A question about the "rich paying their fair share" charge...

[spidey07]

HumblePie,

Thank you for pointing out a true loophole via experience. I however don't have the balls to take such a risk. But you were the first to post said loopholes. I donate a lot and claim it, but I sure as hell am not going to turn over ownership of my property/assets to any third party.

 

[HumblePie]

HumblePie,

Thank you for pointing out a true loophole via experience. I however don't have the balls to take such a risk. But you were the first to post said loopholes. I donate a lot and claim it, but I sure as hell am not going to turn over ownership of my property/assets to any third party.

I'm just saying I know people with money can and do get away with things most people wish they could. Friend a few years back owned his own business here in SA. Was a millionaire+ at age 22. Of course the business he owned was a piece handed down to him by his father. But man, it was great knowing the guy 'cause he loved to party. Went out practically every free night to go club and bar hopping. Never paid a cent for booze or parking. Never waited in any lines either. Always sat in the VIP section. Got to hang out with a few of the Spurs players many occasions. Great times for sure. The shit he got away with because he had money was crazy though.

 

[the DRIZZLE]

HumblePie,

Thank you for pointing out a true loophole via experience. I however don't have the balls to take such a risk. But you were the first to post said loopholes. I donate a lot and claim it, but I sure as hell am not going to turn over ownership of my property/assets to any third party.

If you own a business it's easy to cheat. I've seen people claim hundreds of thousands of dollars a year of personal expenses as business expenses.

 

[Craig234]

If you own a business it's easy to cheat. I've seen people claim hundreds of thousands of dollars a year of personal expenses as business expenses.

I'd like to find ways to prevent that. It's not easy.

 

[highland145]

I'd like to find ways to prevent that. It's not easy.

An audit should do it. More agents, simpler tax code. Would be hard for me to justify a new boat or some such given my business.

Thanks Humble for the post.

 

[rchiu]

I'm just saying I know people with money can and do get away with things most people wish they could. Friend a few years back owned his own business here in SA. Was a millionaire+ at age 22. Of course the business he owned was a piece handed down to him by his father. But man, it was great knowing the guy 'cause he loved to party. Went out practically every free night to go club and bar hopping. Never paid a cent for booze or parking. Never waited in any lines either. Always sat in the VIP section. Got to hang out with a few of the Spurs players many occasions. Great times for sure. The shit he got away with because he had money was crazy though.

Sounds a lot like that Miami football booster Nevin Shapiro, but he is serving his sentence now.

Look, not saying business owners never cheat on their taxes, they do. Just like there will always be thief and rapist in the society. but 1) you cannot generalize that all business owners cheat just because some do. 2) the so called "loopholes" are there to give incentive to go into business, and the flexibility to offset the risk that comes with running a business. business income is not steady work income, and often you can have a loss. You just can't tax business income the same way as salary income.

Giving people the opportunity to start and own a business is what this country is all about. It is why this country is successful with so many self-made millionaires and billionaires. With the flexibility and incentive, naturally there will be people taking advantage of that. IRS is doing something, obviously they cannot catch all. But to say let's reverse the course and kill all the policies that helped so many entrepreneurs just because some people take advantage of the system is just short sighted and idiotic.

Don't expect some anti-entrepreneurs/business socialist to understand that concept. But hope most of other people in this country can see through all these class warfare BS those socialists are pushing using this opportunity during a bad economy.

 

[the DRIZZLE]

Sounds a lot like that Miami football booster Nevin Shapiro, but he is serving his sentence now.

Look, not saying business owners never cheat on their taxes, they do. Just like there will always be thief and rapist in the society. but 1) you cannot generalize that all business owners cheat just because some do. 2) the so called "loopholes" are there to give incentive to go into business, and the flexibility to offset the risk that comes with running a business. business income is not steady work income, and often you can have a loss. You just can't tax business income the same way as salary income.

Giving people the opportunity to start and own a business is what this country is all about. It is why this country is successful with so many self-made millionaires and billionaires. With the flexibility and incentive, naturally there will be people taking advantage of that. IRS is doing something, obviously they cannot catch all. But to say let's reverse the course and kill all the policies that helped so many entrepreneurs just because some people take advantage of the system is just short sighted and idiotic.

Don't expect some anti-entrepreneurs/business socialist to understand that concept. But hope most of other people in this country can see through all these class warfare BS those socialists are pushing using this opportunity during a bad economy.

Business owners cheating isn't even really a loophole. There is just enough gray area in the tax laws and enforcement is lax enough that they take the chance. Like Craig said it is a tough problem to solve. Auditing a business is much more complex then auditing an individual. If I have 5 million in revenue and 4 million in real business expenses, it's pretty easy to include another 200,000 in personal expenses without arousing too much suspicion.

 

[alkemyst]

If you own a business it's easy to cheat. I've seen people claim hundreds of thousands of dollars a year of personal expenses as business expenses.

That's very hard to do, I think you are speculating though rather than seeing this.

You do realize you'd be entitled to a nice chunk of that change right.

 

[the DRIZZLE]

That's very hard to do, I think you are speculating though rather than seeing this.

You do realize you'd be entitled to a nice chunk of that change right.

I'd rather not say how but my work involves people telling me how much they cheat on their taxes.

 

[alkemyst]

Business owners cheating isn't even really a loophole. There is just enough gray area in the tax laws and enforcement is lax enough that they take the chance. Like Craig said it is a tough problem to solve. Auditing a business is much more complex then auditing an individual. If I have 5 million in revenue and 4 million in real business expenses, it's pretty easy to include another 200,000 in personal expenses without arousing too much suspicion.

This is another paper arguement though. Most businesses aren't moving those numbers.

The target is focusing on those making more than $150k in one breath and then acting like those same people are making $10MM+ in another.

The top 1% of our nation do have a TON of loopholes, in counterpointe they are also giving back a TON.

The problem is the poor that are crying out most about this don't understand how the guy that lives the block over from them with $300k in cars in the drive way and a $750k house is not in that 'rich bracket' and probably paying a fuckload of taxes.

 

[alkemyst]

I'd rather not say how but my work involves people telling me how much they cheat on their taxes.

lol, you can say you work for H&R block or whatever.

 

[the DRIZZLE]

This is another paper arguement though. Most businesses aren't moving those numbers.

The target is focusing on those making more than $150k in one breath and then acting like those same people are making $10MM+ in another.

The top 1% of our nation do have a TON of loopholes, in counterpointe they are also giving back a TON.

The problem is the poor that are crying out most about this don't understand how the guy that lives the block over from them with $300k in cars in the drive way and a $750k house is not in that 'rich bracket' and probably paying a fuckload of taxes.

No, no one is cheating by that much but smaller businesses can cheat in other ways if they get paid in cash. Instead of thinking in absolute numbers think in percentages. If you have a 15% profit margin and you throw in 5% of additional personal expenses and under report your revenue by 10% you show no profit at all.

 

[HumblePie]

This is another paper arguement though. Most businesses aren't moving those numbers.

The target is focusing on those making more than $150k in one breath and then acting like those same people are making $10MM+ in another.

The top 1% of our nation do have a TON of loopholes, in counterpointe they are also giving back a TON.

The problem is the poor that are crying out most about this don't understand how the guy that lives the block over from them with $300k in cars in the drive way and a $750k house is not in that 'rich bracket' and probably paying a fuckload of taxes.

alkemyst,

No one is decrying the 100K business owners. The small mom & pop places. Even a few chain restaurants for example. These people aren't making serious dough and don't cheat the system. Well they don't cheat it much. We are talking about the big movers and shakers. The people who can easily afford to buy a $4mill yacht in some place without taxes and save more money moving back to where they want it than pay their fair share. These are the people that have usually a team of accountants working for them as well as a few lawyers. It is cheaper to pay THOSE people an income because their jobs exponentially saves the business more money by finding the loopholes in the system. They make the cayman island accounts and shit.

 

[Craig234]

An audit should do it. More agents, simpler tax code. Would be hard for me to justify a new boat or some such given my business.

Thanks Humble for the post.

I agree that's a big help, but Republicans have slashed enforcement budgets against wealthy taxpaers, even ones that return several dollars per dollar spent.

 

[Craig234]

I'd rather not say how but my work involves people telling me how much they cheat on their taxes.

If you actively help them cheat, if you are an accomplice to it, that's pretty crappy work, hurting society, helping criminals, helping take money from others.

That's the situation some accountants and lawyers get themselves into - they get paid to help others do wrong and hurt society, whether illegal or 'gray area'.

No wonder they'll adopt an ideology telling them how fine that is, how 'government would just waste the money', how government programs hurt the poor.

That's a little like how war works - people in a war almost have to dehumanize the enemy, because they have to to deal with having killed them.

If they had a more honest and realistic view - that they and the people they kill and are killed by are the suckers doing as the powerful people on each side want...

But whether you force their service, or seduce them with offers of respect by the country, proving their manhood, and education money, it doesn't change that they are put in a situation where they have to kill or be killed by people a lot more like them than they'd like to admit.

Reports say that Bush said in the late 90's that in his opinion what really helped a President was to have a war, being a 'war president' helped a lot with public approval, and if we were president, he'd want to do that, then the clear choice was where, and Iraq was the clear choice as a nation with a weakened military who could be demonized. I wonder how the troops would feel knowing they were risking their lives so his policies of helping the rich could get have more public support?

The point was, big money buys big corruption. Whether it's an army of accounting servants to help the boss pay taxes, or an army of soldiers who help the boss's political power. There's not a lot easy to do to oppose such things - go stand with a sign somewhere. The rewards for helping the corruption are far larger than for helping stop it. And we wonder why we have corruption., why someone doesn't 'do something about it'.

 

[alkemyst]

alkemyst,

No one is decrying the 100K business owners. The small mom & pop places. Even a few chain restaurants for example. These people aren't making serious dough and don't cheat the system. Well they don't cheat it much. We are talking about the big movers and shakers. The people who can easily afford to buy a $4mill yacht in some place without taxes and save more money moving back to where they want it than pay their fair share. These are the people that have usually a team of accountants working for them as well as a few lawyers. It is cheaper to pay THOSE people an income because their jobs exponentially saves the business more money by finding the loopholes in the system. They make the cayman island accounts and shit.

No actually the voters are targeting those people that have a couple luxury cars, a <30' boat, a few motorcycles, the golf cart, and jet ski's, etc...

Like I said, most of those that would own that $4 million dollar yacht are giving back a lot more. That yacht would probably need a 2-4 man crew being paid wages that those 2-4 may or may not report.

 

[alkemyst]

No, no one is cheating by that much but smaller businesses can cheat in other ways if they get paid in cash. Instead of thinking in absolute numbers think in percentages. If you have a 15% profit margin and you throw in 5% of additional personal expenses and under report your revenue by 10% you show no profit at all.

Right...proof that the sales tax system is a better moderator than income tax.

As soon as the guy at the counter says you can get a *wink wink* discount by paying $1000 in cash vs on plastic that if you knew what you were doing would get you points back...you should know they are cheating on taxes.

I understand it all, I don't think you don't.

That said it's still the small businesses mostly and still not the top 1% that those poor fuckers think of when they see that guy with a 30' Contender in his driveway (lolz at that BTW)

 

[Throckmorton]

I don't know if this has ever been posted before.

http://ntu.org/tax-basics/who-pays-income-taxes.html

From this graph you can glean the following:

For Tax Year 2008 - Total Personal Income Taxes Paid:
Individuals in the top 1&#37; pay 38% of Federal Personal Income Tax (these individuals make about $380,000 a year or more).
Individuals in the top 2-5% pay 21% of Federal Personal Income Tax (these individuals make between about $160,000 and $380,000 a year).
Individuals in the top 6-10% pay 11% of Federal Personal Income Tax (these individuals make between about $114,000 and $160,000 a year).
Individuals in the top 11-25% pay 16% of Federal Personal Income Tax (these individuals make between about $67,000 and $114,000 a year).
Individuals in the top 26-50% pay 11% of Federal Personal Income Tax (these individuals make between about $33,000 and $67,000 a year).
Individuals in the bottom 50% pay 3% of Federal Personal Income Tax (these individuals make $33,000 or less a year).

The only discrepancy I can see in the slightest from these numbers is that people in the 11-25% bracket pay 5% more in taxes than the top 6-10% bracket. That's a problem, yes, but I don't think it gels very well with the image of horrible greedy overlords that rich people are portrayed to be at least on this forum.

But could someone explain to me what is meant when they say the rich don't pay their fair share? Fair share of what?

EDIT: Woolfe requested data showing taxes paid as a percentage of one's taxable income. I found that data here:

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

From this data, I've gleaned the following:

Tax Year 2009:
After tax credits, individuals with between $1 and $5,000 Adjusted Gross Income pay 4.8% of their AGI in income taxes.
Under the same conditions, individuals with between $5,000 and $10,000 Adjusted Gross Income pay 2.6% of their AGI in income taxes.
Under the same conditions, individuals with between $10,000 and $15,000 Adjusted Gross Income pay 2.3% of their AGI in income taxes.
Under the same conditions, individuals with between $15,000 and $20,000 Adjusted Gross Income pay 3% of their AGI in income taxes.
Under the same conditions, individuals with between $20,000 and $25,000 Adjusted Gross Income pay 4.5% of their AGI in income taxes.
Under the same conditions, individuals with between $25,000 and $30,000 Adjusted Gross Income pay 5.4% of their AGI in income taxes.
Under the same conditions, individuals with between $30,000 and $40,000 Adjusted Gross Income pay 6% of their AGI in income taxes.
Under the same conditions, individuals with between $40,000 and $50,000 Adjusted Gross Income pay 6.8% of their AGI in income taxes.
Under the same conditions, individuals with between $50,000 and $60,000 Adjusted Gross Income pay 7.7% of their AGI in income taxes.
Under the same conditions, individuals with between $75,000 and $100,000 Adjusted Gross Income pay 8.5% of their AGI in income taxes.
Under the same conditions, individuals with between $100,000 and $200,000 Adjusted Gross Income pay 11.9% of their AGI in income taxes.
Under the same conditions, individuals with between $200,000 and $500,000 Adjusted Gross Income pay 19.6% of their AGI in income taxes.
Under the same conditions, individuals with between $500,000 and $1,000,000 Adjusted Gross Income pay 24.4% of their AGI in income taxes.
Under the same conditions, individuals with between $1,000,000 and $1,500,000 Adjusted Gross Income pay 25.3% of their AGI in income taxes.
Under the same conditions, individuals with between $1,500,000 and $2,000,000 Adjusted Gross Income pay 25.6% of their AGI in income taxes.
Under the same conditions, individuals with between $2,000,000 and $5,000,000 Adjusted Gross Income pay 25.8% of their AGI in income taxes.
Under the same conditions, individuals with between $5,000,000 and $10,000,000 Adjusted Gross Income pay 25.4% of their AGI in income taxes.
Under the same conditions, individuals with $10,000,000 or more Adjusted Gross Income pay 22.6% of their AGI in income taxes.

I wish I could represent these percentages in a graph.

Ooops. You forgot local and state taxes, which are very regressive!

http://www.itepnet.org/whopays.htm

 

[Craig234]

Right...proof that the sales tax system is a better moderator than income tax.

Who cares if sales tax is a 'better moderator' when the inequality of percent spent on consumption far outweighs that issue when it comes to tax distribution?

Bottom line, sales tax replacing income tax is nothing but a massive shift of taxes to everyone else off the rich.

 

[Throckmorton]

http://www.wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxes.html

 

[JSt0rm]

median wage is 26k?

lmao.

 

[Throckmorton]

median wage is 26k?

lmao.

Yep, welcome to reality. Big business, he big business-owned media, and the politicians love to the average wage ($39k) because it sounds much better than telling us we're dirt poor. If we think a decent wage is "average" and therefore "normal", then we're much likely to think "I only make $26k so there must be something wrong with me. Tax cuts for the rich wooo!!"

 

[alkemyst]

Who cares if sales tax is a 'better moderator' when the inequality of percent spent on consumption far outweighs that issue when it comes to tax distribution?

Bottom line, sales tax replacing income tax is nothing but a massive shift of taxes to everyone else off the rich.

You are seriously ignorant.

 

[Throckmorton]

You are seriously ignorant.

We know for a fact sales tax is regressive. That's why local taxes are regressive... they're mostly sales tax.

 

[Jhhnn]

Nice vid about Reaganomics-

http://www.youtube.com/watch?v=k71DYM20WRM&NR=1

America's wealthiest, the true Bush constituency, don't cheat on their taxes, at least not in ways they'll get caught. They just pay to have the rules changed in their favor. It's cheaper than just paying taxes, particularly when Repubs are running the govt.