For the Wealthiest, a Private Tax System That Saves Them Billions

[ksen]

http://www.nytimes.com/2015/12/30/b...-billions.html?smid=fb-nytimes&smtyp=cur&_r=1

It's good to be [one of] the king.

 

[bleubird]

What a lot of people do not understand is the power of leverage that comes from wealth.If I had a lever long enough I could move the Earth. The 1% have a big lever.

 

[arkirk]

What a lot of people do not understand is the power of leverage that comes from wealth.If I had a lever long enough I could move the Earth. The 1% have a big lever.

No intelligence required. That is why we have earth movers like Donald Trump.

 

[DBT]

Schemes and systems designed by the rich to benefit the rich. The marginalized and poor being left in the care of government programs and public charities.

 

[Trausti]

They're just doing what any rational person would do. Why pay more tax than you have to?

Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

~ Judge Learned Hand.

Hopefully, anyone critical of the rich for acting in their own interest is not so hypocritical as to take deductions or fail to give gifts to the treasury in excess of actual tax liability.

 

[DBT]

They're just doing what any rational person would do. Why pay more tax than you have to?

Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

~ Judge Learned Hand.

Hopefully, anyone critical of the rich for acting in their own interest is not so hypocritical as to take deductions or fail to give gifts to the treasury in excess of actual tax liability.

It's the sheer scale of tax dodging by those who could easily afford to pay their fair share to the benefit of society as a whole, but are clever enough (or hire those that are) and have the means to create schemes to avoid it.

 

[ZiprHead]

They're just doing what any rational person would do. Why pay more tax than you have to?



~ Judge Learned Hand.

Hopefully, anyone critical of the rich for acting in their own interest is not so hypocritical as to take deductions or fail to give gifts to the treasury in excess of actual tax liability.

It's the sheer scale of tax dodging by those who could easily afford to pay their fair share to the benefit of society as a whole, but are clever enough (or hire those that are) and have the means to create schemes to avoid it.

And have the political influence to have the tax code written to benefit them.

 

[fast]

They're just doing what any rational person would do. Why pay more tax than you have to?

Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

~ Judge Learned Hand.

Hopefully, anyone critical of the rich for acting in their own interest is not so hypocritical as to take deductions or fail to give gifts to the treasury in excess of actual tax liability.

Thank you.

 

[Bomb#20]

It's the sheer scale of tax dodging by those who could easily afford to pay their fair share to the benefit of society as a whole, but are clever enough (or hire those that are) and have the means to create schemes to avoid it.

And have the political influence to have the tax code written to benefit them.

Why do you say that? Because the top tenth of a percent of taxpayers' effective income tax rate went from 20.9% to 17.6%? The average American's income tax rate is 10.1%. If we're calling a lower tax rate a "benefit" (as opposed to the more accurate designation, "less harm"), then the tax code is evidently written to benefit the average American at the expense of the rich. This is precisely what one would expect in a democracy: if any group has the political influence to have the tax code written to benefit themselves, it's the masses.

Any person who only has to put in two days a month on the king's corvee and still gripes about how those who have to put in three days a month aren't doing their fair share should try doing those people's share for a change.

 

[DBT]

Tax loopholes that mainly benefit the rich

''Low-income taxpayers can't afford to take advantage of the zero percent capital gains rate.
The tax code lets rich people deduct interest on a second home at taxpayer expense.
Income of most private equity fund managers is taxed at lower capital gains rates.

A tax loophole isn't illegal. It just seems that the person benefiting from the loophole often is following the letter of the tax law, but not the spirit of the law.

Similarly, there are many tax deductions that appear to provide disproportionate tax benefits to a select few.''

 

[Jimmy Higgins]

And have the political influence to have the tax code written to benefit them.

Why do you say that? Because the top tenth of a percent of taxpayers' effective income tax rate went from 20.9% to 17.6%? The average American's income tax rate is 10.1%. If we're calling a lower tax rate a "benefit" (as opposed to the more accurate designation, "less harm"), then the tax code is evidently written to benefit the average American at the expense of the rich.

The top 0.1% controls what, 50% of the wealth?

This is precisely what one would expect in a democracy: if any group has the political influence to have the tax code written to benefit themselves, it's the masses.

 

[Bomb#20]

Why do you say that? Because the top tenth of a percent of taxpayers' effective income tax rate went from 20.9% to 17.6%? The average American's income tax rate is 10.1%. If we're calling a lower tax rate a "benefit" (as opposed to the more accurate designation, "less harm"), then the tax code is evidently written to benefit the average American at the expense of the rich.

The top 0.1% controls what, 50% of the wealth?

What's your point?

Wealth is the integral of the production rate minus the consumption rate. Suppose a democracy is 90% Christian and 10% Jewish and Christians systematically tend to consume as much as they produce while Jews systematically tend to produce more than they consume. In short order the Jews will control over 90% of the wealth. If the Christians vote to tax Christians' income at 10% and tax Jews' income at 17%, the circumstance that the Jews control over 90% of the wealth will not change the fact that the tax law discriminates against Jews, not against Christians. And it will not change the fact that Christians have the political influence to have the tax code written to benefit themselves, and Jews don't.

This is precisely what one would expect in a democracy: if any group has the political influence to have the tax code written to benefit themselves, it's the masses.

If you're expressing approval of the masses having that power and using it to benefit themselves, no argument. I wasn't offering an opinion on the merits of the situation, just an opinion on the merits of partisans believing their own fantasies about who has the political influence and whom the tax code is written to benefit.

 

[Crazy Eddie]

They're just doing what any rational person would do. Why pay more tax than you have to?

Because your position of power to change the rules so you don't "Have to" pay taxes anymore is unethical. Using that same position to avoid being punished for your unethical behavior is corruption.

And using sheer force of numbers, public discord, and an armed cadre of police and/or military officers who feel the same way to forcibly drag said unethical corrupt individuals out of their homes and beat them to death with bars of soap is potentially a thing of beauty.

Hopefully, anyone critical of the rich for acting in their own interest is not so hypocritical as to take deductions or fail to give gifts to the treasury in excess of actual tax liability.

That's kinda what I mean: if there's nothing wrong with the rich acting unethically in their own interests, then there's nothing wrong with the poor doing the same. When a person or persons have the power to unilaterally reshape the laws in their own favor, the citizens have no further moral obligation to obey it.

 

[RavenSky]

And have the political influence to have the tax code written to benefit them.

^^^ That is the key point

Moreover, each has exploited an esoteric tax loophole that saved them millions in taxes. The trick? Route the money to Bermuda and back...

Some call it the “income defense industry,” consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means.

 

[Nexus]

The top 0.1% controls what, 50% of the wealth?

What's your point?

Fundamentally government is about protecting people and property rights. If someone owns 50% of the wealth they need to pay for the government that makes that kind of wealth accumulation possible. Bill Gates wouldn't have 80 billion dollars if he had to pay for his own airforce, navy, CIA, FBI and mercenaries etc to enforce Microsoft copyrights and protect his physical properties.

 

[Axulus]

What's your point?

Fundamentally government is about protecting people and property rights. If someone owns 50% of the wealth they need to pay for the government that makes that kind of wealth accumulation possible. Bill Gates wouldn't have 80 billion dollars if he had to pay for his own airforce, navy, CIA, FBI and mercenaries etc to enforce Microsoft copyrights and protect his physical properties.

On that basis, it is more than covered:

Top 1% pay ~35% of all federal taxes

http://taxfoundation.org/blog/top-1-percent-pays-more-taxes-bottom-90-percent

There were $3.25 trillion taxes collected in 2015

35% of that is $1.14 trillion

This is enough to pay for all the following departments in 2015:

Department of Defense ($563 billion)
Judicial Branch ($7 billion)
Dept. of Homeland Security ($43 billion)
Dept. of Justice ($27 billion)
Dept. of State ($26 billion)
Dept. of Veterans Affairs ($159 billion)
Dept. of Transportation ($75 billion)
Other Defense civil programs ($63 billion)

https://www.fiscal.treasury.gov/fsreports/rpt/mthTreasStmt/mts0915.pdf

Total = $963 billion

With $177 billion left to spare

Not only that, but it could easily be said that a good portion of these expenses have nothing to do with protecting property and enforcing laws. Our DoD could be cut ~50% to be a more comparable expense to other developed countries as a percent of the economy.

 

[dismal]

It's somewhat embarrassing to argue that the government's primary job is to protect people and property rights when said government's primary spending is on taking money from Person A and giving money (and things) to Person B.

 

[Trausti]

Because your position of power to change the rules so you don't "Have to" pay taxes anymore is unethical. Using that same position to avoid being punished for your unethical behavior is corruption.

And using sheer force of numbers, public discord, and an armed cadre of police and/or military officers who feel the same way to forcibly drag said unethical corrupt individuals out of their homes and beat them to death with bars of soap is potentially a thing of beauty.

Hopefully, anyone critical of the rich for acting in their own interest is not so hypocritical as to take deductions or fail to give gifts to the treasury in excess of actual tax liability.

That's kinda what I mean: if there's nothing wrong with the rich acting unethically in their own interests, then there's nothing wrong with the poor doing the same. When a person or persons have the power to unilaterally reshape the laws in their own favor, the citizens have no further moral obligation to obey it.

What is ethical or moral is not the same as what is legal. As Judge Learned Hand said, moral arguments are "mere cant."

 

[bilby]

It's somewhat embarrassing to argue that the government's primary job is to protect people and property rights when said government's primary spending is on taking money from Person A and giving money (and things) to Person B.

Indeed. The government's primary job is to counterbalance the economic forces that tend to concentrate wealth in fewer and fewer hands over time. Absent this vital service, society would rapidly dissolve into feudalism, to the detriment of all but a tiny number of nobles.

This is the reason why democracy is a better system than any other yet tried - when power is concentrated in few hands, it is difficult to prevent the same from becoming true of wealth, to the detriment of all but the powerful.

You see the forcible redistribution of wealth by government as a problem; but it is not a bug - it's a feature.

 

[DBT]

It's somewhat embarrassing to argue that the government's primary job is to protect people and property rights when said government's primary spending is on taking money from Person A and giving money (and things) to Person B.

Indeed. The government's primary job is to counterbalance the economic forces that tend to concentrate wealth in fewer and fewer hands over time. Absent this vital service, society would rapidly dissolve into feudalism, to the detriment of all but a tiny number of nobles.

This is the reason why democracy is a better system than any other yet tried - when power is concentrated in few hands, it is difficult to prevent the same from becoming true of wealth, to the detriment of all but the powerful.

You see the forcible redistribution of wealth by government as a problem; but it is not a bug - it's a feature.

I think it's already past the degree of acceptability. In recent times, wealth has become far too concentrated in the hands of the few.