As incomes of rich slid, tax take fell (VINDICATION!)

Houston Chronicle ^ | Sept. 26, 2003 | DAVID CAY JOHNSTON DAVID CAY JOHNSTON DAVID CAY JOHNSTON

[mo]

We are 300 million people. The world is over 6 billion-we are less than 5% of the world. the way our government and corporations track our finances and identities has created a vast data base for the 95% of the world to potentially exploit at our risk. IMHO we can do business and pay taxes more efficiently and safely in anonymity rather than as we do now, branded and certified "USDA Grade A no1" .

[Green Knight]

Every time I hear of this issue, I keep thinking back to a story I heard about Russia a while back. How a couple years ago, with an incredibly onerous tax code, the Russian treasury was almost depleted. So they instituted a 13% Flat Tax. And surprisingly enough, the money began pouring in (Forgot specifics, though. Anyone remember the story, and got a link with info on this?).

What people like Arianna Huffington don't understand (And which Arnold Schwarzenegger does, since he pointed it out in the California debate), is that if you start taxing people to high, they don't just sit there and take it. They LEAVE. They go somewhere else where the taxes aren't so onerous. People complain all the time about how all these corporations having tax shelters in Haiti or wherever, yet NO ONE bothers to ask why these companies felt the need to set up their corporate headquarters outside of the US borders.

Well, there's my personal rant. Whatever the case, I completely with you about the National Retail Sales Tax. I'd love to bury the IRS for good, and get rid of the Income Tax, altogether.

[oceanview]

I agree with your points, except one: Arianna Huffington is having no problem with the current tax code it seems, she is writing off her entire life, somehow. Why the IRS isn't raking her over the coals, I do not know.

The corporate issue is something a bit different. Corporations that make profits in the US but then seek offshore tax havens are basically dishonest. They want the markets and the protections of the US system, they make profits, but then try to run and hide when the taxman comes.

[gatex]

"...people shouldn't complain that the IRS is coming after them if they don't, while millions of other Americans are working just as hard as your friend and paying honestly...."

Years ago, I worked part time for H&R Block so that I could take their advanced tax classes.

In one class, I made the statement, "The IRS is a little dishonest."

"They are a lot dishonest," replied the female instructer, who was an Enrolled Agent (qualified to appear before IRS), with 20 years experience in the tax business.

[gatex]

"...but then seek offshore tax havens are basically dishonest..."

Tell us what the tax law is and then tell us how this is dishonest, please.

[cake_crumb]

"One of the primary reason that the incomes of the rich fell in 2001, is the fact that many of our wealthiest taxpayers left the United States in 2001 and took all of their wealth with them"

The bursting of the tech bubble, the catastrophic attacks, then the anthrax scare and nobody knowing when or where the next attack would come had nothing to do with the loss of incomes for the rich?

[oceanview]

I see, so we should allow all these corporations to earn profits in the US market for their goods, employ offshore so they provide no jobs for americans, and then incorporate offshore in jurisdictions in which they earn no profits so they can avoid US taxes.

tell me then, if we should allow all of that, what the hell do we need those coporations for? what are they doing for our country, if they provide no tax base through employment, and no tax revenue from their profits.

[Principled]

It is dishonest to maximize profits by all available, legal means?

Is it, in your eyes, dishonest that I itemize to reduce my tax burden?...dishonest to pay quarterly taxes to reduce burden?...dishonest to put money into an IRA?...

Good greif.

Your assertion that minimizing tax burden using legal means is dishonest is absurd. I can't really believe any grown individual would say that. Maybe you don't like it, but that doesn't make it dishonest. Again, FR needs to implement an eligibility test for new members.

[gatex]

You avoided the explanation of how it is dishonest---

And you did not tell us what the tax code says.

[Principled]

...had nothing to do with the loss of incomes for the rich?

ONE OF THE PRIMARY REASONS... please re-read

[mrsmith]

.

"a drop in income from capital gains"
More than a 250 billion dollar drop, almost 45%!
Individual Income Tax Returns, Preliminary Data, 2001 (PDF)

Wow, that sure took a lot of money out of the top bracket...

[oceanview]

your examples are hardly the norm, these are broadly accepted parts of the code that people are free to participate in.

what Arianna Huffington and Stanley Tools are doing is quite different.

lots of "legal" things are dishonest and immoral.

[Principled]

It's not normal to itemize?

Are you smoking medical marijuana?

[oceanview]

"hardly the norm" with respect to the dishonest practices, the practices you mention are the "norm" and therefore fine.

when someone is setting up a dummy corporation in haiti, or figures out a way to write off every meal they eat, all their clothes, their domicile, their car, their travel expenses, then they have crossed the line.

[ATOMIC_PUNK]

Bumpier than a stone masons head !

[gatex]

"...when someone is setting up a dummy corporation in haiti...."

Last I heard, most U.S. corporations were incorporated in New Jersey ---

Why was that ? It was certainly legal and honest.

[Principled]

I see. So "normal" things are ok - while "hardly the norm" things are actually dishonest? How odd that dishonesty has nothing to do with your definition of dishonesty...only how "normal" something is.

And if someone figures out a way to write off every meal they eat, all their clothes, their domicile, their car, their travel expenses, then they have crossed the line. So it doesn't matter whether the actions are legal? It only matters if they're "out of your norm"?

So I guess all this time you've been using the word "dishonest", you've really meant "out of the norm for oceanview"?

[rb22982]

Europe the top tax rates go as high as 80% (not to mention VAT taxes of 17%) so I dont know why anyone would run there.

[Principled]

Depending on a lot of things, an individual may go to seemingly unnatractive (taxwise) places. For example, Australia has an income tax and a VAT style tax. So obviously this is unnatractive to high-earners. However, there is no asset tax...meaning one may purchase assets with pre-tax monies and reap the income from them without tax. This makes Australia perfect for folks who have earned a lot already and just meed a place to keep it safe. Just one example...

[wizardoz]

more likely, they leave the US to employ foreign labor to increase their profits even more. lets get real, Nike sneakers cost $120 a pair even though they are made using slave labor for $2 a day. who pockets the increased margin?

Well I say good for them. It's their money and they have every right to pocket it. Don't like it? Don't buy their shoes.