Posted on 04/14/2005 2:48:28 PM PDT by traumer
Champagne drinker: "Only the little people pay taxes"
It won't seem that way to the millions of Americans who file their tax returns by the deadline on Friday, but there is a mountain of evidence that tax avoidance (the legal variety) and even tax evasion (the illegal variety) are growth industries.
Accountants in the field have even come up with the term "tax avoision" to describe the grey areas in between. It was Leona Helmsley who said famously that "only the little people pay taxes".
You might forgive her cynicism. The assertion was over-stated but not completely wide of the mark.
Tax burden shifting
According to David Cay Johnston, who won a Pulitzer Prize for his study of American taxes, there's an industry that squirrels away billions of dollars that might otherwise head for the public purse.
"[The IRS is] like a police department that was giving out lots of parking tickets while organized crime was running rampant" - Charles Rossotti, Former Internal Revenue Service commissioner
Trust funds enable wealth to be passed tax-free between generations or enable income to be disguised.
Tax-breaks for pursuits like flying in private jets help minimise the burden at the top. Entities are created so that profits are apparently earned where taxes are low. Losses are borne where taxes are high.
On top of that, Mr Johnston, who covers taxation for the New York Times, says the tax burden has shifted downwards through decisions by government.
Ten years ago the richest Americans paid thirty cents of each dollar of their income in federal income tax (about the same as middle earners did).
Five years ago, that had fallen to 22 cents on the dollar.
In recent years, the trend has continued.
Tax havens
The non-partisan Tax Policy Center calculated that half of Mr Bush's tax cuts this year will in effect go to the wealthiest 10% of tax-payers.
US tax return Filling in tax returns is not an equitable exercise
Companies too are off-loading their burden.
According to the journal Tax Notes, big corporations based in the United States increased the proportion of profit earned in low or no tax countries.
More of their profits were earned in "tax havens" than in the areas where they actually did business and where taxes were higher.
Equitable taxation
The change has come with a big intellectual shift in recent years.
What once seemed like a fringe argument that all taxes were a form of theft from hard-working individuals now has political credibility, at least in America.
There are groups who oppose all income tax who would have been shouting in the wilderness 20 years ago.
Today, they lobby in the corridors of power.
From the Greeks through a string of eighteenth and nineteenth century philosophers, there was a sense that there should be "equity" in the taxation of different groups.
Today, this philosophical basis for proportionately heavy taxation on the rich compared with the poor is debatable.
The counter idea, that taxes represent an unfair confiscation by the state, has grown along with the view that taxing the top penalises success.
Disguised income
On a baser level, politicians have realised that attacking the tax collector is very good business indeed.
That has made it easier to pare the resources of the Internal Revenue Service (IRS) and to brand investigations as a form of heavy-handed pursuit of the powerless.
The former Commissioner of the IRS, Charles Rossotti, says that the agency's enforcers end up scrutinizing ordinary tax-payers who depend on easily-tracked wages rather than the rich who can disguise income more easily.
Mr Rossotti says in his book, Many Unhappy Returns, that the IRS is "like a police department that was giving out lots of parking tickets while organized crime was running rampant".
He adds that it "picks on the little guy" while ''largely overlooking an ocean of money hidden in business entities for which the owners, rather than the businesses themselves, were supposed to pay taxes.''
Having been through the utter hell of an audit, and finding myself writing ever bigger checks every year I'd have to say that heavy handed is an entirely appropriate label for the IRS. I seriously doubt the founders wanted Americans to live in fear of the government, but those who do not fear the IRS do not understand the incredible scope of it's power. More than any other entity they can utterly ruin your life, seize your property, imprison you, even if they are in error. Counter to all of the rest of American jurisprudence, the burden of proof lies soley with the accused. Democrats save all of their hatred for big corporations, but Microsoft cannot do a single thing to you that you will not allow. The govenrment can do whatever it likes and you face a long, bitter, and horribly expensive fight to stop them. A fight you may well lose. If elections were held on April 16, this would be a very different country.
I feel so STUPID just paying taxes....
Should I trot out the line about how businesses don’t pay taxes?
Naaah.
Anyhow, I remember being a kid and working at a truck stop in Portland. The voters in Oregon decided they’d pass a $0.05 state gas tax increase. Two cents on year one, two cents on year two, one cent on year three.
Every December 31 after closing, what did we do? Well, first we made sure all the tanks were filled up with pre-two-cent-increase fuel. Then we went from pump to pump changing the price. Did we bump it up two cents? No.
The owner was of the opinion that if the Oregon motoring public was stupid enough to fork over two more cents to the state, they were stupid enough to fork over another two (or three, depending) cents to him too.
So yes, every December 31, we’d go from pump to pump raising the price four or five cents. Like clockwork.
Oh – and while it required 2/3 vote of Oregon voters to create the new tax – it only required a majority of legislators to extend it. And they did, over and over.
That’s my example of a business “paying” a tax.
And to make matters worse they're probably not as heavy handed as they once were.
Had a neighbor back in the 50's that got sideways with the IRS (I never knew the exact details) but he was a small business owner and seemed an honest type.
Anywho the IRS came to their house, let each family member pack one suitcase (including the kids!), walked them out the front door and that was all they had left, not even a car. The kids didn't even get to take all their toys.
They stayed with us for the night and the next day I got them bus tickets so they could go stay with their relatives.
No hearing, no due process, nothing, just kicked out in the cold.
99 cent solution one shot one kill
I don't like to buy "cheap" gas, (usually buy shell, chevron, etc.) lately i've been buying the cheapest gas i can throw in there, occasionally mixing it with some shell/chevron gas.
I believe Kent Brockman said it first. And I for one welcome our tax-avoising overlords.
While you are correct in your assessment of the IRS, I'm here to say that this manner of 'business' when dealing with the government is also commonplace Government Medicare/Medicaid audits on medical businesses.
They assume you are guilty of medicare/medicaid fraud, come into your business unannounced, and then expect you to prove that you are not. The code or laws when dealing with federal healthcare programs are just as confusing and nebulous as the tax laws, and if the government wants to say you are at fault, who's to stop them?
I've seen entire medical practices bankrupted in the process.
The knee jerk reactions to this is to do all you can ensure that the governemnt has honest, trustworthy people in elected positions. People who are not enthralled by holding so much power over their fellow citizens. That is why I've always voted republican even when I had to hold my nose to do it. No administration was more abusive of it's power than Clintons. But in the 12 years of Reagan/Bush, and the now 5 years of Bush, tax reform, indeed, govenment reform is little more than meaningless talking point and those in power become ever more abusive of it. What will it take? Will we need to get our rifles and line up on the town green at Lexington again?
Well, guess I can't finish my taxes tonight. The Turbotax website just froze up. LOL... popping a beer and relaxing.
This is more and more the case for government money at all levels. So if you take the king's shilling, watch out.
Interesting that they neglect to mention that the top 1/3 of income eraners pay 2/3 (or more) of all the taxes, isn't it?
No mention of the 'reverse' income tax (earned income tax credit) for the fecund but unskilled, either.
Hahaha....
King's shilling for medicare/medicaid? More like King's pence...
And for hospital based physicians, it's not like we have a choice as to whether or not to accept these patients. Every hospital makes taking all comers a prerequisite for employment especially for hospital based physicians.
Believe me, if given a choice, most if not ALL physicians would shun medicaid at very least, and medicare too when inconvenient...it's simply not worth our time, or the headaches.
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