Why America's Billionaires Owe You a Thank You Note
America’s billionaires minimize their tax burdens, making the rest of us pick up their tab.
This tax season, America's billionaires are toasting you, the ordinary taxpayer.
That's because you're the one picking up the tab for our nation's ailing infrastructure of roads, bridges, and rail transport. You're also footing the bill for military forces, disaster relief, veterans' health services, and national park protection.
The share of taxes paid by the 1 percent is declining, even as wealth flows upward to them at dizzying pace.
Maybe you're not shocked to hear that the wealthy shift their tax obligations onto ordinary Americans. But perhaps you don't know all their tricks. Here are five tax secrets billionaires deploy to keep you paying more than your fair share.
1. Tax Work More Than Wealth.
The United States taxes income from investments more lightly than the money you earn by working.
For example, a teacher who earns $40,000 from her job owes Uncle Sam 25 percent of her income. But a hedge fund billionaire raking in $400 million from investments will only pay between 15 and 20 percent of that haul in taxes.
2. Hide Money Offshore.
Senator Elizabeth Warren quipped that Boston's winter had been so harsh that Mitt Romney "left his money here and he went to the Cayman Islands."
But that's no joke. Congressional researchers estimate that people who use offshore tax havens cost the rest of us as much as $70 billion a year. And that's just the tip of the tax-dodging iceberg.
Global Financial Integrity, a financial watchdog agency, estimates that global corporations and wealthy individuals are hiding a total of over $21 trillion.
3. Assemble Tax-Proof Trusts.
You can't hitch a U-Haul of money to your hearse, though some billionaires have found ways for their fortunes to live forever. They deploy tax planners who design trusts and other mechanisms to reduce or flat-out eliminate their estate taxes.
In 2013, casino mogul Sheldon Adelson used a complex trust mechanism to transfer $8 billion to his heirs, shielding over $2.8 billion in federal estate and gift taxes on the assets they'll inherit once he passes on.
Congress could close these billionaire loopholes tomorrow, if it weren't so busy cutting college Pell Grants for working-class college students.
4. Inherit Fortunes.
If I find $100 on the street, that's taxable income. But if my grandfather gives me $100 million, I don't pay any income tax on that jackpot. Inheritances are 100-percent exempt from the income tax.
While a tiny number of extremely rich families will pay taxes on estates before distributing funds, their relatives who inherit that money don't need to fork anything over to the IRS once they take possession of those assets.
Combine this arrangement with low-tax or no-tax trusts, and you can see why the living is easy for the children of billionaires.
5. Subsidize Charity.
When a billionaire donates money to a large hospital or university, we're encouraged to applaud their generosity. We seldom realize that we're actually subsidizing those buildings adorned with the billionaire's name.
Since donations reduce taxes on a billionaire's income and estate, ordinary taxpayers chip in about 50 cents of every dollar they donate. And we're not even invited to the gala.
If billionaires aren't paying their fair share of federal taxes, who is?
You are -- every time you pay higher state and local taxes as the federal government shifts responsibilities onto local jurisdictions, or when it imposes steeper fees for you to exercise your right to obtain a passport or enter a national park.
And that's why America's billionaires owe us all a thank you note this tax season.
We are at a crossroads
This country and this world are at a monumental crossroads. In a few short weeks, US voters will have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
This tax season, America's billionaires are toasting you, the ordinary taxpayer.
That's because you're the one picking up the tab for our nation's ailing infrastructure of roads, bridges, and rail transport. You're also footing the bill for military forces, disaster relief, veterans' health services, and national park protection.
The share of taxes paid by the 1 percent is declining, even as wealth flows upward to them at dizzying pace.
Maybe you're not shocked to hear that the wealthy shift their tax obligations onto ordinary Americans. But perhaps you don't know all their tricks. Here are five tax secrets billionaires deploy to keep you paying more than your fair share.
1. Tax Work More Than Wealth.
The United States taxes income from investments more lightly than the money you earn by working.
For example, a teacher who earns $40,000 from her job owes Uncle Sam 25 percent of her income. But a hedge fund billionaire raking in $400 million from investments will only pay between 15 and 20 percent of that haul in taxes.
2. Hide Money Offshore.
Senator Elizabeth Warren quipped that Boston's winter had been so harsh that Mitt Romney "left his money here and he went to the Cayman Islands."
But that's no joke. Congressional researchers estimate that people who use offshore tax havens cost the rest of us as much as $70 billion a year. And that's just the tip of the tax-dodging iceberg.
Global Financial Integrity, a financial watchdog agency, estimates that global corporations and wealthy individuals are hiding a total of over $21 trillion.
3. Assemble Tax-Proof Trusts.
You can't hitch a U-Haul of money to your hearse, though some billionaires have found ways for their fortunes to live forever. They deploy tax planners who design trusts and other mechanisms to reduce or flat-out eliminate their estate taxes.
In 2013, casino mogul Sheldon Adelson used a complex trust mechanism to transfer $8 billion to his heirs, shielding over $2.8 billion in federal estate and gift taxes on the assets they'll inherit once he passes on.
Congress could close these billionaire loopholes tomorrow, if it weren't so busy cutting college Pell Grants for working-class college students.
4. Inherit Fortunes.
If I find $100 on the street, that's taxable income. But if my grandfather gives me $100 million, I don't pay any income tax on that jackpot. Inheritances are 100-percent exempt from the income tax.
While a tiny number of extremely rich families will pay taxes on estates before distributing funds, their relatives who inherit that money don't need to fork anything over to the IRS once they take possession of those assets.
Combine this arrangement with low-tax or no-tax trusts, and you can see why the living is easy for the children of billionaires.
5. Subsidize Charity.
When a billionaire donates money to a large hospital or university, we're encouraged to applaud their generosity. We seldom realize that we're actually subsidizing those buildings adorned with the billionaire's name.
Since donations reduce taxes on a billionaire's income and estate, ordinary taxpayers chip in about 50 cents of every dollar they donate. And we're not even invited to the gala.
If billionaires aren't paying their fair share of federal taxes, who is?
You are -- every time you pay higher state and local taxes as the federal government shifts responsibilities onto local jurisdictions, or when it imposes steeper fees for you to exercise your right to obtain a passport or enter a national park.
And that's why America's billionaires owe us all a thank you note this tax season.
This tax season, America's billionaires are toasting you, the ordinary taxpayer.
That's because you're the one picking up the tab for our nation's ailing infrastructure of roads, bridges, and rail transport. You're also footing the bill for military forces, disaster relief, veterans' health services, and national park protection.
The share of taxes paid by the 1 percent is declining, even as wealth flows upward to them at dizzying pace.
Maybe you're not shocked to hear that the wealthy shift their tax obligations onto ordinary Americans. But perhaps you don't know all their tricks. Here are five tax secrets billionaires deploy to keep you paying more than your fair share.
1. Tax Work More Than Wealth.
The United States taxes income from investments more lightly than the money you earn by working.
For example, a teacher who earns $40,000 from her job owes Uncle Sam 25 percent of her income. But a hedge fund billionaire raking in $400 million from investments will only pay between 15 and 20 percent of that haul in taxes.
2. Hide Money Offshore.
Senator Elizabeth Warren quipped that Boston's winter had been so harsh that Mitt Romney "left his money here and he went to the Cayman Islands."
But that's no joke. Congressional researchers estimate that people who use offshore tax havens cost the rest of us as much as $70 billion a year. And that's just the tip of the tax-dodging iceberg.
Global Financial Integrity, a financial watchdog agency, estimates that global corporations and wealthy individuals are hiding a total of over $21 trillion.
3. Assemble Tax-Proof Trusts.
You can't hitch a U-Haul of money to your hearse, though some billionaires have found ways for their fortunes to live forever. They deploy tax planners who design trusts and other mechanisms to reduce or flat-out eliminate their estate taxes.
In 2013, casino mogul Sheldon Adelson used a complex trust mechanism to transfer $8 billion to his heirs, shielding over $2.8 billion in federal estate and gift taxes on the assets they'll inherit once he passes on.
Congress could close these billionaire loopholes tomorrow, if it weren't so busy cutting college Pell Grants for working-class college students.
4. Inherit Fortunes.
If I find $100 on the street, that's taxable income. But if my grandfather gives me $100 million, I don't pay any income tax on that jackpot. Inheritances are 100-percent exempt from the income tax.
While a tiny number of extremely rich families will pay taxes on estates before distributing funds, their relatives who inherit that money don't need to fork anything over to the IRS once they take possession of those assets.
Combine this arrangement with low-tax or no-tax trusts, and you can see why the living is easy for the children of billionaires.
5. Subsidize Charity.
When a billionaire donates money to a large hospital or university, we're encouraged to applaud their generosity. We seldom realize that we're actually subsidizing those buildings adorned with the billionaire's name.
Since donations reduce taxes on a billionaire's income and estate, ordinary taxpayers chip in about 50 cents of every dollar they donate. And we're not even invited to the gala.
If billionaires aren't paying their fair share of federal taxes, who is?
You are -- every time you pay higher state and local taxes as the federal government shifts responsibilities onto local jurisdictions, or when it imposes steeper fees for you to exercise your right to obtain a passport or enter a national park.
And that's why America's billionaires owe us all a thank you note this tax season.