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Money in Politics

Why billionaires can pay little income tax, who funds campaigns, what lobbying and interest groups spend, and what research says about their influence.

Last reviewed: October 2026. Figures change; each one below names its source and date.

Two claims come up constantly: that billionaires don't pay taxes, and that big donors and corporations run the country. Both contain real facts, and both are often exaggerated. Here is what the records show, how each side reads them, and where you can look up the money yourself.

On this page: Do billionaires pay taxes? · Who funds campaigns · Lobbying · Interest groups, including AIPAC · Does money buy policy? · Follow the money yourself

Do billionaires pay taxes?

The short answer

Yes, in total they pay large amounts, but often very little compared with how fast their wealth grows. The reason is legal: the U.S. income tax taxes income, and a rise in the value of stock or property isn't income until the asset is sold.

What the leaked and official data show

  • ProPublica (2021), using leaked IRS records, found the 25 richest Americans' wealth grew by about $401 billion from 2014 to 2018 while they paid about $13.6 billion in federal income tax, a "true tax rate" of 3.4% of their wealth growth. Warren Buffett's was 0.1%. Jeff Bezos paid no federal income tax in 2007 and 2011, and Elon Musk none in 2018.
  • The White House Council of Economic Advisers and OMB (2021) estimated that the 400 wealthiest families paid an average federal individual income tax rate of 8.2% from 2010 to 2018 when their unsold gains are counted as income.

How it works

  • Gains are taxed only when sold. Founders often hold their company's stock for decades and take small salaries.
  • "Buy, borrow, die." Instead of selling, the wealthy can borrow against their assets for spending money. Loans aren't income, so they aren't taxed.
  • Stepped-up basis. When someone dies, their heirs' cost basis resets to the asset's value at death, so the gains built up during the owner's lifetime are never taxed as income. (Very large estates may owe estate tax instead; from 2026 the exemption is $15 million per person.)
  • Lower rates on investment income. Long-term capital gains and qualified dividends are taxed at a top rate of 20% plus a 3.8% surtax, compared with 37% on wages. Managers of investment funds can also use the "carried interest" rule to have part of their pay taxed at capital-gains rates.
  • Trusts and foundations. Trusts, charitable foundations and donor-advised funds can move wealth to heirs or causes with less tax.

The other side of the ledger

  • On a conventional basis, top earners pay most federal income tax. In tax year 2022, the top 1% of earners paid 40.4% of all federal income taxes while earning 22.4% of income, at an average rate of 26.1%. The bottom half paid 3.0% (Tax Foundation, from IRS data). Note that "top 1% of earners" isn't the same group as billionaires, many of whom report little income.
  • Unsold gains aren't income under standard accounting, and they can vanish if markets fall. Critics such as the Tax Foundation call the 3.4% and 8.2% figures misleading for that reason.
  • Counting corporate taxes paid by the companies they own raises the total. Economists Emmanuel Saez and Gabriel Zucman, who favor a wealth tax, put the 400 richest Americans' total tax rate at about 23%. Other economists, including Gerald Auten and David Splinter, estimate even higher rates at the very top.

Proposed fixes and the objections

  • A billionaire minimum tax (proposed by President Biden) would set a 25% minimum on income including unsold gains for households worth over $100 million.
  • A wealth tax (proposed by Senators Elizabeth Warren and Bernie Sanders) would tax a small share of very large fortunes each year.
  • Other options: taxing gains at death or when assets are used as loan collateral, and more IRS enforcement.
  • The objections: private assets are hard to value, owners may have to sell businesses to pay, and the wealthy may move money or leave. The Supreme Court's 2024 ruling in Moore v. United States upheld a narrow tax but left open whether unsold gains can be taxed. In Europe, a dozen OECD countries had net wealth taxes in 1990; only a few, such as Norway, Spain and Switzerland, still do, and many repealed them for raising little money.

Who funds campaigns

  • Federal elections in 2024 cost about $16 billion, by OpenSecrets' estimate.
  • About 300 billionaires and their families gave roughly $3 billion, nearly one-fifth of the total, according to a New York Times analysis. In 2024 their giving leaned heavily Republican, about $5 to $1.
  • The largest donors included Elon Musk (more than $250 million for Donald Trump and allied groups), and Miriam Adelson and Timothy Mellon (each more than $100 million).
  • Big money flows to both parties. Democratic candidates also rely on billionaires and large donors, and in 2020 Michael Bloomberg spent about $1 billion of his own money on a presidential bid that won only American Samoa. Democrats have also been especially reliant on small online donors.

How the rules changed

The Supreme Court's Citizens United decision (2010) and a related appeals-court ruling allowed corporations, unions and individuals to spend unlimited amounts on independent ads, which created super PACs. Direct donations to candidates are still capped. Super PACs must disclose their donors, but nonprofit "social welfare" groups that also run political ads don't, which is why critics call that spending "dark money."

Lobbying

  • Organizations reported a record $4.4 billion in federal lobbying in 2024 (OpenSecrets).
  • The biggest single spenders were the National Association of Realtors (over $86 million) and the U.S. Chamber of Commerce ($76.2 million). Pharmaceutical and health-industry groups were the top sector, at about $384 million. Large tech companies such as Meta, Amazon and Alphabet were also among the top spenders.
  • Lobbying isn't only corporate. Labor unions, environmental groups, gun-rights and gun-safety groups, AARP, and groups on both sides of abortion all lobby too. It's legal and protected by the First Amendment's right to petition the government, and lobbyists must register and report what they spend.

Interest groups, including AIPAC

Single-issue groups increasingly spend in primaries, where turnout is low and a few million dollars can decide a race. Three examples from 2024:

  • AIPAC (the American Israel Public Affairs Committee) is a U.S. lobbying group, founded in 1959, that advocates for the U.S.–Israel relationship. For decades it didn't donate to candidates; in 2021 it created a PAC and a super PAC, the United Democracy Project (UDP). It endorses members of both parties. By August 2024, UDP had raised about $68.4 million and spent about $56 million. That included nearly $9.9 million against Rep. Jamaal Bowman and $4.8 million for his opponent in New York, and over $8.5 million in the Missouri race against Rep. Cori Bush (FactCheck.org). Both incumbents lost. Critics say it uses its money to remove critics of Israel's government. Supporters say it's doing what every advocacy group does: backing allies and opposing opponents. On the same issue, groups such as J Street back candidates who favor a different approach.
  • Fairshake, a crypto-industry super PAC funded mainly by Coinbase, Ripple and Andreessen Horowitz founders, raised over $202 million by mid-2024, more than any other super PAC at that point. It spent about $10 million against Rep. Katie Porter's California Senate bid.
  • Unions, the NRA, abortion-rights and anti-abortion groups, and business groups such as the Club for Growth also spend heavily, on both sides of the aisle.

Does money buy policy?

  • The case that it does: In an influential 2014 study, political scientists Martin Gilens and Benjamin Page analyzed nearly 1,800 policy questions. They found that when the preferences of affluent Americans and organized interest groups differed from those of average Americans, policy usually followed the affluent, and average citizens had "little or no independent influence."
  • The pushback: Other researchers found that the affluent and the middle class want the same thing on most issues, so average Americans often get their way even if they aren't the ones driving it (Peter Enns, 2015). Others found the study's model explains only a small share of outcomes (Omar Bashir, 2015). Gilens and Page responded that their core finding stands.
  • What else we know: Donors give mostly to likely winners and incumbents, so money and success go together for reasons other than buying votes. Big spending often fails, as Bloomberg's 2020 campaign showed. But money matters most where the public isn't paying attention: low-turnout primaries and narrow provisions in long bills.

Follow the money yourself

  • FEC.gov: official federal campaign finance filings
  • OpenSecrets: nonpartisan tracking of donors, PACs, super PACs and lobbying
  • FollowTheMoney.org: state-level campaign money
  • Senate lobbying disclosures: official lobbying reports
  • Look up your own members of Congress and see who funds them, then compare their votes with what those donors want.

See also the big policy debates, how to build a balanced news diet and political myths and facts.

Sources

Spotted an error or a newer figure? Write to us at [email protected] and we'll correct it.

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