The recent wedding of Jeff Bezos and Lauren Sánchez in Venice set off quite the furor over tax avoidance. An enormous banner in the Piazza San Marco put the matter plainly: “If you can rent Venice for your wedding, you can pay more tax.”

That banner prompted a commentary from Phoebe Liu at Forbes on how much tax Bezos does indeed pay. For the year 2024, according to a Forbes estimate, Bezos paid about $2.7 billion in tax on the gain from his sale of $13.6 billion worth of Amazon stock. That stock — the heart of the Bezos fortune since he started Amazon in 1994 — originally cost him no more than $13,600.

In other words, some 99.9999 percent of the proceeds of the Bezos stock sale last year counted as a taxable long-term capital gain. This Forbes tax estimate took into account charitable contributions of Amazon stock that Bezos likely claimed as a 2024 deduction.

The Bezos $2.7 billion income tax payment, Liu noted in her Forbes analysis, represented only 4.5 percent of the 2024 increase in his personal net worth — approximately $60 billion — and barely more than 1 percent of his overall $230 billion net worth.

Props to Liu for her reporting. She has helped shine a light on how undertaxed America’s billionaires have become even in years when they pay billions of dollars in tax.

But I wonder: What would the reporting have looked like if Bezos had sold all $200 billion or so of his Amazon stock? Would we be reading that he paid $40 billion in tax — a sum equal to over 20 percent of his net worth — with a suggestion that he paid his fair tax share? Yeah, we probably would. Not necessarily from Liu, but apologists for the ultra-rich would have been all over it.

Which raises the question: Should our view of how much the ultra-rich pay in tax turn on how much of their investments — as a share of their total wealth — they sell in a given year or on how much their overall wealth happens to increase in that specific year?

Bezos, for example, has sold over $600 million of Amazon shares so far this year, with the apparent intention to sell a bunch more. The value of Amazon shares this year has not increased much. He may well pay more in tax on those sales than his wealth increase for the entire year. Would that mean he’s overtaxed? Of course not.

So how can we better understand billionaire tax avoidance? By focusing only on billionaire taxable transactions, without reference to irrelevant data such as their total wealth or the annual increase in their total wealth.

Consider just the Amazon shares Bezos sold last year, shares worth an astounding one million times what he had paid for them 30 years earlier. The average annual increase in the value of those shares, when you do the math, turns out to be 58.5 percent, an incredible performance.

Now assume Bezos paid the full 23.8 percent tax rate on his gains, without taking those charitable contributions into consideration. That would leave him with $10.36 billion after tax, a total that translates to an after-tax average annual rate of increase of 57.1 percent and a reduction of less than 2.5 percent from his pre-tax annual rate of increase.