One of the more puzzling aspects of our economic betters' obsession with tax policy is the reality that, in practice, they're not paying much in taxes.
buy stromectol online cpff.ca/wp-content/languages/new/canadaa/stromectol.html no prescription
The rates are largely irrelevant.
buy singulair online cpff.ca/wp-content/languages/new/canadaa/singulair.html no prescription
They matter to some extent to you and I, but to the moneyed class it is the equivalent of the "recommended servings" on a bag of chips. Much as how everything is single serving if you're sad enough, the effective tax rate is always under 10% if you're rich enough.
online pharmacy zithromax best drugstore for you
This is the reason that America can have simultaneously the highest corporate tax rate in the world and multibillion dollar corporations that pay a couple hundred bucks in taxes during a profitable year. It also explains how Mitt Romney can pay something like 15% on his annual income that runs into eight figures. There are dozens of obvious loopholes in the system and creative lawyers, accountants, and financial planners are coming up with new ones every day.
online pharmacy cymbalta best drugstore for you
Check out this Bloomberg article detailing a neat trick, pioneered by the Waltons, that Sheldon "I'm so rich I can piss $150 million away on Newt Gingrich" Adelson is using to skirt hundreds of millions in taxes.
Look at the graphic and explain to me in what way this is different than money laundering. I'll wait.
J. Dryden says:
"Money laundering" is done by and for the benefit of minorities. Context is everything.
Aaron says:
Damn you, Dryden. Great firstie.
LK says:
@J. Dryden context is indeed everything, but I'd like to finesse your point- a "tax loophole" is a "money laundering" scheme that is performed by a magnate that doesn't own the government.
Daphne says:
…to you and ME. "I" as the object of a preposition is pseudo-grammar: trying to sound correct while getting it wrong.
Kevin says:
“How many times do you have to pay taxes on money?”
Hey, a dishonest framing from Adelson! Who's surprised?
Arslan says:
Unfortunately many Americans don't realize that one of the costs of not taxing the rich is that the difference needs to be made up somewhere, and that comes from the middle class. If you're a small business owner, self-employed, or just a homeowner with a decent income and you're getting needled by the IRS, they're doing it to you because they aren't allowed to do this to the richest folks.
FATCA is a good example of how the burden is shifted to middle class people. This ridiculous law, which violates the sovereignty of literally every nation on earth, requires foreign banks to report on any accounts over $10,000. Since this would actually be illegal in many countries, banks in those countries have simply decided not to offer services to American citizens. It's important to realize that nearly three million US citizens live abroad, and no, they are not all millionaires hiding major assets in offshore banks. Many of them are simply English teachers or owners of small businesses. FATCA flies under the radar of most Americans because few people actually travel or conceive of living abroad, and in a pinch pundits can simply label those people as traitors who are trying to get out of paying their fair share(despite the fact that many of them are employed by foreign companies and pay taxes to those governments).
But FATCA will make up for lost revenue right? Nope. FATCA is expected to bring in $7 billion….wait for it…OVER THE NEXT TEN YEARS. Yes, in a decade it MIGHT bring in the equivalent to what we piss away in Afghanistan in maybe a month. But of course we CAN'T force the job creators in America to pay slightly higher taxes!
Pat says:
Well, the point of money laundering is to move assets into the pool of taxable funds, and out of the black market where they could not be declared, so there's that. Say what you will about Stringer Bell, evidently he paid for more grade school blackboards and fire engines than Sheldon Adelson cares to.
Talisker says:
@Pat: Good point. And money laundering is meant to conceal the original source of income, which is not what's going on here.
This particular tax dodge is really a form of gambling, because it depends on massive gains in the stock price. If Adelson had done the same thing with, say, $30 million in Microsoft stock over the same period, he and his heirs could have lost money on the deal.
So there's yet another incentive to artificially inflate share prices *cough Enron cough*. If it doesn't work then never mind, write the loss off against tax and take another $30M out of petty cash to try something else.
Major Kong says:
"It's good to be the king" – Mel Brooks
Tim H. says:
Letting the bulk of US money idle in the accounts of the .1% is anti-inflationary, greedheads who experienced the seventies inflation are more scared of inflation than Greens are of radiation, so this should go on until that generation dies off.
c u n d gulag says:
Just GRAT!
That's not a loophole, that's a yawning chasm!
And this, THIS, is why we can't have nice things in this country full of stupid, scared, and hateful, people:
The rich aren't taxed nearly enough and don't have to spend any extra money they find in couch cushions and car seats on CPA's and Tax Attorney's to find new loopholes and defend them, and instead, use those savings to try to influence elections.
Elections where the politicians make it easier for the rich to use still more money to influence still more elections – and reelections, of course!
sluggo says:
Let me get this straight.
A guy who owns a casino, is asking how many times someone has to pay taxes on money.
Based on what we know about skimming operations in casinos, we are still waiting for him to pay anything.
http://en.wikipedia.org/wiki/Skimming_%28casinos%29
Misterben says:
The fact that these people exist… the fact that they idly fool around with passing a chump-change wad of $30 million to their teenage kids… while I spent last night with a committee of our neighborhood association, trying to figure out how we could scrape together a few bucks to save a park that dozens of kids use every day…
The 1% wouldn't bother me so much if they actually contributed in any meaningful way. But they're just parasites – rent-seeking parasites.
Chicagojon says:
@Talisker
[i]This particular tax dodge is really a form of gambling…If Adelson had done the same thing with, say, $30 million [≈ Energy industry 2011 political donations] in Microsoft stock over the same period, he and his heirs could have lost money on the deal.[\i]
Seems worth pointing out that if they lost money they could deduct that as a capital loss to reduce their tax burden on other successful ventures. Hardly gambling when the house will pay you no matter what you do.
Chicagojon says:
meh tags. I do like that it copied the 'Dictionary of Numbers' figure though – especially since the referenced number was to political donations. I highly recommend this Chrome add-in. It makes reading G&T even funner when it inserts reference like: Sheldon "I'm so rich I can piss $150 million [≈ cost of F-22 raptor, a stealth fighter jet] away on Newt Gingrich"
The image of Sheldon buying Newt a F-22 makes me chuckle.
https://chrome.google.com/webstore/detail/dictionary-of-numbers/ahhgdmkmcgahbkcbmlkpmmamemlkajaf?hl=en
Brian says:
"Unfortunately many Americans don't realize that one of the costs of not taxing the rich is that the difference needs to be made up somewhere…"
Actually, what is unfortunate is that many (read: over 99%) of Americans don't realize that at the Federal level, the difference never "needs" to be made up. We're monetarily sovereign in a fiat currency. Kinda important little detail there.
Brian M says:
Is the money actually "made up" by the middle class. Or is it mereley borrowed…from the 1% (or at leat the 5%)* or the Chinese govenrment and their 1%. So the 1% gain another source of income from the bonds!
*I know Treasury bonds are also used by middle class people as investment vehicles. The percentages would be interesting
Chuckles says:
Go and enjoy the comments from the many enlightened Christian Americans who steadfastly believe they live in a society of equal opportunity while also believing that the estate tax is an evil invention of an overbearing government.
WolfeTone says:
Okay, this GRAT thing is simply too difficult for me to comprehend. Why is it in the example shown in the graph that Adelson's heirs don't have to pay anything on almost $519 million?
Bob says:
The wealthiest person I know (flies his plane all over the country checking on all the apt. complexes, industrial parks and strip malls he owns) openly brags about not having paid a penny in federal income taxes in the last decade.
His total tax bite is below 10%.
c u n d gulag says:
Bob,
It sounds like that guy is the REAL "moocher" and "taker," who uses what's been built by people's tax money – like airports and roads – but doesn't contribute his fair share.
But, of course, you can't convince a Reich-Winger to see it that way.
Dial Tone says:
@Brian
Ding ding ding! We have a winner. Probably someone that read the New Economic Perspectives "Modern Money Primer".
Here's a link to that primer in case anyone is interested:
http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html
The first 29 chapters are descriptive of the system we have and compare it to some other monetary regimes. After that is the MMT "Job Bank" full employment policy which doesn't seem like a terrible idea.
negative 1 says:
They hate the estate tax because it is designed to stop hereditary wealth, or basically to stop capitalism from creating the kings that democracy took away. Adelson is right that the same money is taxed twice, but it doesn't matter — it's a tacit admission that capitalism sucks money upwards with no hope of redistribution, and it was directly a result of the fact that over and over the US watched it happen with no hope of stopping it within its existing economic framework. If anyone needs any more proof that we are living in a new gilded age, the fact that there is a 'debate' over this is it.
negative 1 says:
@WolfeTone — the crux of it is that you can give the trust money while you are still alive, and then order the trust to give it to your heirs after you are dead. All estate tax planning works on a variation of that model. For instance if you want to give your heirs the money while you're still alive but circumvent gift tax laws, the trust hires them to do 'community outreach' or to run the trust despite the fact that the trust does nothing. If someone at the IRS were entreprising enough they'd take the issue to court arguing that since Citizens United granted personhood to corporations then trusts should be eligible for a.) the gift tax and b.) the estate tax.
DrS says:
@Arslan said, "Unfortunately many Americans don't realize that one of the costs of not taxing the rich is that the difference needs to be made up somewhere, and that comes from the middle class."
Yeah, I'm fortunate to be doing fairly decently, although with a crap mortgage and student loan debt, but still paying a higher tax rate that Mitt.
Well mostly says:
Corporations people? Then file a 1040 come April. And get on a jury. And one vote (with photo ID).
Ridnik Chrome says:
"…to the moneyed class it is the equivalent of the 'recommended servings' on a bag of chips. Much as how everything is single serving if you're sad enough, the effective tax rate is always under 10% if you're rich enough."
Lines like these are why I keep coming back to this blog. Well said, sir.
Matt says:
I'm not universally opposed to exploiting tax loopholes, but I think there should be a simple rebalancing: new rule – if you execute a loophole that you KNOW to be fraudulent (as most of the trust-shuffling bullshit in the article seems) you've basically busted out in the casino of life. Your assets are forfeit, go back and use all that Galtian brainpower to make more since you assure people that being rich is just a matter of "hard work".
Something tells me the risk-reward crowd would suddenly have an outbreak of patriotism regarding paying their taxes. Or they'd move – win-win all around.
moderateindy says:
What I truly love about the fact that rich people, and corporate types bitch about our complicated tax system, comes from the fact that it is only complicated because they spend so much of their time and money to make it that way. The lion's share of people don't qualify for anything more than standard, or common place deductions. Rich people and corporation's are the true beneficiaries of the convoluted tax code, which is why you never actually see any real action when it comes to reforming the tax code, other tha cutting marginal or capital gains rates.
Heywood J. says:
The 1% wouldn't bother me so much if they actually contributed in any meaningful way. But they're just parasites – rent-seeking parasites.
What Misterben said. This should carved on their tombstones, every damned one of them.