How thousands of Millionaires donít pay Income Tax
percent of all tax filers (individuals or households)
pay no federal income taxes because
of various exclusions.
High-income tax filers make up a tiny portion of that
number, but they are by far the biggest
Over $298 billion vs $61 billion !
More than half of the tax revenue lost to
the most common tax exclusions stays
in the pockets of the
richest one-fifth of Americans,
according to an analysis by the Congressional Budget Office.
In 2011 about 433,000 tax filers with incomes over
$100,000 paid no federal income tax, according to
estimates based on limited IRS data by
the Tax Policy Center, a nonprofit think tank.
That number includes approximately 4,000 filers with
an income of $1 million or more.
Most low-income filers ó those with a pretax
income of $20,000 or less ó who paid no tax did so because they made just
enough to cover family expenses, or less.
Many also benefit from the Earned Income Tax Credit,
which offers a payment to low- and moderate-income workers. That
cost the government about $61 billion in
forgone tax revenue in 2013, according to the CBO.
By contrast, high earners who paid no tax
were primarily able to do so because of a wide array of other special
provisions in tax law. Roughly 1,000 of the 4,000
millionaire non-payers in 2011 did so because their income
that year was locked away in
individual retirement accounts not subject
to federal taxes, according to Roberton Williams of the Urban
Institute, one of the authors of the Tax Policy Center analysis.
At an annual cost of $137 billion annually,
the tax exclusion for pension contributions was
more than twice as expensive as the
Earned Income Tax Credit.
||Oxfam blamed tax havens in its
2016 annual report on income inequality for much of the widening gap
between rich and poor. "Tax havens are at the core of a global system
that allows large corporations and wealthy individuals to avoid paying their
fair share," , "depriving governments, rich and poor, of the resources they
need to provide vital public services and tackle rising inequality."
At least 2,400 US-based clients were found in the Panama Papers....,
Mossack Fonseca offered advice to many of its US clients on how to evade
US tax and financial disclosure laws.
Donald Trumpís allies in the Paradise Papers ( including the
Koch Brothers and
Robert Mercer )
18 Hypocritical CEOs: Receiving Bailouts,
Outsourcing Jobs & Evading Taxes
Tax documents obtained by the New York Times show that Donald Trump declared a
massive net operating loss of $916 million in
1995, enough to allow him to avoid paying federal
income taxes for up to 18 years. The documents shed light
on provisions in the U.S. tax code that allow wealthy individuals to avoid
income tax payments even in years when they make millions.
In 1995, Trump declared $3.4
million in business income, $7.4 million in interest income, and close to
$100,000 in income from other sources such as dividends, taxable refunds and
wages. But this income was more than offset by
hundreds of millions of dollars in reported losses
from real estate and "the financial wreckage he left behind in the
early 1990s through mismanagement of three Atlantic City casinos, his
ill-fated foray into the airline business and his ill-timed purchase of the
Plaza Hotel in Manhattan," according to the Times.
Another significant chunk of the 4,000 high-income
non-filers made their money from interest on municipal bonds, which is not subject to federal
income tax. Reduced tax rates on
capital gains were also one of most costly
federal tax provisions: $161 billion.
Calculating the cost of the 10 largest tax expenditures ó the exclusions, deductions and
credits allowed through the tax code ó the 2013 CBO report found that the top 20%
of earners were the biggest beneficiaries.
The CBO report didn't include "net operating loss"
in its calculation of top tax expenditures. But as Trump
shows, it can be a major boon.
People like Trump who work in
real estate can use real
estate losses to offset gains or income from elsewhere,
according to Williams. For real estate developers,
"your business is such that you're more likely to generate losses in the short
run, and the government is going to allow you a way of
deferring your taxes while you're in a losing situation,"
But, he added, often times "these are paper losses, not
real losses." The tax code allows property owners in the
real estate business to claim losses from things
like depreciation even if the property itself is
gaining market value. Williams
says these provisions are not necessarily problematic or harmful on their own,
and that they weren't created with the intention of allowing
wealthy people to avoid
paying taxes indefinitely. But the complexity
they add to an already-complex and massive tax code can erode people's trust in
the fairness of the tax system. "Right now we have an extremely complex tax code
that literally nobody understands," Williams said
in an interview. "That's not right. The reasons that isn't right is not so much
that the provisions themselves are wrong, but rather that we don't understand
why we're paying what we do." This complexity can lead to suspicion of wealthy
non-taxpayers, like Trump. And it can just as
easily lead to suspicion of low-income people who don't pay tax either.
"HALF of Americans don't pay income tax despite crippling govt debt,"
Trump was one of them.
The most shocking part of Donald Trumpís tax
records isnít the $916 million loss.
It's non-existent DEPRECIATION
What the government does for people like Donald Trump
that it wonít do for the poor
A new study says Trump would raise taxes for
millions. Trump's campaign insists he won't.
Why the world's third-richest man is attacking
A strange but accurate predictor of whether someone supports Donald
source Washington Post,