How the Wealthiest Americans Avoid Paying Their Taxes

[morningstar2651]

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax — ProPublica

You probably are taxed at a higher rate than most billionaires.

As Warren Buffett put it in 2011: “There’s been class warfare going on for the last 20 years, and my class has won.”

 

[wonderkins]

So jeff bezos payed 973 million dollars in taxes? Do you think that isn't enough? I'm absolutely positive I don't pay as much in taxes as the rich do. Why worry about it?

 

[morningstar2651]

So jeff bezos payed 973 million dollars in taxes? Do you think that isn't enough? I'm absolutely positive I don't pay as much in taxes as the rich do. Why worry about it?

If you read the article, you will discover that there are years where he paid no taxes. Some billionaires will go several years in a row without paying a single cent in taxes.

Why worry? Because I would prefer this money be used for the public good rather than to purchase another empty mansion. These people have more income than some nations while our fellow Americans struggle to survive.

Maybe you haven't noticed, but things are pretty bad for a lot of people right now, but the billionaires just had their best year ever.

 

[GoldenBoy89]

So jeff bezos payed 973 million dollars in taxes? Do you think that isn't enough? I'm absolutely positive I don't pay as much in taxes as the rich do. Why worry about it?

As a percentage of his total wealth and income, no. It’s not enough, or rather... it’s not equal to the amount normal middle class people pay as a percentage of their wealth and income.

 

[jacks]

Elon Musk needs a new accountant.

 

[hislegacy]

ooohhh... the SECRET files!

Of course this is completely unsubstantiated, if it were true - it is a felony to obtain the Tax information of private individuals - you would spend time in federal prison for doing so.

Either it is yet another conspiracy theory that is unsubstantiated, yet broadcast as truth or someone committed a felony and needs to go to prison.

The 1% Pay 37% of Federal Income Taxes

he IRS has released new tax data that demonstrate how much we’ve been fooled by claims that the rich aren’t paying their fair share. Those claims are based on statistical errors and incomplete data. Now that we have the complete data, we gain more perspective.

We’ve written a piece in the Wall Street Journal that explains it all. Excerpts below.

America’s wealthiest earners still carry the lion’s share of the tax burden.


According to the IRS, the top 0.01% of earners—those with incomes above $10 million—paid a 24.8% effective federal income-tax rate in 2018. This isn’t very different from the 25.3% the group paid in 2017, and is higher than the average rate of 22.5% on the same group during the George W. Bush administration. As these rates only encompass federal income taxes, most filers can expect to add another 8% to 12% of income from other forms of taxation, placing their total burden well above the Saez-Zucman numbers.


​

 

[Whyayeman]

I have an idea. Why not ask all multi-billionaires to give away all their money minus $1bn? Their lifestyles would be effectively unchanged. Think of the fun we would all have laughing at their reasons not to.

[Please note: they would only have to worry about avoiding taxes on $1bn, thus reducing their workload.]

 

[essentialsaltes]

It's a bit of a stretch to call that the 'true' tax rate.

We don't (not yet, anyway) tax wealth. Only income.

 

[wonderkins]

It's a bit of a stretch to call that the 'true' tax rate.

We don't (not yet, anyway) tax wealth. Only income.

How would you implement that? Would you keep getting taxed on what sits in the bank? Or a tax for owning a certain kind of car?

That's a real question. I've never understood a wealth tax.

 

[SummerMadness]

The logic being employed by some in this thread make no sense.

"Someone paying $1 billion in taxes? Isn't that enough?" Well, how much do they make? If you make $10,000 and pay $2,000 in taxes and someone makes $10 billion and then pays $200 million in taxes, would you say, "They paid $200 million, that is more than enough." Just do the math, you paid 20%, they paid 2%. They should be paying more.

It's the same with citing the percentage of the total taxes paid, that says nothing about whether they have paid their fair share of taxes.

 

[mark46]

How would you implement that? Would you keep getting taxed on what sits in the bank? Or a tax for owning a certain kind of car?

That's a real question. I've never understood a wealth tax.

Ask Senator Warren. She proposed it. Warren thought it an easy way to take from the rich and give to whoever she favored.

 

[grasping the after wind]

The logic being employed by some in this thread make no sense.

"Someone paying $1 billion in taxes? Isn't that enough?" Well, how much do they make? If you make $10,000 and pay $2,000 in taxes and someone makes $10 billion and then pays $200 million in taxes, would you say, "They paid $200 million, that is more than enough." Just do the math, you paid 20%, they paid 2%. They should be paying more.

It's the same with citing the percentage of the total taxes paid, that says nothing about whether they have paid their fair share of taxes.

If you make only $10,000 you would pay no income tax whatsoever. As a matter of fact, the government would give you money, EIC, instead of taxing your income. So if you would have a negative percentage income tax not 20% but perhaps a -5% income tax rate.

Do You Qualify for The 2020, 2021 Earned Income Tax Credit Or EITC? (efile.com)

Filing Status
Number of Children
Income Limit 2019/2020

Single, Head of Household, or Widowed
Zero
$15,820

Single, Head of Household, or Widowed
One
$41,756

Single, Head of Household, or Widowed
Two
$47,440

Single, Head of Household, or Widowed
Three or More
$50,954

Married Filing Jointly
Zero
$21,710

Married Filing Jointly
One
$47,646

Married Filing Jointly
Two
$53,330

Married Filing Jointly
Three or More
$56,844

The investment income can not exceed $3,650.


2020 Max Credit Amounts

Maximum EITC
Number of Qualified Children

$538
Zero

$3,584
One

$5,920
Two

$6,660
Three or More

 

[Whyayeman]

How odd it is that there are people who defend tax avoidance for the unimaginably rich!

 

[wonderkins]

How odd it is that there are people who defend tax avoidance for the unimaginably rich!

Are the unimaginably rich breaking the law?

 

[morningstar2651]

Are the unimaginably rich breaking the law?

Frequently. The banks help them too. There is a reason the FBI has an entire department dedicated to white-collar crime. You don't become a billionaire by following the rules. You have to exploit a lot of victims to get that kind of money.

• Example: ABUSE OF STRUCTURED FINANCIAL PRODUCTS: Misusing Basket Options to Avoid Taxes and Leverage Limits
• Example: Scott Tucker Sentenced To More Than 16 Years In Prison For Running $3.5 Billion Unlawful Internet Payday Lending Enterprise
• Example: Kushner Companies Violated Multiple Laws in Massive Tenant Dispute, Judge Rules
• Example: The Enron Scandal
• Example: The rise and fall of Theranos, the blood-testing startup that went from Silicon Valley darling to facing fraud charges
• Example: Microsoft to pay $97 million to settle 'permatemp' case
• Example: Deutsche Bank faces action over $20bn Russian money-laundering scheme
  
• Example: HSBC moved vast sums of dirty money after paying record laundering fine

Or my favorite example, the Panama Papers. The journalist that published them was assassinated.

 

[Strathos]

How odd it is that there are people who defend tax avoidance for the unimaginably rich!

Right-wing media (which is owned and paid for by... guess who) has indoctrinated a large portion of Americans into believing that anyone who criticizes rich people in any way must be a communist.

 

[Whyayeman]

Tax avoidance is legal; governments spend a great deal of time trying to patch up their tax laws and accountants spend just as much time finding new loopholes.

Whether it is ethical is another question, the issue that needs addressing.

If billionaires were to give all their money after the first billion much of the ethical problem would be ameliorated. After all, who would be discomfited by retaining a billion dollars?

 

[hislegacy]

Tax avoidance is legal; governments spend a great deal of time trying to patch up their tax laws and accountants spend just as much time finding new loopholes.

Whether it is ethical is another question, the issue that needs addressing.

If billionaires were to give all their money after the first billion much of the ethical problem would be ameliorated. After all, who would be discomfited by retaining a billion dollars?

What makes you think people would voluntarily give their possessions?

If they don’t voluntarily give all their money after the first billion, it would have to be compulsory or by force of law.

That in and of itself is a major ethical problem.


Also we are speaking like the OP is true and substantiated, which it is not.

We are also speaking like the top 1% don’t already pay 37% of the taxes collected.

How much should 1% pay if 100%?

 

[Belk]

What makes you think people would voluntarily give their possessions?

If they don’t voluntarily give all their money after the first billion, it would have to be compulsory or by force of law.

That in and of itself is a major ethical problem.


Also we are speaking like the OP is true and substantiated, which it is not.

We are also speaking like the top 1% don’t already pay 37% of the taxes collected.

How much should 1% pay if 100%?

Are you talking all taxes or Federal Income tax?

 

[Whyayeman]

My suggestion is that we ask them to give up their second and subsequent billions - no compulsion involved. I am not proposing a tax or the seizure of their money.

It would be interesting to see their reasons not to and perhaps some of them would do it. Many are already substantial donors to charity and you never know, once one does it the others might too. We know how competitive they can be!