duce a tax for App Store list­ings be­low a cer­tain Time Well Spent per­cent­age. This would a) di­rectly in­cen­tivize de­vel­op­ers to op­ti­mize for time well spent and b) could be used to ac­cel­er­ate Humane Tech pro­jects and re­ward apps with a very high time well spent met­ric.Do I re­ally want to down­load an app that peo­ple spend more than an hour on a day with­out even en­joy­ing it?Ap­ple could an­a­lyze us­age pat­terns and de­tect mind­less brows­ing, such as idly switch­ing be­tween apps, open­ing & clos­ing apps rapidly, scrolling back and forth, … Apple could help us set con­di­tions for how and when we use cer­tain apps.This way, we could set bound­aries for our­selves, on our own terms.For ex­am­ple if you’re strug­gling to use Tinder re­spon­si­bly, you could cre­ate a con­di­tion that you can only use the app while FaceTiming with a friend.You could for ex­am­ple make sure that when you’re us­ing Twitter, you’re in a good men­tal and phys­i­cal state.While this is more spec­u­la­tive than the pre­vi­ous sug­ges­tions, it goes to show just how many pos­si­bil­i­ties there are to help us do the things that we truly want to do.changes like these could im­prove mil­lions of lives — help­ing peo­ple fo­cus, be well, sleep well, live more mean­ing­ful lives. It’s time to show ad­dic­tion-based busi­nesses their proper place in the world. You can do it, maybe bet­ter than any other en­tity in the world. Will you?we be­lieve tech­nol­ogy can and should help us live well. We be­lieve our dig­i­tal en­vi­ron­ment can in­spire and en­able us to do the things we truly want to do. That’s why we’re work­ing on an app that un­locks bet­ter choices on your phone. It helps you be in­ten­tional and align your be­hav­ior with your as­pi­ra­tions — and some of our early users are ex­cited. They find it eas­ier to be mind­ful with their phones and do more of the things they ac­tu­ally want to be do­ing. You can join the wait­ing list be­low, and we’ll do our best to on­board you as soon as pos­si­ble.

Sign up to­day to get weekly up­dates and alerts from Oceana.

An Oceana analysis found hundreds of for­eign fish­ing ves­sels, pri­mar­ily Chinese, pil­lag­ing the wa­ters off Argentina and dis­ap­pear­ing from pub­lic track­ing sys­tems. These dis­tant-wa­ter fleets mainly fish for short­fin squid, which are vi­tal to Argentina’s econ­omy and the diet of nu­mer­ous com­mer­cial and recre­ational species, such as tuna and sword­fish.

Oceana an­a­lyzed the ac­tiv­ity of fish­ing ves­sels along the bor­der of Argentina’s na­tional wa­ters from January 1, 2018, to April 25, 2021, us­ing Au­to­matic Iden­ti­fi­ca­tion Sys­tem (AIS) data from Global Fishing Watch (GFW), an in­de­pen­dent non­profit founded by Oceana in part­ner­ship with Google and SkyTruth. AIS de­vices trans­mit in­for­ma­tion such as a ves­sel’s name, flag state, and lo­ca­tion. Of the fish­ing vis­i­ble on GFW, Oceana doc­u­mented over 800 for­eign ves­sels log­ging more than 900,000 to­tal hours of ap­par­ent fish­ing. The analy­sis also re­vealed that 69% of this fish­ing ac­tiv­ity was con­ducted by more than 400 Chinese ves­sels. In com­par­i­son to the for­eign fleets, 145 of Argentina’s fish­ing ves­sels con­ducted 9,269 hours of vis­i­ble fish­ing in this area dur­ing the same pe­riod — less than 1% of the to­tal amount.

As part of this analy­sis, Oceana doc­u­mented more than 6,000 gap events, in­stances where AIS trans­mis­sions are not de­tected for more than 24 hours, which po­ten­tially in­di­cates ves­sels are dis­abling their pub­lic track­ing de­vices. These ves­sels were in­vis­i­ble for more than 600,000 to­tal hours, hid­ing fish­ing ves­sel lo­ca­tions and mask­ing po­ten­tially il­le­gal be­hav­ior, such as cross­ing into Argentina’s na­tional wa­ters to fish. The Chinese fleet was re­spon­si­ble for 66% of these in­ci­dents.

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Inside the Tax Records of the .001%

ProPublica is a non­profit news­room that in­ves­ti­gates abuses of power. The Secret IRS Files is an on­go­ing re­port­ing pro­ject. Sign up to be no­ti­fied when the next in­stall­ment pub­lishes.

In 2007, Jeff Bezos, then a multi­bil­lion­aire and now the world’s rich­est man, did not pay a penny in fed­eral in­come taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the sec­ond-rich­est per­son in the world, also paid no fed­eral in­come taxes.

Michael Bloomberg man­aged to do the same in re­cent years. Billionaire in­vestor Carl Icahn did it twice. George Soros paid no fed­eral in­come tax three years in a row.

This is an on­go­ing in­ves­ti­ga­tion. Sign up to be no­ti­fied when the next story pub­lishes.

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ProPublica has ob­tained a vast trove of Internal Revenue Service data on the tax re­turns of thou­sands of the na­tion’s wealth­i­est peo­ple, cov­er­ing more than 15 years. The data pro­vides an un­prece­dented look in­side the fi­nan­cial lives of America’s ti­tans, in­clud­ing Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their in­come and taxes, but also their in­vest­ments, stock trades, gam­bling win­nings and even the re­sults of au­dits.

Taken to­gether, it de­mol­ishes the cor­ner­stone myth of the American tax sys­tem: that every­one pays their fair share and the rich­est Americans pay the most. The IRS records show that the wealth­i­est can — per­fectly legally — pay in­come taxes that are only a tiny frac­tion of the hun­dreds of mil­lions, if not bil­lions, their for­tunes grow each year.

Many Americans live pay­check to pay­check, amass­ing lit­tle wealth and pay­ing the fed­eral gov­ern­ment a per­cent­age of their in­come that rises if they earn more. In re­cent years, the me­dian American house­hold earned about $70,000 an­nu­ally and paid 14% in fed­eral taxes. The high­est in­come tax rate, 37%, kicked in this year, for cou­ples, on earn­ings above $628,300.

The con­fi­den­tial tax records ob­tained by ProPublica show that the ul­tra­rich ef­fec­tively side­step this sys­tem.

You May Be Paying a Higher Tax Rate Than a Billionaire

America’s bil­lion­aires avail them­selves of tax-avoid­ance strate­gies be­yond the reach of or­di­nary peo­ple. Their wealth de­rives from the sky­rock­et­ing value of their as­sets, like stock and prop­erty. Those gains are not de­fined by U. S. laws as tax­able in­come un­less and un­til the bil­lion­aires sell.

To cap­ture the fi­nan­cial re­al­ity of the rich­est Americans, ProPublica un­der­took an analy­sis that has never been done be­fore. We com­pared how much in taxes the 25 rich­est Americans paid each year to how much Forbes es­ti­mated their wealth grew in that same time pe­riod.

We’re go­ing to call this their true tax rate.

The re­sults are stark. According to Forbes, those 25 peo­ple saw their worth rise a col­lec­tive $401 bil­lion from 2014 to 2018. They paid a to­tal of $13.6 bil­lion in fed­eral in­come taxes in those five years, the IRS data shows. That’s a stag­ger­ing sum, but it amounts to a true tax rate of only 3.4%.

It’s a com­pletely dif­fer­ent pic­ture for mid­dle-class Americans, for ex­am­ple, wage earn­ers in their early 40s who have amassed a typ­i­cal amount of wealth for peo­ple their age. From 2014 to 2018, such house­holds saw their net worth ex­pand by about $65,000 af­ter taxes on av­er­age, mostly due to the rise in value of their homes. But be­cause the vast bulk of their earn­ings were salaries, their tax bills were al­most as much, nearly $62,000, over that five-year pe­riod.

The Ultrawealthy by the Numbers

Wealth, in­come and taxes for four of the rich­est peo­ple in the coun­try from 2014 to 2018.

No one among the 25 wealth­i­est avoided as much tax as Buffett, the grand­fa­therly cen­tibil­lion­aire. That’s per­haps sur­pris­ing, given his pub­lic stance as an ad­vo­cate of higher taxes for the rich. According to Forbes, his riches rose $24.3 bil­lion be­tween 2014 and 2018. Over those years, the data shows, Buffett re­ported pay­ing $23.7 mil­lion in taxes.

Note: Values in the graphic are rounded.

That works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.

In the com­ing months, ProPublica will use the IRS data we have ob­tained to ex­plore in de­tail how the ul­tra­wealthy avoid taxes, ex­ploit loop­holes and es­cape scrutiny from fed­eral au­di­tors.

Experts have long un­der­stood the broad out­lines of how lit­tle the wealthy are taxed in the United States, and many lay peo­ple have long sus­pected the same thing.

But few specifics about in­di­vid­u­als ever emerge in pub­lic. Tax in­for­ma­tion is among the most zeal­ously guarded se­crets in the fed­eral gov­ern­ment. ProPublica has de­cided to re­veal in­di­vid­ual tax in­for­ma­tion of some of the wealth­i­est Americans be­cause it is only by see­ing specifics that the pub­lic can un­der­stand the re­al­i­ties of the coun­try’s tax sys­tem.

Consider Bezos’ 2007, one of the years he paid zero in fed­eral in­come taxes. Amazon’s stock more than dou­bled. Bezos’ for­tune leapt $3.8 bil­lion, ac­cord­ing to Forbes, whose wealth es­ti­mates are widely cited. How did a per­son en­joy­ing that sort of wealth ex­plo­sion end up pay­ing no in­come tax?

In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, re­ported a pal­try (for him) $46 mil­lion in in­come, largely from in­ter­est and div­i­dend pay­ments on out­side in­vest­ments. He was able to off­set every penny he earned with losses from side in­vest­ments and var­i­ous de­duc­tions, like in­ter­est ex­penses on debts and the vague catchall cat­e­gory of “other ex­penses.”

In 2011, a year in which his wealth held roughly steady at $18 bil­lion, Bezos filed a tax re­turn re­port­ing he lost money — his in­come that year was more than off­set by in­vest­ment losses. What’s more, be­cause, ac­cord­ing to the tax law, he made so lit­tle, he even claimed and re­ceived a $4,000 tax credit for his chil­dren.

His tax avoid­ance is even more strik­ing if you ex­am­ine 2006 to 2018, a pe­riod for which ProPublica has com­plete data. Bezos’ wealth in­creased by $127 bil­lion, ac­cord­ing to Forbes, but he re­ported a to­tal of $6.5 bil­lion in in­come. The $1.4 bil­lion he paid in per­sonal fed­eral taxes is a mas­sive num­ber — yet it amounts to a 1.1% true tax rate on the rise in his for­tune.

While Bezos’ wealth has grown as­tro­nom­i­cally over the last decade and he’s paid a mi­nus­cule frac­tion of it in taxes, a typ­i­cal American house­hold paid more in taxes than it ac­cu­mu­lated in wealth.

The rev­e­la­tions pro­vided by the IRS data come at a cru­cial mo­ment. Wealth in­equal­ity has be­come one of the defin­ing is­sues of our age. The pres­i­dent and Congress are con­sid­er­ing the most am­bi­tious tax in­creases in decades on those with high in­comes. But the American tax con­ver­sa­tion has been dom­i­nated by de­bate over in­cre­men­tal changes, such as whether the top tax rate should be 39.6% rather than 37%.

ProPublica’s data shows that while some wealthy Americans, such as hedge fund man­agers, would pay more taxes un­der the cur­rent Biden ad­min­is­tra­tion pro­pos­als, the vast ma­jor­ity of the top 25 would see lit­tle change.

The tax data was pro­vided to ProPublica af­ter we pub­lished a se­ries of ar­ti­cles scru­ti­niz­ing the IRS. The ar­ti­cles ex­posed how years of bud­get cuts have hob­bled the agen­cy’s abil­ity to en­force the law and how the largest cor­po­ra­tions and the rich have ben­e­fited from the IRS’ weak­ness. They also showed how peo­ple in poor re­gions are now more likely to be au­dited than those in af­flu­ent ar­eas.

Why We Are Publishing the Tax Secrets of the .001%

The Secret IRS Files Short Form: A Quick Guide to What We Uncovered

How We Calculated the True Tax Rates of the Wealthiest

ProPublica is not dis­clos­ing how it ob­tained the data, which was given to us in raw form, with no con­di­tions or con­clu­sions. ProPublica re­porters spent months pro­cess­ing and an­a­lyz­ing the ma­te­r­ial to trans­form it into a us­able data­base.

We then ver­i­fied the in­for­ma­tion by com­par­ing el­e­ments of it with dozens of al­ready pub­lic tax de­tails (in court doc­u­ments, politi­cians’ fi­nan­cial dis­clo­sures and news sto­ries) as well as by vet­ting it with in­di­vid­u­als whose tax in­for­ma­tion is con­tained in the trove. Every per­son whose tax in­for­ma­tion is de­scribed in this story was asked to com­ment. Those who re­sponded, in­clud­ing Buffett, Bloomberg and Icahn, all said they had paid the taxes they owed.

A spokesman for Soros said in a state­ment: “Between 2016 and 2018 George Soros lost money on his in­vest­ments, there­fore he did not owe fed­eral in­come taxes in those years. Mr. Soros has long sup­ported higher taxes for wealthy Americans.” Personal and cor­po­rate rep­re­sen­ta­tives of Bezos de­clined to re­ceive de­tailed ques­tions about the mat­ter. ProPublica at­tempted to reach Scott through her di­vorce at­tor­ney, a per­sonal rep­re­sen­ta­tive and fam­ily mem­bers; she did not re­spond. Musk re­sponded to an ini­tial query with a lone punc­tu­a­tion mark: “?” After we sent de­tailed ques­tions to him, he did not re­ply.

One of the bil­lion­aires men­tioned in this ar­ti­cle ob­jected, ar­gu­ing that pub­lish­ing per­sonal tax in­for­ma­tion is a vi­o­la­tion of pri­vacy. We have con­cluded that the pub­lic in­ter­est in know­ing this in­for­ma­tion at this piv­otal mo­ment out­weighs that le­git­i­mate con­cern.

The con­se­quences of al­low­ing the most pros­per­ous to game the tax sys­tem have been pro­found. Federal bud­gets, apart from mil­i­tary spend­ing, have been con­strained for decades. Roads and bridges have crum­bled, so­cial ser­vices have with­ered and the sol­vency of Social Security and Medicare is per­pet­u­ally in ques­tion.

There is an even more fun­da­men­tal is­sue than which pro­grams get funded or not: Taxes are a kind of col­lec­tive sac­ri­fice. No one loves giv­ing their hard-earned money to the gov­ern­ment. But the sys­tem works only as long as it’s per­ceived to be fair.

Our analy­sis of tax data for the 25 rich­est Americans quan­ti­fies just how un­fair the sys­tem has be­come.

By the end of 2018, the 25 were worth $1.1 tril­lion.

For com­par­i­son, it would take 14.3 mil­lion or­di­nary American wage earn­ers put to­gether to equal that same amount of wealth.

The per­sonal fed­eral tax bill for the top 25 in 2018: $1.9 bil­lion.

The bill for the wage earn­ers: $143 bil­lion.

The idea of a reg­u­lar tax on in­come, much less on wealth, does not ap­pear in the coun­try’s found­ing doc­u­ments. In fact, Article 1 of the U. S. Constitution ex­plic­itly pro­hibits “direct” taxes on cit­i­zens un­der most cir­cum­stances. This meant that for decades, the U.S. gov­ern­ment mainly funded it­self through “indirect” taxes: tar­iffs and levies on con­sumer goods like to­bacco and al­co­hol.

With the costs of the Civil War loom­ing, Congress im­posed a na­tional in­come tax in 1861. The wealthy helped force its re­peal soon af­ter the war ended. (Their pique could only have been ex­ac­er­bated by the fact that the law re­quired pub­lic dis­clo­sure. The an­nual in­come of the moguls of the day — $1.3 mil­lion for William Astor; $576,000 for Cornelius Vanderbilt — was listed in the pages of The New York Times in 1865.)

By the late 19th and early 20th cen­tury, wealth in­equal­ity was acute and the po­lit­i­cal cli­mate was chang­ing. The fed­eral gov­ern­ment be­gan ex­pand­ing, cre­at­ing agen­cies to pro­tect food, work­ers and more. It needed fund­ing, but tar­iffs were pinch­ing reg­u­lar Americans more than the rich. The Supreme Court had re­jected an 1894 law that would have cre­ated an in­come tax. So Congress moved to amend the Constitution. The 16th Amendment was rat­i­fied in 1913 and gave the gov­ern­ment power “to lay and col­lect taxes on in­comes, from what­ever source de­rived.”

In the early years, the per­sonal in­come tax worked as Congress in­tended, falling squarely on the rich­est. In 1918, only 15% of American fam­i­lies owed any tax. The top 1% paid 80% of the rev­enue raised, ac­cord­ing to his­to­rian W. Elliot Brownlee.

But a ques­tion re­mained: What would count as in­come and what would­n’t? In 1916, a woman named Myrtle Macomber re­ceived a div­i­dend for her Standard Oil of California shares. She owed taxes, thanks to the new law. The div­i­dend had not come in cash, how­ever. It came in the form of an ad­di­tional share for every two shares she al­ready held. She paid the taxes and then brought a court chal­lenge: Yes, she’d got­ten a bit richer, but she had­n’t re­ceived any money. Therefore, she ar­gued, she’d re­ceived no “income.”

Four years later, the Supreme Court agreed. In Eisner v. Macomber, the high court ruled that in­come de­rived only from pro­ceeds. A per­son needed to sell an as­set — stock, bond or build­ing — and reap some money be­fore it could be taxed.

Since then, the con­cept that in­come comes only from pro­ceeds — when gains are “realized” — has been the bedrock of the U. S. tax sys­tem. Wages are taxed. Cash div­i­dends are taxed. Gains from sell­ing as­sets are taxed. But if a tax­payer has­n’t sold any­thing, there is no in­come and there­fore no tax.

Contemporary crit­ics of Macomber were plen­ti­ful and pre­scient. Cordell Hull, the con­gress­man known as the “father” of the in­come tax, as­sailed the de­ci­sion, ac­cord­ing to scholar Marjorie Kornhauser. Hull pre­dicted that tax avoid­ance would be­come com­mon. The rul­ing opened a gap­ing loop­hole, Hull warned, al­low­ing in­dus­tri­al­ists to build a com­pany and bor­row against the stock to pay liv­ing ex­penses. Anyone could “live upon the value” of their com­pany stock “without sell­ing it, and of course, with­out ever pay­ing” tax, he said.

Hull’s pre­dic­tion would reach full flower only decades later, spurred by a se­ries of epochal eco­nomic, le­gal and cul­tural changes that be­gan to gather mo­men­tum in the 1970s. Antitrust en­forcers in­creas­ingly ac­cepted merg­ers and stopped try­ing to break up huge cor­po­ra­tions. For their part, com­pa­nies came to ob­sess over the value of their stock to the ex­clu­sion of nearly every­thing else. That helped give rise in the last 40 years to a se­ries of cor­po­rate mono­liths — be­gin­ning with Microsoft and Oracle in the 1980s and 1990s and con­tin­u­ing to Amazon, Google, Facebook and Apple to­day — that of­ten have con­cen­trated own­er­ship, high profit mar­gins and rich share prices. The win­ner-take-all econ­omy has cre­ated mod­ern for­tunes that by some mea­sures eclipse those of John D. Rockefeller, J. P. Morgan and Andrew Carnegie.

In the here and now, the ul­tra­wealthy use an ar­ray of tech­niques that aren’t avail­able to those of lesser means to get around the tax sys­tem.

Certainly, there are il­le­gal tax evaders among them, but it turns out bil­lion­aires don’t have to evade taxes ex­ot­i­cally and il­lic­itly — they can avoid them rou­tinely and legally.

Most Americans have to work to live. When they do, they get paid — and they get taxed. The fed­eral gov­ern­ment con­sid­ers al­most every dol­lar work­ers earn to be “income,” and em­ploy­ers take taxes di­rectly out of their pay­checks.

The Bezoses of the world have no need to be paid a salary. Bezos’ Amazon wages have long been set at the mid­dle-class level of around $80,000 a year.

For years, there’s been some­thing of a com­pe­ti­tion among elite founder-CEOs to go even lower. Steve Jobs took $1 in salary when he re­turned to Apple in the 1990s. Facebook’s Zuckerberg, Oracle’s Larry Ellison and Google’s Larry Page have all done the same.

Yet this is not the self-ef­fac­ing ges­ture it ap­pears to be: Wages are taxed at a high rate. The top 25 wealth­i­est Americans re­ported $158 mil­lion in wages in 2018, ac­cord­ing to the IRS data. That’s a mere 1.1% of what they listed on their tax forms as their to­tal re­ported in­come. The rest mostly came from div­i­dends and the sale of stock, bonds or other in­vest­ments, which are taxed at lower rates than wages.

Wealth and in­come work very dif­fer­ently for the ul­tra­wealthy than they do for most peo­ple. This rep­re­sents $100 of in­come for a typ­i­cal wage-earn­ing American house­hold. The fed­eral gov­ern­ment taxes in­come. A typ­i­cal American house­hold might pay some­thing like 14%.For many house­holds, the rest of their in­come goes to­ward ex­penses every year with maybe a small amount left over for sav­ings.A typ­i­cal house­hold might also own a home, which of­ten grows in value over time. Such as­set gains make up much of that house­hold’s wealth growth for any given year.This pro­por­tion of wealth growth vs. taxes has been typ­i­cal for mid­dle-aged Americans since the mid-2000s. However, it’s in­verted for the ul­tra­wealthy.This rep­re­sents $100 of in­come for Bezos. From 2006 to 2018, his taxes were about 21% of his in­come. But for peo­ple in this stratos­phere, in­come does­n’t re­ally mat­ter. Bezos’ Amazon shares have sky­rock­eted in value since 2006. In most years, his wealth grew far more than what he re­ported in in­come to the IRS.Between 2006 and 2018, Bezos’ wealth shot up by over $120 bil­lion, while he paid a mi­nus­cule pro­por­tion in taxes.

Meanwhile, typ­i­cal Americans his age paid more in taxes than they saw in wealth growth over that pe­riod.That is, for every $100 of wealth growth over that pe­riod, typ­i­cal Americans paid $160 in taxes.

Bezos paid only $1.09.

As Congressman Hull en­vi­sioned long ago, the ul­tra­wealthy typ­i­cally hold fast to shares in the com­pa­nies they’ve founded. Many ti­tans of the 21st cen­tury sit on moun­tains of what are known as un­re­al­ized gains, the to­tal size of which fluc­tu­ates each day as stock prices rise and fall. Of the $4.25 tril­lion in wealth held by U. S. bil­lion­aires, some $2.7 tril­lion is un­re­al­ized, ac­cord­ing to Emmanuel Saez and Gabriel Zucman, econ­o­mists at the University of California, Berkeley.

Buffett has fa­mously held onto his stock in the com­pany he founded, Berkshire Hathaway, the con­glom­er­ate that owns Geico, Duracell and sig­nif­i­cant stakes in American Express and Coca-Cola. That has al­lowed Buffett to largely avoid trans­form­ing his wealth into in­come. From 2015 through 2018, he re­ported an­nual in­come rang­ing from $11.6 mil­lion to $25 mil­lion. That may seem like a lot, but Buffett ranks as roughly the world’s sixth-rich­est per­son — he’s worth $110 bil­lion as of Forbes’ es­ti­mate in May 2021. At least 14,000 U. S. tax­pay­ers in 2015 re­ported higher in­come than him, ac­cord­ing to IRS data.

There’s also a sec­ond strat­egy Buffett re­lies on that min­i­mizes in­come, and there­fore, taxes. Berkshire does not pay a div­i­dend, the sum (a piece of the prof­its, in the­ory) that many com­pa­nies pay each quar­ter to those who own their stock. Buffett has al­ways ar­gued that it is bet­ter to use that money to find in­vest­ments for Berkshire that will fur­ther boost the value of shares held by him and other in­vestors. If Berkshire had of­fered any­where close to the av­er­age div­i­dend in re­cent years, Buffett would have re­ceived over $1 bil­lion in div­i­dend in­come and owed hun­dreds of mil­lions in taxes each year.

Many Silicon Valley and in­fotech com­pa­nies have em­u­lated Buffett’s model, es­chew­ing stock div­i­dends, at least for a time. In the 1980s and 1990s, com­pa­nies like Microsoft and Oracle of­fered share­hold­ers rock­et­ing growth and prof­its but did not pay div­i­dends. Google, Facebook, Amazon and Tesla do not pay div­i­dends.

In a de­tailed writ­ten re­sponse, Buffett de­fended his prac­tices but did not di­rectly ad­dress ProPublica’s true tax rate cal­cu­la­tion. “I con­tinue to be­lieve that the tax code should be changed sub­stan­tially,” he wrote, adding that he thought “huge dy­nas­tic wealth is not de­sir­able for our so­ci­ety.”

The de­ci­sion not to have Berkshire pay div­i­dends has been sup­ported by the vast ma­jor­ity of his share­hold­ers. “I can’t think of any large pub­lic com­pany with share­hold­ers so united in their rein­vest­ment be­liefs,” he wrote. And he pointed out that Berkshire Hathaway pays sig­nif­i­cant cor­po­rate taxes, ac­count­ing for 1.5% of to­tal U. S. cor­po­rate taxes in 2019 and 2020.

Buffett re­it­er­ated that he has be­gun giv­ing his enor­mous for­tune away and ul­ti­mately plans to do­nate 99.5% of it to char­ity. “I be­lieve the money will be of more use to so­ci­ety if dis­bursed phil­an­throp­i­cally than if it is used to slightly re­duce an ever-in­creas­ing U. S. debt,” he wrote.

So how do mega­bil­lion­aires pay their mega­bills while opt­ing for $1 salaries and hang­ing onto their stock? According to pub­lic doc­u­ments and ex­perts, the an­swer for some is bor­row­ing money — lots of it.

For reg­u­lar peo­ple, bor­row­ing money is of­ten some­thing done out of ne­ces­sity, say for a car or a home. But for the ul­tra­wealthy, it can be a way to ac­cess bil­lions with­out pro­duc­ing in­come, and thus, in­come tax.

The tax math pro­vides a clear in­cen­tive for this. If you own a com­pany and take a huge salary, you’ll pay 37% in in­come tax on the bulk of it. Sell stock and you’ll pay 20% in cap­i­tal gains tax — and lose some con­trol over your com­pany. But take out a loan, and these days you’ll pay a sin­gle-digit in­ter­est rate and no tax; since loans must be paid back, the IRS does­n’t con­sider them in­come. Banks typ­i­cally re­quire col­lat­eral, but the wealthy have plenty of that.

The vast ma­jor­ity of the ul­tra­wealthy’s loans do not ap­pear in the tax records ob­tained by ProPublica since they are gen­er­ally not dis­closed to the IRS. But oc­ca­sion­ally, the loans are dis­closed in se­cu­ri­ties fil­ings. In 2014, for ex­am­ple, Oracle re­vealed that its CEO, Ellison, had a credit line se­cured by about $10 bil­lion of his shares.

Last year Tesla re­ported that Musk had pledged some 92 mil­lion shares, which were worth about $57.7 bil­lion as of May 29, 2021, as col­lat­eral for per­sonal loans.

With the ex­cep­tion of one year when he ex­er­cised more than a bil­lion dol­lars in stock op­tions, Musk’s tax bills in no way re­flect the for­tune he has at his dis­posal. In 2015, he paid $68,000 in fed­eral in­come tax. In 2017, it was $65,000, and in 2018 he paid no fed­eral in­come tax. Between 2014 and 2018, he had a true tax rate of 3.27%.

The IRS records pro­vide glimpses of other mas­sive loans. In both 2016 and 2017, in­vestor Carl Icahn, who ranks as the 40th-wealthiest American on the Forbes list, paid no fed­eral in­come taxes de­spite re­port­ing a to­tal of $544 mil­lion in ad­justed gross in­come (which the IRS de­fines as earn­ings mi­nus items like stu­dent loan in­ter­est pay­ments or al­imony). Icahn had an out­stand­ing loan of $1.2 bil­lion with Bank of America among other loans, ac­cord­ing to the IRS data. It was tech­ni­cally a mort­gage be­cause it was se­cured, at least in part, by Manhattan pent­house apart­ments and other prop­er­ties.

Borrowing of­fers mul­ti­ple ben­e­fits to Icahn: He gets huge tranches of cash to tur­bocharge his in­vest­ment re­turns. Then he gets to deduct the in­ter­est from his taxes. In an in­ter­view, Icahn ex­plained that he re­ports the prof­its and losses of his busi­ness em­pire on his per­sonal taxes.

Icahn ac­knowl­edged that he is a “big bor­rower. I do bor­row a lot of money.” Asked if he takes out loans also to lower his tax bill, Icahn said: “No, not at all. My bor­row­ing is to win. I en­joy the com­pe­ti­tion. I en­joy win­ning.”

He said ad­justed gross in­come was a mis­lead­ing fig­ure for him. After tak­ing hun­dreds of mil­lions in de­duc­tions for the in­ter­est on his loans, he reg­is­tered tax losses for both years, he said. “I did­n’t make money be­cause, un­for­tu­nately for me, my in­ter­est was higher than my whole ad­justed in­come.”

Asked whether it was ap­pro­pri­ate that he had paid no in­come tax in cer­tain years, Icahn said he was per­plexed by the ques­tion. “There’s a rea­son it’s called in­come tax,” he said. “The rea­son is if, if you’re a poor per­son, a rich per­son, if you are Apple — if you have no in­come, you don’t pay taxes.” He added: “Do you think a rich per­son should pay taxes no mat­ter what? I don’t think it’s ger­mane. How can you ask me that ques­tion?”

Skeptics might ques­tion our analy­sis of how lit­tle the su­per­rich pay in taxes. For one, they might ar­gue that own­ers of com­pa­nies get hit by cor­po­rate taxes. They also might counter that some bil­lion­aires can­not avoid in­come — and there­fore taxes. And af­ter death, the com­mon un­der­stand­ing goes, there’s a fi­nal no-es­cape clause: the es­tate tax, which im­poses a steep tax rate on sums over $11.7 mil­lion.

ProPublica found that none of these fac­tors al­ter the fun­da­men­tal pic­ture.

Take cor­po­rate taxes. When com­pa­nies pay them, econ­o­mists say, these costs are passed on to the com­pa­nies’ own­ers, work­ers or even con­sumers. Models dif­fer, but they gen­er­ally as­sume big stock­hold­ers shoul­der the li­on’s share.

Corporate taxes, how­ever, have plum­meted in re­cent decades in what has be­come a golden age of cor­po­rate tax avoid­ance. By send­ing prof­its abroad, com­pa­nies like Google, Facebook, Microsoft and Apple have of­ten paid lit­tle or no U. S. cor­po­rate tax.

For some of the na­tion’s wealth­i­est peo­ple, par­tic­u­larly Bezos and Musk, adding cor­po­rate taxes to the equa­tion would hardly change any­thing at all. Other com­pa­nies like Berkshire Hathaway and Walmart do pay more, which means that for peo­ple like Buffett and the Waltons, cor­po­rate tax could add sig­nif­i­cantly to their bur­den.

It is also true that some bil­lion­aires don’t avoid taxes by avoid­ing in­comes. In 2018, nine of the 25 wealth­i­est Americans re­ported more than $500 mil­lion in in­come and three more than $1 bil­lion.

In such cases, though, the data ob­tained by ProPublica shows bil­lion­aires have a palette of tax-avoid­ance op­tions to off­set their gains us­ing cred­its, de­duc­tions (which can in­clude char­i­ta­ble do­na­tions) or losses to lower or even zero out their tax bills. Some own sports teams that of­fer such lu­cra­tive write-offs that own­ers of­ten end up pay­ing far lower tax rates than their mil­lion­aire play­ers. Others own com­mer­cial build­ings that steadily rise in value but nev­er­the­less can be used to throw off pa­per losses that off­set in­come.

Michael Bloomberg, the 13th-richest American on the Forbes list, of­ten re­ports high in­come be­cause the prof­its of the pri­vate com­pany he con­trols flow mainly to him.

In 2018, he re­ported in­come of $1.9 bil­lion. When it came to his taxes, Bloomberg man­aged to slash his bill by us­ing de­duc­tions made pos­si­ble by tax cuts passed dur­ing the Trump ad­min­is­tra­tion, char­i­ta­ble do­na­tions of $968.3 mil­lion and cred­its for hav­ing paid for­eign taxes. The end re­sult was that he paid $70.7 mil­lion in in­come tax on that al­most $2 bil­lion in in­come. That amounts to just a 3.7% con­ven­tional in­come tax rate. Between 2014 and 2018, Bloomberg had a true tax rate of 1.30%.

In a state­ment, a spokesman for Bloomberg noted that as a can­di­date, Bloomberg had ad­vo­cated for a va­ri­ety of tax hikes on the wealthy. “Mike Bloomberg pays the max­i­mum tax rate on all fed­eral, state, lo­cal and in­ter­na­tional tax­able in­come as pre­scribed by law,” the spokesman wrote. And he cited Bloomberg’s phil­an­thropic giv­ing, of­fer­ing the cal­cu­la­tion that “taken to­gether, what Mike gives to char­ity and pays in taxes amounts to ap­prox­i­mately 75% of his an­nual in­come.”

The state­ment also noted: “The re­lease of a pri­vate cit­i­zen’s tax re­turns should raise real pri­vacy con­cerns re­gard­less of po­lit­i­cal af­fil­i­a­tion or views on tax pol­icy. In the United States no pri­vate cit­i­zen should fear the il­le­gal re­lease of their taxes. We in­tend to use all le­gal means at our dis­posal to de­ter­mine which in­di­vid­ual or gov­ern­ment en­tity leaked these and en­sure that they are held re­spon­si­ble.”

Ultimately, af­ter decades of wealth ac­cu­mu­la­tion, the es­tate tax is sup­posed to serve as a back­stop, al­low­ing au­thor­i­ties an op­por­tu­nity to fi­nally take a piece of gi­ant for­tunes be­fore they pass to a new gen­er­a­tion. But in re­al­ity, prepar­ing for death is more like the last stage of tax avoid­ance for the ul­tra­wealthy.

University of Southern California tax law pro­fes­sor Edward McCaffery has sum­ma­rized the en­tire arc with the catch­phrase “buy, bor­row, die.”

In the sum­mer of 2009, I had an idea. My work­days were spent de­ploy­ing tons of cloud in­fra­struc­ture as Rackspace ac­quired Slicehost and we rushed to keep up with the con­stant de­mands for new in­fra­struc­ture from our cus­tomers. Working quickly led to chal­lenges with hard­ware and net­work­ing.

That was a time where the I Can Has Cheeseburger meme was red hot just about every­where. We needed a way to quickly check the pub­lic-fac­ing IP ad­dress of lots of back­end in­fra­struc­ture and our cus­tomers some­times needed that in­for­ma­tion, too.

It has al­ways been sim­ple site that re­turns your ex­ter­nal IP ad­dress and noth­ing else. No ads. No track­ers. No goofy re­quire­ments. Sure, if you looked hard enough, you could spot my at­tempt at jokes in the HTTP head­ers. Other than that, the site had a nar­row use case and started out mainly as an in­ter­nal tool.

Lifehacker’s Australian site fea­tured a post about ican­hazip.com and traf­fic went through the roof. My lit­tle Slicehost in­stance was in­un­dated and I quickly re­al­ized my Apache and Python setup was not go­ing to work long term.

I mi­grated to ng­inx and set up ng­inx to an­swer the re­quests by it­self and re­moved the Python scripts. The load on my small cloud in­stances came down quickly and I fig­ured the is­sue would be re­solved for a while.

Fast for­ward to 2015 and ican­hazip.com was serv­ing well over 100M re­quests per day. My cloud in­stances were get­ting crushed again, so I de­ployed more with round robin DNS. (My bud­get for ican­hazip is tiny.) Once that was over­loaded, I moved to Hetzner in Germany since I could get phys­i­cal servers there with bet­ter net­work cards along with un­lim­ited traf­fic.

The Hetzner servers were not ex­pen­sive, but I was pay­ing al­most $200/month to keep the site afloat and the site made no money. I met some peo­ple who worked for Packet.net (now Equinix Metal) and they of­fered to spon­sor the site. This brought my ex­penses down a lot and I de­ployed ican­hazip.com on one server at Packet.

The site soon crossed 500M re­quests per day and I de­ployed a sec­ond server. Traffic was still over­load­ing the servers. I did­n’t want to spin up more servers at Packet since they were al­ready help­ing me out quite a bit, so I de­cided to look un­der the hood of the ker­nel and make some im­prove­ments.

I learned more than I ever wanted to know about TCP back­logs, TCP/VLAN of­fload­ing, packet co­a­lesc­ing, IRQ bal­anc­ing, and a hun­dred other things. Some Red Hat net­work ex­perts helped me (before I joined the com­pany) to con­tinue tweak­ing. The site was run­ning well af­ter that and I was thank­ful for the sup­port.

Soon the site ex­ceeded 1B re­quests per day. I went back to the peo­ple who helped me at Red Hat and af­ter they looked through every­thing I sent, their re­sponse was sim­i­lar to the well-known line from Jaws: “You’re gonna need a big­ger boat.”

I lan­guished on Twitter about how things were get­ting out of con­trol and some­one from Cloudflare reached out to help. We con­fig­ured Cloudflare to fil­ter traf­fic in front of the site and this re­duced the im­pact from SYN floods, half-open TLS con­nec­tions, and other ma­li­cious clients that I could­n’t even see when I hosted the site on my own.

Later, Cloudflare launched work­ers and my con­tact there said I should con­sider it since my re­sponses were fairly sim­ple and the work­ers prod­uct would han­dle it well. The cost for work­ers looked hor­ri­fy­ing at my traf­fic lev­els, but the folks at Cloudflare of­fered to run my work­ers for free. Their new prod­uct was get­ting bucket loads of traf­fic and I was able to scale the site even fur­ther.

In 2021, the traf­fic I once re­ceived in a month started ar­riv­ing in 24 hours. The site went from 1B re­quests per day to 30-35B re­quests per day over a week­end. Almost all of that traf­fic came from sev­eral net­work blocks in China. Through all of this, Cloudflare’s work­ers kept chug­ging along and my re­sponse times barely moved. I was grate­ful for the help.

Cloudflare was do­ing a lot for me and I wanted to curb some of the ma­li­cious traf­fic to re­duce the load on their prod­ucts. I tried many times to reach out to the email ad­dresses on the Chinese ASNs and could­n’t make con­tact with any­one. Some for­mer cowork­ers told me that my chances of chang­ing that traf­fic or get­ting a re­sponse to an abuse re­quest was near zero.

There was a phase for a few years where mal­ware au­thors kept writ­ing mal­ware that would call out to ican­hazip.com to find out what they had in­fected. If they could find out the ex­ter­nal IP ad­dress of the sys­tems they had com­pro­mised, they could quickly as­sess the value of the tar­get. Upatre was the first, but many fol­lowed af­ter that.

I re­ceived emails from com­pa­nies, US state gov­ern­ments, and even US three let­ter agen­cies (TLA). Most were very friendly and they had lots of ques­tions. I ex­plained how the site worked and rarely heard a lot more com­mu­ni­ca­tion af­ter that.

Not all of the in­ter­ac­tions were pos­i­tive, how­ever. One CISO of a US state emailed me and threat­ened all kinds of le­gal ac­tion clam­ing that ican­hazip.com was in­volved in a mal­ware in­fec­tion in his state’s com­puter sys­tems. I tried re­peat­edly to ex­plain how the site worked and that the mal­ware au­thors were call­ing out to my site and I was pow­er­less to stop it.

Along the way, many of my host­ing providers re­ceived abuse emails about the site. I was us­ing a colo­ca­tion provider in Dallas for a while and the tech called me about an abuse email:

“So we got an­other abuse email for you,” they said.

“Yes. I did­n’t know that was run­ning here, I use it all the time!”

“You know what, I’ll write up a generic re­sponse and just start re­ply­ing to these id­iots for you from now on.”

There were many times where I saw a big traf­fic jump and I re­al­ized the traf­fic was com­ing from the same ASN, and likely from the same com­pany. I tried reach­ing out to these com­pa­nies when I saw it but they rarely ever replied. Some even be­came ex­tremely hos­tile to my emails.

The pas­sion left in my pas­sion pro­ject started shrink­ing by the day.

Seeing that over 90% of my traf­fic load was ma­li­cious and abu­sive was frus­trat­ing. Dealing with the abuse emails and com­plaints was worse.

I built the site orig­i­nally as just a util­ity for my team to use, but then it grew and it was fun to find new ways to han­dle the load with­out in­creas­ing cost. Seeing 2 petabytes of data flow­ing out per month and know­ing that al­most all of it was garbage pushed me over the line. I knew I needed a change.

I re­ceived a few small of­fers from var­i­ous small com­pa­nies ($5,000 or less), but I re­al­ized that the money was­n’t what I was af­ter. I wanted some­one to run the site and help the in­for­ma­tion se­cu­rity in­dus­try to stop some of these ma­li­cious ac­tors.

I’ve worked closely with my con­tacts at Cloudflare for a long time and they’ve al­ways jumped in to help me when some­thing was­n’t work­ing well. Their spon­sor­ship of ican­hazip.com has saved me tens of thou­sands of dol­lars per month. It has also man­aged to keep the site alive even un­der hor­rific traf­fic load.

I made this de­ci­sion be­cause Cloudflare has al­ways done right by me and they’ve pledged not only to keep the site run­ning, but to work through the traf­fic load and de­ter­mine how to stop the ma­li­cious traf­fic. Their co­or­di­nated work with other com­pa­nies to stop com­pro­mised ma­chines from de­grad­ing the per­for­mance of so many sites was a great sell­ing point for me.

If you’re cu­ri­ous, Cloudflare did pay me for the site. We made a deal for them to pay me $8.03; the cost of the do­main reg­is­tra­tion. The goal was never to make money from the site (although I did get about $75 in to­tal do­na­tions from 2009 to 2021). The goal was to pro­vide a ser­vice to the in­ter­net. Cloudflare has helped me do that and they will con­tinue to do it as the new own­ers and op­er­a­tors of ican­hazip.com.

I’d like to thank every­one who has helped me with ican­hazip.com along the way. Tons of peo­ple stepped up to help with host­ing and server op­ti­miza­tion. Hosting providers helped me field an on­slaught of abuse re­quests and DDoS at­tacks. Most of all, thanks to the peo­ple who used the site and helped to pro­mote it.

Stripe Tax lets you cal­cu­late and col­lect sales tax, VAT, and GST with one line of code or the click of a but­ton. Know where to reg­is­ter, au­to­mat­i­cally col­lect the right amount of tax, and ac­cess the re­ports you need to file re­turns.

Internet busi­nesses are re­quired to col­lect taxes in over 130 coun­tries and in most US states. Staying com­pli­ant can be chal­leng­ing, es­pe­cially as your busi­ness scales. Tax rules and rates change con­stantly and vary based on what and where you sell. If you ig­nore these com­plex­i­ties, you risk pay­ing penal­ties and in­ter­est on top of un­col­lected taxes. We built Stripe Tax to sim­plify tax com­pli­ance, so you can fo­cus on grow­ing your busi­ness.

On av­er­age, there is a 30% in­ter­est penalty on past-due sales tax in the US.

European reg­is­tra­tion thresh­olds vary from €0 in Spain to £85,000 in the UK.

Over 130 coun­tries are tax­ing dig­i­tal goods and more coun­tries are plan­ning to im­pose taxes on dig­i­tal goods.

Non-EU busi­nesses sell­ing dig­i­tal goods and ser­vices into the EU must col­lect taxes from their very first sale.

If you don’t col­lect sales tax from your cus­tomers, you’ll have to pay past-due taxes out of your own pocket.

SaaS sales are 100% tax­able in New York, 80% in Texas, and non-tax­able in California.

In 2021, the United States will in­tro­duce around 400 rate changes.

In Europe, busi­nesses sell­ing dig­i­tal prod­ucts gen­er­ally need to col­lect two pieces of non-con­flict­ing ev­i­dence to val­i­date a cus­tomer’s lo­ca­tion.

SaaS is only tax­able in some US states, and some­times only B2B or B2C SaaS is taxed.

Over 80% of star­tups on Stripe sell into more than 20 states and coun­tries.

In 2021, over 20 coun­tries will change their VAT rates for cer­tain prod­ucts.

72% of on­line busi­nesses see com­pli­ance as a bar­rier to in­ter­na­tional growth.

US sales tax reg­is­tra­tion thresh­olds for re­mote sell­ers vary from $100k in sales or 200 trans­ac­tions in most states to $500k in CA, NY, and TX.

Collect taxes around the world by adding a sin­gle line of code to your ex­ist­ing in­te­gra­tion or click­ing a but­ton in the Dashboard.

Know where to reg­is­ter

Stripe Tax mon­i­tors your trans­ac­tions in each mar­ket, so you know when and where you need to reg­is­ter to col­lect taxes.

Stripe Tax de­ter­mines your cus­tomer’s pre­cise lo­ca­tion and al­ways cal­cu­lates and col­lects the right amount of tax. It also val­i­dates the EU VAT ID num­ber when needed.

Speed up fil­ing and re­mit­tance with com­pre­hen­sive re­ports for each mar­ket in which you’re reg­is­tered.

Start col­lect­ing taxes by adding one line of code to your ex­ist­ing Stripe in­te­gra­tion.

If you’re us­ing one of Stripe’s no-code prod­ucts, such as Invoicing, you can col­lect taxes with the click of a but­ton in the Dashboard.

Know where to reg­is­ter

Stripe Tax is op­ti­mized for tax cal­cu­la­tion in all US states and 30+ coun­tries. Understand where you need to col­lect taxes and ac­ti­vate tax col­lec­tion in a new mar­ket in sec­onds. In Europe, Stripe Tax sup­ports both coun­try and VAT OSS reg­is­tra­tions.

​​Locations where you are cur­rently col­lect­ing tax with Stripe.

Compare your vol­ume to lo­cal state or coun­try tax thresh­olds and add where you are reg­is­tered.

​​Once added, Stripe will cal­cu­late tax for cus­tomers lo­cated in Idaho on any pay­ment with au­to­matic tax en­abled.

We use a rolling ba­sis to cal­cu­late tax and in­clude all trans­ac­tions re­gard­less of el­i­gi­bil­ity.

Are you cur­rently reg­is­tered to col­lect sales taxes in Idaho?

You must be reg­is­tered in Idaho in or­der to col­lect and re­mit sales tax.

Always cal­cu­late and col­lect the cor­rect amount of tax, no mat­ter what or where you sell. Stripe Tax sup­ports tax col­lec­tion on hun­dreds of prod­ucts and ser­vices and keeps tax rules and rates up to date.

Reduce check­out fric­tion by cal­cu­lat­ing taxes based on the avail­able lo­ca­tion in­for­ma­tion and show taxes in the most fa­mil­iar way to your cus­tomers.

Stripe Tax helps you col­lect the tax iden­ti­fi­ca­tion num­ber from B2B cus­tomers. You can au­to­mat­i­cally val­i­date VAT IDs for European cus­tomers and ap­ply a re­verse charge or zero VAT rate when nec­es­sary.

Save time when rec­on­cil­ing thou­sands of trans­ac­tions. Stripe re­ports sur­face all the in­for­ma­tion you need for each fil­ing lo­ca­tion, so you can eas­ily file and re­mit taxes on your own, with your ac­coun­tant, or with a pre­ferred part­ner.

We no longer have to keep up with the tax reg­u­la­tions in every US state and are now ex­pand­ing faster than ever.

Thanks to Stripe Tax, we avoided six months of en­gi­neer­ing work and we never have to think about taxes again.

We switched to Stripe from a mer­chant of record provider be­cause we wanted com­plete con­trol over our check­out ex­pe­ri­ence and pric­ing.

Our cus­tomers can’t wait to say ‘goodbye’ to man­u­ally cal­cu­lat­ing their taxes. Integrating Stripe Tax into Kajabi Checkout will make their lives a whole lot eas­ier.

Learn more about global tax com­pli­ance and how to use Stripe Tax.

Understanding US sales tax and eco­nomic nexus: A guide for star­tups

TaxJar guide to tax fil­ing in the US

Stripe Tax is cur­rently in in­vite only. If you’d like to get ac­cess, please pro­vide your in­for­ma­tion and we’ll con­tact you.

Thank you for your in­ter­est in Stripe Tax! We’ll be in touch soon.

Ohio Attorney General Dave Yost has filed a law­suit ask­ing a court to de­clare Google a pub­lic util­ity that should be reg­u­lated as such.

“Google uses its dom­i­nance of in­ter­net search to steer Ohioans to Google’s own prod­ucts – that’s dis­crim­i­na­tory and anti-com­pet­i­tive,” Yost said in a state­ment. “When you own the rail­road or the elec­tric com­pany or the cell­phone tower, you have to treat every­one the same and give every­body ac­cess.”

The law­suit, filed in Delaware County Common Pleas Court, is be­lieved to be the first of its kind, Yost’s of­fice said.

Specifically, the law­suit seeks a le­gal de­c­la­ra­tion that Google is a “common car­rier,” like phone, gas and elec­tric com­pa­nies, which must pro­vide its ser­vices to any­one will­ing to pay its fee. In lieu of a fee, Yost ar­gues in the com­plaint, Google col­lects user data that is mon­e­tized pri­mar­ily by sell­ing tar­geted ad­ver­tise­ments.

Yost ar­gues Google should there­fore not be able to pri­or­i­tize place­ment of its own prod­ucts, ser­vices and web­sites on its search re­sults pages.

Google dis­ad­van­tages busi­nesses and con­sumers by rank­ing its own ser­vices above com­peti­tors, Yost ar­gues in the com­plaint. For ex­am­ple, if some­one searches for a flight, Google Flights is the first re­sult that pops up af­ter ad­ver­tise­ments, not other search sites such as Expedia and Travelocity.

The law­suit does not seek mon­e­tary dam­ages.

In a state­ment, Google said Google Search is de­signed to pro­vide peo­ple with the most rel­e­vant and help­ful re­sults and the Ohio law­suit would make it harder for small busi­nesses to con­nect di­rectly with cus­tomers.

“Ohioans sim­ply don’t want the gov­ern­ment to run Google like a gas or elec­tric com­pany,” the com­pany said in a state­ment. “This law­suit has no ba­sis in fact or law and we’ll de­fend our­selves against it in court.”

The law­suit is­n’t the first Ohio has filed against Google. In December, Ohio joined 37 other state at­tor­neys gen­eral ac­cus­ing Google of vi­o­lat­ing anti-trust laws. That com­plaint also claimed Google un­fairly gives pref­er­ence to its own sites and ser­vices over com­peti­tors in search re­sults.

Jackie Borchardt is the Bureau Chief for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other af­fil­i­ated news or­ga­ni­za­tions across Ohio.

ALiEn is an ar­ti­fi­cial life sim­u­la­tion pro­gram based on a spe­cial­ized physics and ren­der­ing en­gine in CUDA. It is de­signed to sim­u­late dig­i­tal or­gan­isms em­bed­ded in ar­ti­fi­cial ecosys­tems and to mimic con­di­tions for (pre-)biotic evo­lu­tion.