How 21,000 Wealthy Americans Avoided Paying Income Tax

[werepossum]

There's one thing you can always count on with sensationalist journalism: it's always light on facts.

Indeed, but this article goes above and beyond regular horrible "reportage" to stand out as an example that even the worst reporters and copy writers can safely ridicule. The trick is knowing that if you can't write a coherent, useful article you can still achieve some measure of success by making it laughably biased to one side or the other, guaranteeing that at least that portion of the political spectrum will lap it up even if everyone else ridicules it. The sad part is that with some effort (and granted, a certain minimum competence that no doubt doggedly eludes this woman) she could have framed a useful, factual article that pointed out some inequities and problems with the tax code.

 

[zanejohnson]

You and your CPA should be in prison and you're a fool for admitting to this criminal behavior in a public forum.

cpa has been to prison once.. guess it pays off too good to not risk it..


me? have good luck finding "me."

 

[Fern]

Another garbage article.

Some things, even if already mentioned above, bear repeating:

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.

Oh no! A rich woman got out of taxes!

Oh really? Read below:

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.

So they switched it from the woman paying all the taxes on the company's net income so that now the company itself pays all the taxes on it's income. Err, what's the problem?

Why isn't the title of this article something about a company's state tax burden ballooned under Obama? That would be just as fair and accurate.

And the utter horror of this bit:

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.

My god, they had huge doctors' bills, donated to charity or had to pay tax in (high-tax) foreign countries where they earned the income. So, what's the problem?

(BTW: Charity can't drive your tax to zero. There's a limit on how much you can deduct, the excess is carried over to future years.)

As a tax professional I have an interest in these type stories and usually try to drill down to the details of such tales to see if I'm missing any new 'trick' in cutting taxes.

So, what does this article recommend I tell clients about how to get out of federal income tax?

1. Get cancer or some other catastrophic illness such that you will pay more in uninsured medical expenses than you actually make in that year. Or,

2. Go earn your income in a foreign country that will charge you even more in tax than the US govt will.

I'm emailing all the CPA tax publications to make sure everyone becomes aware of these awesome tax planning strategies.

Fern

 

[Fern]

cpa has been to prison once.. guess it pays off too good to not risk it..
-snip-

Then (s)he's not a CPA and will never be one again.

Fern

 

[blackangst1]

There's one thing you can always count on with sensationalist journalism: it's always light on facts.

Pretty much this.

 

[ElFenix]

reporter doesn't understand how corporate taxes work and that actual people bear the burden of those, not the corporation, story at 11.

 

[Zebo]

I paid more in taxes when I worked a job than doing my own thing and couldnt afford anything. It's all about basis. You can reduce your basis to almost nothing because you buy things before taxed as opposed to after you get taxed as an employee.

Unfortunately there is no way to wiggle out of quarterly and in her case weekly payroll deposits - I bet she paid more in taxes than everyone in this thread when you factor that in.

 

[JS80]

reporter doesn't understand how corporate taxes work and that actual people bear the burden of those, not the corporation, story at never.

fixed

 

[Sonikku]

Not having to pay taxes should be a reward for being a job creater. Only people who should be paying taxes are the middle class and working class that constantly leech off of the good natured job creaters that already have endured disproportionately more hardship then anyone else.

 

[dmcowen674]

Not having to pay taxes should be a reward for being a job creator. Only people who should be paying taxes are the middle class and working class that constantly leech off of the good natured job creators that already have endured disproportionately more hardship then anyone else.

Hopefully people like you will be joining the exodus leaving the U.S. :

6-1-12

http://finance.yahoo.com/news/number-u-millionaires-declines-2-174100310.html?l=1

Number of U.S. millionaires declines 2.5%

No wonder Facebook's "co-founder Eduardo Saverin moved to Singapore.

He just wanted to be with people like himself.


According to Boston Consulting Group's annual study of global wealth trends, Singapore is home to the greatest concentration of millionaire households in the world. More than 17% of households there have private wealth of $1 million or more.

The number of U.S. millionaire households fell 129,000, or 2.5%, in 2011 to 5,134,000.

 

[DucatiMonster696]

Democrats don't want a simple tax code. They want to do their social engineering via the US tax code. This is what you get. Blame the Democrats.

And then they rant and complain when businesses (like Apple for example) move out state or worse move their major production out of this nation.

 

[DucatiMonster696]

Hopefully people like you will be joining the exodus leaving the U.S. :

6-1-12

http://finance.yahoo.com/news/number-u-millionaires-declines-2-174100310.html?l=1

Number of U.S. millionaires declines 2.5%

No wonder Facebook's "co-founder Eduardo Saverin moved to Singapore.

He just wanted to be with people like himself.


According to Boston Consulting Group's annual study of global wealth trends, Singapore is home to the greatest concentration of millionaire households in the world. More than 17% of households there have private wealth of $1 million or more.

The number of U.S. millionaire households fell 129,000, or 2.5%, in 2011 to 5,134,000.

And what are you going to do to encourage those millionaires who produce wealth to move back to the US?

Oh wait never mind you're entire schtick is basically a blind rant against the rich for being rich and nothing else period. You're so called solutions would create more problems such as flight of the wealthy out of certain US states into other friendlier states and in a worse case scenario they would also see moving to another nation as good solution as well.

 

[dmcowen674]

Originally Posted by dmcowen674
Hopefully people like you will be joining the exodus leaving the U.S. :

And what are you going to do to encourage those millionaires who produce wealth to move back to the US?

You are right. I don't want them back.

You are right. They produce wealth, for themselves.

When they are all gone real Americans will prosper without their greedy asses.

 

[epidemis]

Populist drivel

 

[disappoint]

LOL, fail. So, under Romney's plan they will almost certainly pay less.... than zero?? What an idiot.

The truth is that under obummer's plan EVERYONE will pay more, but they like to pretend that it's just socking it to "the rich" and then change who is "rich" whenever they want to raise more taxes.

Yes in fact they already do pay less than zero. You see, thanks to the bailouts for the Wall St. wealthy, they actually COLLECT tax money, not pay it.

 

[blackangst1]

Originally Posted by dmcowen674
Hopefully people like you will be joining the exodus leaving the U.S. :




You are right. I don't want them back.

You are right. They produce wealth, for themselves.

When they are all gone real Americans will prosper without their greedy asses.

And as soon as they prosper, you'll rail against them. Great plan.