[Vision2020] In the mood for April 15th?
Joan Opyr
auntiestablishment@hotmail.com
Mon, 12 Apr 2004 15:38:39 -0700
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Dear Visionaries:
Just in case you were feeling cheerful about paying your fair share of ou=
r federal taxes, read the following and be cured.
--Joan
----------------------------------------------------------------------
This article was sent to you by someone who found it on SFGate.
The original article can be found on SFGate.com here:
http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2004/04/11/INGV560V=
O41.DTL
---------------------------------------------------------------------
Sunday, April 11, 2004 (SF Chronicle)
Stroke the rich/IRS has become a subsidy system for super-wealthy America=
ns
IRS winks at rich deadbeats
David Cay Johnston
The federal tax system that millions of Americans are forced to deal with
before April 15 is not at all what you think it is. Congress has changed
it in recent decades from a progressive system in which the more one earn=
s
the more one pays in income taxes. It has become a subsidy system for the
super rich.
Through explicit policies, as well as tax laws never reported in the news=
,
Congress now literally takes money from those making $30,000 to $500,000
per year and funnels it in subtle ways to the super rich -- the top
1/100th of 1 percent of Americans.
People making $60,000 paid a larger share of their 2001 income in federal
income, Social Security and Medicare taxes than a family making $25
million, the latest Internal Revenue Service data show. And in income
taxes alone, people making $400,000 paid a larger share of their incomes
than the 7,000 households who made $10 million or more.
While millions of Americans in the last quarter-century debated about who
shot J.R. and scurried for news about who would be Jennifer Lopez's next
lover, Congress quietly passed tax laws that shift the tax burden from th=
e
28,000 Americans in households with incomes of $8 million per year or
more.
One 1985 law, promoted in the Senate as relieving middle class Americans,
gave a huge tax break to corporate executives who make personal use of
company jets. CEOs may now fly to vacations or Saturday golf outings in
luxury for a penny a mile. Congress shifted the real cost of about $6 per
mile to shareholders, who pay two-thirds, and to taxpayers who suffer the
rest of the cost lost as a result of reduced corporate income taxes.
Since 1988, Congress has also cut in half the Internal Revenue Service's
capacity to enforce tax laws, replacing it with extra effort to reduce
audits of corporations and the rich.
On March 30, Congress was told that 78 percent of known tax cheats in
investment partnerships are not even asked to pay because there are not
enough tax collectors to go after them. Congress and the Bush
administration rejected the request by the IRS Oversight Board, a citizen
panel Congress created, for extra money to pursue some of these tax cheat=
s
and stop about 1 percent of the $311 billion in estimated annual tax
cheating.
In the late '90s, a crooked banker gave the IRS records on 1,600 criminal
tax cheats who used his Cayman Islands bank. The Justice Department
prosecuted 49 of them, but the other 1,551 were not even asked to pay,
lawyers for some of them say.
Two billionaires in New York, the art dealer Alec Wildenstein and his
former wife, Jocelyn, testified under oath in their divorce that for 30
years they never filed a tax return. They have not been prosecuted.
There are now seminars that show business owners how to drop out of the
tax system with virtually no risk of detection by the IRS, which relies o=
n
a computer system installed when John F. Kennedy was president.
As tax law enforcement has declined, illegal tax evasion has risen,
especially among the rich and more recently among the young.
All of these actions reward cheats at the expense of honest taxpayers, bu=
t
because "tax" is a four letter word in Washington, nothing is done. Those
who support tax law enforcement are denounced on the campaign trail as
advocates of higher taxes.
While letting rich tax cheats run wild, Congress did finance a crackdown
on the poor. The working poor, most of whom make less than $16,000, are
eight times more likely to be audited than millionaire investors in
partnerships.
The audits of low-income taxpayers found little cheating. Two-thirds of
the poor get either their full refund or more than they sought.
These and other unseen changes in the tax system are major factors in
profound economic changes that have caused so many in America to lurch
from job to job, a fourth of which pay less than $8 an hour, while helpin=
g
a very few grow very rich.
Because the news media focus on what politicians say about the tax system=
,
rather than how it actually operates, few Americans realize that:
-- Corporate income tax laws reward companies that move jobs offshore,
allowing them to earn untaxed profits as long as the money stays offshore=
-- Widespread cuts in health insurance and pensions for the rank-and-f=
ile
are driven by a special law that lets top executives defer paying taxes
for years, in a way that adds 35 percent to the cost of their bloated pay=
-- The 2001 Bush tax cuts included a stealth tax increase on the middl=
e
class and upper-middle class that will cost them a half trillion dollars
in the first 10 years and, for 35 million families, wiping out part or al=
l
of their Bush tax cuts.
-- The stealth tax boost on people making $30,000 to $500,000 was
explicitly used to make sure that the super rich would get their entire
Bush tax cuts.
-- A California couple who make $75,000 to $100,000 and have two child=
ren
face a 97 percent chance of losing part of their Bush tax cuts to this
stealth tax increase and overall will lose 42 percent of their Bush tax
cuts by next year.
-- If your child becomes seriously ill, Congress, under this same law,
will raise your income taxes if you spend more than 7.5 percent of your
income trying to keep your child alive.
-- Since 1983, under a plan devised by Alan Greenspan, Americans have =
paid
$1.8 trillion more in Social Security taxes than have been paid out in
benefits, money that is used to finance tax cuts for the super rich while
robbing the middle class of their capacity to save.
-- A family earning $50,000 this year will have about $1,500 of its mo=
ney
funneled to the super rich because of the Greenspan plan.
-- Since 1993, the income tax burden on the 400 highest-income America=
ns
has been cut 40 percent when measured the way that President Bush prefers=
,
which is by counting how many pennies out of each dollar go to income
taxes. In 1993 the top 400 paid 30 cents out of each dollar in federal
income taxes. By the end of the Clinton administration in 2000 they were
down to 22 cents. Under Bush, their burden is less than 18 cents. Everyon=
e
else felt their tax bite rise to 15 cents on the dollar from an average o=
f
13 cents.
Over time, the impact of tax relief for the super rich and more taxes for
everyone else is profound. The rich can save and invest more and more,
increasing their incomes and political power over time through the magic
of compound interest, while everyone else has less of their money to spen=
d
or save and millions of people are mired in debt.
While wage earners have every dollar of income reported to the government=
,
the super rich control what the IRS knows about their incomes. But the
rich are rarely audited anymore. Congress also gives them many perfectly
legal devices to defer reporting income for years or decades. That means
that the real incomes of the super rich are much larger than the IRS data
show and their tax burden is even lighter.
IRS data, adjusted for inflation, show that the poor are really getting
poorer and the super rich are getting fabulously richer, a trend enhanced
by their falling tax burden. In 1970, the poorest third of Americans had
more than 10 times as much income as the super rich, the top 1/100th of
one percent. Back then the poor had more than 10 percent of all income an=
d
the super rich had one percent.
By 2000 the two groups were equal -- the 28,000 Americans at the top had
as much income as the 96 million at the bottom. The poor's share of incom=
e
fell by half while the super rich's share rose to more than 5 percent of
all income.
Not only did the poorest third's share of income shrink, they actually ha=
d
less money. The average 25-year-old man in 1970 made $2 per hour more,
adjusted for inflation, than in 2000.
Over those three decades the bottom 99 percent of Americans had an averag=
e
increase in total income of $2,710. That is an annual raise of less than
$100 per year, the equivalent of a nickel an hour raise each year for 30
years. The super rich did fabulously better, their average incomes rising
$20.3 million to an average of $24 million each.
Plot these figures on a chart and the results astound. If the increase fo=
r
99 percent of Americans is a bar 1-inch high, the bar for the super rich
soars heavenward 625 feet.
All of this is having a devastating impact on America, which the preamble
to our Constitution says was created to "promote the general welfare."
Until Americans decide to take back their democracy and become actively
engaged in politics, the super rich will continue to rig the tax system
for their benefit only.
--
David Cay Johnston is a Pulitzer Prize-winning reporter for the New York
Times and author of "Perfectly Legal: The Covert Campaign to Rig Our Tax
System to Benefit the Super Rich -- and Cheat Everybody Else," from which
this article is adapted. ------------------------------------------------=
----------------------
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<HTML><BODY STYLE=3D"font:10pt verdana; border:none;"><DIV> </DIV> <=
DIV>Dear Visionaries:</DIV> <DIV> </DIV> <DIV>Just in case you =
were feeling cheerful about paying your fair share of our feder=
al taxes, read the following and be cured.</DIV> <DIV> </DIV> <DIV>-=
-Joan</DIV> <DIV> </DIV> <DIV> </DIV> <DIV>--------------------=
--------------------------------------------------<BR>This article was se=
nt to you by someone who found it on SFGate.<BR>The original article can =
be found on SFGate.com here:<BR>http://www.sfgate.com/cgi-bin/article.cgi=
?file=3D/c/a/2004/04/11/INGV560VO41.DTL<BR>------------------------------=
---------------------------------------<BR>Sunday, April 11, 2004 (SF Chr=
onicle)<BR></DIV> <DIV>Stroke the rich/IRS has become a subsidy system fo=
r super-wealthy Americans</DIV> <DIV>IRS winks at rich deadbeats<BR></DIV=
> <DIV>David Cay Johnston<BR><BR><BR>The federal tax system that millions=
of Americans are forced to deal with<BR>before April 15 is not at all wh=
at you think it is. Congress has changed<BR>it in recent decades from a p=
rogressive system in which the more one earns<BR>the more one pays in inc=
ome taxes. It has become a subsidy system for the<BR>super rich.<BR></DIV=
> <DIV>Through explicit policies, as well as tax laws never reported in t=
he news,<BR>Congress now literally takes money from those making $30,000 =
to $500,000<BR>per year and funnels it in subtle ways to the super rich -=
- the top<BR>1/100th of 1 percent of Americans.<BR></DIV> <DIV>People mak=
ing $60,000 paid a larger share of their 2001 income in federal<BR>income=
, Social Security and Medicare taxes than a family making $25<BR>million,=
the latest Internal Revenue Service data show. And in income<BR>taxes al=
one, people making $400,000 paid a larger share of their incomes<BR>than =
the 7,000 households who made $10 million or more.<BR></DIV> <DIV>While m=
illions of Americans in the last quarter-century debated about who<BR>sho=
t J.R. and scurried for news about who would be Jennifer Lopez's next<BR>=
lover, Congress quietly passed tax laws that shift the tax burden from th=
e<BR>28,000 Americans in households with incomes of $8 million per year o=
r<BR>more.<BR></DIV> <DIV>One 1985 law, promoted in the Senate as relievi=
ng middle class Americans,<BR>gave a huge tax break to corporate executiv=
es who make personal use of<BR>company jets. CEOs may now fly to vacation=
s or Saturday golf outings in<BR>luxury for a penny a mile. Congress shif=
ted the real cost of about $6 per<BR>mile to shareholders, who pay two-th=
irds, and to taxpayers who suffer the<BR>rest of the cost lost as a resul=
t of reduced corporate income taxes.<BR></DIV> <DIV>Since 1988, Congress =
has also cut in half the Internal Revenue Service's<BR>capacity to enforc=
e tax laws, replacing it with extra effort to reduce<BR>audits of corpora=
tions and the rich.<BR></DIV> <DIV>On March 30, Congress was told that 78=
percent of known tax cheats in<BR>investment partnerships are not even a=
sked to pay because there are not<BR>enough tax collectors to go after th=
em. Congress and the Bush<BR>administration rejected the request by the I=
RS Oversight Board, a citizen<BR>panel Congress created, for extra money =
to pursue some of these tax cheats<BR>and stop about 1 percent of the $31=
1 billion in estimated annual tax<BR>cheating.<BR></DIV> <DIV>In the late=
'90s, a crooked banker gave the IRS records on 1,600 criminal<BR>tax che=
ats who used his Cayman Islands bank. The Justice Department<BR>prosecute=
d 49 of them, but the other 1,551 were not even asked to pay,<BR>lawyers =
for some of them say.<BR></DIV> <DIV>Two billionaires in New York, the ar=
t dealer Alec Wildenstein and his<BR>former wife, Jocelyn, testified unde=
r oath in their divorce that for 30<BR>years they never filed a tax retur=
n. They have not been prosecuted.<BR></DIV> <DIV>There are now seminars t=
hat show business owners how to drop out of the<BR>tax system with virtua=
lly no risk of detection by the IRS, which relies on<BR>a computer system=
installed when John F. Kennedy was president.<BR></DIV> <DIV>As tax law =
enforcement has declined, illegal tax evasion has risen,<BR>especially am=
ong the rich and more recently among the young.<BR></DIV> <DIV>All of the=
se actions reward cheats at the expense of honest taxpayers, but<BR>becau=
se "tax" is a four letter word in Washington, nothing is done. Those<BR>w=
ho support tax law enforcement are denounced on the campaign trail as<BR>=
advocates of higher taxes.<BR></DIV> <DIV>While letting rich tax cheats r=
un wild, Congress did finance a crackdown<BR>on the poor. The working poo=
r, most of whom make less than $16,000, are<BR>eight times more likely to=
be audited than millionaire investors in<BR>partnerships.<BR></DIV> <DIV=
>The audits of low-income taxpayers found little cheating. Two-thirds of<=
BR>the poor get either their full refund or more than they sought.<BR></D=
IV> <DIV>These and other unseen changes in the tax system are major facto=
rs in<BR>profound economic changes that have caused so many in America to=
lurch<BR>from job to job, a fourth of which pay less than $8 an hour, wh=
ile helping<BR>a very few grow very rich.<BR></DIV> <DIV>Because the news=
media focus on what politicians say about the tax system,<BR>rather than=
how it actually operates, few Americans realize that:<BR></DIV> <DIV>&nb=
sp; -- Corporate income tax laws reward companies that move jobs of=
fshore,<BR>allowing them to earn untaxed profits as long as the money sta=
ys offshore.<BR></DIV> <DIV> -- Widespread cuts in health ins=
urance and pensions for the rank-and-file<BR>are driven by a special law =
that lets top executives defer paying taxes<BR>for years, in a way that a=
dds 35 percent to the cost of their bloated pay.<BR></DIV> <DIV> &nb=
sp; -- The 2001 Bush tax cuts included a stealth tax increase on the midd=
le<BR>class and upper-middle class that will cost them a half trillion do=
llars<BR>in the first 10 years and, for 35 million families, wiping out p=
art or all<BR>of their Bush tax cuts.<BR></DIV> <DIV> -- The =
stealth tax boost on people making $30,000 to $500,000 was<BR>explicitly =
used to make sure that the super rich would get their entire<BR>Bush tax =
cuts.<BR></DIV> <DIV> -- A California couple who make $75,000=
to $100,000 and have two children<BR>face a 97 percent chance of losing =
part of their Bush tax cuts to this<BR>stealth tax increase and overall w=
ill lose 42 percent of their Bush tax<BR>cuts by next year.<BR></DIV> <DI=
V> -- If your child becomes seriously ill, Congress, under th=
is same law,<BR>will raise your income taxes if you spend more than 7.5 p=
ercent of your<BR>income trying to keep your child alive.<BR></DIV> <DIV>=
-- Since 1983, under a plan devised by Alan Greenspan, Ameri=
cans have paid<BR>$1.8 trillion more in Social Security taxes than have b=
een paid out in<BR>benefits, money that is used to finance tax cuts for t=
he super rich while<BR>robbing the middle class of their capacity to save=
<BR></DIV> <DIV> -- A family earning $50,000 this year will =
have about $1,500 of its money<BR>funneled to the super rich because of t=
he Greenspan plan.<BR></DIV> <DIV> -- Since 1993, the income =
tax burden on the 400 highest-income Americans<BR>has been cut 40 percent=
when measured the way that President Bush prefers,<BR>which is by counti=
ng how many pennies out of each dollar go to income<BR>taxes. In 1993 the=
top 400 paid 30 cents out of each dollar in federal<BR>income taxes. By =
the end of the Clinton administration in 2000 they were<BR>down to 22 cen=
ts. Under Bush, their burden is less than 18 cents. Everyone<BR>else felt=
their tax bite rise to 15 cents on the dollar from an average of<BR>13 c=
ents.<BR></DIV> <DIV>Over time, the impact of tax relief for the super ri=
ch and more taxes for<BR>everyone else is profound. The rich can save and=
invest more and more,<BR>increasing their incomes and political power ov=
er time through the magic<BR>of compound interest, while everyone else ha=
s less of their money to spend<BR>or save and millions of people are mire=
d in debt.<BR></DIV> <DIV>While wage earners have every dollar of income =
reported to the government,<BR>the super rich control what the IRS knows =
about their incomes. But the<BR>rich are rarely audited anymore. Congress=
also gives them many perfectly<BR>legal devices to defer reporting incom=
e for years or decades. That means<BR>that the real incomes of the super =
rich are much larger than the IRS data<BR>show and their tax burden is ev=
en lighter.<BR></DIV> <DIV>IRS data, adjusted for inflation, show that th=
e poor are really getting<BR>poorer and the super rich are getting fabulo=
usly richer, a trend enhanced<BR>by their falling tax burden. In 1970, th=
e poorest third of Americans had<BR>more than 10 times as much income as =
the super rich, the top 1/100th of<BR>one percent. Back then the poor had=
more than 10 percent of all income and<BR>the super rich had one percent=
<BR></DIV> <DIV>By 2000 the two groups were equal -- the 28,000 American=
s at the top had<BR>as much income as the 96 million at the bottom. The p=
oor's share of income<BR>fell by half while the super rich's share rose t=
o more than 5 percent of<BR>all income.<BR></DIV> <DIV>Not only did the p=
oorest third's share of income shrink, they actually had<BR>less money. T=
he average 25-year-old man in 1970 made $2 per hour more,<BR>adjusted for=
inflation, than in 2000.<BR></DIV> <DIV>Over those three decades the bot=
tom 99 percent of Americans had an average<BR>increase in total income of=
$2,710. That is an annual raise of less than<BR>$100 per year, the equiv=
alent of a nickel an hour raise each year for 30<BR>years. The super rich=
did fabulously better, their average incomes rising<BR>$20.3 million to =
an average of $24 million each.<BR></DIV> <DIV>Plot these figures on a ch=
art and the results astound. If the increase for<BR>99 percent of America=
ns is a bar 1-inch high, the bar for the super rich<BR>soars heavenward 6=
25 feet.<BR></DIV> <DIV>All of this is having a devastating impact on Ame=
rica, which the preamble<BR>to our Constitution says was created to "prom=
ote the general welfare."<BR>Until Americans decide to take back their de=
mocracy and become actively<BR>engaged in politics, the super rich will c=
ontinue to rig the tax system<BR>for their benefit only.<BR></DIV> <DIV>-=
-</DIV> <DIV>David Cay Johnston is a Pulitzer Prize-winning reporter for =
the New York<BR>Times and author of "Perfectly Legal: The Covert Campaign=
to Rig Our Tax<BR>System to Benefit the Super Rich -- and Cheat Everybod=
y Else," from which<BR>this article is adapted. -------------------------=
---------------------------------------------<BR>Copyright 2004 SF Chroni=
cle<BR><BR></DIV></BODY></HTML><br clear=3Dall><hr>Get more from the Web.=
FREE MSN Explorer download : <a href=3D'http://explorer.msn.com'>http:/=
/explorer.msn.com</a><br></p>
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