Why is this a surprise and/or news worthy?
People with more resources can hire more professional tax advisers and structure their businesses and returns in more optimal ways than people with less resources.
For the first time on record, the 400 wealthiest Americans paid a lower tax rate
211–220 of 504 posts
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#212That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705
Maybe its time we start considering the Fair Tax plan again. https://en.wikipedia.org/wiki/FairTax
LPT: an organization with an opinion in its name is not a trustworthy organization.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#213Even if the rich were paying more taxes, that does not automatically mean that they are bearing the tax burden, because of "tax incidence" [0]. A rich person has usually much more bargaining power and can more easily shift the burden to someone else.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#214Earlier quoted context omitted.
- They are NOT speaking of the 1% (such as medical professional or high income technical professionals) - They are NOT speaking of the 0.1 %. - They are speaking of the 0.01%. One person out of 10000. Not multimillionaires. 100 millionaires and billionaires. There is a very good reason why the tax foundating speaks of the 1% and not of the 0.1% or 0.01% : it is usefull to protect billionaires.
But when the politicians use this stuff to change the law it will most certainly be the first two (expanded far more broadly) who will be targeted. They always say hand wavy stuff about billionaires whenever they get asked about paying for grand projects. But we’ve all seen how that works out in real life every time. I highly doubt that sort of categorization will ever carry over when it matters.
You’re being wildly optimistic if you think the first two (the top 1%) will ever be meaningfully impacted by any tax law change. There’s a reason the super rich all line up in support of “higher taxes”: they know that these policies always affect the middle class and never touch the upper class. That makes it harder for anybody else to break through from middle class to upper class, which is exactly what the (upper class) politicians are shooting for when they pretend they’re going after “the 1%”.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#215Earlier quoted context omitted.
Careful. The two articles rely on vastly different cherry-picked definitions of who counts as rich, and neither claim is even remotely true anymore if you use the other definition. The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. This NYT article on the other hand picks out the top 400, who apparently pay lower taxes but are much more aggress…
> The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. But they don't. That's the point. Your conventional wisdom is wrong. The USA has a large number of regressive taxes, which tax the poor more heavily than the rich. These have been steadily expanded. And it has one, only one, progressive tax - the federal (not state) income tax - which has bee…
The actual article contains charts that seem to support the claim that the top 1% pay higher taxes
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#216I'm tired to read articles written inside "Opinions" sections.(not that I necessarily disagree with it, you guys are explaining how this article is right or wrong better than me). I would really like (not intended at HN, it's a general crisis in my life) to read more articles about politics that are neutral and factually oriented. It seems like 90% of the political content I read twists facts and build cheap, cherry-…
Opinion articles should be tagged with [Opinion] or similar when submitted.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#217That has to be the worst x-axis on a graph I've seen in a long time. The grid lines measure 0-10th, 20-30th, 40-50th, 60-70th, 80-90th, 95-99th, 99.99th, Top 400? That's atrocious, not only is it non-linear, not only does it have a line with regularly spaced dots giving the impression of continuity, but it skips from percent groups to absolute numbers? If we're talking about historical taxes why are we looking at tax…
I don't understand your complaint, isn't average tax rate a percentage of income?
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#218A couple of points regarding the lower rate of taxation for capital gains: • Capital gains are not inflation-indexed, which is one reason to have a lower rate. Consider three individuals: * Person A earned $100,000 working at BigCo in 2019 * Person B sold shares in 2019 that were purchased in 2017, for a (LTCG) gain of $100,000 * Person C sold shares in 2019 that were purchased in 1965, for a (LTCG) gain of $100,000…
> Capital gains are not inflation-indexed, which is one reason to have a lower rate. No, it's a good reason to inflation adjust them; not inflation adjusting them and charging a lower rate means that people who can regularly turn over capital so that there is often very little inflation effect (more common with the really rich) pay low real taxes on income, while people who have a few capital assets that are held a l…
I completely agree that we should inflation-index assets for which electronic purchase/sale records readily available (stock purchased through brokerages). For other types of assets, the inflation rationale is still a decent reason to have a lower LTCG rate (think antiques, paintings, etc.).
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#219That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705
The Pro Publica link you provided does not show they "audit the poor instead". It shows that the IRS audits poor and rich at the same rates. Unfortunately it seems Pro Publica is succumbing to the same forces as other journalistic outlets and has started to engage in sensationalist headlines. Here is their title verbatim: > IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor Here is the article's first sen…
Well, the article they link to in April explains this to at least some degree, doesn't it?
https://projects.propublica.org/graphics/eitc-audit
"As we reported last year, the IRS audits EITC recipients at higher rates than all but the richest Americans, a response to pressure from congressional Republicans to root out incorrect payments of the credit. The study estimates that Humphreys [County, Mississippi], with a median annual household income of just $26,000, is audited at a rate 51 percent higher than Loudoun County, Virginia, which boasts a median income of $130,000, the highest in the country."
The article doesn't define rich as "the top 1% of taxpayers"; it simply notes that EITC recipients are audited more frequently than all but that top 1%.
"The five counties with the highest audit rates are all predominantly African American, rural counties in the Deep South. The audit rate is also very high in South Texas’ largely Hispanic counties and in counties with Native American reservations, such as in South Dakota. Primarily poor, white counties, such as those in eastern Kentucky in Appalachia, also have elevated audit rates.
"The states with the lowest audit rates tend to be home to middle income, largely white populations: places like New Hampshire, Wisconsin and Minnesota. Generally, the IRS audits taxpayers with household income between $50,000 and $100,000 the least."
From the article more directly linked with the clickbaity headline, in fact, that headline is also supported if you keep reading the article:
"On the one hand, the IRS said, auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. They are 'the most efficient use of available IRS examination resources,' [IRS Commissioner Charles] Rettig’s report says.
"On the other hand, auditing the rich is hard. It takes senior auditors hours upon hours to complete an exam. What’s more, the letter says, 'the rate of attrition is significantly higher among these more experienced examiners.' As a result, the budget cuts have hit this part of the IRS particularly hard."
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#220Earlier quoted context omitted.
Yup. That's the strategy the Military uses - https://www.rollingstone.com/politics/politics-features/pent... "At a cost of $400 million, some 1,200 auditors charged into the jungle of military finance, but returned in defeat. They were unable to pass the Pentagon or flunk it. They could only offer no opinion, explaining the military’s empire of hundreds of acronymic accounting silos was too illogical to penetrate"
Remember when Rumsfeld announced that 2.3T USD were missing from the military? https://www.city-journal.org/html/americas-missing-money-157... Yeah, nor do most people. The date he announced that? September 10, 2001. The section of the Pentagon hit? The accounting wing with all the records.
Yes, Rumsfeld did make this speech on the day before the attacks. It's actually a great speech too! He talks about the cumulative bureaucratic waste of the previous few years of the Department of Defense, and poor auditing.
https://www.c-span.org/video/?c4623026/donald-rumsfeld-speec...
https://www.cbsnews.com/news/the-war-on-waste/
https://www.quora.com/What-does-the-missing-3-trillion-dolla...
But the section of the Pentagon that was hit was not the "accounting wing". There is (and was) no "accounting wing". The specific areas that were hit were mostly "Naval Command Center" and "Defense Intelligence Agency", but even then, the area was relatively unoccupied due to renovations that started in 1998.
https://en.wikipedia.org/wiki/File:FirstFloor_Pentagon_Bodie...
https://media.washingtonpost.com/wp-srv/national/images/pent...
https://en.wikipedia.org/wiki/American_Airlines_Flight_77#Cr...
https://en.wikipedia.org/wiki/The_Pentagon#September_11,_200...