Amazon founder Jeff Bezos is advocating for a dramatic restructuring of the US federal tax system, proposing that the bottom half of American taxpayers should pay zero federal income tax instead of the current 3% of total collections. Speaking on CNBC from his Blue Origin rocket facility in Florida, Bezos used the powerful example of a nurse in Queens earning $75,000 annually, stating 'There's something very powerful about zero.' He characterized the situation as 'a tale of two economies' where some people are doing really well, but many others are struggling. As reported by CNBC, Bezos questioned why a nurse making $75,000 annually should pay more than $1,000 a month in taxes, noting that 'That's $1,000 a month that could help with rent, groceries, or anything.' He later used the example of an Amazon worker in New York making around $50,000 a year, calling the idea of taxing them 'absurd' and asking 'Why are you taxing them so much? I really am puzzled by this.' Bezos made it clear that he's not calling for a reduction in income tax for lower-income families. 'I don't want to reduce it, I want to eliminate it,' he told CNBC's Andrew Ross Sorkin. 'I think there's something very powerful about zero. Zero is a better number than $1.'
According to data compiled by the Tax Foundation using latest IRS statistics, the bottom half of taxpayers reported adjusted gross income of approximately $54,000 in 2023 and paid an average of $913 in federal income taxes, resulting in an effective tax rate of 3.7%. By comparison, the top 1% earned at least $676,000 and paid an average federal income tax rate of 26.3%. The average income tax rate in 2023 was 14.1%, according to Tax Foundation analysis. There were more than 76 million households in the bottom half in 2023, and when counting refundable tax credits, the bottom 40% of taxpayers already pay no income tax on average, as noted by Tax Foundation vice president Erica York. However, when accounting for all federal, state and local taxes, the top 1% account for 24% of total tax revenue, only slightly higher than their share of reported income at 20%, according to an ITEP analysis in 2024.
Bezos argued that eliminating taxes for lower-income Americans could ease financial strain and encourage entrepreneurship, stating that 'The government can give people who are struggling today a better chance at entrepreneurial success by eliminating their tax bill.' He referenced the potential for creating the next Steve Jobs, suggesting that removing tax barriers could unlock entrepreneurial potential. According to the Bureau of Labor Statistics, the median annual wage for a registered nurse across New York, Newark, and Jersey City is roughly $120,000, while vocational nurses making $75,000 generally have lower levels of education. Bezos has repeatedly underscored the value he says Amazon has created for society, estimating in his last shareholder letter as CEO that Amazon created $301 billion in total value for shareholders, employees, third-party sellers, and customers in 2020.
Bezos' comments come as several lawmakers are pushing for tax relief for working Americans amid renewed political tensions. Sen. Corey Booker has proposed the 'Keep Your Pay Act,' which would exempt the first $75,000 of income from federal income tax for many households filing joint returns, with proportional tax relief for single filers and heads of households. As reported by CNBC International, Booker stated that 'No income tax on the first $75,000 families earn would be a game changer for working people,' adding that this tax cut would immediately put more money in households' pockets to deal with high living expenses. The proposal represents a significant shift in tax policy discussions, moving beyond traditional tax reform to complete elimination for lower-income earners. Meanwhile, several Democratic states are exploring higher taxes on the wealthy, creating a contrasting political environment for tax reform discussions. Last month, proponents of a proposal to tax California billionaires obtained enough signatures for the measure to appear on the November ballot, imposing a one-time 5% tax on Californians with net worths of $1 billion or more.
Bezos' proposal comes as Democrats push for new wealth taxes while Republicans include tax breaks for the wealthy in their spending bills. Sen. Elizabeth Warren introduced the Ultra-Millionaire Tax Act of 2026, calling for an annual 2% tax on households and trusts worth more than $50 million, plus an extra 1% tax on billionaires' wealth, along with a 40% 'exit tax' on individuals worth more than $50 million who renounce citizenship. The renewed push for wealth taxes comes as the government faces mounting pressure to address income inequality, with the top 1% currently paying about 40% of federal income taxes according to the Tax Foundation. Meanwhile, the Republicans' 'big, beautiful' tax and spending bill included tax breaks that critics say predominantly help the wealthiest households, creating a stark political divide over tax policy priorities.
