Rich vs. Poor - Tax Cuts vs. Spending
polaris
Posts: 3,527
i know a lot of discussions here focus on how the conservative agenda favours the rich but is denied ... talk then shifts to tax rates and such ... i always thought the biggest thing left out which is really hard to discuss unless you know the tax code inside out are these loopholes that really only favour the wealthy ... so, even tho the tax rate may seem like the wealthy get taxed more - they also have the advantage of using these loopholes ...
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http://www.thestar.com/Business/article/485344
U.S. tax loopholes save the rich billions
WASHINGTON–Tax and accounting loopholes that largely benefit rich taxpayers and companies cost the U.S. government $20 billion (U.S.) a year even as the pay gap between chief executives and employees has widened, two groups said yesterday.
The biggest loss comes from a "stock-option accounting double standard" that allows corporations paying executives stock options to deduct more than their actual expenses, they said.
For example, when UnitedHealth Group Inc. paid chief executive William McGuire nine million stock options, it put on its financial statement that the compensation cost the company nothing, according to the Institute for Policy Studies and the group United for a Fair Economy. But its tax filing claimed a deduction of $317.7 million, the groups said.
That practice alone costs the U.S. government a total of $10 billion a year, the groups said.
A practice known as deferred compensation – which allows executives to defer an unlimited amount of pay – costs the government $80.6 million a year, among other loopholes that bring the total loss in federal tax revenues to $20 billion, the groups said.
"It's outrageous that our tax dollars are inflating executive paycheques," said Sarah Anderson, an author of the report. "Surely in these troubled economic times we can find better ways to spend our nation's wealth."
The report said CEOs of large U.S. companies averaged $10.5 million in compensation last year, 344 times what the average worker earned.
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http://www.thestar.com/Business/article/485344
U.S. tax loopholes save the rich billions
WASHINGTON–Tax and accounting loopholes that largely benefit rich taxpayers and companies cost the U.S. government $20 billion (U.S.) a year even as the pay gap between chief executives and employees has widened, two groups said yesterday.
The biggest loss comes from a "stock-option accounting double standard" that allows corporations paying executives stock options to deduct more than their actual expenses, they said.
For example, when UnitedHealth Group Inc. paid chief executive William McGuire nine million stock options, it put on its financial statement that the compensation cost the company nothing, according to the Institute for Policy Studies and the group United for a Fair Economy. But its tax filing claimed a deduction of $317.7 million, the groups said.
That practice alone costs the U.S. government a total of $10 billion a year, the groups said.
A practice known as deferred compensation – which allows executives to defer an unlimited amount of pay – costs the government $80.6 million a year, among other loopholes that bring the total loss in federal tax revenues to $20 billion, the groups said.
"It's outrageous that our tax dollars are inflating executive paycheques," said Sarah Anderson, an author of the report. "Surely in these troubled economic times we can find better ways to spend our nation's wealth."
The report said CEOs of large U.S. companies averaged $10.5 million in compensation last year, 344 times what the average worker earned.
Post edited by Unknown User on
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Comments
What's really funny about these conventions. Of all these so called public servants... how many of them are poor? Ever wonder how they got rich while working all those years in public office? Think they pay taxes?
The salary structure is like that in public and private groups. It's always a little fat dumb and happy at the top with a golden parachute if they are smart.
Hell just look at Nardelli from Home Depot or the people at Delta throughout the past 20 years. Talk about getting out at the right time... wow.
The issue my friend is that there will ALWAYS ALWAYS ALWAYS be these loopholes because the people with big money make sure to stuff the right pockets, the more punitive they make the tax structure the more they screw the average person (see alternative minimum tax) who isn't spending a fortune on an accountant and even then you're trusting the accountant not to be crooked which is a pretty high level of trust for a super ambitious segment of the society who very much like lawyers are the only people who really understand the system in which they work and they like it that way.
Who is to dicipline the CEO pay structure? The government? Surely thier hypocracy knows no bounds. In the media.. sure shocked and appalled, in their office... how might I serve thee loyal constituants?
I agree...get rid of the loopholes...flat tax.
i fully believe that given the absolute truth about how things are whether it be taxes, israel or the environment - most of us would come to similar conclusions on how to address those issues ...
Very very true. Ultimately most of our differences are based on how we view the world or economics, be it collective or individual. There is always common ground.
Probably so in most cases...there are many cases where there is no absolute truth, and thus makes it difficult to really come to a compromise on the best course of action.
You probably won't care, but:
- the top 50% of all earners pay over 96% of all fed income tax
- the top 25% of all earners pay over 85% of all fed income tax
- the top 5% of all earners pay over 59% of all fed income tax
- the top 1% of all earners pay over 39% of all fed income tax
- the bottom 50% pay just over 3% of all fed income tax
So, without these loopholes, I guess then the top 50% would pay 98% instead of 96%, and the top 1% would pay 40% instead of 39%, and then you'd feel better.
So tell me how the rich do not pay taxes.
Source: IRS
http://www.irs.gov/pub/irs-soi/05in05tr.xls
no one is saying the rich do not pay taxes ... but it isn't as simple as that ... if you make 10 million a year and pay 1% in taxes and i make 30,000 and pay 10% ... you're still gonna pay 33% more actual tax than me ...
at the end of the day - what is best for americans?? ... a country that is mired in debt and runs a huge defecit where the economy is weak and the poor are still poor or a situation where prosperity spans all economic classes?
i believe like some economists that in the whole - everyone is better off if there is not a huge prosperity gap ...
What you are arguing is that any regressive tax structure is wrong. You & I agree there. However, the tax structure is set up to be very much progress, with incentive "loopholes" here & there to drive behavior or to please whatever lobbyists, etc. I think that's where you are going with this OP.
There are "loopholes," I will not say there are not - however if these loopholes were so widely available, then we'd see those stats in post #7 a lot more flat, wouldn't we?
But you are correct regarding the middle class - what has made America's economy so strong over the last 60 years is its robust middle class. Not everyone can buy a yacht or whatever - but if everyone is buying a car every so many years, going to dinner, buying clothes, etc etc, that all adds up in a big way!
the stats would be more flat except for the widening of the prosperity gap ... if the rich keep getting richer - their incremental taxes will supercede the fact that the poor (or those who pay the least tax) are growing ...
in any case - the current tax structure favours the widening of this gap and that is the result of a more conservative agenda ...
oh and as y'all can tell - economics is not my forte ...