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US super-rich 'pay almost no income tax

Discussion in 'BBS Hangout: Debate & Discussion' started by ChrisBosh, Jun 9, 2021 at 1:45 PM.

  1. tinman

    tinman Contributing Member
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  2. txtony

    txtony Member

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    Focusing on that isn’t so useful because as you stated, it’s volatile. This is really a problem though -

    ProPublica said the richest 25 Americans pay less in tax - an average of 15.8% of adjusted gross income - than most mainstream US workers.”
     
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  3. durvasa

    durvasa Contributing Member
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    I’d like to understand which deductions they claim before concluding if it’s a problem. The super rich just have more ways to do things with their income that make it non-taxable, and some of that is not necessarily a bad thing. Like giving vast amounts of it to charity.
     
  4. fchowd0311

    fchowd0311 Contributing Member

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    The issue is that people who earn through capital gains millions of dollars are paying the same tax rate as someone who earned 50 grand through income and in many of those cases the person who earned 50 grand probably put in more hours and labor into their work than the person who got millions through capital gains.
     
    #24 fchowd0311, Jun 10, 2021 at 7:52 AM
    Last edited: Jun 10, 2021 at 9:41 AM
  5. Major

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    Agree with this part - I'm a huge advocate of raising Cap Gains rates and using that to lower baseline income tax rates across the board (making it revenue neutral, and harder for the GOP to advocate against since it's not a tax hike and would lower taxes for most people).
     
  6. NewRoxFan

    NewRoxFan Contributing Member

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  7. edwardc

    edwardc Member

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    Well the rich have abused them to the max.
     
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  8. mdrowe00

    mdrowe00 Member
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    ...and this is why it was always a bit of an overstep to consider Mittens as anything like a "principled" elected official.

    On average, he might not be all that bad a person. But his hand has been in the proverbial cookie jar for about as long as anybody else's.
    Him being a step up from the Donald is like a slug being a step-up from pond scum.

    The love of money's the problem. Has been since the very beginning.
    ...and it looks like it will finally be the end of all of us pretty soon...
     
  9. rocketsjudoka

    rocketsjudoka Contributing Member

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    I've become a convert for a flatter and simpler tax code, one that treats all income the same and has far fewer deductions.
     
  10. TheresTheDagger

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    I wonder how much Corn Pop pays in taxes?
     
  11. txtony

    txtony Member

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    I'm kind of there with you, but only if we also have a robust support system.
     
  12. rocketsjudoka

    rocketsjudoka Contributing Member

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    Yes we need better and stricter enforcement of tax collections. One of the things I'm most disappointed with current debates is that Republicans are rejecting proposals to pay for new infrastructure by increasing tax enforcement.

    We always here from Republicans that we should be enforcing the laws on the books yet in this case they are against even enforcing current laws.
     
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  13. txtony

    txtony Member

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    I have come to the conclusion that the #1 priority of MM or GOP leadership is for Biden to fail (shouldn't be a surprise). Then things start to make sense.

    Increasing tax enforcement means a lot of cheaters (there are lots of them, from small to large) would fear the dreaded IRS audit. GOP understands that's one good way to weaken support for the popular infrastructure plans.
     
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  14. rocketsjudoka

    rocketsjudoka Contributing Member

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    On subject:
    https://www.nytimes.com/2021/06/09/...l?action=click&module=Opinion&pgtype=Homepage
    We Ran the Treasury Department. This Is How to Fix Tax Evasion.
    By Timothy F. Geithner, Jacob J. Lew, Henry M. Paulson Jr., Robert E. Rubin and Lawrence H. Summers

    Six hundred billion dollars per year, and growing: That is two-thirds of total nondefense discretionary spending by the federal government, about what is spent on defense operations, military personnel and procurement, and more than mandatory federal expenditures on Medicaid. It’s also approximately how much unpaid taxes cost the U.S. government. This must change, and it can.

    The five of us served as Treasury secretary under three presidents, both Republican and Democrat, representing 17 years of experience at the helm of the department. While we are not in agreement on many areas of tax policy, we believe in the importance of strengthening the tax system to do more to collect legally owed but uncollected taxes — which, left unaddressed, could total $7 trillion over the next decade. We are convinced by the strength of our experiences that more can be done to pursue evasion in the ways outlined by President Biden’s recent proposal to increase the resources and information available to the I.R.S.

    Over the past 25 years, I.R.S. resources have been steadily cut, with the ratio of enforcement funding to returns filed falling by around 50 percent. Today, the I.R.S. has fewer auditors than at any time since World War II. Faced with resource constraints, it is no surprise that the agency is not able to appropriately focus scrutiny on complex returns, where noncompliance is greatest. Of about four million partnership returns filed in 2018, the I.R.S. audited only 140 of them. It did not pursue 300 high-income taxpayers who together cost the agency $10 billion in unpaid taxes over a three-year period when they failed to even file returns. And audit rates of those in the top 1 percent have fallen most staggeringly over the course of the past decade, such that rural counties in the Deep South have some of the highest rates of examination in the country.

    The proposal also calls for increasing the information the I.R.S. has at its disposal. When income can be verified by third-party reports — like wages, salaries, pension and unemployment income — misreporting rates are under 5 percent. But misreporting exceeds 50 percent for certain types of business income, like rental and proprietorship income. The current tax system thus benefits certain high earners who accrue most of their income from sources where misreporting is common.

    We are convinced that better information-reporting requirements can be designed that will permit significant increases in revenue collection without imposing any burden at all on taxpayers and imposing no significant increase in regulatory burdens across the economy. Relying on financial institutions to relay some basic information about account holders is a sensible way forward. With better information for the I.R.S., voluntary compliance will rise through deterrence as potential tax evaders realize there is a risk to evasion.

    The Treasury’s Office of Tax Analysis estimates that these initiatives will generate $700 billion over the 10-year budget window. But this proposal, if anything, is modest. Former I.R.S. Commissioner Charles Rossotti, who served under Presidents Bill Clinton and George W. Bush, and Fred Forman, an experienced technology executive and former I.R.S. associate commissioner for modernization, estimate $1.6 trillion could be collected within a decade from efforts to close the gap between taxes owed and collected. This is because they include, for example, modernizing outdated technological systems and improving taxpayer experiences with the I.R.S. — elements of the administration’s proposal whose revenue impact is not accounted for.

    Rightly, the Biden approach recognizes that compliance can be improved by making it easier for taxpayers to avoid honest errors, by the I.R.S.’s being able to pick up the phone when taxpayers call with questions and by increasing oversight of tax preparers to ensure their competency.

    The president’s proposal calls for significant investment in the I.R.S., with $80 billion over a decade in primarily mandatory funding to provide multiyear resources to support necessary work force, service and information technology advancements. In particular, the agency’s siloed and antiquated I.T. is a major source of risk, causing server crashes and leaving the I.R.S. susceptible to cyberattacks. It is imperative that the information technology undergirding our tax system keep pace with the information technology driving our economy.

    We know firsthand the challenge dedicated I.R.S. employees face each day as they work to administer tax laws while hamstrung by inadequate funding and support. Reasonable people can disagree on the magnitude of particular tax rate increases. But on this issue, all should agree, including members of Congress of both parties: Giving the I.R.S. the tools it needs to improve compliance will raise significant revenue and create a fairer, more efficient system of tax administration.
     
  15. deb4rockets

    deb4rockets Hope is on the horizon in the NBA draft.
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    Old article, but good example of why the tax loops are making billionaires out of the rich, and further dividing the wealth gap like never seen before.

    Zoom paid $0 in federal taxes on $664 million in pandemic profits, mostly by paying executives stock options
    Tyler Sonnemaker Mar 22, 2021, 7:10 PM

    https://www.businessinsider.com/zoom-paid-no-federal-income-taxes-600-million-pandemic-2021-3

    Even if you hate Bernie, you can't deny what he says isn't true.

    "If you paid $14.99 a month for a Zoom Pro membership, you paid more to Zoom than it paid in federal income taxes even as it made $660 million in profits last year – a 4,000 percent increase since 2019. Yes. It's time to end a rigged tax code that benefits the wealthy & powerful," Sen. Bernie Sanders tweeted.
     
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  16. glynch

    glynch Contributing Member

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  17. larsv8

    larsv8 Contributing Member

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    I have often toyed with this policy idea in my head.

    Employee Compensation for a company say anyone in the 0-80% percentile of earners in that company, that comp should be double tax deductible for the company. Any executives or top 20% compensation should not be added back in.

    Tremendous incentive to hire middle class workers, disincentive to pay outrageous ceo salaries.
     
  18. Major

    Major Member

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    This is actually a good example of the problem with these kinds of articles that focus on one-off or one-year specifics. If the company pays stock options to the executives, then the executives have to pay the taxes on that money instead of the company. It doesn't really avoid taxes - it just shifts who's paying them.
     
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  19. real_egal

    real_egal Contributing Member

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    FLAT TAX. NO DEDUCTION.

    Yes, I know it's over-simplified. But there has to be a goal, to create a standardized tax system as simple as possible. TRY really hard NOT to "deal with" special cases or make exceptions, because that's normally how loopholes were formed in the first place.

    We need to have a clear vision before planning, that is to treat everyone equally and every penny earned equally. Starting at 30K or whatever number they come up with, flat 15, 18, or 20 percent or whatever number they fight to conclude.

    A lot of known loopholes like trust and capital gain on options can be eliminated, and I guess Bezo won't be borrowing from banks for own expenses then. In a flat tax America, 80%+ tax experts and congress men/women specialized in tax will have to find another job, maybe in service sector or hard labor. We will need less illegal immigrants to fill those vacancies. Average tax paying residents can have more trust in the government. One stone, several bad birds.

    However, that's just internet ranting. The tax system is too big to correct. More people will be earning more by arguing how to fix it and creating more patches therefore more loopholes. Nothing will change.
     
  20. deb4rockets

    deb4rockets Hope is on the horizon in the NBA draft.
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    Compensation for American chief executives increased by 940% from 1978 to 2018, while pay for the average worker rose by a miserable 12% over the same 40-year period.

    https://www.latimes.com/business/story/2019-08-19/column-trickle-down-is-a-lie
     

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