The left-leaning news site ProPublica recently published an exposé on the tax filings of America’s wealthiest people. Their reporting was enabled by a massive leak of individual symbols taxpayer data by an unidentified IRS employee, which divulged returns from thousands of the nation’s richest people. Acknowledging that disclosure of such information is illegal, ProPublica claims that exposing the tax strategies of the rich is nonetheless ethical journalism because “the public interest in an informed debate outweighs privacy considerations.”

The disclosure that billionaires like Jeff Bezos, Elon Musk, Michael Bloomberg, Carl Icahn, and George Soros all had years where they paid zero income tax is titillating stuff. This reporting provoked a wave of populist outrage and re-ignited the most potent and durable debate in American politics. Who should pay taxes? How much, and on what basis? And is there any meaningful distinction between what is legal and what is ethical?

ProPublica’s editorial bias is notably progressive. Their first article in this series repeatedly compares how much the billionaires paid in taxes to how much their estimated net worth (based on reporting by Forbes) grew during the same period. Using this calculus, ProPublica concludes that the 25 richest Americans paid a “true” tax rate of only 3.4% for the years 2014 to 2018. During those years, their collective net worth increased an estimated $401 billion, while their federal income tax payments aggregated to $13.6 billion.

The problem is, that isn’t how the U.S. tax code works.

When the 16th Amendment was ratified in 1913 it gave the federal government the authority to “lay and collect taxes on incomes, from whatever source derived.” In 1920 the Supreme Court addressed the most fundamental question of this new system: what constitutes income? In Eisner v. Macomber the court ruled that a person must receive proceeds from selling an asset before it could be taxed as income.

What were the billionaires’ tax rates on income, as opposed to the fictional wealth tax ProPublica emphasized? On average, the 25 wealthiest paid 15.8% of their income between 2014 and 2018. Admittedly, that’s still a modest rate compared to many Americans.

ProPublica did not find illegal activity. The techniques that allow the .001% to drastically reduce their tax bills were approved by Congress and signed into law by Presidents from both parties. Those loopholes include deductions for state and local taxes, charitable donations, mortgage and other loan interest, and an enormous list of credits that offset taxable income to compensate for business and investment losses.

In 1986 I worked as an intern for the U.S. Senate Committee on Finance as it assembled the last major tax simplification legislation approved by Congress. All summer long I watched as corporate executives, trade groups, and lobbyists paraded through D.C. seeking to preserve their favorite tax loopholes. That experience was revelatory, even if it drove me away from a career in government service.

From my brief tenure in the “swamp” I learned that tax breaks are the primary currency of American politics. Politicians touch taxes far more often than they vote on social legislation or trade agreements. Every time they do, they have an opportunity to monetize their vote with campaign donations, PAC donations, or quid pro quo accommodations.

Those political incentives are the first reason why the U.S. tax code is so complex. With 435 representatives and 100 senators slipping changes into the code every year to benefit their constituents, the loopholes add up. The second reason is that tax lawyers and accountants also have a financial interest in promoting complexity.

How complex is it? The CCH Standard Federal Tax Reporter, which compiles tax legislation, IRS guidance, and relevant case law, comes in a 25-volume binder set with roughly 74,000 pages. There is a reason why the IRS rarely audits billionaires. The rich have more resources to master tax code complexity than the agency does.

Among the more interesting reactions to ProPublica’s tax expose is an opinion piece in The Atlantic written by Abigail Disney, daughter of Roy Disney. In her own description, Ms. Disney took her inherited wealth for granted as a young adult and only later in life developed a more egalitarian perspective. She also acknowledges being taught to “use every tool at your disposal within the law, especially through estate planning, to keep as much of that money as possible out of the hands of government bureaucrats who will only misuse it.”

Eventually Ms. Disney began to equate the dynamics of wealth hoarding with those of addiction. The catalyst for her transformation was the embrace of a more ethical perspective about money. From that vantage point she noted, “What’s shocking about the ProPublica report is not just that the tax bills are so low, but that these billionaires can live with themselves.”