Jeff Bezos’ Radical Zero-Tax Proposal Could Be a Lifeline for First-Time Buyers—but There’s a Catch

One of America’s most notorious billionaires says he’s in favor of tax breaks for those who need it most: the working class.  

Jeff Bezos, founder of Amazon and the fourth-richest man in the world, spoke last week with CNBC on the state of the American economy, the AI boom, and most notably, wealth inequality. 

The highlight of his conversation on "Squawk Box" was when he told CNBC’s Andrew Ross Sorkin that he believes low earners in the U.S. shouldn’t pay taxes.

"One percent of taxpayers pay 40% of all the tax revenue; the bottom half pay only 3%. I think it should be zero," Bezos said in the interview on May 20. "There's something very powerful about zero."

Powerful is perhaps an understatement, given that, if this were the case, the amount of money low-income taxpayers could save would be enough to cover critical housing costs, like insurance, maintenance, and in some cases, a down payment. 

And some politicians are working to make this a reality. 

The tax acts

The idea of offering tax relief to Americans struggling the most has become a focus in Washington ahead of the midterm elections.

Democratic Sen. Cory Booker of New Jersey recently introduced a plan to almost triple the federal standard deduction to $75,000 for married couples and $37,500 for single filers.

"This tax cut would immediately put more money in your pocket every month to deal with the high price of everyday expenses, an unexpected emergency, or to plan for the future," Booker said in a news release.

Elsewhere, Democratic Sen. Chris Van Hollen of Maryland has co-sponsored a plan to exempt up to $92,000 from federal income taxes.

"Far too many Americans are working hard for their paychecks but still having trouble making ends meet," Van Hollen stated in a press release about the plan.

These proposals shift the tax burden toward the highest earners and corporations, such as Bezos and Amazon.

In response, Bezos encouraged the conversation to focus on those who make far less than he does. 

"Some people talk about making the tax system more progressive," Bezos continued on CNBC. "How about we start by having the nurse in Queens not pay taxes?

"Why is a nurse in Queens who makes $75,000 a year paying more than $1,000 a month in taxes? That's $1,000 a month that could help with rent, groceries, or anything.

"If people want me to pay more billions, then let's have that debate, but don't pretend that that's going to solve the problem," he added. "You could double the taxes I pay, and it's not going to help that teacher in Queens. I promise you."

Breaking down the math

Let’s consider this hypothetical nurse. Let’s assume she’s a 40-year-old single woman working in Queens, NY, and she makes $75,000.

According to The Housing Mismatch report from Realtor.com® and the National Association of Realtors®, buyers earning about $75,000 can afford only 23% of active listings nationwide in 2026. 

In a balanced market, they would be able to access about 44%. That gap equals roughly 311,000 missing listings priced below their max purchase point, estimated at $261,000, according to the report.

“The U.S. housing market continues to face a structural mismatch between the homes available for sale and what buyers can afford,” Nadia Evangelou, NAR principal economist and director of real estate research, explains. 

“Too much of the inventory available today remains concentrated at higher price points, leaving a shortage of options for entry-level and middle-income buyers.”

Now, making $75,000 puts our hypothetical nurse in the 22% tax bracket, meaning she would have paid $7,949 in federal taxes in 2025. (That’s just federal taxes. If we factor in FICA, state, and local New York taxes as well, this nurse from Queens paid roughly $19,271 in taxes last year.)

If this nurse were able to save nearly $8,000 a year by not paying federal taxes, in three years, she would have saved enough for the current median down payment in the U.S., which stands at $23,400 in the first quarter of 2026. 

Given that saving for a down payment remains one of the toughest barriers for renters who want to make the leap to homeownership, this would be welcome news for a first-time homebuyer. 

“Even though one might argue that low-income households already pay very little in income tax because they fall into a low tax bracket, the truth is they often feel the tax bite more because so much of their income is going to fixed costs,” says Bobbi Rebell, CFP and personal finance expert at CardRates.com. 

They have less wiggle room in their budgets. Eliminating their earned income taxes would have very little impact on the overall income tax that the government collects, relative to the positive impact on those citizens’ quality of life

A reality check 

If federal taxes were eliminated for low-income households, there’s no question that the money could be put to good use. It’s more a question of whether the average American could afford to sock it away consistently, or would need that money for cost-of-living expenses. 

Everyday items like gas and groceries are incredibly expensive, and while renting remains cheaper than owning in many places, rates are still increasing in most metros. 

But it’s where you live in the country that will define how much of an impact that money will make on getting you closer to your homeownership dreams. 

For our hypothetical nurse, the current median listing price of a home in Queens is $635,000. That would mean a $127,000 down payment for a buyer looking to put down 20% and avoid PMI. 

Even if she were able to pocket her federal income taxes every year in full, she would still need to work almost 16 years to save enough for a down payment—or tap additional savings to make up the shortfall. 

Additionally, while injecting thousands of dollars of extra cash into every low- and middle-income buyer's pocket would be welcome, without a simultaneous increase in the housing supply, one could argue that this flood of first-time buyers would just drive prices up again.