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Thread: Big Paychecks, Tiny Tax Burdens: How 21,000 Wealthy Americans Avoided Paying Income T

  1. #1
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    Big Paychecks, Tiny Tax Burdens: How 21,000 Wealthy Americans Avoided Paying Income T

    The richest woman in Wisconsin, Diane Hendricks, is worth an estimated $2.8 billion, but she did not pay a dime in state income tax in 2010, the Milwaukee Journal-Sentinel first reported.
    Because of a change in how her company, ABC Supply Inc., the country's largest distributor of roofing, windows and siding, is structured, Hendricks reduced her personal state income tax burden from $2.3 million in 2009 to zero in 2010, according to records the state Department of Revenue released to the Journal-Sentinel.
    While a tweak in ABC's corporate structure allowed its CEO to get out of state income taxes, a complex web of deductions and exemptions in the federal tax code have allowed more than 20,000 wealthy tax filers get off the hook on paying federal income taxes.
    A recent IRS report showed that 20,752 households that reported earning more than $200,000 in 2009 paid no federal income taxes. About 1,500 of those tax-free Americans were millionaires.
    So how does someone in the top 3 percent of America's income earners finagle their income tax burden down to zero? For the majority of them, it's all about donating to charity, investing in local and state governments, earning money overseas and writing off doctor bills.
    In Hendricks' Wisconsin case, ABC Supply switched from an "S" corporation, which passes all of its profits and losses through its owner to be taxed under personal income, to a "C" corporation, which stands independently of its owner and whose income is subject to corporate taxes.
    Scott Bianchini, ABC tax director, told the Journal-Sentinel that the switch was a "substantial part" of why Hendricks had no state income tax liability. Bianchini noted that while Hendricks' tax burden was minuscule this year, the billionaire has paid more than $10 million in taxes since 2005.
    On the federal level, the nearly 21,000 high-income earners who aren't paying federal income tax represent only one half of one percent of the 4 million tax filers that make up the top 3 percent.
    They account for an even smaller fraction of the 59 million tax filers who did not pay income tax in 2009. The vast majority - 56 million - of the people who skipped out on these income taxes earned less than $50,000 per year.
    "It's tiny," Williams said of number of wealthy Americans who are income tax-free. "But these are the ones people get upset about."
    In 1969, Congress was so up in arms about a mere 155 individuals who earned more than $200,000 and paid no income tax that it passed the Alternative Minimum Tax, which aims to prevent wealthy people from claiming too many tax exemptions and deductions.
    More than 40 years after the AMT went into effect, the number of wealthy, income-tax-free individuals has ballooned to 133 times as many as the 155 that inspired the new tax.
    In the 2012 battle for the White House, President Obama has made taxing these wealthy Americans a cornerstone of his re-election campaign.
    Under Obama's tax plan, the Bush tax cuts would expire, raising taxes for married couples earning more than $212,300 by 3 percentage points. Obama also plans to enact the "Buffett Rule," which creates a minimum tax rate of 30 percent for millionaires.
    Mitt Romney takes a virtually opposite approach to tax reform for the wealthy.
    His plan not only extends the Bush tax cuts, but further reduces tax rates at all income levels by 20 percent, which puts the tax rate for those making more than $200,000 at about 28 percent. Romney ardently opposes instituting a minimum tax for millionaires, such as the Buffett Rule.
    Under Obama's plan, the top 1 percent of income earners would see their taxes go up about 5 percent. Under Romney's plan, they would go down by nearly 8 percent, according to an analysis by the Tax Policy Center.
    And as for the 21,000 wealthy Americans who currently pay no income tax, Williams said, "Under Obama's plan, these people would almost certainly pay more. Under Romney's, they will almost certainly pay less."

    [url]http://news.yahoo.com/big-paychecks-tiny-tax-burdens-21-000-wealthy-100029578--abc-news-politics.html[/url]


    Another reason not to believe in the system.................I really do not understand why we can not put a huge tax on imports from a domestic owned business...............The only way people can take their business overseas and get a good import price is if they move overseas with their business's...............Sounds good to me if the CEO of Nike wants to have algerians make his shoe overseas then he should have to move over there with his company or pay a huge import tax......................IMO

  2. #2
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    [QUOTE=ucrenegade;4481722]...a complex web of deductions and exemptions in the federal tax code have allowed more than 20,000 wealthy tax filers get off the hook on paying federal income taxes..[/QUOTE]

    And this is why this country doesn't have a flat tax.

    Most Republican/conservative/Libertarians try to pretend that the reason we don't is because of the awesome lobbying force that is lower income people....that THEY are the ones who want the tax code to remain the same so they can "Bwa-ha-ha-ha" all the way to the bank.



    Lolz.

  3. #3
    and dont forget the CPA lobby who pushy to keep the tax code as confusing as possible.

  4. #4
    Get hit hard in the polls... Call media... Ask them to ***** about wealthy Americans... High five Carney...

  5. #5
    Dumb article already disproven. They paid State taxes in a lot of different States. Their Wisconsin operation is relatively tiny by comparison. The article was misleading and false. Smarten up people. Correcting stupidity is getting tiring. The conclusions in the article are absurd as well. The "complex web of deductions" would be reduced under the GOP plan to reduce corporate rates in exchange for getting rid of loopholes and exceptions. Obamas plan simply hikes rates on everyone keeping the deductions in place.
    Last edited by chiefst2000; 06-01-2012 at 10:04 AM.

  6. #6
    [QUOTE=ucrenegade;4481722]The richest woman in Wisconsin, Diane Hendricks, is worth an estimated $2.8 billion, but she did not pay a dime in state income tax in 2010, the Milwaukee Journal-Sentinel first reported.[/QUOTE]

    I lose alot of respect for an article that cites someones net worth when discussing their income tax buden for a single year. Doing so displays a rather clear bias in reporting, an attempt to make something bigger than it is by citing apples when discussing oranges. It's dishonest.

    [QUOTE=PlumberKhan;4481734]And this is why this country doesn't have a flat tax.

    Most Republican/conservative/Libertarians try to pretend that the reason we don't is because of the awesome lobbying force that is lower income people....that THEY are the ones who want the tax code to remain the same so they can "Bwa-ha-ha-ha" all the way to the bank.[/quote]

    You become more full of **** with each passing day PK.

    Of course rich folks are one reason we don't have a flat tax. But so are the millions and millions who pay no net Federal income tax, reap a number of social services and benefits, and pay for that with their vote for the (D) who promices to keep the free ride coming.

    The idea that 2,000 control policy (evil rich wargarbl!), but the 100,000,000 or so who are net takers from our system don't......even a Plumber should realize how lame that math is.

    Nice Flushingesque "blame the Libertarians" too btw, my obviously liberal but claims not to be friend.:rolleyes:

    [QUOTE]and dont forget the CPA lobby who pushy to keep the tax code as confusing as possible.[/QUOTE]

    And the thousands who work for the IRS, who would mostly be out of work in a flat tax system. I'm sure their Union strongly supports flat taxation systems, right?

    And the millions of progressives who refuse any concept of a flat or equal tax, because those evil rich wargarbl garble need to pay MORE, they owe it to us since they stole all their wealth from us in the first place, amirite?!!

    It would be so nice to at least once in a while see folks admit their own side is as culpable as their enemy in some of these issues. The lack o' Flat Tax is a universal issue, not a partisan one. It's only the reasons for being against it that differ between right and left.

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    [QUOTE=Warfish;4481874]The idea that 2,000 control policy (evil rich wargarbl!), but the 100,000,000 or so who are net takers from our system don't......even a Plumber should realize how lame that math is.[/QUOTE]

    To think that real power does lie in the hands of the few is powerfully naive.

  8. #8
    [QUOTE=PlumberKhan;4481890]To think that real power does lie in the hands of the few is powerfully naive.[/QUOTE]

    Say it slowly with me, cause we both know math isn't your strongest subject.

    100,000,000 votes > 2,000 votes

    Lets be honest PK. You're probably a net taker yourself. And rather than face the fact you don't contribute, but instead net take, you'd rtather ***** about those evil rich folks who have more than you. Jealosy and bitterness is a tough pill for the working class heros to swallow some days, obviously.:zzz:

    By the way, if I ever needed proof you're "I'm a Republican really!" line was total BS, this is it. Your inabillity to even admit that there is a direct financial incentive to vote (D) for millions of Americans currently acting as net takers from our redistributive taxation and spending system is, frankly, all the proof one needs that you lack even a single objective or conservative bone in your body. You're Intelligent Jets Fan-like in your constant one-sidedness.

    Fact is, both rich and poor, (R) and (D), ensure we'll never get a Flat Tax. Thats the facts.
    Last edited by Warfish; 06-01-2012 at 10:56 AM.

  9. #9
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    You know what? Good for them. Taxes blow.

  10. #10
    Only little people pay taxes.

  11. #11
    The article does not state if the woman had any personal income of consequence. Does the corpoartion pay what she paid before?
    As for wealth? That does not mean income. I could have $200mill in real estate. No fed or state tax.
    Also, depending on your age and bracket - tax free municipal bonds. I have as much as stocks. Not much growth but 4-4.5% dividend and tax free.
    Anybody can own real estate or tax free investments.

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    Taxes don't need to be raised; the tax system needs to be reformed.

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    [QUOTE=ucrenegade;4481722]Another reason not to believe in the system.................I really do not understand why we can not put a huge tax on imports from a domestic owned business...............The only way people can take their business overseas and get a good import price is if they move overseas with their business's...............Sounds good to me if the CEO of Nike wants to have algerians make his shoe overseas then he should have to move over there with his company or pay a huge import tax......................IMO[/QUOTE]

    As the article states "For the majority of them, it's all about donating to charity, investing in local and state governments, earning money overseas and writing off doctor bills."

    This is all social engineering at its finest. The government wants to give incentives for people to invest in the country on low rate loans so they make them tax-free. Remove the incentive and no more cheap money for the government. Same with deducting charity money.

    As for your brilliant diatribe on the plight of the American worker due to low paying, high labor jobs being overseas how much do you think a pair of Nike's would cost if they were made in Tennessee? Is it better or worse for more Americans to levy a high import tax on non-domestic goods than to allow "free trade"? Think about it. Millions of Americans get affordable products due to overseas manufacturing or hundreds of American's get crap low paying jobs and the rest of us pay out the nose for the same product we now get for cheap prices. Do you think raising the prices on Walmart goods would hurt the rich or the poor more?

  14. #14
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    [QUOTE=palmetto defender;4482016]The article does not state if the woman had any personal income of consequence. Does the corpoartion pay what she paid before?
    As for wealth? That does not mean income. I could have $200mill in real estate. No fed or state tax.
    Also, depending on your age and bracket - tax free municipal bonds. I have as much as stocks. Not much growth but 4-4.5% dividend and tax free.
    Anybody can own real estate or tax free investments.[/QUOTE]

    Wahh!!! That's not fair!

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    [QUOTE=parafly;4482022]Taxes don't need to be raised; the tax system needs to be reformed.[/QUOTE]

    Cut spending. I heard today the post office union lobby's to repeal certain bar codes because it hurts hiring.:rolleyes:

    THAT is government....

  16. #16
    [QUOTE=southparkcpa;4482223]Cut spending. I heard today the post office union lobby's to repeal certain bar codes because it hurts hiring.:rolleyes:

    THAT is government....[/QUOTE]

    Fed Ex doesn't want to lose their best customer.

  17. #17
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    [QUOTE=Warfish;4481894]Say it slowly with me, cause we both know math isn't your strongest subject.

    100,000,000 votes > 2,000 votes[/QUOTE]

    Say it slowly with me, cause we both know math isn't your strongest subject.

    $1,000,000,000 > $30,000

  18. #18
    [QUOTE=PlumberKhan;4482298]Say it slowly with me, cause we both know math isn't your strongest subject.

    $1,000,000,000 > $30,000[/QUOTE]

    Last time I checked we use the electoral college, so money really really really matters.

  19. #19
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    [QUOTE=Warfish;4481874.

    Nice Flushingesque "blame the Libertarians" too btw, my obviously liberal but claims not to be friend.:rolleyes:

    .[/QUOTE]

    Please leave me out of this heathen crypto-liberal vs liberal internecine spat thanks. Let me know when the rich stop paying more tax then everyone else.

  20. #20
    [QUOTE=PlumberKhan;4482298]Say it slowly with me, cause we both know math isn't your strongest subject.

    $1,000,000,000 > $30,000[/QUOTE]

    Actually, it is my best subject.

    And Elections are not won by casting your wallet.

    They're won by casting your vote.

    And as I said, 100,000,000 net takers voting for their own wallets > 20,000 who pay 80% of the total taxes.

    It's ok PK. I don't ever expect the net taker who vote (D) to admit to this being part of their reason why. I'd be too embarassed too.

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