Tag Archives | Income Tax

Greatest trick of the rich? Making us believe they pay all the taxes

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liz west (CC BY 2.0)

 

Dylan Matthews via Vox:

Typically when politicians fight about taxes, they fight about the income tax. That is to say, they fight about the tax that rich people hate — not the taxes poor people hate.

This leads to a really perverse dynamic, wherein the taxes the privileged pay are worthy of attention and the ones the poor pay are ignored. It paints a picture where the government is being supported on the backs of the wealthy, and the poor and middle class are free-riding. It leads to plans for various kinds of tax cuts and tax reforms that matter massively for the rich and very little for the poor.

The issue here is the ceaseless focus on the federal income tax. A report from the Joint Committee on Taxation found that most Americans (65.4 percent of filers) pay more in payroll taxes than income taxes.

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City Introduces “Sex Tax Meters” For Prostitutes

800px-10.3010_Torino-nightlife.v2Inspectors may be pulling prostitutes off the streets in Germany. Not because they’re trying to lower crime rate, but because they haven’t been paying their income taxes. Via Reuters:

Prostitutes in the German city of Bonn must carry a ticket purchased from a new parking meter-like machine while working the streets or face hefty fines from tax authorities in a scheme launched on Monday night.

In Germany, ladies of the night pay income tax — the level of which varies from region to region — but compliance is difficult to enforce with women seeking business on the street.

Germany’s first “sex tax meters,” from which prostitutes can purchase a ticket for 6 euros ($8.72) per night, will ensure the tax system is fairly implemented, a city spokeswoman said.

“Inspectors will monitor compliance — not every evening but frequently,” the spokeswoman told Reuters.

[Continues at Reuters]

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Should There Be A Tax On Wealth?

imagesWarren Buffett says we need a significantly higher income tax for the super-rich. But could that argument be a red herring? Partial Objects writes that the real conversation we need to be having is about taxing wealth — i.e., Buffett’s $45 billion fortune, not the paltry millions he made in 2010:

Warren Buffett wants us to stop coddling the super-rich. He argues for superlatively higher taxes on those with incomes greater than $1 million a year.

Let’s say we take Buffett’s advice, and we raise taxes so that those highest 400 income earners pay an additional 20% more in income taxes (i.e. 41.5 instead of 21.5). That would mean an additional $18 billion in revenue. Nice, right?

The US doesn’t tax wealth, but other countries do. If we did, at a modest 10%, it would mean an additional $140 billion in revenue every year. But we never talk about taxing wealth, only income.

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The Economy of The Crow: Bird Brains Want to Throw Away $116 Billion A Year to Benefit The Richest 1.3% ‘Small’ Business Owners

There is an old folk saying that comes down from the Irish tradition:  “The economy of the crow”.  It’s uttered whenever some old wag wishes to describe, in a dryly pithy manner, a short-sighted and foolish resource management strategy.  It supposedly is derived from the habit of scavenger birds like crows who, upon noticing an unharvested bit of carrion ripe for the picking, tend to drop whatever goodies they may currently have in their clutches in order to go in pusuit.  Basically the saying is a ridicule, a chastisement of stupid waste.
Economy of The Crow
While that kind of bird-brained buffoonery may be understandable in a creature with the cranial capacity of a thimble, it’s not the type of responsible management practice we expect from our elected representatives.  Certainly not from the members of the party that claim in one breath to be both the party of fiscal responsibility and the party of deep business savvy. … Read the rest

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Soak The Very, Very Rich

A sensible suggestion from the capable mind of The New Yorker‘s James Surowiecki, but what are the chances that our government will implement it, one wonders (whilst thinking of all those campaign contributions made by the very rich):

The fight on Capitol Hill over whether to extend the Bush tax cuts is about many things: deficit reduction, economic stimulus, supply-side ideology. But at its core is a simple question: who counts as rich? The Obama Administration’s answer is that you’re rich if you make more than two hundred thousand dollars a year as an individual or two hundred and fifty thousand dollars a year as a household, and therefore you should have your taxes raised. Conservatives suggest that this threshold is far too low, and argue that Obama would be taxing mostly small-business owners, or the people a Fox News host has referred to as “the so-called rich,” rather than fat plutocrats.

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GE Files 7,000 Tax Returns Globally, Ends Up With A $0 U.S. Tax Bill

General ElectricAnnalyn Censky writes on CNNMoney:

General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0.

How’d it pull off that trick? By losing lots of money.

GE had plenty of earnings last year — just not in the United States. For tax purposes, the company’s U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

That left GE with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a “tax benefit” of $1.1 billion back into its reported earnings.

“This is the first time in at least decades that GE has reported negative U.S.

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More Than 53% of Your Tax Payment Goes to the Military

Atomic BombI think this 53 percent number is debatable, but I don’t doubt that the U.S. government’s (i.e. the taxpayer’s) greatest expense is the military. Dave Lindorff writes on Common Dreams:

If you’re like me, now that we’re in the week that federal income taxes are due, you are finally starting to collect your records and prepare for the ordeal. Either way, whether you are a procrastinator like me, or have already finished and know how much you have paid to the government, it is a good time to stop and consider how much of your money goes to pay for our bloated and largely useless and pointless military.

The budget for the 2011 fiscal year, which has to be voted by Congress by this Oct. 1, looks to be about $3 trillion, not counting the funds collected for Social Security (since the Vietnam War, the government has included the Social Security Trust Fund in the budget as a way to make the cost of America’s imperial military adventures seem smaller in comparison to the total cost of government).

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A History of American Tax Revolts (Photos)

Newsweek presents:

Boston Tea Party

Nobody likes taxes. But some people really don’t like taxes. Joseph Stack, a software engineer in a long-running feud with the Internal Revenue Service, crashed his small airplane into an Austin, Texas, office building that housed nearly 200 IRS workers on Feb. 18, 2010. Stack and a man believed to be an IRS employee were killed in the crash. The Austin attack is just the latest in a long history of protests against the government’s power to tax. Before the United States even existed, patriots staged the Boston Tea Party in protest of the British crown’s taxation of the Colonies.

See the photos and read the stories of the history of tax revolt in America on Newsweek

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Joe Stack Plane Crash: Why Did He Hate the IRS Enough to Kill?

Austin Plane CrashWe certainly received, and continue to receive, a range of opinion on the final act of Andrew Joseph Stack III.  Since that day, many news outlets have attributed a 1986 tax law change as the source of his anger expressed in the Stack “manifesto” many of you have been commenting on.

As it currently stands, 1 person was killed and 12 injured by his actions in Austin that day.

Carlin DeGuerin Miller writes on CBS News:

Joseph Andrew Stack’s seething hatred for the IRS appeared to have roots at least two decades long, judging from the web post he left behind before crashing his plane into in an Austin, Texas office building Thursday where some 200 employees of the tax agency worked.

The anti “tax man” fuse may have been lit in Stack in 1986, when the software engineer confronted a change in tax law, that required companies using high-tech contractors to withhold part of their salaries for income tax purposes.

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