John Kerry weasels out of $500K in MA taxes

[BoberFett]

So you're saying that it's unethical to LEGALLY reduce your taxes to the minimum possible amount?

Perhaps you should look up the word "hypocrisy." If Kerry publicly stated that it was wrong for anyone to register their possessions or corporations outside their state of residence to gain a tax advantage, and then he did just that, he would be a hypocrite. But Kerry has done nothing of the kind. And it's not hypocritical for a rich senator to ADVOCATE that the tax rate be raised on the wealthy, but while the tax rates remain low, to pay taxes at the low rate.

If you, I, or any other sane person owned a $7 million yacht, we would ALL register the yacht in the lowest-tax jurisdiction possible, and there would be absolutely NOTHING wrong with doing so.

404 hypocrisy not found.

Isn't it the Democrats who are always complaining about loopholes for the wealthy?

LOLiberals.

 

[Turin39789]

you're right! we should lower taxes for the upper income range and raise it for the bottom

nice timeline?

The following chart shows the top marginal rate and the average effective rate on the top 1% of taxpayers since World War II. The latter is from calculations by the Congressional Budget Office (here) and is only available beginning in 1979. (As of 2005, a four-person household in the top 1% had a pretax income of $600,000 or more.) The effective rate is lower now than it was in the late 1970s and in the mid-1990s.

note - this image taken from google image search and poster makes no claim as to absolute veracity.

 

[PeshakJang]

So you're saying that it's unethical to LEGALLY reduce your taxes to the minimum possible amount?

Perhaps you should look up the word "hypocrisy." f Kerry publicly stated that it was wrong for anyone to register their possessions or corporations outside their state of residence to gain a tax advantage, and then he did just that, he would be a hypocrite. But Kerry has done nothing of the kind. And it's not hypocritical for a rich senator to ADVOCATE that the tax rate be raised on the wealthy, but while the tax rates remain low, to pay taxes at the low rate.

If you, I, or any other sane person owned a $7 million yacht, we would ALL register the yacht in the lowest-tax jurisdiction possible, and there would be absolutely NOTHING wrong with doing so.

404 hypocrisy not found.

http://www.house.gov/apps/list/press/il05_emanuel/Fair_Share_Act_08.html

“Setting up sham companies in the Cayman Islands to avoid paying Social Security taxes for workers turns the idea of patriotism on its head. No wonder Americans are disgusted with Washington when big corporations profit from no bid contracts for the war in Iraq, then hide money and costs offshore to avoid paying taxes while hard working Americans get stuck with the bill,” said Sen. Kerry. “KBR is abusing the public trust at the taxpayer's expense, and our reform will close the loophole that enables big corporations to take advantage of the American people.”

One of many quotes displaying his disgust with a company doing everything it LEGALLY can to avoid paying taxes by registering is corporation outside of the US's tax jurisdiction. Doesn't make a difference if it is a different state or a different country, the principal is exactly the same. the only difference is that since he makes the rules, he can close the rules that don't apply to him.

His position is indefensible based on his prior words and actions.

 

[Linflas]

Isn't it the Democrats who are always complaining about loopholes for the wealthy?

LOLiberals.

Funny thing is that most states that have personal property taxes such as Massachusetts also make it illegal for legal residents to evade the taxes by registering personal property such as vehicles or boats in neighboring states that do not tax the property. So not only is it unethical it is likely illegal as well.

 

[Pens1566]

This thread is amusing. "Evading" taxes ... lol. I'm sure no one criticizing Kerry has ever done anything to limit their taxes.

 

[ericlp]

Loop holes are perfectly legal.
They may be immoral, but they're still perfectly legal.

Luckily I'm not one of those people who believes Democrats are moral while Republicans are immoral(or vice-versa) so I have no problems with what he did as long as it's legal. In black and white, everyone of them are immoral.

Business(and ordinary) people do these with cars to pay a reduced amount(or completely avoid paying all together) sales tax.
California citizens buy their cars in Oregon. California tried to stop this again recently but failed. All one has to do now is keep the car in a family/friend garage for a few months and bring it back.

Or an even better idea...
Buy a new car, register it in Montana under your business.
Price=Cost of Montana plates. Sales tax= Zero.
Works for cars, trucks, boats, trailers, motorcycles, ATVs, and aircraft.

Note: creating a business for the sole purpose of vehicle registration is tax evasion. However if you currently(or are going to) have a legitimate business presence there, it's called tax avoidance.

It's how the corporations/businesses do it.
Craig234 hit the nail in the head when he also mentioned Delaware and South Dakota as examples. Just be sure to add Montana to the list

I agree...

If you think both repubs or demo's aren't all doing this you know the (RICH) bastards left in the USA ... That's what loop holes are for. For the rich, unless you got a tax free state that you can buy all your items from.

If I find a 2-300 dollar item I want, I'll try to buy it online with free shipping to avoid the taxes. I usually save a few bucks to boot since it's sometimes cheaper. But if I don't have to pay that 7% on the purchase price that's just icing on the cake! I guess I am failing to pay my taxes too right?

But I don't care who it is, ANYONE would try to get out of paying half a mil, I would if I could.

 

[PeshakJang]

This thread is amusing. "Evading" taxes ... lol. I'm sure no one criticizing Kerry has ever done anything to limit their taxes.

I'm also sure none of us are multi-millionaire senators that chastise corporations for taking advantage of tax loopholes, pass laws to close those tax loopholes, champion themselves on doing so, then buy multi-million dollar yachts in the middle of a recession and use said loopholes to avoid paying those taxes himself.

It's a perfect example of talking the talk but walking a different walk.

 

[Linflas]

This thread is amusing. "Evading" taxes ... lol. I'm sure no one criticizing Kerry has ever done anything to limit their taxes.

I do everything in my power to legally reduce the taxes I pay be they Federal, state, or local. I also do not run around beating the drum for new taxes, that taxes be levied on those making more than myself at a higher rate, or that taxes in general be raised on anyone no matter their level of wealth.

 

[Craig234]

I'm also sure none of us are multi-millionaire senators that chastise corporations for taking advantage of tax loopholes, pass laws to close those tax loopholes, champion themselves on doing so, then buy multi-million dollar yachts in the middle of a recession and use said loopholes to avoid paying those taxes himself.

It's a perfect example of talking the talk but walking a different walk.

Not all loopholes are equal. If i choose to buy a vacation house in one state over another based on tax differences, am I using a 'loophole'? Am I 'evading taxes'?

On the other hand, if I am a big corporation who puts up a phony headquarters in the Cayman islands to evade taxes in the US where I really make money, am I evading taxes?

If I falsify my records to avoid the taxes on the prices one of my subsidiaries is selling good to another, am I evading taxes? Happens all the time.

I haven't commented on Kerry yet here, haven't gotten the reasonable request to do so, but you are simplistic to lump all tax-related actions together as equal under 'loopholes'.

 

[Craig234]

I agree...

If you think both repubs or demo's aren't all doing this you know the (RICH) bastards left in the USA ... That's what loop holes are for. For the rich, unless you got a tax free state that you can buy all your items from.

If I find a 2-300 dollar item I want, I'll try to buy it online with free shipping to avoid the taxes. I usually save a few bucks to boot since it's sometimes cheaper. But if I don't have to pay that 7% on the purchase price that's just icing on the cake! I guess I am failing to pay my taxes too right?

But I don't care who it is, ANYONE would try to get out of paying half a mil, I would if I could.

You still owe the sales tax on internet purchases to your state, as 'use tax' on your income taxes. These laws have been on the books for close to a century typically.

 

[PeshakJang]

Not all loopholes are equal. If i choose to buy a vacation house in one state over another based on tax differences, am I using a 'loophole'? Am I 'evading taxes'?

On the other hand, if I am a big corporation who puts up a phony headquarters in the Cayman islands to evade taxes in the US where I really make money, am I evading taxes?

If I live in Chicago, but I legally register my car in Indiana to avoid paying taxes, and I using a loophole?

What if I am a politician in Chicago, and I chastise and work to punish Chicago based companies that are chartered in Nevada to avoid paying Illinois taxes?

That's a pretty accurate comparison, and you'd be lying to say it isn't hypocritical. Is it anything illegal? No. Is it disingenuous? Highly.

If I falsify my records to avoid the taxes on the prices one of my subsidiaries is selling good to another, am I evading taxes? Happens all the time.

And falsifying records would be a crime, and not a loophole.

I haven't commented on Kerry yet here, haven't gotten the reasonable request to do so,

We don't need to request your commentary, because it's always the same, predictable apologist crap, devoid of anything resembling impartial reasoning.

but you are simplistic to lump all tax-related actions together as equal under 'loopholes'.

Some things are as simple as preaching one thing and practicing the opposite. I don't have to lump all tax-related actions together, but you've done a pretty good job of coming up with unrelated and incomparable situations. Bottom line; He spouts rhetoric about other entities not paying their "fair share", calls them unpatriotic for taking advantage of legal tax loopholes, works through congress to remove those advantages, then spends millions of dollars building a boat in New Zealand (wonder how much tax he paid there?), and then uses an on-shore tax haven to register it in the US, for the simple reason of avoiding a $500,000 tax bill to his home state.

What is he going to say when MA has to raise taxes to make up for shortfalls? Will he be lining up to "pay his fair share"? Or will he use his position as a lawmaker to take more of other people's money instead?

 

[ericlp]

You still owe the sales tax on internet purchases to your state, as 'use tax' on your income taxes. These laws have been on the books for close to a century typically.

Haha, ok, well, I've been breaking the law! Whoohooo I'll... you just keep paying them. I won't, ok? Shhhhhhh, don't tell anyone ok?

Hmmm, ya know I bought a few expensive items in a taxless state and brought them back to my state, again don't tell them alright?

My point is and WAS.... Who here actually fills out a Fair use tax form when filing to add up all the shit they bought on the net?

 

[BoberFett]

Haha, Craig still trying to defend his wealthy corporate masters. What a pathetic tool.

 

[brencat]

Wrong again. First, their efforts are good to have at all - and second, the things that 'don't apply to them' are the exception, not the rule.

Look, JFK banned the import of Cuban cigars - but he smoked them. I guess by your standard that's the whole story of his presidency.

Yet it's this very "relativist" thinking on the part of the left that pisses ordinary people off the most. JFK smoking a delicious banned Cuban is excusable because it's a 'minor' infraction. Nevermind he's told the rest of us 'little people' we can't have them.

Same thing with gun rights...the hicks in the south and in flyover country are told we're too stupid to handle a gun properly and shouldn't have one. Meanwhile, the limosine libs pushing the anti-gun agendas take their $8k Krieghoffs and Perazzis and spend an afternoon at their sporting clays clubs and eat on silverware and fine China afterward.

The point I'm trying to make is, the "do as I say, not as I do" hypocrisy from BOTH parties has got to stop. And the relativist point you're making about some activities being worse than others just looks stupid. It's ALL bad when politicians responsible for voting on policy that controls or restricts our lives and freedom do the things we can no longer do.

 

[spacejamz]

[obama]I do think at a certain point you’ve made enough money[\obama]

 

[Craig234]

Haha, ok, well, I've been breaking the law! Whoohooo I'll... you just keep paying them. I won't, ok? Shhhhhhh, don't tell anyone ok?

Hmmm, ya know I bought a few expensive items in a taxless state and brought them back to my state, again don't tell them alright?

My point is and WAS.... Who here actually fills out a Fair use tax form when filing to add up all the shit they bought on the net?

I just learned of this on my 2008 taxes, and immediately complied (it came to hundreds of dollars in extra tax, for what it's worth).

To your question, turns out you have to actively lie in Turbotax now to not pay the tax - it asks you, 'did you buy anything on the internet that you use in your state?'

I think it's fair to tax the internet purchases and put the online companies more on an equal competition with the brick & mortar stores.

The real difference isn't some principle, it's merely enforcability.

You are basically like a shoplifter who steals when you can get away with it and rationalizes what you do to try to find some justification that's not there.

You are a thief - those tax burdens you don't pay don't disappear, they go onto other people.

You lack the honesty to try to make some coherent argument against the sales tax at all (which you would have a hard time doing), you just steal when it's easy.

But let me guess, a government employee steals something far less valuable than your unpaid taxes from the government that taxpayers have to replace, you are OUTRAGED.

 

[Craig234]

unread

You haven't noticed, as I see you replied to my post but went unread, that you are not someone I'm reading or responding to based on the excesses of idiocy and rudeness?

 

[Fern]

The question is, are we going to reserve all our partisan anger for only the people in the other party who commit such abuses, or are we all going to get all of our collective asses in gear and demand that all our politicians close the damn loopholes that make these abuses possible in the first place?

In this case its a slightly more complex interstate issue, one state decides to give a tax break to the citizens of all States, but that does not mean Massachusetts has to respect the exemption for their citizens.

But why blame to smarter person who takes advantage of a loophole when you and I would cheerfully do the same, blame the loophole for the abuse.

As for a dumb guy like me, I never heard of that loophole before, but there are so many more loopholes that also need closing. Or maybe, alternatively, we could cap the collective use of loopholes to something like $30,000 per person per year. Anything in excess of that is not tax deductible.

It's not a "loophole" that can or should be closed - states have a right to design their taxation structures. (See more on this below.)

Nor is it something that MA can likely fix. Under the laws regarding Sales Tax, the state needs some type of nexus before it can legally levy a sales tax on property purchased. So, if Kerry purchases outside of MA and keeps it out of teh state thereafter they cannot tax it. MA has no choice in the matter.

If it is kept out of the state, MA cannot levy property taxes either. (Imagine the trouble if a state could levy property taxes on it's citizens' possessions located in other states. Think of vacation homes et.)
----------------

RI has every right to pursue a taxation scheme that it feels benfits itself and it's citizens. Seems to me RI likely has a very strong and profitable industry around boats - marinas, boat repair shops, restaurants/bars near the waterfront, gas stations for boats etc. MA, OTOH, likely has a very poor one.

A quote from the article:

John Kerry proves an important point that taxes in Massachusetts are too high

So, IMO, Kerry himself is demonstrating how destructive a high tax regime can be to an economy. That it can be counter-productive, as in MA's case.

Yes, Kerry looks to be hypocritical but as a tax professional I firmly believe that we are NOT obligated to arrange our affair so as to result in the highest possible tax. That would be stupid. His case that the boat is docked there for maintance etc actually makes some sense to me; given the favorable climate for the boating industry RI is probably the best place to keep it if only because so many support businesses are located there.

Fern

 

[PeshakJang]

You haven't noticed, as I see you replied to my post but went unread, that you are not someone I'm reading or responding to based on the excesses of idiocy and rudeness?

No, I understand. You can't justify your stance, yet you can't stand admitting that I am right, so you pretend like you are offended, you call me rude and an idiot, and ignore me.

Wait, who is the rude one?

You're an idiot.

http://forums.anandtech.com/showthread.php?p=30167175&highlight=idiot#post30167175

You're an idiot.

http://forums.anandtech.com/showthread.php?p=30178697&highlight=idiot#post30178697

Bamacre, welcome to the idiot list.

http://forums.anandtech.com/showthread.php?p=30159420&highlight=idiot#post30159420

No, you are an idiot is the problem here.

http://forums.anandtech.com/showthread.php?p=30074523&highlight=idiot#post30074523

You're an idiot.

http://forums.anandtech.com/showthread.php?p=29339124&highlight=idiot#post29339124

You're an idiot.

...

You're an idiot.

http://forums.anandtech.com/showthread.php?p=29325533&highlight=idiot#post29325533

You're an idiot.

http://forums.anandtech.com/showthread.php?p=29262223&highlight=idiot#post29262223

Your entry into the idiot of the thread contest is received.

http://forums.anandtech.com/showthread.php?p=29244080&highlight=idiot#post29244080

You're an idiot, Hyabusa.

http://forums.anandtech.com/showthread.php?p=29226696&highlight=idiot#post29226696

Idiot.

http://forums.anandtech.com/showthread.php?p=29211997&highlight=idiot#post29211997

Because I'm very conservative about the word idiot, I usually take some time before using it. Congrats.

You get the irony of the week as week as well.

http://forums.anandtech.com/showthread.php?p=29483344&highlight=idiot#post29483344

YOU call everybody an idiot.

No, I don't; not even close. You were dishonest.

http://forums.anandtech.com/showthread.php?p=29216033&highlight=idiot#post29216033


Need I say more? Idiot.

 

[Craig234]

It's not a "loophole" that can or should be closed - states have a right to design their taxation structures. (See more on this below.)

Nor is it something that MA can likely fix. Under the laws regarding Sales Tax, the state needs some type of nexus before it can legally levy a sales tax on property purchased. So, if Kerry purchases outside of MA and keeps it out of teh state thereafter they cannot tax it. MA has no choice in the matter.

If it is kept out of the state, MA cannot levy property taxes either. (Imagine the trouble if a state could levy property taxes on it's citizens' possessions located in other states. Think of vacation homes et.)
----------------

RI has every right to pursue a taxation scheme that it feels benfits itself and it's citizens. Seems to me RI likely has a very strong and profitable industry around boats - marinas, boat repair shops, restaurants/bars near the waterfront, gas stations for boats etc. MA, OTOH, likely has a very poor one.

A quote from the article:


So, IMO, Kerry himself is demonstrating how destructive a high tax regime can be to an economy. That it can be counter-productive, as in MA's case.

Yes, Kerry looks to be hypocritical but as a tax professional I firmly believe that we are NOT obligated to arrange our affair so as to result in the highest possible tax. That would be stupid. His case that the boat is docked there for maintance etc actually makes some sense to me; given the favorable climate for the boating industry RI is probably the best place to keep it if only because so many support businesses are located there.

Fern

What we're talking about here is a reported 6.25% sales tax in MA versus a 0% sales tax in RI. While you have something of a point, it can go too far, to a 'race to the bottom'.

No pun intended about the boat.

What we're also talking about is the principle or spirit, not just the letter of the law.

When a Schwarzeneggar registers his multi-million dollar plane in Nevada for no other reason than to not pay the sales tax to the government of the state prefers to live in - nice oceans, not mostly sand - not to mention the state he wants to be governor of - that raises the issue that he's avoiding his 'fair share' of taxes to his state. The same isuse applies to Kerry for a multi-million dollar yacht - or any purchase.

Is there any legitimate reason for Kerry to register in RI, as opposed to just the sales tax? I don't know, but suspect likely not.

It's a reasonable political criticism for him, if he's going to some lengths to avoid the MA sales tax, which he may well owe anyway as a posted pointed out.

He also has some point that he does pay a very large tax bill to MA - but that doesn't excuse the avoidance of an even larger one that's fair. He has a lot more money, too.

There's a gray area when you cross from 'legitimately minimizing your taxes', to when you try to minimize them so much as to exceed the spirit of fair taxation.

Sometimes this can be blamed on the legislature for writing bad tax laws, whether out of carelessness or corruption, but some of the blame sometimes goes on to the taxpayer, too.

In short, it is hypocrisy to rail against the excesses of tax avoidance, and then to indulge in excesses, even if they are lesser in degree than the worst of others.

I haven't heard Kerry's side yet. You speculate there might be legitimate reasons to register in RI; maybe. I don't know.

But this is why I like the tax laws to not have loopholes, and to minimize the excessive 'race to the bottom' competition that's bad for society. It shouldn't rely on taxpayers' 'generosity'.

It should just be one fair bill, with incentives good for society.

 

[BoberFett]

You haven't noticed, as I see you replied to my post but went unread, that you are not someone I'm reading or responding to based on the excesses of idiocy and rudeness?

Hahahaha, Craig the baby strikes again.

Peshak tears him a new one repeatedly and now he's on Craig's "ignore list".

 

[MotF Bane]

No, I understand. You can't justify your stance, yet you can't stand admitting that I am right, so you pretend like you are offended, you call me rude and an idiot, and ignore me.

Wait, who is the rude one?



http://forums.anandtech.com/showthread.php?p=30167175&highlight=idiot#post30167175



http://forums.anandtech.com/showthread.php?p=30178697&highlight=idiot#post30178697



http://forums.anandtech.com/showthread.php?p=30159420&highlight=idiot#post30159420



http://forums.anandtech.com/showthread.php?p=30074523&highlight=idiot#post30074523



http://forums.anandtech.com/showthread.php?p=29339124&highlight=idiot#post29339124



http://forums.anandtech.com/showthread.php?p=29325533&highlight=idiot#post29325533



http://forums.anandtech.com/showthread.php?p=29262223&highlight=idiot#post29262223



http://forums.anandtech.com/showthread.php?p=29244080&highlight=idiot#post29244080



http://forums.anandtech.com/showthread.php?p=29226696&highlight=idiot#post29226696



http://forums.anandtech.com/showthread.php?p=29211997&highlight=idiot#post29211997



http://forums.anandtech.com/showthread.php?p=29483344&highlight=idiot#post29483344



http://forums.anandtech.com/showthread.php?p=29216033&highlight=idiot#post29216033


Need I say more? Idiot.

LOL. Spectacular!

 

[nobodyknows]

This thread is amusing. "Evading" taxes ... lol. I'm sure no one criticizing Kerry has ever done anything to limit their taxes.

Anyone who can aford a yacht can aford to pay the damn taxes on it. If Kerry ever so much as docks at a port in MA with his yacht he should be be arrested for tax evasion.

 

[joebloggs10]

So, with what agency does one register a boat? Really, wouldn't it be that agency's fault that the tax was avoided?

What I'm thinking is that there was a break down somewhere along the way. As a similar situation, one could reside in a high-tax state like CA and buy a car in a lower tax state like NV. The problem with that is that when you guy the car the NV DMV will refuse to register the car without a proper NV permanent address. You will have to register in CA and pay the CA registration fees. Why doesn't whoever you register a boat with do something different and refuse the registration without a permanent address in state?

 

[Darwin333]

This thread is amusing. "Evading" taxes ... lol. I'm sure no one criticizing Kerry has ever done anything to limit their taxes.

I do everything I possibly can, within the law, to minimize my taxes. I also readily admit that I am a hypocrite because I think that we are in a serious fiscal crisis and that taxes eventually need to go up and spending needs to come down. What does that have to do with the discussion at hand though?