How the superrich avoid paying taxes

[umbrella39]

When your food, food for the brood, rent/utilities and all basic necessities are provided for free, and an 8k check from the government each year, it's not hard at all.

Now get back to work so you can pay their lot in life!

Where do you pull this bullshit from? Your ass... that's where.

Someone making 19K a year does NOT have their utilities/rent paid for. They do NOT get an 8K check. If they are lucky, they will get a bridge card with $100 on it a month for food but even that's not likely making that much...

Stop lying.

 

[nickbits]

3 or 5k I believe. I've done it.

I think that's the carry back limit. Carry forward isnt limited.

 

[Matt1970]

And yet the top 1% managed to pay 21% of all Federal Income Tax. How is that possible???

 

[umbrella39]

$9921 in 1988 would buy more than 19k would today. http://www.usinflationcalculator.com/

Wow so did he really pull out numbers that are that old? WOW! It's it painfully obvious those numbers don't mean a thing in 2012.

 

[soulcougher73]

And yet the top 1% managed to pay 21% of all Federal Income Tax. How is that possible???

Just shows you how much fucking money the top 1% have. You are looking at the problem wrong.

 

[cybrsage]

Wow so did he really pull out numbers that are that old? WOW! It's it painfully obvious those numbers don't mean a thing in 2012.

In today's dollars it is $19,244.73 Everyone would agree that amount rounds down to $19k.

How does your foot taste? I recommend gravy, it makes everything taste better. If you want more of it to eat, add rice to the gravy. Rice takes on the taste of whatever you put it in, and it is cheap.

 

[Jhhnn]

Nope, had to live off base. Not enough housing. Base housing would have made the money go a LOT longer - I had to pay 2/3 of my monthly pay for housing.



For me, yes, but only if I went to a military doctor...if I went to a civilian doctor I had to pay. For my family, no, you have to pay...or at least we did when I was in. We had CHAMPUS, which is now Tricare Standard.

http://www.military.com/benefits/tricare/your-tricare-benefits-explained.html

One of my friends, retired military, widower, says TriCare is the best healthcare deal he ever got... he pays, but at a vastly reduced rate compared to when we worked together... covers his second wife, too.

You also received a housing allowance, obviously, which is not taxable income. PX privileges. Post service educational benefits. So forth & so on.

Comparing military pay & civilian pay is apples to oranges...

 

[umbrella39]

In today's dollars it is $19,244.73 Everyone would agree that amount rounds down to $19k.

How does your foot taste? I recommend gravy, it makes everything taste better. If you want more of it to eat, add rice to the gravy. Rice takes on the taste of whatever you put it in, and it is cheap.

Pst... the cost of an item in 1988 vs 2012 != the costs to live/eat/house/drive/be insured/etc/etc/etc in 2012

Again those numbers you posted don't mean a thing today. Your situation is unique to you back then. I'd like to see you have the same quality of life today as you did then on that same amt of pay. How much did you pay a month for internet and cable back then... oh yeah....

 

[Matt1970]

Well this article happens to be about 2009. I wonder who had control of the Presidency, Congress, and the Senate yet I don't remember any loophole bills being brought up.

And if this is one of the loopholes they want to bitch about, than that's pretty lame.

In 2008, people with large stock portfolios and other less liquid assets were disproportionately hit with large losses on paper. One of the oddities of the tax code is that capital gains taxes are discretionary, since they must be paid only when gains are realized. And they can be offset by losses. The silver lining in a bad year like 2008 for wealthy people is that they can “harvest” losses by selling assets, then use those losses to offset any gains. They can also carry forward the losses to offset gains in future years.

That still means they lost a bundle at one point or another and used those loses to offset taxes when they cash out.

 

[DrPizza]

One of my friends, retired military, widower, says TriCare is the best healthcare deal he ever got... he pays, but at a vastly reduced rate compared to when we worked together... covers his second wife, too.

You also received a housing allowance, obviously, which is not taxable income. PX privileges. Post service educational benefits. So forth & so on.

Comparing military pay & civilian pay is apples to oranges...

Housing allowance? Subsidized health care? Is he not being completely honest again?

 

[Anarchist420]

I hate how so many people are concerned about fairness and that goes for pro-state neocons like spidey as well as liberal pro-state people like craig. The more people who wind up paying no tax, the better... that is because that means less money is taken out of the market. The less theft, the more fair it is as it doesn't matter who is getting stolen from... it matters how much the govt is stealing.

 

[Nebor]

One of my friends, retired military, widower, says TriCare is the best healthcare deal he ever got... he pays, but at a vastly reduced rate compared to when we worked together... covers his second wife, too.

You also received a housing allowance, obviously, which is not taxable income. PX privileges. Post service educational benefits. So forth & so on.

Comparing military pay & civilian pay is apples to oranges...

Only someone that's never had good civilian healthcare would say that TriCare is any kind of deal. The military medical system sucks. My civilian healthcare plan through my employer was way, way better (I paid just under $1k a month and my employer paid the rest.)

Also LOL @ PX priveleges. If the military didn't stick you in the middle of nowhere, you'd never go to the PX. Everything is overpriced. The commissary offers good savings though.

 

[hal2kilo]

Only someone that's never had good civilian healthcare would say that TriCare is any kind of deal. The military medical system sucks. My civilian healthcare plan through my employer was way, way better (I paid just under $1k a month and my employer paid the rest.)

Also LOL @ PX priveleges. If the military didn't stick you in the middle of nowhere, you'd never go to the PX. Everything is overpriced. The commissary offers good savings though.

It seems to be a simple matter of preference. All of my workers are retired navy. 2 of them would not be caught dead using tri-care the other thinks it's better than sliced bread. No or little co-pays for scripts if you pick'em up at the Navy hospital.

 

[piasabird]

You will even be more shocked to find you can carry over losses for one year.

Well if you depend on mostly capital gains for income and you had a loss, you dont pay taxes on that.

If you invest money you have to take the losses with the gains. That is how it works. That is the definition of Risk. The stock market is not a sure thing, and the government does not make up your losses.

 

[hal2kilo]

what is "hire Romney's accountants and lawyers for a thousand Alex"

 

[piasabird]

What really sucks is when you have to withdraw money from your IRA and you have to pay a penalty. Plus if you get layed off if you borrowed against your retirement funds you have to pay that back immediately.

You didnt see the federal government telling those layed off people they were going to waive penalties during these tough times. The feds just let the layed off folks suffer.

 

[Matt1970]

You will even be more shocked to find you can carry over losses for one year.

Well if you depend on mostly capital gains for income and you had a loss, you dont pay taxes on that.

If you invest money you have to take the losses with the gains. That is how it works. That is the definition of Risk. The stock market is not a sure thing, and the government does not make up your losses.

That's how you may wish it worked. If you invest 10K each in 2 differen't stocks where one loses all it's value and the other gains 5K you shouldn't have to pay tax on that 5K. That's not how the stock market works. You will see a lot of people pull out of the stock market if were that way.

 

[hal2kilo]

That's how you may wish it worked. If you invest 10K each in 2 differen't stocks where one loses all it's value and the other gains 5K you shouldn't have to pay tax on that 5K. That's not how the stock market works. You will see a lot of people pull out of the stock market if were that way.

So the stock market is so pathetic that it requires tax law social engineering to make it work?

 

[Fern]

-snip-
AMT doesn't apply to LTCG's, either.

Yes it does:

Result? Under the AMT, adding $1,000 of long-term capital gain can increase your tax by as much as $220, consisting of the $150 tax on the gain itself and the $70 that hits you because the exemption amount is reduced. In effect, you're paying 22% on the gain under the AMT and 15% on the gain under the regular income tax, so a big capital gain can lead to a big AMT bill.

http://fairmark.com/amt/ltcg.htm

Normally the AMT rate for LTCG is the same 15% as for regular tax purposes. This article demonstrates how LTCG can actually end up being taxed at 22% under the AMT regime.

Fern

 

[Fern]

Originally Posted by Matt1970
That's how you may wish it worked. If you invest 10K each in 2 differen't stocks where one loses all it's value and the other gains 5K you shouldn't have to pay tax on that 5K. That's not how the stock market works. You will see a lot of people pull out of the stock market if were that way.

So the stock market is so pathetic that it requires tax law social engineering to make it work?

Ummm, no.

It's about simple math. If you invest $20K (whether in only one stock or more than just one) and only get back $15K when you sell them you have had a loss, not a taxable gain.

Fern

 

[Fanatical Meat]

Above is something I never understood, the AMT was designed to go after people with large incomes and large deductions. I understand it was never indexed for inflation but why does it only seem to impact people with medium sized incomes? You never hear wealthy people complaining about the AMT.

 

[Fern]

8-14-2012

http://finance.yahoo.com/news/superrich-clues-might-romney-returns-135603513.html

How the Superrich avoid paying taxes

-snip-
It so happens that this summer the Internal Revenue Service released data from the 400 individual income tax returns reporting the highest adjusted gross income.

And buried in the data is the startling disclosure that six of the 400 paid no federal income tax.

This elite ultrarich group earned on average $202 million in 2009, the latest year available.

How do they do it?

In 2008, people with large stock portfolios and other less liquid assets were disproportionately hit with large losses on paper. One of the oddities of the tax code is that capital gains taxes are discretionary, since they must be paid only when gains are realized. And they can be offset by losses. The silver lining in a bad year like 2008 for wealthy people is that they can “harvest” losses by selling assets, then use those losses to offset any gains. They can also carry forward the losses to offset gains in future years.

How they avoid tax is an important and legitimate issue we should be talking about.

Another outstanding example of articles written by someone with absolutely no clue of the subject.

First, note that these high income taxpayers had large AGI.

Second, the author tries to claim that the reason for having a huge AGI and no income tax is due to deducting capital losses, whether current losses or are those carried forward.

The problem with his argument? Capital losses are deducted in calculating AGI. I.e., if the taxpayer offset his other taxable income with large capital losses the AGI would be zero, not some huge number. All the IRS stats would show is a taxpayer with no income and no tax, not someone with a huge AGI and no tax.

The only reason I can think of ATM for someone with a huge AGI and no US tax is the Foreign Tax Credit. I.e., the person did pay income tax, just not to the US. Foreign income is first taxed by the foreign country where it was earned. If the foreign country has rates as high, or higher, as US rates there will be no tax paid to the US. If the foreign country has lower rates, the US will step in to demand tax.

Cliffs: Article is BS.

Fern

 

[Fern]

Above is something I never understood, the AMT was designed to go after people with large incomes and large deductions. I understand it was never indexed for inflation but why does it only seem to impact people with medium sized incomes? You never hear wealthy people complaining about the AMT.

The AMT has been perverted and stands as an example for the thought that once a govt starts a tax it never disappears.

The AMT was created back when we had all kinds of deductions. Even though Reagan's tax acts removed those deductions the AMT was allowed to remain, but it lost it's whole purpose for existing.

AMT does affect the wealthy, particularly super-high paid CEO's etc whose income is primarily from ISO stock options.

Otherwise, the AMT primarily targets itemized deductions like state income taxes. A few years ago those were phased out based on AGI, so the AMT was less relevant to them (they lost their deductions due to phase-out, not AMT). The phase-out no longer applies so they will be hit with AMT now.

Fern

 

[Matt1970]

So the stock market is so pathetic that it requires tax law social engineering to make it work?

Would that make society so pathetic? If you lose your job you have unemployment. If you don't make very much one year you have earned income tax credit. Someone loses thier ass on almost thier entire portfolio but are expected to pay tax on one stock that made some money? There would a lot of little old ladies living off their retirement portfolios that would be pretty ticked off if that were the case.

 

[werepossum]

Another outstanding example of articles written by someone with absolutely no clue of the subject.

First, note that these high income taxpayers had large AGI.

Second, the author tries to claim that the reason for having a huge AGI and no income tax is due to deducting capital losses, whether current losses or are those carried forward.

The problem with his argument? Capital losses are deducted in calculating AGI. I.e., if the taxpayer offset his other taxable income with large capital losses the AGI would be zero, not some huge number. All the IRS stats would show is a taxpayer with no income and no tax, not someone with a huge AGI and no tax.

The only reason I can think of ATM for someone with a huge AGI and no US tax is the Foreign Tax Credit. I.e., the person did pay income tax, just not to the US. Foreign income is first taxed by the foreign country where it was earned. If the foreign country has rates as high, or higher, as US rates there will be no tax paid to the US. If the foreign country has lower rates, the US will step in to demand tax.

Cliffs: Article is BS.

Fern

Good info as always, thanks. I've found Yahoo articles to be sometimes wildly slanted left and occasionally wildly slanted right, but almost uniformly bad even by today's standards.

I've always been against taxing income earned outside of the USA, but put that way - taxing foreign income only if it's already been taxed at a lower rate - it actually makes sense. It's not double taxation so much as preventing people from conducting business abroad in low or no tax nations to avoid our taxes.

I always learn things in a NostroDaveous thread. 😀