How Fair is it that Multi-Billionaires Usually Pay 0-3% in Federal Taxes?

[BigPunny]

ProPublica just released a story after having obtained the tax records of at least 25 of the richest men in the country: https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

They found that in 2007 & 2011, Bezos paid nothing in federal taxes. In fact, Bezos was paid $4,000 from the government for Earned Income Tax Credit.

Carl Icahn, Michael Bloomberg, and a few others also were able to pay nothing in federal taxes.

People who earn $70k have a 14% tax rate, which comes right out of their check. Do you believe it's fair?

It's Fair

It's Not Fair

It's Kind of Fair

I Don't Think Anyone Should Pay Taxes

[nightdrot]

Actually, it is well past time that everyone pay their "fair share." This given the fact that 47% of ALL Americans pay NO Federal income tax at all. Rather, they are content to rail against the size of government, the "waste, fraud and abuse," and then to foist the cost off onto generations yet to be born - and who, not uncoincidentally, therefore get no vote. This being what deficits and debt really are.

In that sense, the system works quite well. The middle class is slothful and self-satisfied. They fancy themselves put upon when in fact they get back about $2.10 in government services for every $1 they pay in taxes. (This why the national debt now exceeds 100% of GDP.) Yet then whine that they are overburdened and overtaxed.

Indeed, the taxes on the evil awful reptilian rich could be raised to 100% - their wealth confiscated - and it would make no difference to the long term fiscal viability of the nation. The two central programs of the welfare state alone are on the verge of insolvency.

Medicare has $43 trillion in unfunded liabilities. Social Security has $22 trillion in unfunded liabilities. The whole of the economy coming to only $23 trillion in GDP. Please note, you could confiscate 100% of the wealth of the rich - and everyone else in the country - and not meet the fiscal liabilities that the country has chosen, and continues to choose, for itself.

In that connection, please note, the American public that whines that it is overtaxed and that the "rich" are not taxed enough have the following profile:

1 in 6 who works, works for government

1 in 7 is a Social Security recipient - and this will only get worse as the population ages. As indeed, it is aging.

1/3 of ALL families, this year, will receive some form of government transfer payment. (Indeed, if you count COVID relief as a "transfer payment," the number shoots to 92% of ALL families.)

All this, to repeat again, as 47% of ALL Americans pay NO Federal income tax AT ALL. This further worsening the fiscal picture as the population ages and the workforce shrinks relative to population. Thus, there will be more retirees taking benefits from the system as there are fewer paying into the system. The irony here being that this becomes a massive transfer of wealth from the relatively poor to the relatively rich as the elderly, as a demographic, are wealthier than the young.

Yet try to modify Social Security or Medicare and the public howls as if someone had just set out to touch up the Mona Lisa with a paint gun. The public's rants about the evil awful reptilian rich always stopping short of the Social Security and Medicare programs. THOSE evil awful reptilian rich are not so bad.

Here then the fallacy in the premise to this question. It presumes to define "fair share" not in econometric terms, but in terms of emotional catharsis. The "rich" don't pay enough, so the argument goes. The fact that the national debt illustrates that the nation as a whole does not pay its' fair share - at least relative to its wants and what it asks from government - is ignored.

[BigPunny]

Every $ we spend on things like food stamps, for people who work full time, is actually welfare for the company that employs that person.

Most welfare paid out is paid to the company, not the employer.

Even when you don't add THAT to the metric of what is deemed 'corporate welfare', they still pay less money to people than they do to corporations.

thinkbynumbers.org/.../

www.goodjobsfirst.org/.../...rporateonepercent.pdf

www.businessinsider.com/its-time-to-end-corporate-welfare-boeing-is-exhibit-a-2020-1

As for your use of "COVID relief" -- did you know that businesses got far more of that 'transfer payment,' and most of the money went to multi-million dollar businesses? www.propublica.org/.../the-cares-act-sent-you-a-1-200-check-but-gave-millionaires-and-billionaires-far-more

By the numbers, not even the COVID relief was fair.

Please notice how I've cited my statements and you've cited none.

[nightdrot]

Yes, all documented - but small beer.

Social Security has $23 trillion in unfunded liabilities. Medicare has $43 trillion in unfunded liabilities. Obamacare adding about another $2 trillion to that. This again, in a country that whines about the taxes they pay yet 47% pay no taxes at all.

The public talks a ferocious game against big government but when push comes to shove, they love it. They just don't love paying for it.

Not to mention that, at the end of the day, as you allude, business does not pay taxes, business collects taxes. The costs of taxes being imposed via the price of goods and services.

So, if you want to break the American public's habit of demanding ever more government services, make them pay the taxes. Up front and visibly. It is well past time that the country was summoned to a reckoning with the costs of its' wants.

[OlderAndWiser]

1. I have never heard anyone say that the wealthy should not pay taxes. Never.

2. The examples you cited are all cases that would get other people angry, but. . . paying taxes is a game that we play with the government. We all try to take advantage of every possible rule to minimize our tax obligation. And some even take advantage to the extent that they get refunds when they never paid any taxes. Do you equally criticize those people?

If I told you that I know of a loophole in the tax code which you could use - perfectly legal and would withstand IRS scrutiny in an audit - that would immediately reduce your tax obligation by 50%, are you suggesting that you would refuse to do that because it would be unfair?

3. Yes, it seems that these people you cited should be paying more taxes, but are they typical of the wealthy or are they the exceptions? Citing these examples certainly has an incendiary effect, but is it fair to use these outliers to paint all of the wealthy with a broad brush?

In 2018, the top 1% of income earners (earned more than $540,000 for the year) earned 21% of all U. S. income while paying 40% of all federal income taxes. The top 10% earned 48% of the income and paid 71% of federal income taxes. If you use that data to suggest that there is a problem with the distribution of wealth in this country, then the same logic should compel you to also argue that there is a problem with the distribution of the tax burden in this country.

[Prettygurl12]

Get you a tax account who knows the legal loopholes and see what happens. If you're so educated in tax prep and the system that you can navigate yourself through that process in a legal manner where you don't have to pay so much in taxes... honestly, good for you.

I'm big on advocating for yourself (legally) and not relying on the government to help you or complaining about what is or isn't fair. Clearly the resources exist and it's up to the individual to seek out those resources.

[BigPunny]

You do realize that a person with $70k income a year, without kids, can't get his/her tax liability down to $0, right?

Without donating to charity, volunteering somewhere (and getting a write-off), there aren't enough loopholes for someone who is employed to get their liability to nothing.

Independent contractors or people with children, maybe, but not employees.

[Celtero]

Billionaires have most of their wealth in assets. It's not like Bezos gets a 1 million dollar check every month, and I bet someone like him has a lot of tax write-offs.

There are many ways to avoid paying more in taxes, the average American is just too stupid and lazy to figure it out.

The idea behind complaining about billionaires is that they're not contributing to society. But in reality, Amazon employs 800,000 people and is the best online retailer in the world. So you have to be an entitled jealous brat to complain that the government doesn't take more of his money.

The top 25% of earners in the US pay something like 90% of taxes already. So if you're making 70k a year your tax contribution doesn't really matter, you're basically just paying so there's a reason for you to have a vote.

[BigPunny]

"Hey look guys, I can move money around on this ledger, build a $500 million dollar boat, and pretend I didn't make any money this year!"

"Look, I just bought a $53 million dollar house with a negative income!"

Because they're able to pay accountants to do all of that for them, they deserve to not have the same burden of taxes that everyone else does?

Looks like the indoctrination works. You aren't just drinking that kool-aid... you're making it for free!

[Celtero]

You're the indoctrinated democrat voter who doesn't understand how things work.

Bezos founded Amazon, yes? Right now he only owns 10% of it. So what he did is he sold stock from Amazon and used the money from that to invest into other things like Uber, AirBnB etc. It's not like he's paying himself billions.

And why do you people even care? Do you think the government desperately needs more money? Or are you just butthurt that rich people exist and you're not one of them? It's safe to say people like Bezos, Gates, or Musk have improved the world for the better, much, much more than you or I ever will. So I really don't care if they get to live a more luxurious lifestyle.

[BigPunny]

I'm not a Democrat, though. lol

[Celtero]

Conservatives usually understand that the whole "eat the rich" shtick is bad for everyone.

[oldasIfeel22]

You are 40 years old and you still think this way? Smdh. What about option number 5: people need to STUDY tax code to understand why this is.

Earning money off investments that you put post taxed dollars into is very different that paying taxes on salary earnings that haven’t been taxed yet. Also if you own stock you bought at $50 and it went up to $100 it doesn’t mean you automatically profited 50 bucks. You are paper rich, cash poor. You didn’t REALIZE the income yet. I can’t fill up my gas tank by giving the gas station a portion of stocks.

If billionaires Elon Musk, Bill Gates, Mark Zuckerberg suddenly sold $100M in stock they would be liable for 15% to 40% in earnings like anyone else. They are billionaires ON PAPER. They aren’t Scrooge McDuck with a huge gold vault filled with gold and cash.

[Anpu23]

I pay 17% of my income in federal income tax. On the other hand my business hasn't paid any taxes for the last couple of years (I own the company). One of the errors in things like this is the confusion between personal income and corporate income. Both are taxed in very difetent ways. If my company made a million in gross income that doesn't necessarily mean that I owe taxes. Just because I make personal income doesn't mean that my business owes taxes.
Jef Bezos's income is $81,840.00 a year. If he is taxed as I am he pays roughly 14,000 in federal income tax (growth of net worth simply doesn't count. It's not income) but if you conflate the two his tax base goes down to 0.8% but until you can spend it, it's really not income.

[Anonymous]

The reason for this is because they may have billions of dollars in net worth but their income for that year is usually low and they're taking capital loss carry forward. Take Jeff bezos for example he literally when he was CEO of Amazon only got paid $80000 a year for being a CEO.

This is really just propaganda because they want to push a wealth tax. Are not cheating On their taxes they just literally don't have that much income. But on paper they have a lot of wealth and people think wealth equals income because people are stupid

[BigPunny]

So, the $500 million dollar yacht that Jeff is having built for himself while he still pays less than 3% income tax... that's cool? Totally fair?

The $53 million dollar home he owns while paying less than 3% in tax? Totally fair? What about the other, paltry, $10 million dollar home?

Because they are able to move money around on a ledger and pretend they aren't actually 'making money' yet have billions they can spend at a moment's notice, they deserve to pay less than someone making $70k/yr.

Interesting.

Do you think people making $70k are paying enough tax?

[Opinion Owner]

If he sold 500 million dollars in assets he would pay the taxes on that. What he does though is he takes a loan out for 500 million dollars at like 2 or 3% interest rate and pays it over time. You can do this at any income level for any asset really.

If they try to sell the assets they get text on it if they take a loan out they have to pay back the loan and when they sell the assets to pay the loan they get taxed on it.

The top 10% pay like 70% of the taxes. Is in truth people who make money the top 10% are very heavily taxed over 50% of Americans don't even pay federal income tax. In truth it is not the wealthy not paying taxes it's the poor and people who are envious of those with more than them can't understand the difference between different types of income and having money and assets versus having money in the bank they're just envious and want the government to take it away from them.

Your whole comment here is a 100% basin envy you just are upset they have more than you so you want the government to hurt them

[BigPunny]

"The top 10% pay like 70%" -- yet their tax burden is still nowhere near the burden imposed on everyone else.

Tax burden is the issue here. It is not fair to tax someone who actually needs the money at a % higher than someone who doesn't.

That's pretty much the definition of unfair.

[Opinion Owner]

What are you talking about most people don't even pay federal income tax they make too little. It's over 50% of Americans don't pay federal income tax.

How is it fair that someone in the top 10% pays more in taxes than you're going to pay in your entire lifetime in one year and your crying that they should be pay more. These people you're crying about pay more in taxes in one year usually then you're going to making your entire lifetime. Fact is you're just envious and you want the government to come and take from them because you realise you cannot reach their level so you want the government to push them down to make you feel better

[BigPunny]

Tax burden.

[Opinion Owner]

Now you're just saying random words because you realised you have no clue what you're talking about just full of envy

[The_Maphio]

Generalization at its worse.
The only real big companies who are allowed such kind of treatment are big tech (whose ideology is pretty clear) and Amazon (and we all know what "values" Bezos holds).
Also read, every other powerful friend of a certain political side.

[NaultD]

The whole point of tax breaks is to move and create incentives to a more favorable society. So the American tax payers are making a deal of sorts that they upheld but the giant corporations are not upholding there side. Bad deals happens and you eat the costs and change the strategy.

We are fucking up the change strategy of the equation for like 50 years. I'm not opposed to the whole idea but you got to point that carrot in a better direction.

[UnknownUser01]

Jeff Bezos salary in 2011 was $81,800.00 . He didn't get any bonuses or other financial compensation from Amazon. People have to realise that income and net worth are two separate things. Even Elon Musk doesn't get a salary at Tesla. You can't pay taxes on a salary of $0.00 These guys are mostly rich on paper ( the value of their stocks)

[888theGreat]

They create jobs for one and two they use real estate and debt to avoid taxes. All legal. Mostly Democrats created the laws they use.

[BigPunny]

Interesting concept that people are not necessary for corporations to make money or to be able to create those jobs.

Why do people so readily dismiss the importance of human labor?

[joeldalton]

If you don’t get income, you don’t pay income tax. Seems normal.

[BigPunny]

If you read the article, you would realize that what you just stated is not what's happening.

Every single one of them are building personal wealth - in the billions - and paying almost nothing in taxes.

[joeldalton]

The article literally states what I just said. Most all their wealth doesn’t come from income but from investments.

[BigPunny]

Do you think they snap their fingers and all of a sudden investments appear that they can take loans against and avoid paying taxes while still having complete and total access to that money?

You can play semantics all you want, but the fact is that it IS income.

[joeldalton]

The fact is it isn’t. If their stocks tanked so would their wealth.

[Anonymous]

We pay taxes on income we earn, we pay sales taxes when we buy things, We pay property taxes annually on homes and vehicles.. We pay taxes on literally everything. I honestly see taxation as theft,

[Anonymous]

There is an advantage to making the taxes low for them. If the US has the lowest tax rate then they will have more of a reason to keep the corporation HQ in the US and give more people jobs.

[Anonymous]

Oh but lets vote to tax the rich right? NAIVE FOOLS YOU ONLY HURT THE MIDDLE CLASS THE RICH WILL NEVER PAY THEY ARE TOO POWERFUL

[KrakenAttackin]

Ugh... you really don't understand taxes.

[JamesRandiDebates]

They are obeying the tax laws.

[goaded]

That they totally didn't influence.

[JesseJayNeak]

There are loopholes that they can exploit