Serving up this steaming pile of
Celebrity Gossip
Gay Politics
Gay News
and Pointless Bitchery
Since 1995

Big Paychecks, Tiny Tax Burdens: How 21,000 Wealthy Americans Avoided Paying Income Tax

The richest woman in Wisconsin, Diane Hendricks, is worth an estimated $2.8 billion, but she did not pay a dime in state income tax in 2010, the Milwaukee Journal-Sentinel first reported.

Because of a change in how her company, ABC Supply Inc., the country’s largest distributor of roofing, windows and siding, is structured, Hendricks reduced her personal state income tax burden from $2.3 million in 2009 to zero in 2010, according to records the state Department of Revenue released to the Journal-Sentinel.

While a tweak in ABC’s corporate structure allowed its CEO to get out of state income taxes, a complex web of deductions and exemptions in the federal tax code have allowed more than 20,000 wealthy tax filers get off the hook on paying federal income taxes.

A recent IRS report showed that 20,752 households that reported earning more than $200,000 in 2009 paid no federal income taxes. About 1,500 of those tax-free Americans were millionaires.

So how does someone in the top 3 percent of America’s income earners finagle their income tax burden down to zero? For the majority of them, it’s all about donating to charity, investing in local and state governments, earning money overseas and writing off doctor bills.

In Hendricks’ Wisconsin case, ABC Supply switched from an ”S” corporation, which passes all of its profits and losses through its owner to be taxed under personal income, to a “C” corporation, which stands independently of its owner and whose income is subject to corporate taxes.

Scott Bianchini, ABC tax director, told the Journal-Sentinel that the switch was a “substantial part” of why Hendricks had no state income tax liability. Bianchini noted that while Hendricks’ tax burden was minuscule this year, the billionaire has paid more than $10 million in taxes since 2005.

On the federal level, the nearly 21,000 high-income earners who aren’t paying federal income tax represent only one half of one percent of the 4 million tax filers that make up the top 3 percent.

They account for an even smaller fraction of the 59 million tax filers who did not pay income tax in 2009. The vast majority – 56 million – of the people who skipped out on these income taxes earned less than $50,000 per year.

“It’s tiny,” Williams said of number of wealthy Americans who are income tax-free. “But these are the ones people get upset about.”

In 1969, Congress was so up in arms about a mere 155 individuals who earned more than $200,000 and paid no income tax that it passed the Alternative Minimum Tax, which aims to prevent wealthy people from claiming too many tax exemptions and deductions.

More than 40 years after the AMT went into effect, the number of wealthy, income-tax-free individuals has ballooned to 133 times as many as the 155 that inspired the new tax.

In the 2012 battle for the White House, President Obama has made taxing these wealthy Americans a cornerstone of his re-election campaign.

Under Obama’s tax plan, the Bush tax cuts would expire, raising taxes for married couples earning more than $212,300 by 3 percentage points. Obama also plans to enact the “Buffett Rule,” which creates a minimum tax rate of 30 percent for millionaires.

Mitt Romney takes a virtually opposite approach to tax reform for the wealthy.

His plan not only extends the Bush tax cuts, but further reduces tax rates at all income levels by 20 percent, which puts the tax rate for those making more than $200,000 at about 28 percent. Romney ardently opposes instituting a minimum tax for millionaires, such as the Buffett Rule.

Under Obama’s plan, the top 1 percent of income earners would see their taxes go up about 5 percent. Under Romney’s plan, they would go down by nearly 8 percent, according to an analysis by the Tax Policy Center.

And as for the 21,000 wealthy Americans who currently pay no income tax, Williams said, “Under Obama’s plan, these people would almost certainly pay more. Under Romney’s, they will almost certainly pay less.”

by Anonymousreply 5701/30/2013

The American people are pushovers. They are too busy watching Reality TV to care.

by Anonymousreply 106/12/2012

Disgusting, these people have no conscience. It's immoral, I could never live with myself if I were in that kind of income bracket.

by Anonymousreply 206/13/2012

Enough with the class warfare!!!

by Anonymousreply 406/13/2012

She doesn't pay her share of taxes, but that is just the start of the problem that she and the rich investors and corporate owners just like her cause.

She and her ilk support a political system that has kept us from national health care 75 years after other countries got it because the rich can make money off owning private, for-profit health-care investments.

They buy politicans who supported NAFTA and the breaking of the state-welfare commitment under Clinton. They have bought off enough politicians in both parties that slashes to public education, public works, government employment, and Social Security are on the table no matter what party wins in November.

They bought complacency in the Democratic Party that resulted not in a general strike in Madison, but in the debacle of a recall election. Now she and the other owners face a hamstrung union movement that can offer little resistance.

The question is not what does she have in her savings account and how much does she give the IRS, the right-wing and the rich can always drag out that hoary argument that the wealthy pay more in taxes than the poor, a current Romney talking point.

The larger problem is not that the rich have wealth that buys them tax policies that keep them rich. The real problem is their wealth buys them social policy. It is the social policy beyond taxation that keeps them rich, us poor and makes that situation worse each year. Changes in tax law won't change that.

What has to change is to take away the ability of the investing class to participate in politics. Permanently. By whatever means necessary.

by Anonymousreply 506/13/2012

what r5 said.

by Anonymousreply 606/13/2012

this kind of thing is sickening and unbelievable and needs to stop!!!

by Anonymousreply 706/13/2012

[post by racist shit-stain # 2 removed.]

by Anonymousreply 806/13/2012

This will never change. The USA is now bought and sold by "Corporate America," and we are at their mercy.

George W. Bush was the last piece of the puzzle, and he situated the country at just the right place that the rich needed the rest of us to be.

Now they are in control of the banks, of the wealth, and thanks to the Supreme Court of the United States, they are in control of the legal system. They can now legislate themselves a state of wealth and power, into perpetuity.

Any hope we had of defeating this beast, is gone. From here on out, it's all poverty and misery for the 99% of Americans. THEY are in control, and there's nothing we can do to stop it.

by Anonymousreply 906/13/2012

What's unfair is that the common people in Ancient Roman Empire got at least bloody gladiator games, what do we get? The Kardashians! Now if that isn't an insult on its own.

by Anonymousreply 1006/13/2012

thanks, idiots who voted for republicans!

by Anonymousreply 1106/13/2012

r11, but ... but ... we're gonna be rich real soon, why should we hurt our future rich selves?

by Anonymousreply 1206/13/2012

[quote]What has to change is to take away the ability of the investing class to participate in politics. Permanently. By whatever means necessary.

Thank you, Roland. You're an inspiration to us all.

by Anonymousreply 1306/13/2012

Which is why "Tax the rich" is never going to work out like Obama thinks it will.

by Anonymousreply 1506/13/2012

Wrong, r14. Are you r35 on the health insurance thread?

by Anonymousreply 1606/13/2012

I'm a cooze

by Anonymousreply 1706/13/2012

R14:

We are mad not at people avoiding taxes, but that the rich people write the laws that enable the rich to avoid taxes. They also write the laws that keep the rest of us without health care, one step away from homelessness, but with a jobless recovery.

Try a thought experiment. Suppose the only people who get to write tax legislation are people who made the average income in this country, about 50K and had no more than the average assets, a house and a car, with loans on both.

Suppose people of average income write the tax laws, hire the tax investigators, go out and collect the taxes, and determine how the tax money gets spent. You think rich people would still get the same tax breaks?

by Anonymousreply 1806/13/2012

She used part of her savings to fund the Walker recall campaign.

by Anonymousreply 1906/13/2012

That is to say, the Walker Anti-Recall campaign.

by Anonymousreply 2006/13/2012

If we understand the difference between parasitic wealth and real value/wealth creation, we can properly align the tax structure to reality: the tax on authentic wealth creation should be low, to encourage wealth creation and the employment (broad-based wealth creation) generated by legitimate value creation.

We must also understand that the Central State now protects and enables parasitic skimming as the primary function of the nation's financial system. Thus the entire financial system is parasitic on the wealth of the nation.

Financial parasitic incomes should be taxed at 99%. If Mitt Romney reshuffles assets created by others and skims $100 million, 99% of that parasitic wealth should be returned to the nation via taxes. The parasite still gets to keep $1 million, more than enough to live well but not enough to buy the presidency, the Congress and the regulatory machinery of the Central State.

All those who claim the Mitt Romney/investment bankers are "creating wealth" are either terribly confused about value creation and capitalism, or they are lackeys/ apologists of the parasitic Elite.

If we cannot grasp the difference between parasitic wealth and legitimate value/wealth creation, then we are well and truly lost.

by Anonymousreply 2106/13/2012

Disgusting.

by Anonymousreply 2206/13/2012

Ultimately the difference between socialists and libertarians (and in reality, those are the only two poles in the system) is this-

Socialists believe in the perfectibility of man, the notion that if the right laws were passed and enforced by the right people under the right educational and controlled economic conditions then everybody would be happy and carefree.Â

Libertarians realize that man is never perfect, and that laws must be designed to account for the self-interested nature of the men that pass and enforce them- and the nature of those who live under those laws, that education and income and desire and aptitude will always vary in everyone, and that not everyone will be happy and free from harm in every interaction. And how boring would that be anyway.Â

The problem arises from the fact that the laws and regulations and safety nets and bailouts that socialists love create numerous unintended consequences that require more rules, more regulations, etc. Their blind devotion to this ideal society leaves them unable to see the damage their beliefs create.Â

The laws that control education have resulted in a system where many (especially minority) youth don't graduate, and most of those that do graduate don't have a decent education. The banking system has been designed to transfer wealth and power from the lower and middle classes to the uberwealthy (the .01%) and the regulatory system is under their control (Madoff, Corzine, Summers- remember them?) and they get the first new money that gets printed; the military, big business and big oil are all aligned to control the middle east via violence; the health care laws are written by the big insurance, pharma and medical lobbies...the list of corruption- petty, grand and treasonous- could fill this entire site.Â

See Europe circa 2012.Â

by Anonymousreply 2306/19/2012

"More than 40 years after the AMT went into effect, the number of wealthy, income-tax-free individuals has ballooned to 133 times as many as the 155 that inspired the new tax."

That's why taxes are so high on the middle class- it hasn't been indexed for inflation. According to the CPI, 200K would be 1.2M today.

The big billionaire guys write the laws. They spend millions getting little breaks for themselves. Then they get away with paying zero in taxes, while the average person pays 30-40%.

It's not the 1%. It's the .01%.

by Anonymousreply 2406/19/2012

Democracy in the USA is a method of mass control not a form of responsible government.

by Anonymousreply 2609/26/2012

The ultrawealthy .01% use the government to get tax breaks while the rest of us suffer.

That sounds fair.

by Anonymousreply 2709/26/2012

In the years that Ms. Hendricks reduced her tax obligation to the state to zero, did ABC Supply Company grow jobs through the reinvestment of this money as the supply-siders/trickle down people tell us will happen?

by Anonymousreply 2809/26/2012

this is criminal, this wouldn't have been possible forty years ago.

by Anonymousreply 2909/26/2012

R29, you're being naive.

Politicians of both parties have been using their position to evade taxes and other laws since the 18th century. The difference today is that the Internet is exposing their crimes.

by Anonymousreply 3009/26/2012

R28 is making the point that I want to make. Roland is partially right, R14, but the problem is that the reason always given for the major tax breaks for the rich is that they will create all these good-paying jobs which will help the economy to grow.

The problem is, they don't. They either sit on their money or expect workers to work for next-to-nothing with no benefits. There is no sharing for the effort that labor puts in, just a ripping off and then whining about it. And that fatass Donald Trump is one very good example.

by Anonymousreply 3109/26/2012

Frank McCourt and his wife own the Los Angeles Dodgers. They made $100,000,000 in two yrs. They didn't pay any taxes

I'll bet there were quite a few years in the last decade that romney didn't pay a penny. That's why he won't release his returns

by Anonymousreply 3209/26/2012

They still own the Dodgers? Aren't the bankrupt? Vanity Fair did a feature on them a couple of years ago. At the time, they were living rather cushily, but as personae non gratae in the L.A. area. Bankrutpcy was about to occur.

by Anonymousreply 3309/27/2012

So, Buffett has been saying how all the "rich people" need to pay more in taxes? Hypocrite.

--------

Warren Buffett's $1.2 billion share buyback from a single unnamed investor likely helped that person's estate save substantially on taxes, just one day after the Berkshire Hathaway CEO said the rich should actually be paying more, not less, when they die.

With the "fiscal cliff" looming and estate taxes set to rise dramatically in less than three weeks, the timing was seen as advantageous - and, according to Berkshire watchers, also out of place in the context of Buffett's recent tax activism.

"I would say 'Warren, would you please just keep your nose out of this.' He's not in a position to criticize what's good for America and for everyone else's estate," said Anthony Sabino, a professor of business at St. John's University. "He's no doubt utilized the present tax code to maximum effect."

by Anonymousreply 3412/13/2012

Rich people that call for "more taxes" just mean more taxes on "the little people" and never intend to pay themselves.

Should we be paying attention to what Warren Buffett is doing rather than his Obama fan-boy tax increase comments?

Consider. One strategy employed by some companies is to launch stock buyback programs rather than paying out dividends. Employing this strategy delays immediate tax payouts.

This summer, Seeking Alpha explained the tax advantages of such programs and how the programs work:

With the Bush-era tax cuts possibly ending this year, now is the time to start preparing for an eventual rise in investment tax rates. Currently, the long-term capital gains and stock dividend tax rates are capped at 15%, but all investors -- especially those in the upper income tax brackets -- should prepare now for higher rates...

One way...to avoid taxes is to invest in companies that buy back stock instead of paying out huge dividends. Instead of paying taxes on those dividends every year, investors instead delay any tax payments until years down the road when or if they ever sell the stock. The investor can control when he or she pays the taxes.

Instead of getting that dividend payment, the investor obtains a larger share of the companies earnings with every net share bought by the company. These buybacks can add up over time to 10%, 20%, or even more gains in earnings per share -- all without the investor having to pay any taxes in the process. Got that? Find companies that are using their cash to buyback stock instead of paying dividends. It's  a nice tax dodge against the increase in taxes that Warren Buffet has been advocating. So who is launching such programs? This announcement was just released this morning:

Berkshire Hathaway has purchased 9,200 of its Class A shares at $131,000 per share from the estate of a long-time shareholder. The Board of Directors authorized this purchase coincident with raising the price limit for repurchases to 120% of book value. Berkshire may purchase additional shares in the market or through direct offerings at no more than 120% of book value.

Berkshire is Warren Buffett's public investment vehicle and that buyback was for $1.2 billion.

There is nothing wrong with loopholes to lower taxes due. Ludwig von Mises called loopholes the method by which capitalism breathes,

Buffett has been doing buybacks for a long time and has encouraged other companies that he is a shareholder in to do the same, but you have to wonder about a guy that is advocating higher taxes on income and then employs methods so that he will avoid paying those taxes any time in the near future.

by Anonymousreply 3512/13/2012

The fact that the billionaire boys of the USA won't pay a penny more due to the "Fiscal Cliff" tax law, while the poor will pay more- even the people working minimum wage at Burger King- should make everyone sick.

Our Government is out of control, and needs to be stopped.

Secession is the best way to do it.

Drag queens and Baptist preachers. Pot smokers and right wing cops. Hippies and survivalists. We ALL need to work together to get DC of our jock.

by Anonymousreply 3601/04/2013

Of=off.

by Anonymousreply 3701/04/2013

Rich people are evil.

by Anonymousreply 3801/05/2013

[quote]The fact that the billionaire boys of the USA won't pay a penny more due to the "Fiscal Cliff" tax law, while the poor will pay more- even the people working minimum wage at Burger King- should make everyone sick.

If that were true, you might be right about everyone being sick. Fortunately, like all of your claims, it's not only false, it's stupidly false.

by Anonymousreply 3901/05/2013

Now that Congress has extended the president’s requested Payroll Tax Holiday, America may want to spend it while they got it. Without significant tax code changes, in 2013, America is scheduled to get hit with what would be the largest tax increase in our history.

Not only will the $1,000 per year tax holiday for a $50,000 income household disappear, come 2013 all Americans will see the tax on their first $8,700 of income jump from a 10% rate to 15% rate.

That hike will cost the majority of filers an additional $435.

For those eligible for child care tax credits that deduction will drop from $1,000 to $500. The marriage penalty will roar back into effect. The AMT, alternative minimum tax, will finally kick in.

Roll those changes up and a family filing as married with two children making $50,000, will see their taxes increase by basically $2,700.

by Anonymousreply 4001/06/2013

This is why I don't understand all of this about 250K versus 400K. If you have any real wealth and a decent accountant, you aren't paying shit in taxes.

by Anonymousreply 4101/06/2013

R40, the article you are quoting was written 11 months ago and it didn't come to pass. Tell me, do you even stop to think for as much as 30 seconds before you post such obvious bullshit?

by Anonymousreply 4201/06/2013

R42-

Tell us how big the hit per paycheck you get. The poorest are seeing a 2% rise in taxes, which is a BIG CHUNK when you make $300/wk.

Explain how raising taxes on the poor is good for them.

by Anonymousreply 4301/06/2013

R43? the poor are paying the same Social Security tax rate they were 2 years ago, as are all people in every tax bracket. A "tax holiday" that never should have happened in the first place just expired and was not renewed. It is used to fund a program that will benefit the poor the most.

by Anonymousreply 4401/06/2013

Exactly, r18.

by Anonymousreply 4501/06/2013

R44- it doesn't change the fact that it is regressive and horrible tax on the poorest people.

Fucking retarded morons like you that use newspeak semantics that it "was just a temprorary tax holiday" and other bullshit should be ashamed.

Tell that to the single mother, or poor widow, or disabled vet that is working minimum wage to live. Fuck you.

by Anonymousreply 4601/07/2013

If these tax havens are out there, then they are doing nothing wrong. The only way to make them pay more is to get rid of the loopholes. How many of you have cheated on your taxes by taking an extra deduction or added more than you donated to charities? That means you cheated. They didn't cheat. They did their taxes legitimately. Flat tax for all.

by Anonymousreply 4701/07/2013

[quote] it doesn't change the fact that it is regressive and horrible tax on the poorest people.

It is NOT a regressive tax. If they want to benefit from the system when they are old enough to retire then they MUST contribute something into it.

by Anonymousreply 4801/07/2013

Just take all the money and make us a good socialist state!

by Anonymousreply 4901/12/2013

Dear heart, reviving all of your old threads to post non sequiturs is exactly the behavior that gets these threads deleted.

by Anonymousreply 5001/12/2013

Freeper that keeps bumping these threads is flagged, and will be deleted along with her threads now.

by Anonymousreply 5101/12/2013

Credit expansion is the governments foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.

But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.

by Anonymousreply 5201/12/2013

CUNTS

by Anonymousreply 5301/12/2013

Don't we know, R53

They are vile, corruption personified..and they will feed on our fear.

They need to be stopped.

by Anonymousreply 5401/12/2013

I'll bet that the tax increase Obama signed into law hasn't touched these people.

Why should it- they control the government.

by Anonymousreply 5501/29/2013

You do realize, R55, that Obama did not sign any tax increase into law except for the tax increase on the wealthy, right?

Yeah, I didn't think so. You always did have trouble with facts.

by Anonymousreply 5601/29/2013

R56-

Look at your paycheck. Your taxes went up whether you made $10,000 a year or $100,000 a year. Obama raised taxes on the poor. Fuck him.

by Anonymousreply 5701/30/2013
Loading
Need more help? Click Here.