As the April 15 tax filing deadline looms, each year the media cranks out stories about the certainty of death and taxes. No one can yet escape death, but it is getting easier for many Americans to avoid paying taxes. In fact, an estimated 70 millions households will pay no federal income taxes this year.
Despite the tax burden falling on fewer and fewer Americans, the Democrat Party and their spiritual leader President Obama continue to preach that the wealthy are not ponying up their "fair share" of federal income taxes. This lie exists only because the media allows it to fester unchallenged.
The top one percent of income earners, those with an adjusted gross income of $434,000 or more, shelled out more than 38 percent of all the federal income taxes paid into the Treasury. These figures are courtesy of the Internal Revenue Service based on 2012 tax data, the latest numbers available.
IRS data shows that the top five percent of wage earners, those with incomes over $175,817, anted up 59 percent of the income taxes paid. Another way to look at the statistic is to realize that five percent of Americans account for nearly six of every ten dollars confiscated by the IRS.
The bottom 50 percent of earners, those with incomes under $36,000, contributed 2.8 percent of all the federal income taxes amassed by the federal government. That fact belies the Democrat lie that the so-called poor and middle class are shouldering the nation's income tax burden.
The National Tax Limitation Foundation (NTLF), using Congressional Budget Office (CBO) data, calculated that the bottom 90 percent of earners, who took home 52 percent of all income, paid less than 30 percent of the federal income taxes.
The non-partisan Tax Policy Center has issued studies showing that deductions, exemptions and credits allow millions of Americans to zero out their tax bill. Nearly 67 percent of those who owe no taxes fall into the bottom 50 percent of wage earners.
"Many people who pay no income tax simply have too little income to owe tax," explains Roberton Williams of the Tax Policy Center. "The rest benefit from the tax code's many preferences." Those include deductions for earned income, childcare and educational expenses.
The center forecasts that slightly more than 43 percent of U.S. households will pay no federal income tax. That number was 46 percent in 2011. The center estimates that the number will continue to decline as the economy improves. But there are no guarantees that will happen.
Income tax deniers are quick to point out that many households that pay no tax contribute to the federal government with paycheck deductions for Social Security and Medicare taxes. But there are still 14 percent of households that pay none of those taxes. Zero.
In fact, an analysis of CBO data shows the bottom 20 percent of earners actually have a negative tax rate of 7.5 percent, meaning they are net takers when it comes to federal income taxes. The next 20 percent pay a negative tax rate of 1.3 percent, reports the NTLF.
By way of explanation, the CBO points out that a negative income tax rate means an individual has refundable tax credits that exceed the income tax liability owed to the government. These households often receive money from government programs, such as food stamps and rent assistance.
Individual tax payers contribute most of the trillions of dollars spent by the federal government. In 2014, individuals accounted for 51.8 percent of the federal taxes collected by the IRS. Businesses' share of the tax burden was 9.7 percent. Social Security taxes made up the balance.
With the battle over the 2015 budget on the horizon, Americans who still pay taxes would be well advised to get involved in the debate. Once Congress approves the budget, the certainty remains that individuals will be on the hook for paying the lion's share of the government's spending tab.
Showing posts with label Income Taxes. Show all posts
Showing posts with label Income Taxes. Show all posts
Monday, April 13, 2015
Monday, December 10, 2012
Warren Buffet: The Orifice of Omaha
Billionaire blowhard Warren Buffet is leading a one-man band to drum up support for hiking taxes on his pals in the upper earning bracket. The once publicity shy businessman has become a media darling and a personal shill for President Obama during his high-profile class warfare campaign.
Most Americans know little about Buffet, dubbed the "Oracle of Omaha" for his ability to cherry pick undervalued companies for his firm, Berkshire Hathaway. His net worth has been estimated at something north of $46 billion. But he is less than forthcoming about his immense wealth.
The 82-year-old, self-described agnostic has invested billions in companies ranging from railroads to candy companies, jewelry chains, insurance underwriters, newspapers and furniture stores. Buffet scrupulously avoided the limelight for most of his career until he recently became infatuated with notoriety.
In his latest evangelical outreach, Buffet lectured the country on how jacking up taxes would boost the morale of those unwashed middle class Americans. His sermon was delivered as the president stumped on the moral imperative to eliminate the Bush tax cuts for high-income families.
The 82-year-old, self-described agnostic has invested billions in companies ranging from railroads to candy companies, jewelry chains, insurance underwriters, newspapers and furniture stores. Buffet scrupulously avoided the limelight for most of his career until he recently became infatuated with notoriety.
In his latest evangelical outreach, Buffet lectured the country on how jacking up taxes would boost the morale of those unwashed middle class Americans. His sermon was delivered as the president stumped on the moral imperative to eliminate the Bush tax cuts for high-income families.
The pomposity of Buffet is only eclipsed by his hypocrisy.
For starters, Buffet's army of lawyers and tax accountants at Berkshire are contesting nearly $1 billion in Internal Revenue Service (IRS) claims against his companies. One of the firms, NetJets, sued the government over $642.7 million in back taxes, interest and penalties.
The sanctimonious Buffet could set a good example for corporations by paying his business taxes.
While Buffet scolds others about paying their fair share of taxes, the iconic billionaire has taken deliberate steps to shield as much of his income as possible from the IRS. For instance, Buffet has shifted billions of dollars into a private charity to skirt paying billions in taxes.
Buffet pays a lower tax rate than most Americans earning $250,000 and up because the majority of his wealth has been generated by stock ownership, which is taxed at a lower rate than wages. That helps explain why the industrialist lobbies for higher tax rates on those wretched small business people.
The hypocrisy doesn't end there.
Included in Buffet's portfolio of companies are life insurance firms that peddle estate planning products that help the wealthiest Americans lower the amount of taxes they pay the government. When taxes are raised, it fuels demand for even more tax shelters, which benefits Buffet's legion of companies.
Buffet's support for President Obama's soak-the-rich scheme is not entirely altruistic either.
The moneyed mogul counts Government Employees Insurance Company (GEICO) among his holdings. Obama's push to grow the government bureaucracy has benefited GEICO, a company that serves a large portion of the federal workforce.
Buffet also hit the jackpot when the president derailed the multi-million dollar Keystone Pipeline project. Obama's decision opened the doors for the tycoon's railroad company (BNSF) to haul oil across the country at a higher rate than it would have cost to pump the crude over a pipeline.
Yet the media has cloaked Warren Buffet in a sheen of self-righteousness.
Buffet, like Obama, isn't really interested in tax fairness. The narcissistic magnate wants to ingratiate himself to the president to secure preferential treatment for his sundry industries. Buffet has always finagled every advantage to enrich his vast portfolio.
If he wants to "boost the morale" of the middle class, Warren Buffet should shut up. A little more silence from the Orifice of Omaha would be a welcome relief for all Americans.
If he wants to "boost the morale" of the middle class, Warren Buffet should shut up. A little more silence from the Orifice of Omaha would be a welcome relief for all Americans.
Monday, October 15, 2012
What the U.S. Can Learn From France
Since President Obama considers raising taxes on the wealthy a patriotic duty, he should ponder the recent fallout in France after that country's new socialist leader zapped millionaires. The maneuver has fueled a selling frenzy of pricey real estate and triggered an exodus to tax friendly nations.
The great escape began when candidate Francois Hollande pandered to his Socialist Party faithful by vowing to levy a 75 percent tax on all personal income that exceeds one million euros a year. Many figured it was an election stunt. But President Hollande has rammed through the new tax and signaled he wants to increase taxes on businesses, too.
The confiscatory tax, scheduled to take affect later this year, has sent shivers through France's top earners. About 500 residences worth more than one million euros have gone onto the Paris market since May. Lawyers report an unprecedented number of calls from prosperous executives wanting to flee France.
The country's wealthiest man made no secret of the fact he is seeking citizenship in neighboring Belgium. Bernard Arnault, chief executive of luxury brand Moet-Hennessy Louis Vuitton (MHLV), wants no part of Hollande's soak-the-rich scheme.
The French media acted with outrage. Hollande scolded Arnault for being unpatriotic. Socialists and trade unions squealed with delight. However, Hollande's public approval ratings have nosedived. The French president has no one to blame but himself and his lousy political acumen.
In defending the tax, France's top man claimed the revenues would help reduce the nation's hefty budget deficit. However, the tax revenue from an estimated 30,000 wealthy earners would make-up a tiny fraction of the 33 billion euros needed to help balance France's budget.
The tax does nothing to address France's economic woes. The country recorded zero growth in the second quarter. Unemployment ticked up to 10.3 percent, the highest in more than a decade. Raising taxes will blunt any chance of economic recovery.
Does any of this sound familiar? It should. Hollande and his socialist pals have ripped a page right out of the playbook of Barrack Obama. If the U.S. president gets his way, America will be treated to the same sort of spectacle.
It is political naiveté to think sharp increases in taxes will be met with passive resignation. As France is discovering, the new levy is stifling business growth, drying up capital for new ventures and motivating foreign companies to consider alternative locations for their investment.
The draconian tax, aimed at the wealthy, has harmed every French citizen and splintered the nation by pitting one class against another.
Don't expect America's socialist president to learn from his French connection. President Obama is determined to hoist the top tax rate to 39.6 percent on every couple earning $250,000 or more. Why stop there? In 1963, the United States' highest individual income tax rate stood at 91 percent.
Democratic Party President John Kennedy lobbied for a lower rate. After his death, Congress sliced the rate on the largest earners to 70 percent. President Reagan trimmed the top rate to 50 percent in 1982. He went a step further in 1988, dropping it to 28 percent, igniting the longest sustained economic boom in the nation's history.
The French lesson should be painfully obvious. Higher taxes often hinder economic growth by reducing consumer spending and investment. In the midst of the current U.S. economic malaise, the idea of a tax hike on any wage earner deserves public scorn.
It is rotten political and economic policy.
The great escape began when candidate Francois Hollande pandered to his Socialist Party faithful by vowing to levy a 75 percent tax on all personal income that exceeds one million euros a year. Many figured it was an election stunt. But President Hollande has rammed through the new tax and signaled he wants to increase taxes on businesses, too.
The confiscatory tax, scheduled to take affect later this year, has sent shivers through France's top earners. About 500 residences worth more than one million euros have gone onto the Paris market since May. Lawyers report an unprecedented number of calls from prosperous executives wanting to flee France.
The country's wealthiest man made no secret of the fact he is seeking citizenship in neighboring Belgium. Bernard Arnault, chief executive of luxury brand Moet-Hennessy Louis Vuitton (MHLV), wants no part of Hollande's soak-the-rich scheme.
The French media acted with outrage. Hollande scolded Arnault for being unpatriotic. Socialists and trade unions squealed with delight. However, Hollande's public approval ratings have nosedived. The French president has no one to blame but himself and his lousy political acumen.
In defending the tax, France's top man claimed the revenues would help reduce the nation's hefty budget deficit. However, the tax revenue from an estimated 30,000 wealthy earners would make-up a tiny fraction of the 33 billion euros needed to help balance France's budget.
The tax does nothing to address France's economic woes. The country recorded zero growth in the second quarter. Unemployment ticked up to 10.3 percent, the highest in more than a decade. Raising taxes will blunt any chance of economic recovery.
Does any of this sound familiar? It should. Hollande and his socialist pals have ripped a page right out of the playbook of Barrack Obama. If the U.S. president gets his way, America will be treated to the same sort of spectacle.
It is political naiveté to think sharp increases in taxes will be met with passive resignation. As France is discovering, the new levy is stifling business growth, drying up capital for new ventures and motivating foreign companies to consider alternative locations for their investment.
The draconian tax, aimed at the wealthy, has harmed every French citizen and splintered the nation by pitting one class against another.
Don't expect America's socialist president to learn from his French connection. President Obama is determined to hoist the top tax rate to 39.6 percent on every couple earning $250,000 or more. Why stop there? In 1963, the United States' highest individual income tax rate stood at 91 percent.
Democratic Party President John Kennedy lobbied for a lower rate. After his death, Congress sliced the rate on the largest earners to 70 percent. President Reagan trimmed the top rate to 50 percent in 1982. He went a step further in 1988, dropping it to 28 percent, igniting the longest sustained economic boom in the nation's history.
The French lesson should be painfully obvious. Higher taxes often hinder economic growth by reducing consumer spending and investment. In the midst of the current U.S. economic malaise, the idea of a tax hike on any wage earner deserves public scorn.
It is rotten political and economic policy.
Thursday, September 29, 2011
Raising Hackles Over Rising Taxes
Even for a president known for his dunderhead economic ideas, it was stunning to watch Barack Obama stump for raising taxes to the tune of $1.5 trillion to reduce the deficit. In a futile attempt to defend his soak the rich plan, the president dredged up feckless justifications.
Obama bellowed that it wasn't fair that secretaries coughed up more money for taxes than millionaires and billionaires, borrowing a line from gazillionaire Warren Buffett. There was only one problem with the Buffett-Obama assertion. It is factually incorrect.
Households earning more than $1 million pay an average of 29.1 percent of their income in federal taxes, while those with incomes of $50,000 pay an average of 12.5 percent. The numbers clearly underscore the fallacy of the president's argument about tax fairness.
According to the Congressional Budget Office, 10 percent of the households with the highest incomes pay more than 70 percent of federal income taxes. Meanwhile 51 percent of Americans pay no federal income tax. Where is the fairness in that?
Those aren't the only flaws with the president's wrong-headed plan. Obama claimed that his tax increases were aimed at millionaires and billionaires. However, his proposal actually would lift federal taxes for individuals with $200,000 and above in income.
There is ample evidence to suggest that raising taxes on any group while the economy sputters is a prescription for economic disaster. Instead of raising government revenue, a tax hike likely would have the opposite effect because it would cripple job creation thus worsening the economy and suppressing wage growth. Total tax revenue will decline under that scenario.
A robust economy is the most reliable way to fuel more jobs. However, the nation's economic growth in the most recent quarter was an anemic one percent. That followed growth of a puny 0.4 percent in the first quarter. Increasing taxes will strangle the tiny economic development the country has experienced.
Increasing taxes will stifle small business job growth. One-half of individual and household incomes above $250,000 annually are attributable to small businesses revenue. These firms create more than 60 percent of all new jobs in the economy. Raising taxes on these individuals will leave less money for them to invest in their firms.
Under the president's plan, higher taxes also would apply to investment partnerships. The tax will be acutely felt by real estate and oil and gas developers. That will quell capital deployment among small business partnerships in these industries, further suffocating job growth.
In addition, the president's plan targets tax-exempt income from municipal bonds issued by states and cities. By reducing the tax benefits for individuals, these bonds will become a less attractive investment. As a result, infrastructure projects, often cited by the president as job creators, will lack proper funding.
Despite the adverse economic impacts, the Obama-controlled media has swept these obvious deficiencies under the rug and donned a cheerleader outfit to extoll the benefits of forcing the wealthy to pay an even higher portion of their earnings to the government.
Unfortunately, there are too many Americans who think confiscating more money from the rich will solve the country's debt problems. Even if everyone earning $200,000 and above were taxed at 100 percent of their income, it would hardly make a dent in nation's $14 trillion debt.
America does not have an income problem. The country has a spending problem. Even the economically illiterate should be able to understand that. Too bad that logic still eludes the president.
Obama bellowed that it wasn't fair that secretaries coughed up more money for taxes than millionaires and billionaires, borrowing a line from gazillionaire Warren Buffett. There was only one problem with the Buffett-Obama assertion. It is factually incorrect.
Households earning more than $1 million pay an average of 29.1 percent of their income in federal taxes, while those with incomes of $50,000 pay an average of 12.5 percent. The numbers clearly underscore the fallacy of the president's argument about tax fairness.
According to the Congressional Budget Office, 10 percent of the households with the highest incomes pay more than 70 percent of federal income taxes. Meanwhile 51 percent of Americans pay no federal income tax. Where is the fairness in that?
Those aren't the only flaws with the president's wrong-headed plan. Obama claimed that his tax increases were aimed at millionaires and billionaires. However, his proposal actually would lift federal taxes for individuals with $200,000 and above in income.
There is ample evidence to suggest that raising taxes on any group while the economy sputters is a prescription for economic disaster. Instead of raising government revenue, a tax hike likely would have the opposite effect because it would cripple job creation thus worsening the economy and suppressing wage growth. Total tax revenue will decline under that scenario.
A robust economy is the most reliable way to fuel more jobs. However, the nation's economic growth in the most recent quarter was an anemic one percent. That followed growth of a puny 0.4 percent in the first quarter. Increasing taxes will strangle the tiny economic development the country has experienced.
Increasing taxes will stifle small business job growth. One-half of individual and household incomes above $250,000 annually are attributable to small businesses revenue. These firms create more than 60 percent of all new jobs in the economy. Raising taxes on these individuals will leave less money for them to invest in their firms.
Under the president's plan, higher taxes also would apply to investment partnerships. The tax will be acutely felt by real estate and oil and gas developers. That will quell capital deployment among small business partnerships in these industries, further suffocating job growth.
In addition, the president's plan targets tax-exempt income from municipal bonds issued by states and cities. By reducing the tax benefits for individuals, these bonds will become a less attractive investment. As a result, infrastructure projects, often cited by the president as job creators, will lack proper funding.
Despite the adverse economic impacts, the Obama-controlled media has swept these obvious deficiencies under the rug and donned a cheerleader outfit to extoll the benefits of forcing the wealthy to pay an even higher portion of their earnings to the government.
Unfortunately, there are too many Americans who think confiscating more money from the rich will solve the country's debt problems. Even if everyone earning $200,000 and above were taxed at 100 percent of their income, it would hardly make a dent in nation's $14 trillion debt.
America does not have an income problem. The country has a spending problem. Even the economically illiterate should be able to understand that. Too bad that logic still eludes the president.
Monday, April 18, 2011
Tax Day: Half of Americans Get a Pass
Nearly half of your fellow citizens shrugged their shoulders at today's filing deadline for federal income taxes. Unlike the rest of us saps, these Americans pay no income taxes to Washington. No wonder so few people are upset over President Obama's calls to raise taxes to pay for a bloated government.
According to the Tax Policy Center, 47 percent of Americans contributed nothing to funding the federal government through income taxes for 2009. This does not mean they avoided taxes altogether. Most had their paychecks docked for Social Security and Medicare.
Incredibly, 14 percent of Americans paid no federal taxes or payroll taxes. This is possible because the threshold for filing keeps being raised to accommodate the poverty level. Although no data exists, it is safe to assume many of these same people receive benefits for food, rent and other services from the government.
More than half of the nation's federal tax revenue came from the top 10 percent of earners, the center estimates. Those evil millionaires who make up the top five percent contributed 44 percent of all the revenue the federal government collected through income taxes from individuals and corporations in 2009.
Even that comparison may be unfair to the wealthy. Considering only individual tax returns, the top five percent of taxpayers paid far more than the bottom 95 percent. These individuals earned 34.7 percent of the nation's adjusted income yet shelled out the lion's share of federal income taxes. If you have listened to the media and the president, you would swear the rich were carried by the middle class.
Meanwhile, 52 million households not only paid no taxes but actually got back every penny withheld from their paychecks, reports The Tax Foundation. These figures are for tax returns filed in 2008, the latest year for which the data is available.
How did that happen? This is the result of a tax code that contains credits, deductions and exemptions valued at about $1.1 trillion, according to the National Taxpayer Advocate, an dependent watchdog organization. One of the most lucrative refund producers is the Earned Income Tax Credit for all sorts of government boondoggles. It includes credits for purchases of weatherproofing, for example.
This is why it is so disingenuous for the president to call on the most successful individuals to fork over an even larger share of the tax burden while many people pay not a single dime. Even if the rates on the top five percent were doubled, it wouldn't matter. There still would not be enough money to reduce the federal deficit to zero.
What America needs is significant tax reform to restore fairness. Every citizen should be required to pay for his or her government, even if the amount is only a few dollars. When people don't have to worry about who's funding government, they become dependent drones who happily vote for anyone who promises more federal handouts.
Paying taxes should be viewed as one of the costs of citizenship. When a country allows one group to be taxed while others escape responsibility, it is a nation that invites class warfare that will one day lead to financial ruin and anarchy.
According to the Tax Policy Center, 47 percent of Americans contributed nothing to funding the federal government through income taxes for 2009. This does not mean they avoided taxes altogether. Most had their paychecks docked for Social Security and Medicare.
Incredibly, 14 percent of Americans paid no federal taxes or payroll taxes. This is possible because the threshold for filing keeps being raised to accommodate the poverty level. Although no data exists, it is safe to assume many of these same people receive benefits for food, rent and other services from the government.
More than half of the nation's federal tax revenue came from the top 10 percent of earners, the center estimates. Those evil millionaires who make up the top five percent contributed 44 percent of all the revenue the federal government collected through income taxes from individuals and corporations in 2009.
Even that comparison may be unfair to the wealthy. Considering only individual tax returns, the top five percent of taxpayers paid far more than the bottom 95 percent. These individuals earned 34.7 percent of the nation's adjusted income yet shelled out the lion's share of federal income taxes. If you have listened to the media and the president, you would swear the rich were carried by the middle class.
Meanwhile, 52 million households not only paid no taxes but actually got back every penny withheld from their paychecks, reports The Tax Foundation. These figures are for tax returns filed in 2008, the latest year for which the data is available.
How did that happen? This is the result of a tax code that contains credits, deductions and exemptions valued at about $1.1 trillion, according to the National Taxpayer Advocate, an dependent watchdog organization. One of the most lucrative refund producers is the Earned Income Tax Credit for all sorts of government boondoggles. It includes credits for purchases of weatherproofing, for example.
This is why it is so disingenuous for the president to call on the most successful individuals to fork over an even larger share of the tax burden while many people pay not a single dime. Even if the rates on the top five percent were doubled, it wouldn't matter. There still would not be enough money to reduce the federal deficit to zero.
What America needs is significant tax reform to restore fairness. Every citizen should be required to pay for his or her government, even if the amount is only a few dollars. When people don't have to worry about who's funding government, they become dependent drones who happily vote for anyone who promises more federal handouts.
Paying taxes should be viewed as one of the costs of citizenship. When a country allows one group to be taxed while others escape responsibility, it is a nation that invites class warfare that will one day lead to financial ruin and anarchy.
Friday, April 2, 2010
Factoids That You Can Use
The number of Americans who pay no taxes has increased 59 percent in less than a decade, according to the non-partisan Tax Foundation. In 2008, an estimated 51.6 million tax filers--out of a total of 142 million tax filers--paid no taxes. That means 36.3 percent of tax filers paid no federal income tax. In 2000, the number of tax filers who paid no taxes was 32.6 million. During the same period (2000-2008), the number of people filing tax returns grew by only 10 percent. What do all these numbers mean? We have reached a point where many Americans are completely disconnected from the cost of government because they contribute no money to fund the massive federal budget. Is it any wonder why a sizable segment of society wants more "free" government programs, such as health care?
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