Super Rich Still Have Little To Fear From IRS
By Stephanie Mencimer on Wed. April 11, 2012 7:10 AM PDT
In 2009, IRS commissioner Doug Shulman said in a speech that the IRS had formed a new group of auditors who were going to be directing their attention at a special group of taxpayers: the super rich. Dubbing them “global high wealth individuals,” Shulman promised that his agency would be taking a hard look at people who had tens of millions of dollars worth of assets and income tied up in complicated financial dealings that often involved overseas banking and aggressive tax avoidance strategies. The IRS, he said, wanted to make sure that hard-working, tax-paying Americans could be sure that everyone is paying her own fair share. It’s certainly a ripe area for the government to turn up more revenue. In fiscal 2011, audits of people making more than $1 million identified $5 billion in underreported income tax, and that’s just for the roughly 15 percent of millionaires the IRS audited.
Two-and-a-half years later, though, the effort to target the super rich has proven underwhelming. According to a new study by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University, the IRS has completed a mere 36 audits from the over-$10 million set since launching the global high wealth group. TRAC researchers estimate that this means the IRS audited only between 12 and 18 people, because the audits were counted by annual returns, not by individuals, who may have had more than one year of returns examined. That’s not even one percent of the more than 8,000 annual returns that the IRS has said include gross income of $10 million or more. (By comparison, working poor people with children who claim the Earned Income Tax Credit get audited at twice the rate of any other taxpayer.)
As part of its global high wealth group effort, the IRS has also promised to focus more on “flow through” entities—the partnerships and S corporationsthat super rich people use to avoid paying taxes. The group didn’t have the most ambitious goals to begin with, according to TRAC. But it failed to even meet those. The IRS hoped to audit 122 of these sorts of corporate entities in fiscal 2011, but completed only 40.
The IRS hasn’t come up totally empty handed by looking at the portfolios and tax returns of the super rich. They found $47 million in additional taxes owed. But if you consider how much the IRS turns up just in simple audits of ordinary millionaires, that’s pretty small potatoes. TRAC can’t say whether the disappointing results from the IRS are due to a lack of resources for the agency or the fact that the super rich might just have incredibly complicated financial affairs that aren’t quickly and easily tackled by the average IRS auditor. Either way, more resources for the IRS ought to be a priority for anyone who really cares about the budget deficit. The government is clearly leaving money on the table that it could surely use right now.
Source: Mother Jones
Obama promotes ‘Buffett Rule’ among wealthy endorsers
President Obama plugged his plan to increase taxes on millionaires yet again Wednesday morning, but this time with a new twist – appearing alongside rich people who support the signature tenet.
The proposal would require that people earning $1 million a year or more pay at least the same tax rate as middle-class families. Obama calls it the “Buffett rule” after billionaire investor Warren Buffett, who has famously complained that he pays a lower rate than does his secretary.
To help make the point, the endorsers showed up with their assistants. Appearing on stage with Obama were Abigail Disney, president of the Daphne Foundation, and her assistant, Celine Justice. Whitney Tilson, managing partner of T2 Partners LLC, appeared with her assistant, Kelli Alires; Google retiree Frank Jernigan joined with his assistant, Teresa Gardiner; and Lawrence Benenson, of Benenson Capital, appeared with his assistant, Carmen Peterson.
None of those millionaires has told him they’re excited about paying more taxes, Obama said.
But “they agree with Warren,” he said. “This should be fixed.”
The measure is highly unlikely to pass the divided Congress this election year. But the message was live on network television this morning, same as Tuesday, giving the president’s “tax fairness” message the kind of exposure that money can’t buy.
Source: Los Angeles Times
The base Gulfstream G5 starts at roughly $45,000,000.00 million dollars. School lunch costs roughly $1.95. That’s 23,076,923 lunches. And yet there are children that go without because their parents can’t afford $1.95 a day. Across the country politicians try to pass laws, often on behalf of Lobbyists for Corporations, that cut programs at schools, like Free & Reduced Lunches.
I challenge ANY CEO to sell their jet and use the money to pay for school lunches for EVERY child in any state for one year.
Unsurprisingly, the New York metropolitan area has the largest number of very high-income households. Nearly 12 percent of top-income households live in the New York region, compared to about 7 percent of all households. Second-place Los Angeles is home to about 5 percent of the very rich, compared to about 4 percent of all households.
There are 54 metropolitan areas whose share of very high-income households exceeds their share of all households. These include 18 of the 20 metropolitan areas with the most very high-income households, several others among the nation’s 100 largest metropolitan areas (including Hartford, Austin, Raleigh, Charlotte, New Haven, Poughkeepsie and Richmond), some smaller university towns (Trenton, which includes Princeton, plus Boulder, Ann Arbor, Santa Cruz, Charlottesville, Durham, Ithaca, and Iowa City), and some other small metropolitan areas (Naples, Florida; Midland, Texas; Sebastian, Florida; Napa, California; Santa Fe, New Mexico; Anchorage, Alaska; Reno, Nevada; Barnstable Town, Massachusetts; Manchester, New Hampshire; Lafayette, Louisiana; Tyler, Texas and Rochester, Minnesota).Courtesy Brookings Institution
A drill-down to the zip code level shows that the zip code with the largest number of very rich households is 10023 on the Upper West Side of Manhattan, with 7,621 such households. That zip code, plus one other on the Upper West Side, one on the Upper East Side of Manhattan, and the Washington suburb of Potomac, Maryland, each have about 0.2 percent of all the nation’s very high-income households.
Rounding out the 20 zip codes with the most very high-income households are several in Manhattan (on the Upper East and Upper West Sides, Midtown East, and Greenwich Village), the New York suburb of Scarsdale, Chicago’s Lincoln Park, Cupertino in Silicon Valley, the Houston suburb of Sugar Land, part of Houston’s west side, the Chicago suburb of Barrington, Princeton, a suburban area north of San Diego, and the Washington suburb of Bethesda, Maryland. Wall Street itself doesn’t make the list, since few people live there.
There are Occupy movements in nearly all the metropolitan areas where the top 3 percent are concentrated. All of the 20 metropolitan areas with the most top-income households have groups listed in the directory on the Occupy Together Web site. So do all but six of the 54 metropolitan areas where the very rich are disproportionately located. (The missing six are Bridgeport, Connecticut; Naples, Florida; Sebastian, Florida; Lafayette, Louisiana; Midland, Texas; and Tyler, Texas.)
Yet movements in support of Occupy Wall Street also exist in many places other than those where the very rich are concentrated, including such seemingly unlikely locales as Anderson, Indiana, and Texarkana, Texas. Geographically, their reach is greater than that of the very rich.
What ‘Percent’ Are You? The Numbers Behind the Tax Divide Debate
When it comes to dividing up our class structure, the middle is a good place to start — namely, the 60% of households wedged between the poorest 20% and the richest 20%. These families make between $20,001 and $100,065 a year, and were the group hardest hit by the recession: In 2008, their average income fell by 3.6%, thebiggest single-year dropin history. At the same time, they were also devastated by rising unemployment, mass foreclosures, soaring tuitions and frozen wages. By comparison, households below the 20% line often qualify for social welfare programs, were far less likely to own real estate, and were less affected by massive layoffs. In other words, they had less to lose, and ended up losing less.
On the other end of the spectrum, many of those above the 80% line were shielded from the harsher effects of economic downturns. And over the last 30 years, the top 20% have done quite well: Their share of all wages paid in the U.S. has gone from 50% to 60%. Everyone else has lost ground.
The 53% vs. the 47%
The dividing line between the 99% and the 1% is stark, but some argue there’s a better one: The boundary between those who pay income taxes and those who don’t. According to the nonpartisan Tax Policy Center, 53% of households pay federal income tax; the rest either break even or get back more in refunds than they pay.
In fact, thesecond-to-lowest20% of the country — households making between $20,001 and $38,043 — get back about 0.4% more income tax than they pay; for families who make less than $20,000, it’s about 6.8%.
Some conservatives — notably on the Tumblr blogWe are the 53%— have taken these numbers to heart, arguing that this means the bottom 47% is getting a free ride. But the 53%/47% division is a bit misleading.
To begin with, almost all households pay state taxes, Medicare tax, Social Security tax, excise taxes, sales taxes, and a raft of other government fees. When this broader, and more accurate, assessment of taxation is used, the 47% doesn’t look to be getting off so easy: Thesecond poorest quintile— the ones that got 0.4% of their income tax back — still paid more 10% of their incomes in various federal taxes.
In fact, when everything is factored in, 86% of the country pays more than it gets back in federal taxes.As for the rest, it’s not the split you might expect: More than half (8% of Americans) are senior citizens receiving Social Security.
And that last 6% — the ones who really pay nothing to the federal government? They are unemployed, disabled, in school, or making very low incomes. But even this small group pays state and local taxes, sales taxes, and other government fees.
Where the Poor Pay More
When it comes to percentage of income, the line is even clearer: For some taxes, the bottom 20% of the Americans pay more than the top 20%. For example, a household on the bottom pays almost 54% more of its income into Social Security than a household on the top. The same goes for excise taxes — fees attached to certain commodities like gasoline and alcohol: As a percentage of income, the poorest 20% pays more than four times as much as the richest 20%.
…if the stories we grew up with were honest.
It really does amaze me that people look surprised upon the youth and young working class adults of today as “entitled” for wanting the very values we were reared on to be implemented in the reality in which we all must live.
Save the Rich by Garfunkel and Oates
Everyone knows these times are really tough
And we need to band together say we’ve had enough
All the jobless people need to learn to be content
Cause what we need to do is protect our one percent
Save the rich
Let them know you care
Don’t leave them to languish
In their penthouse of despair
Save the rich
Let their bonuses be swollen
And let them keep it all tax free
Even if it’s stolen.
Save the rich
Let’s give our job creators
More than their fair share
So they can go to Asia
And create jobs over there.
There’s loopholes and exemptions
And children to exploit.
So give them special tax breaks
Go fuck yourself Detroit!
And those who don’t create jobs
Really need help, too.
Cause without their 7th home
How will they make it through?
It’s not time for complaining
Not the time for class war
It’s time sacrifice yourself
To give them more and more and more
And more and more and more…
Save the rich!
America’s built on corporate greed
It’s not Wall Street’s fault
If you can’t get what you need.
Save the rich
Don’t go crying to mommy
Cause if you don’t agree
Than you’re socialist commie
Save the rich
Blame yourself for your problems
Not the bad economy.
So what if those who have the most
Are the ones who put it in jeopardy?
Fuck your student loans!
Fuck your kids and their health care!
It’ll only take 10,000 of your jobs
To put another private jet in the air.
Save the rich
It’s so easy to do
Just let yourself be ignorant
To what’s been done to you.
Save the rich
By doing nothing at all
Deny all sense and logic
And just think really small.
You should think really small
Or just don’t think at all!
And save the rich!
But let’s just remember that, as the 53%, I am working SO HARD while those blue collar/poor people work lazy jobs like shoveling, melding, and standing all day at a cash register. But because you got a degree, for which you spent a substantial amount of money on, you get the luxury of a safer, more comfortable office job.
See the reason some people are upset right now is that they feel they were tricked and coerced into taking on a horrible investment - preyed on like crooks prey on the elderly. We’re not just talking houses, but education as well. It used to be that you could work hard a few years and invest a lump sum of money (if you were lucky enough to have it) into a degree so that after that sentence, you could get a more comfortable job. A job where you could sit, indoors, with a computer or other boredom killers. And it used to be that those jobs paid more to cover the cost of that education. That made it a worthwhile investment. But the system has fallen apart because education prices have sky-rocketed since our parents went to school, yet our salaries have stayed at relatively the same stagnant level. We were bred on the mantra, you must get a degree to get a job these days. So we did. And we were told to go to a good school. We had rankings and schools gave out statistics on their 95% post-graduate employment rate within six months. But who the F**K has $15-50,000 PER YEAR just sitting around? So basically we were told, if you want to succeed in life you will take this loan. It all sounded like a must take deal.
Oh, no more jobs? Salary hasn’t risen? Too bad, so sad. You should have known better at 18 years old. You shouldn’t have listened to ALL these professional adults, including your parents. So stop being a whiny brat and get a job. WTF? What rock have you been living under? And to all the people complacent in their austerity - your life is unfair. You shouldn’t have to sweat and stress as hard or harder than another person and live in squalor (or if you’re lucky, relative comfort but one accident or sickness away from squalor), whilst they live in luxury of services, medical care, technologies, educations, experiences YOU WILL NEVER HAVE ACCESS TO. This isn’t about complaining or being whiny. This is about justice and fairness. This isn’t even about taxing. This is about the whole system. How much we pay our workers and charge for education. That would be the “trickle down” we should have seen from the bail-outs. Instead that money disappeared into the bonuses of bankers.
Do people really not see the problem? Without education we won’t see the sorts of progresses we would like to see under capitalism. Because people WILL start to decide against education if, when they look around, they begin to see that education is a bad investment.
THIS is the problem, on a totally mathematical, economic, logical level - not on a bleeding-heart liberal level.