The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax

[lpetrich]

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax — ProPublica

Elon Musk, Jeff Bezos, Michael Bloomberg, Warren Buffett, Carl Icahn, George Soros, Bill Gates, Rupert Murdoch, Mark Zuckerberg, ...

Some years back, Warren Buffett noted that he pays a lower effective tax rate than his secretary. We can now see how much lower.

 

[Harry Bosch]

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax — ProPublica

Elon Musk, Jeff Bezos, Michael Bloomberg, Warren Buffett, Carl Icahn, George Soros, Bill Gates, Rupert Murdoch, Mark Zuckerberg, ...

Some years back, Warren Buffett noted that he pays a lower effective tax rate than his secretary. We can now see how much lower.

Are people really surprised that there isn't a federal wealth tax? Or a sales tax? This thread would be far more interesting if it were on how people illegally don't pay their fair share of income taxes because they cheat; and the IRS is too understaffed to catch them.

 

[ZiprHead]

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax — ProPublica

Elon Musk, Jeff Bezos, Michael Bloomberg, Warren Buffett, Carl Icahn, George Soros, Bill Gates, Rupert Murdoch, Mark Zuckerberg, ...

Some years back, Warren Buffett noted that he pays a lower effective tax rate than his secretary. We can now see how much lower.

Are people really surprised that there isn't a federal wealth tax?

No, and we all know why.

Or a sales tax?

Sales taxes are effectively regressive. No thanks.

This thread would be far more interesting if it were on how people illegally don't pay their fair share of income taxes because they cheat; and the IRS is too understaffed to catch them.

Really? Over 180 replies surely means there is some interest.

I seem to remember some threads concerning tax cheating by the wealthy but they didn't seem to go far. But you are welcome to start one and we can test your hypothesis.

 

[Harry Bosch]

No, and we all know why.

Or a sales tax?

Sales taxes are effectively regressive. No thanks.

This thread would be far more interesting if it were on how people illegally don't pay their fair share of income taxes because they cheat; and the IRS is too understaffed to catch them.

Really? Over 180 replies surely means there is some interest.

I seem to remember some threads concerning tax cheating by the wealthy but they didn't seem to go far. But you are welcome to start one and we can test your hypothesis.

Actually I think that you might be right that people are more interested in people legally not paying as much taxes as some; as compared to criminals defrauding the government. That's curious to me. I actually think that catching cheats would be a unifying political issue for many on left.

 

[ZiprHead]

No, and we all know why.



Sales taxes are effectively regressive. No thanks.



Really? Over 180 replies surely means there is some interest.

I seem to remember some threads concerning tax cheating by the wealthy but they didn't seem to go far. But you are welcome to start one and we can test your hypothesis.

Actually I think that you might be right that people are more interested in people legally not paying as much taxes as some; as compared to criminals defrauding the government. That's curious to me. I actually think that catching cheats would be a unifying political issue for many on left.

What you don't seem to get is that the legality of it is the problem.

 

[Rhea]

No, and we all know why.



Sales taxes are effectively regressive. No thanks.



Really? Over 180 replies surely means there is some interest.

I seem to remember some threads concerning tax cheating by the wealthy but they didn't seem to go far. But you are welcome to start one and we can test your hypothesis.

Actually I think that you might be right that people are more interested in people legally not paying as much taxes as some; as compared to criminals defrauding the government. That's curious to me. I actually think that catching cheats would be a unifying political issue for many on left.

What you don't seem to get is that the legality of it is the problem.

I find both are a problem, and maybe it would help to quantify each.
1. What is the cost to the rest of the tax payers for various cheating schemes (e.g. valuing a high-rise low to pay taxes versus high to get a loan)
2. What is the cost to the rest of the taxpayers for various special deals to the rich (e.g. deducting interest on a second home mortgage, like your yacht.)

 

[Swammerdami]

The New York Times has an article discussing yet another trick many multi-millionaires are using to save huge sums in taxes. Not only is a $10 million profit tax-free (or, say, $60 million applying a company-merger trick mentioned in the article), but that can be duplicated for each family member. Tax advisors joke to their clients that they should have more children since they save millions in taxes for each one.

Ironically, the tax break was originally intended to support small businesses (if $50 million start-up is "small"). But rich venture capitalists are among the beneficiaries as they get $10 million (or more) free profit for each "small business" they invest in.

 

[thebeave]

The New York Times has an article discussing yet another trick many multi-millionaires are using to save huge sums in taxes. Not only is a $10 million profit tax-free (or, say, $60 million applying a company-merger trick mentioned in the article), but that can be duplicated for each family member. Tax advisors joke to their clients that they should have more children since they save millions in taxes for each one.

Ironically, the tax break was originally intended to support small businesses (if $50 million start-up is "small"). But rich venture capitalists are among the beneficiaries as they get $10 million (or more) free profit for each "small business" they invest in.

If what they are doing is illegal, they should be prosecuted. Otherwise, they are making use of the tax code as written to save on taxes. Just like what you, me and all other financially smart and savvy law abiding citizens do at tax time. Only difference is they have more money at stake. If its a poorly written or thought out law with unintended loopholes, then it needs to be revised by the agency that wrote that tax code in the first place. What you want to do is, essentially, "shoot the messenger".

On another note, let's say you won $25 million in the Powerball Lottery. Wouldn't you consult a tax adviser on the best way to receive and invest the income, so as to minimize your tax burden? Or would you think, "Wow, this is great. Now I can do what I have been telling other rich people to do for decades now. Pay my fair share! I think I'll voluntarily increase my tax payment to the IRS from the bare minimum to 85%".

 

[Swammerdami]

The New York Times has an article discussing yet another trick many multi-millionaires are using to save huge sums in taxes. Not only is a $10 million profit tax-free (or, say, $60 million applying a company-merger trick mentioned in the article), but that can be duplicated for each family member. Tax advisors joke to their clients that they should have more children since they save millions in taxes for each one.

Ironically, the tax break was originally intended to support small businesses (if $50 million start-up is "small"). But rich venture capitalists are among the beneficiaries as they get $10 million (or more) free profit for each "small business" they invest in.

If what they are doing is illegal, they should be prosecuted. Otherwise, they are making use of the tax code as written to save on taxes. Just like what you, me and all other financially smart and savvy law abiding citizens do at tax time. Only difference is they have more money at stake. If its a poorly written or thought out law with unintended loopholes, then it needs to be revised by the agency that wrote that tax code in the first place. What you want to do is, essentially, "shoot the messenger".

On another note, let's say you won $25 million in the Powerball Lottery. Wouldn't you consult a tax adviser on the best way to receive and invest the income, so as to minimize your tax burden? Or would you think, "Wow, this is great. Now I can do what I have been telling other rich people to do for decades now. Pay my fair share! I think I'll voluntarily increase my tax payment to the IRS from the bare minimum to 85%".

I wonder if you grasp what a complete non sequitur your entire post is.
Nowhere did I suggest that they were doing anything illegal. Nor did I suggest that minimizing one's taxes is immoral. (Though interestingly, one woman quoted in the article said she eschewed the method because she found it "unpatriotic.")

Note that the same remarks apply to the tax dodge that motivated this thread initially: "Legal" and "smart," but, in effect transfers a tax burden from the rich to those with lower income.

Thebeave: 'What you want to do is, essentially, "shoot the messenger".'
Pray tell, what "reasoning," if any, did you use to reach this conclusion about me?

Since your entire comment is non sequitur, and since you accuse me of "wanting to shoot some 'messenger'" (which messenger?) I am tempted to diagnose the underlying tone in your response. Perhaps you can obviate a round of rejoinders by outlining your proposals, if any, to shift some tax burden from the middle class to the super-rich.

 

[Rhea]

If its a poorly written or thought out law with unintended loopholes, then it needs to be revised by the agency that wrote that tax code in the first place.

But that’s the thing. It is beautifully written - to benefit the rich. The loopholes are not unintended since they are the point as it was designed by the wealthy, who support organizations who craft these laws and then use their money to elect people who will enact them, while obfuscating and hiding their actions from the rest of the voters.

What you want to do is, essentially, "shoot the messenger".

“The messenger” is not blameless. They absolutely know exactly how to get these unfair advantages and how to keep them, and they are active in that pursuit.

These things are not “badly written” laws with “unintended loopholes.” They are purposeful and deliberate in their unfairness.

 

[thebeave]

If its a poorly written or thought out law with unintended loopholes, then it needs to be revised by the agency that wrote that tax code in the first place.

But that’s the thing. It is beautifully written - to benefit the rich. The loopholes are not unintended since they are the point as it was designed by the wealthy, who support organizations who craft these laws and then use their money to elect people who will enact them, while obfuscating and hiding their actions from the rest of the voters.

What you want to do is, essentially, "shoot the messenger".

“The messenger” is not blameless. They absolutely know exactly how to get these unfair advantages and how to keep them, and they are active in that pursuit.

These things are not “badly written” laws with “unintended loopholes.” They are purposeful and deliberate in their unfairness.

Fine. Then Congress, who writes these laws, need to step up and do their jobs. Instead we get people in Congress like Elizabeth Warren beating on billionaires who aren't "paying their fair share". Sounds more like to me that she is blaming others for her (and her fellow Congress) shortcomings.

 

[thebeave]

The New York Times has an article discussing yet another trick many multi-millionaires are using to save huge sums in taxes. Not only is a $10 million profit tax-free (or, say, $60 million applying a company-merger trick mentioned in the article), but that can be duplicated for each family member. Tax advisors joke to their clients that they should have more children since they save millions in taxes for each one.

Ironically, the tax break was originally intended to support small businesses (if $50 million start-up is "small"). But rich venture capitalists are among the beneficiaries as they get $10 million (or more) free profit for each "small business" they invest in.

If what they are doing is illegal, they should be prosecuted. Otherwise, they are making use of the tax code as written to save on taxes. Just like what you, me and all other financially smart and savvy law abiding citizens do at tax time. Only difference is they have more money at stake. If its a poorly written or thought out law with unintended loopholes, then it needs to be revised by the agency that wrote that tax code in the first place. What you want to do is, essentially, "shoot the messenger".

On another note, let's say you won $25 million in the Powerball Lottery. Wouldn't you consult a tax adviser on the best way to receive and invest the income, so as to minimize your tax burden? Or would you think, "Wow, this is great. Now I can do what I have been telling other rich people to do for decades now. Pay my fair share! I think I'll voluntarily increase my tax payment to the IRS from the bare minimum to 85%".

I wonder if you grasp what a complete non sequitur your entire post is.
Nowhere did I suggest that they were doing anything illegal. Nor did I suggest that minimizing one's taxes is immoral. (Though interestingly, one woman quoted in the article said she eschewed the method because she found it "unpatriotic.")

Note that the same remarks apply to the tax dodge that motivated this thread initially: "Legal" and "smart," but, in effect transfers a tax burden from the rich to those with lower income.

Thebeave: 'What you want to do is, essentially, "shoot the messenger".'
Pray tell, what "reasoning," if any, did you use to reach this conclusion about me?

Since your entire comment is non sequitur, and since you accuse me of "wanting to shoot some 'messenger'" (which messenger?) I am tempted to diagnose the underlying tone in your response. Perhaps you can obviate a round of rejoinders by outlining your proposals, if any, to shift some tax burden from the middle class to the super-rich.

So, what point where you trying to make about posting the article in the first place? You could have said at the beginning, "Another way rich people are legally and morally using the tax code to save on their taxes. More news at 11."

 

[Swammerdami]

So, what point where you trying to make about posting the article in the first place? You could have said at the beginning, "Another way rich people are legally and morally using the tax code to save on their taxes. More news at 11."

My conversation with you will be strictly about me trying to understand your thought processes. For starters, do you think your guess at what I might have written is a fair approximation to how I would have summarized? If not, can you try again, putting more effort and sincerity into the attempt?

I'll reciprocate. I think you view much of politics as some morality play. I think you believe that "liberals" (which you probably classify me as) want to tax the rich because we think they are evil and want to punish them. And I think you regard policies to increase taxes on the rich as evil, because taxing Elon Musk is a way to steal money that is rightfully his. I think there is a fair chance that this is a caricature of your actual viewsso this is your chance to set me straight.

 

[Rhea]

Fine. Then Congress, who writes these laws, need to step up and do their jobs. Instead we get people in Congress like Elizabeth Warren beating on billionaires who aren't "paying their fair share". Sounds more like to me that she is blaming others for her (and her fellow Congress) shortcomings.

No, you missed my point entirely. I thought i was pretty clear.

The Billionaires are active participants in the drafting and enacting of these laws. They are not hapless bystanders. They spend considerable time, effort and money to get these beautifully written pieces of legislation, with intentional loopholes, that allow them to unfairly engage in commerce at a different set of rules, enacted into law.

Elizabeth Warren knows they are not powerless spectators. She knows that without their active support, these laws would not be made.

Follow the money. Why would anyone create laws to unfairly benefit billionaires. WHY? Seriously, answer this question. WHY did they create these laws, written this way, and fight against changing them?

 

[thebeave]

Fine. Then Congress, who writes these laws, need to step up and do their jobs. Instead we get people in Congress like Elizabeth Warren beating on billionaires who aren't "paying their fair share". Sounds more like to me that she is blaming others for her (and her fellow Congress) shortcomings.

No, you missed my point entirely. I thought i was pretty clear.

The Billionaires are active participants in the drafting and enacting of these laws. They are not hapless bystanders. They spend considerable time, effort and money to get these beautifully written pieces of legislation, with intentional loopholes, that allow them to unfairly engage in commerce at a different set of rules, enacted into law.

Elizabeth Warren knows they are not powerless spectators. She knows that without their active support, these laws would not be made.

Follow the money. Why would anyone create laws to unfairly benefit billionaires. WHY? Seriously, answer this question. WHY did they create these laws, written this way, and fight against changing them?

And again, back to Congress. The billionaires can't enact tax legislation by themselves. Ultimately, the power rests with Congress to tell the billionaires to fuck off.

 

[Elixir]

And again, back to Congress. The billionaires can't enact tax legislation by themselves. Ultimately, the power rests with the billionaire-owned Congress to tell the billionaires to fuck off.

FIFY

So many "easy fixes" from getting rid of Citizens United, going to publicly financed elections, forbidding any and all "dark money", enacting more severe and enforceable campaign finance laws...

There might be 2-3 Republicans and 8-10 Democrats in all of Congress who would vote for such things. Rule one of free market capitalism:
DON'T SHOOT THE GOLDEN GOOSE

 

[Loren Pechtel]

If what they are doing is illegal, they should be prosecuted. Otherwise, they are making use of the tax code as written to save on taxes. Just like what you, me and all other financially smart and savvy law abiding citizens do at tax time. Only difference is they have more money at stake. If its a poorly written or thought out law with unintended loopholes, then it needs to be revised by the agency that wrote that tax code in the first place. What you want to do is, essentially, "shoot the messenger".

On another note, let's say you won $25 million in the Powerball Lottery. Wouldn't you consult a tax adviser on the best way to receive and invest the income, so as to minimize your tax burden? Or would you think, "Wow, this is great. Now I can do what I have been telling other rich people to do for decades now. Pay my fair share! I think I'll voluntarily increase my tax payment to the IRS from the bare minimum to 85%".

It looks like the original measure had an oops--it didn't exclude gifts. If there's a legitimate reason for it (and I'm not seeing it), fix the gift problem.

 

[TV and credit cards]

Both the Senate and House have a platoon of lawyers who specialize in tax law (Office of Legislative Counsel) who write these bills. There are no mistakes. Everything is intended.

 

[Loren Pechtel]

Both the Senate and House have a platoon of lawyers who specialize in tax law (Office of Legislative Counsel) who write these bills. There are no mistakes. Everything is intended.

Disagree. The fact that this went unexploited for some time suggests it's a genuine oops, not a deliberate loophole.

Although the measure itself seems like something of a loophole, why do the guys who hit it big need tax protection??