Ruphus -> RE: Taxes, Corruption (May 30 2011 21:31:40)
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Equalling me with the country I am residing and fancying me smoking something, shows how the idea irks you that you could be unconsciously noticing things only within moderate frames. Brisk dismiss might not make a potential basis of questioning the possibility at all, however. But I am glad that common double accounting, donation and bribe exist only occasionally in your great new world. Me could be crazy with being aware of a fundamental circumstance like appropriated labour surplus value, which as tremendous factor would be rendering pretty much everything from demographic issues to tax levy etc. negligible items anway ... Or maybe you. What my supposed lunatic state is concerned, I must ascertain that unfortunately the very most of my estimations of national and global corresponding status quo and developing tendencies over the past decades did realize. Many of them appearing just as off to the people like now my statement that there exists no democracy sounding to you. A number of friends who deemed some of the observations as impossible, had to grant me the cup of coffee or whatever symbolic object we had bet on, years afterwards. Anyway, I don´t really mind about who I or you are supposed to be. I like what I was allowed to read from you, thinking that you are a nice guy. But what counts to me is the matter; not so much who of us could be more cognitively vulnerable or smoking the pipe. I made a quick search on the topic of US tax paying on official playground. I am sure that there can also be found much more on tax avoiding routines, and likely even explorations on falsified statistics, but I am not going to frisk the internet with an anemic internet connection. quote:
The Institute on Taxation and Economic Policy found that that the wealthiest 1 percent of Massachusetts residents paid only 4.8 percent of their income in taxes, while 80 percent of middle-and low-income residents paid more than 10 percent of their income. In other words, the burden of financing public services rested primarily on those who could least afford it. A second component of tax unfairness is that public services are funded largely by the personal income tax. Some defend the top 1 percent of Americans, who pay about a third of all income taxes. But this does not tell the whole story. Consider tax shelters. Taxpayers in the top 1 percent receive much of their income not from wages but from investments. Capital gains are taxed at a much lower marginal rate. The tax rules on corporate, capital gains, dividend, estate, and interest taxes primarily benefit the economic elites, not working people. Working people pay taxes on a bigger share of their earnings than the rich. They’re hit more by Social Security taxes, excise levies, and tariffs. Payroll taxes also unfairly gouge middle- and low-income folks. The employer’s share of the Social Security tax is actually a levy on wages, since employers reduce wages to compensate for that tax. And when property taxes and fuel taxes are included in the equation, it is clear that our tax system is painfully unfair to middle- and low-income people. http://labornotes.org/2010/10/who-pays-taxes --------- In the year 2000, at the height of the last economic boom and before the most recent round of tax cuts were enacted, IRS data shows that the richest 400 taxpayers paid 27% of their income in federal, state, and local taxes. On average, these 400 taxpayers each had taxable income of $151 million. All other taxpayers had average taxable income of only $34,600, and yet their tax burden was 40%. Journalists Donald Barlett and James Steele point out that this inequity results from a political system that has been put up for auction: “Over the last three decades, America’s elected officials have turned a reasonably fair tax code into one crafted for the benefit of those who give the largest campaign contributions, enjoy the greatest access, hire the most influential lobbyists, or otherwise exercise power beyond that enjoyed by average citizens.” Corporations have been profiting in Washington, too. In 1965, individual taxpayers paid 66% of all US income taxes, and corporations paid about a third. But by 2000, the corporate share had dropped to 18%, just about half what it used to be. A recent Congressional study reported that 63% of US corporations paid no income taxes at all in 2000. Six in ten American corporations reported no tax liability for the five years from 1996 through 2000, even though corporate profits were growing at record-breaking levels during that period. BACK TO TOP The Tax Code Fuels Wealth Concentration Not since 1929 have so few people controlled so much of the wealth in our country. In his new book, Perfectly Legal, New York Times reporter David Cay Johnston reports that between 1970 and 2000 average income for the top 13,400 households in America increased from $3.6 million to nearly $24 million. That’s a staggering 538% increase. At the same time, the average income for 90% of US households actually fell from $27,060 to $27,035. These 13,400 households account for just .01% of the population, according to Johnston. Income distribution in the United States is the most unequal among all developed nations, according to OECD data. Prosperity that was supposed to ‘trickle down’ has instead flowed straight uphill. Between 1990 and 2000, the average CEO pay went up by 571% and corporate profits grew by 93% while worker pay barely stayed ahead of inflation. BACK TO TOP The Inherent Unfairness of Income Taxes Investors pay lower income taxes than workers. Roughly 85% of stock market wealth is owned by 10% of American households and there is no logical reason why income from those investments (called “capital gains” by the tax code) should be taxed less than income from work. But the top tax rate on wages is 35% while the top tax rate on capital gains is only 15%. This rate structure gives the richest households enormous advantages without producing any obvious social benefit. If we reversed the favor – and let workers pay lower tax rates than investors – then working families might have greater opportunity to accumulate wealth. Historians point out that more people moved up into the middle class during the 1950s and 1960s – and American wealth was much less concentrated – when the top income tax rate was 91%, impacting salaries and capital gains equally. According to IRS data for 2000, most American households earned 70% of their income from work and only 10% from capital gains. But in the highest tax brackets, the situation is completely reversed. Eliminating the special rate for capital gains taxes would reverse a major inequity in the current income tax. And we could reduce rampant under-reporting of capital gains income by instituting automatic withholding, just as we do with salaries. BACK TO TOP The Estate Tax Gets a Death Sentence The Federal Estate tax is the only tax that directly combats the problem of excessive wealth accumulation. Public investments provide American entrepreneurs with a literate work force, court-enforced property laws, and a stable business environment, among many other benefits. The estate tax recaptures some of those investments and makes them available to future generations. Oftentimes, the assets in an estate have never been taxed. In 2000, only 52,000 estates out of over 2 million deaths that year were large enough to pay estate taxes . Even though the heirs of rich families kept 75% to 80% of their family’s fortunes, the tax generated vast sums for the government. According to the analysts at United for a Fair Economy, “In 2000, the estate tax alone raised more than double the total amount of federal income taxes paid by the bottom half of American taxpayers.” And yet the tax is slated for extinction by President Bush. Analysts across the political spectrum recommend keeping the estate tax. And dozens of wealthy individuals are actively working to reform but retain the estate tax, including Bill Gates Senior who is father to the world's richest man, and Warren Buffett, who owns the world's second-largest private fortune. Gates has recommended earmarking the proceeds for public investments, like education, that create broad-based economic opportunities. BACK TO TOP Social Security Taxes Subsidize Income Tax Cuts The government collects more Social Security taxes than it needs for current benefits, and yet we face enormous shortfalls when the Baby Boomers retire. David Cay Johnston reports, “From 1984 to 2002, the government collected $1.7 trillion more in Social Security taxes than the agency paid out in benefits to retirees, widows, orphans, and in disability benefits. Instead of investing that surplus to pay for the looming retirement of baby boomers, as promised, that money was used to pay the ordinary bills of the government, making up for the taxes that were no longer being paid by the rich because of the 1981 tax cuts created by Ronald Reagan. The only way that the taxes Americans have paid in advance for their Social Security benefits can be turned into retirement checks is by a new round of taxes.” Because their money is gone now, “People have lost not just what they paid, but the opportunity to invest the money for themselves.” Three quarters of US households pay more Social Security taxes than income taxes. Employers deduct the tax straight out of paychecks and send the money directly to the Federal government. A middle-income household pays 9.6% of its income in social security taxes, while households in the top 1% of income pay less than 2%. Social Security tax rates have increased since 1980, while income tax rates have been cut repeatedly. During the last presidential campaign, both candidates promised not to spend the Social Security surplus. And candidate Bush specifically promised not to use the surplus to finance tax cuts. But as Johnston reports, that’s just what he did: “In June 2001, President Bush signed his tax cut package that lowered rates on the rich, eliminated the estate tax for one year, and gave more than half of the $1.3 trillion tax cut to the richest 1% of taxpayers. It was a tax cut that also promised years of budget deficits . . . and more raiding of Social Security so that the middle class could subsidize the rich.” The Social Security tax only applies to income up to $87,000 and people earning above that ceiling get a break from paying the tax. Refunding excess Social Security payments now will not repair the damages already done. But we could fix the Social Security system by taxing all salaries equally – even salaries over $87,000 that are currently exempt from the tax – and by investing the funds in real assets, not government IOUs. BACK TO TOP States Raise Taxes to Compensate for Federal Cuts When Congress cuts Federal income and estate taxes it ends up sending less money to the states, and each state has to make up the lost revenue somehow. And most states have responded by increasing their sales and excise taxes, or by cutting essential programs, or both. Many states have also cut taxes for their best-off residents. As a result, people in every state are losing libraries, childcare centers and fire stations, while paying bigger bus fares, bridge tolls and sales taxes. The federal income tax which made up 11% of GDP in 1965, now consumes under 9% of our national income. Total taxes increased from 25% of GDP to 29% during those years, according to data from the Office of Management and Budgets (OMB), but the burden has shifted from the national government to the states. States rely on regressive taxes, like sales taxes, car taxes and property taxes. Because they impact everyone, regardless of ability to pay, these taxes take a bigger bite from modest incomes than huge fortunes, even if the rich folks own very expensive property or buy more expensive goods. Because state and local taxes are regressive, as one study recently reported, “Only four states require their best-off citizens to pay as much of their incomes in taxes as middle-income families have to pay.” Therefore, when we shift taxes from the national government to the states, we are once again shifting the burden from wealthy people to poor and middle class people. The Bush budget for 2005 cuts another $6 billion in federal support to states, and yet public investment in education, job training, child care, the environment, energy, and research is already less than half what it was during the 1960s and 1970s. Raising taxes and collecting more revenue at the national level – and then passing the resources back to the states – would greatly increase tax equity in America. BACK TO TOP Fraud Costs More Than Medicare “If tax dodging were a business, it would be the nation’s largest corporation,” said journalists Barlett and Steele. The current $311 billion tax gap is the equivalent of the total income taxes paid annually by all individuals and families earning less than $75,000. If we simply collected taxes that cheaters are withholding from the system, we would have enough to give a free college education to every child in America, or to provide health insurance for small business employees, or to cut social security taxes in half. It amounts to more money than we spent for Medicare in 2003, almost as much as the Defense budget, and almost enough to pay last year’s deficit. Large corporations and rich individuals have greater incentive and many more opportunities to cheat – by understating income or shipping money to foreign tax havens, by inflating deductions or claiming expenses that never existed, or by speculating in the stock market and then not reporting the gains. People with a job or a pension have no similar opportunity to lie about income or evade taxes. Unfortunately, as their biggest donors turned into the biggest tax cheaters, politicians have reacted by handcuffing the tax police. Congress has consistently under-funded IRS enforcement efforts and computer upgrades that would catch more tax dodgers. Congressional misdirection of IRS resources is even worse than their failure to properly fund the agency. Statistics cited by Johnston show that the IRS polices the poor more than the rich, even though the rich have greater opportunity and incentive to cheat. Corporate tax dodgers get off easy, too: in 2002, the IRS assessed just 22 penalties against corporations, a decline of more than 99% from 1993 when 2,400 penalties were imposed. Audits of corporate returns fell sharply from 26 per 1000 returns in 1997, to only 7 audits per 1000 returns in 2003. The independent IRS Oversight Board recommends beefing up the IRS enforcement budget, targeting the biggest cheaters first (not the smaller ones), and modernizing or automating more of the IRS enforcement systems. Others have also suggested de-criminalizing tax fraud, arguing that we can catch more people – and recapture more revenue – if the penalty is a fine instead of jail. BACK TO TOP Corporate Tax Incentives Fail to Deliver Corporate tax incentives have been used in the past to encourage socially valuable behavior, like locating a factory in an inner city, for example, or cleaning up pollution levels. But with corporate taxes already at their lowest levels in history, there is very little room left for further incentives. In 2000, only 8% (of more than 27 million American businesses that filed tax returns) were subject to the corporate income tax. Current tax law favors the wrong kind of corporate behavior. Global companies can park assets overseas, for example, and evade taxes that smaller, local companies still have to pay. Corporations can also justify excessive CEO compensation and executive perks (like private jets) because the tax code makes those expenses tax deductible. Economists argue that the current tax code encourages waste and fraudulent accounting. Some claim that expensive US income taxes give advantages to foreign corporations who pay less tax in their home countries, but the evidence does not support this claim. Total federal and state corporate income taxes in the US were less than the average for other developed countries. Corporate taxes that were common in earlier generations have quietly dropped from public discussion. War profits taxes, for example, were once widely used to offset the costs of war, to share the sacrifices fairly among foot soldiers and financiers, and to prevent outright profiteering. Special windfall profit taxes were levied against companies in the past when an unfair business advantage resulted from unusual circumstances. For instance, when the Arab oil cartel (OPEC) hiked the world oil prices in 1973, the US government initially responded by setting price controls on American crude oil, but then switched to a windfall profits tax. The proceeds were earmarked for energy conservation research. Both candidates talk about corporate tax incentives, but before we consider additional tax breaks for corporations, we should evaluate the effectiveness of existing programs. Are we keeping jobs where we want them? Are we encouraging openness with shareholders and employees? Are we rewarding efficiency? Many analysts recommend reducing corporate tax evasion, closing loopholes, and increasing economic efficiency by making corporations pay taxes on the income they report to stockholders, not a separate figure cooked up for the IRS. Another recommendation: boost IRS audit rates for companies that use aggressive tax avoidance tactics. http://www.askquestions.org/articles/taxes/ --------------------- Still on a national basis, large corporations pay less than 8% of the revenue and they get all the funding and breaks. http://my.firedoglake.com/perris/2009/03/07/the-middle-class-actually-pays-progressively-more-in-taxes-then-the-wealthy/ --- Traditionally, the top 1% earners earn around 15% of all individual income and pay around 35% of total income tax. The top 10% earn about 37% of all individual income and pay 67% of taxes, while the next 10% earn about 10% of all income and pay about 15% of all income taxes. The remaining 80% earn about 48% of all income and pay 18% of income tax. in fact, the lowest 10% earners earn about 4% of all income and get paid 1% of federal taxes in addition. These figures suggest that the burden falls largely on the very high income earners, and it is they only who pay most of the taxes and therefore run the economy. The reality is very different. The theory of tax incidence suggests that actually the burden of taxation is very often shared by those who do not actually pay it themselves. Let us begin with social security taxes. Even if they are paid by the employer, the burden falls largely on the employees, as the employer can pay only as much in the end. In fact if you add social security payments, all the above figures will change. Then top 1% pay only 23% of tax, top 10% pay less than 50% and the poorest 10% pay 1% of all federal tax (out of their share of 4% of all income). Take into account other minor taxes, situation will look more different, but wait, the real climax is yet to come. Every penny paid by the rich also falls in some way on the poor not directly paying the tax. Let us begin now with corporate tax. It is not paid by companies, because in reality, companies do not exist - they are just a fiction. The actual tax is paid by people like you and me. It is not even paid by the shareholders, because the tax is levied on all companies, so all companies accommodate it in their pricing and it is ultimately borne by you and me and all others who buy that company's products. http://www.helium.com/items/1583593-who-bear-the-tax-burden-tax-burden-who-pays-maximum-tax-income-tax-economics-of-taxation-tax - Lets say I decide to open Company A that mines mineral X and my unit cost is $10 per. I then sell to my off-shore Company B (probably only on paper) for $9 per unit and therefore report a loss. No tax. Then my offshore Company B sells it back to my domestic distribution firm, Company C, for $110 per unit which then sells it at $100 per unit. Again no tax because Company C also is operating at a loss (of $10 per unit). I am paying no tax even though bottom line is I am making $90 per unit (and probably all before my units of mineral X have left the shipping dock at Company A). But if I play my cards right, I can get extra subsidies and money from the government for things like job creation, offset my "losses", offset my costs of exploration for more mineral X, perhaps get some cash for keeping the environment clean, etc. Nothing really new here. http://www.sciencechatforum.com/viewtopic.php?f=53&t=17692 ----- While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less. In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back. Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009. ... The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company’s executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion. http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=1&hp - Wal-Mart pays very little taxes as well and they are the single biggest contributor to the Republican Party so take your pick of which party is more in bed with the corporations.Probably evenly split. http://www.amazon.com/forum/politics/Tx2G5AIFTA4TKN9/176-2353716-1660610 Ruphus
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