Millionaires who owe no federal income tax

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    May 09, 2011 3:31 PM GMT
    Are the rich really paying their fair share?


    http://money.cnn.com/2011/05/09/pf/taxes/millionaires_income_tax/index.htm?hpt=T2
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    May 09, 2011 4:16 PM GMT
    Ah... you beat me to it. icon_lol.gif
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    May 09, 2011 4:30 PM GMT
    I doubt the rich have ever really paid their fair share !!!!

    There's one more thing about the very rich, there are very few cases of the exceptionally wealthy individual or corporation, that have gained such wealth without doing so at the expense of some misstreated masses of poor people. Its just a fact of life in a capitolistic society.

    Note too that the best economies have come about when policies have been enacted for saefety net programs and for fair living wages for the masses, when policies lean toward the rich there are recessions, because the masses have no money to spend to keep the economy moving.

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    May 09, 2011 4:43 PM GMT
    No, but it's good motivation to become rich!
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    May 09, 2011 4:44 PM GMT
    southbeach1500 saidOf course the rich aren't paying their fair share, when 51% of households in the USA pay ZERO Federal income tax, ANYONE paying Federal income tax is OVERPAYING and hence, the amount they are paying is NOT their "fair share" at all.


    Did you read the article? There are plenty of people across the income distribution levels that aren't paying an federal income tax.
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    May 09, 2011 5:20 PM GMT
    This is where I differ from some of the reflexively "liberal" posters.

    Rich people have much greater marginal tax rates and therefore do a whole helluva lot more tax planning.

    A tax system that tries to be fair, but creates a lot of special rules for special circumstances, can always be gamed to an extent. So the choice is, a simple tax system that is hard to game but ends up being unfair in a lot of individual circumstances, or a really complex system that tries to be fair in a lot of particular applications but can be gamed. We have the latter.

    If you follow the rules and owe less tax more power to you.
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    May 09, 2011 6:34 PM GMT
    showme saidThis is where I differ from some of the reflexively "liberal" posters.

    Rich people have much greater marginal tax rates and therefore do a whole helluva lot more tax planning.

    A tax system that tries to be fair, but creates a lot of special rules for special circumstances, can always be gamed to an extent. So the choice is, a simple tax system that is hard to game but ends up being unfair in a lot of individual circumstances, or a really complex system that tries to be fair in a lot of particular applications but can be gamed. We have the latter.

    If you follow the rules and owe less tax more power to you.


    I don't disagree about the tax planning angle. Our system is too complex but a lot of that has to do corporations and the wealthy lobbying for tax code changes that benefit them.

    Further to the point, though, for billionaires to scream about a marginal rate of 35% when they only pay 10% or 5% or nothing is just bullshit. It proves that it's not about "fairness" but about greed.
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    May 09, 2011 6:35 PM GMT
    5ebastian saidconsidering its a progressive tax system (the more you make the more tax you pay)... they are paying MORE than their fair share IMHO. there are exceptions, but on the grand scheme of things it stifles the free-market enterprise when you are penalized for succeeding. sounds count-intuitive. you know what would be fair? A flat tax. That way EVERYONE pays the same in relative terms without the need for this bureaucratic nonsense.


    That's fiction.
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    May 09, 2011 6:35 PM GMT
    5ebastian saidconsidering its a progressive tax system (the more you make the more tax you pay)... they are paying MORE than their fair share IMHO. there are exceptions, but on the grand scheme of things it stifles the free-market enterprise when you are penalized for succeeding. sounds count-intuitive. you know what would be fair? A flat tax. That way EVERYONE pays the same in relative terms without the need for this bureaucratic nonsense.


    In my view, a tax system without some degree of progressiveness would be extremely unfair, in a society with such wide differences in wealth and earnings.
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    May 09, 2011 7:07 PM GMT
    Liberals this, corporations and wealthy that. Blecch.

    Anyway, look at the article. It mentions a few reasons why this happens:

    1. Very conservative investments focused primarily on tax-exempt munis. Would we like to revoke the tax exemption for municipal obligations? Perhaps a policy discussion worth having, but investing in munis is hardly evil.

    2. Taxable securities gains offset by taxable securities losses. Nothing nefarious about that, if you're taxed when you realize income than realization of losses ought to offset the taxable income.

    3. Tax credits derived from paying foreign tax on foreign investments. Our tax system, complex as it is, aims for fairness. If you have to pay foreign tax on an investment, why shouldn't you get an equivalent credit on your US tax return?

    I am not a tax lawyer but none of these sounds particularly controversial to me.

    4. Charitable deductions, either from selling property to a charity at below market value and getting a deduction for the difference, or donating appreciated stock and getting a deduction for the full market value.

    I can see how this one could be gamed, particularly for assets that don't have a readily determinable market value. But the general principle makes sense, unless we want to remove the deduction for charitable donations. Maybe we want to consider that as a policy matter but I figure that many charities (including those beloved by us in the center/left) would object, to put it mildly.

    In other words, this seems to me to be much ado about nothing.
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    May 09, 2011 7:32 PM GMT
    5ebastian said
    realifedad said I doubt the rich have ever really paid their fair share !!!!

    There's one more thing about the very rich, there are very few cases of the exceptionally wealthy individual or corporation, that have gained such wealth without doing so at the expense of some misstreated masses of poor people. Its just a fact of life in a capitolistic society.

    Note too that the best economies have come about when policies have been enacted for saefety net programs and for fair living wages for the masses, when policies lean toward the rich there are recessions, because the masses have no money to spend to keep the economy moving.



    consumption is what fueled "The Great Recession". So your saying that its prudent that everyone buys 3 cars, even though they only need 1 spend spend spend beyond their means. Maybe thats the reason why other countries have advanced whereas everyone knows consumption-fueled "recoveries" are just bubbles waiting to be popped.


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    You missed the whole point, the masses need things to make their lives better, so when they have a living wage job they will spend it for things they need. That everyday spending by great numbers keeps the economy moving.

    What you said about 3 cars, spending beyond their means and your talk about consumption fueled recoveries are just bubbles waiting to be popped, went over the top of what I'm talking about.

    What I am referring to is the everyday living type spending, the natural result of which is a vibrant moving economy, (nothing artificial/consumption fueled)its what happened in the 60's when most everyone had a living wage job and could own a home, have two cars paid for and not be deep in debt like things are today.
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    May 09, 2011 10:41 PM GMT
    catfish5 saidAre the rich really paying their fair share?
    Of course not! That's why I want to get rich. icon_twisted.gif
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    May 09, 2011 11:40 PM GMT
    5ebastian saidI see what you are saying. The US is the richest country in the world, but in order for that to be a reality.. maybe some people aren't suppose to own a home. Its not always economically feasible, in order for there to be haves, there has to be have nots. Unless you want to live in communist Cuba, its contradictory. On paper you can say how great that would be, but in real life history has shown it does not work. Some people shouldnt be taking out 30 year mortgages. I empathize whole-heartedly that people are struggling but blame Clinton and Bush Jr for that. This crash wasnt caused because of a lack of hindsight. I also dont think that all corporations succeeded by exploiting the general public, thats an over-simplification.


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    Well we've come toghether pretty much on this.

    I agree, there are a lot of people who have no business owning a home with even a 20 year mortgage, let alone a 30 year mortgage. There's a good share of the poor who are just plain lazy when it comes to caring for a home, renting is the thing for them. An even larger share of the poor though have had some pretty rough knocks in life and are ill equiped to rise above their situation, for these the safety nets put into policy is their only saviour.

    I was Director of a Housing and Redevelopment Authority (retired now) and was in charge of a home ownership program, where we built houses for Low Income Families. One of my most successful tactics of weeding out families who were capable or incapable of taking on home ownership was, letting the head of household do all the leg work that I could shift onto them. I did not prod the applicants to get things done, because my theory was if they want it and are serious, they will work for it, if not, I'll let them fall out of the program. Usually that weeded out the lazy ones in and of itself. The ones who got right to work bringing in signed verifications, and correcting any credit problems and volunteered certain portions of the work for their home, (a certain amount was required ) rarely failed at being home ownership capable, and to this day still have those homes.

    Well back to the real subject, You mentioned corps. Walmart is a good example, They are extremely wealthy, Much of that comes at the expense of extremely low paid workers, We Americans benefit, but one day those workers will wake up like the American workers did and organize for a living wage, then our Walmart purchases will be going up in price and Walmart may not do as well as they have up to now.
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    May 09, 2011 11:53 PM GMT
    5ebastian saidWell you guys failed to highlight this infinitely important point.

    The rich only account for maybe 1% of the population, and they still (in real dollars) pay more tax than everyone else combined.

    And also this

    69 million, are estimated to have owed no federal income taxes for 2010. The vast majority of them, however, are low income.

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    So 69 million people dont pay tax, majority of them are poor. I agree with Warren Buffet when he says that the trickle down theory does not work. Warren Buffet is a big advocate of taxing the rich. The rich are paying their share in fact they are picking up the slack of the other 69 million people THAT DONT. Of course CNN money doesnt want to sensationalize the OBVIOUS.

    So why doesnt anyone suggest alternatives. So should the rich be taxed 100%. How about 110% would that be good enough?
    They have been suggested.. a flat tax. and a VAT. but that doesnt give anyone loopholes, so neither the REPUBS nor the DEMS want to touch it!
    The rich would be paying the same percentage of wealth as anyone else but would lose all those writeoffs.. neither would those who have 15 offspring and the soccer mom child credits!.
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    May 10, 2011 12:19 AM GMT
    5ebastian saidMaybe the banks that nickel and dime everyone should finally pay their fair share.
    Ya mean robbery/fraud and embezzle? I agree with you here!