1. The Tea Party was not a protest against high taxes. The Boston Tea Party was certainly a tax protest, but it was not a protest against high taxes. In fact, it was sparked by a tax cut, not a tax hike.The Boston Tea Party was sparked by a tax cut on tea imports that certain prominent men in the community--most of them also tea bootleggers--opposed. Those prominent men staged a protest and got all the rabble riled up over "No taxation without representation," meaning, they wanted representatives in the British parliament that would vote in the colonist's interests on import levies and other protectionist policies.
Unlike salary and bonus, stock-option grants are typically an untaxed event at the time of grant. For the most widely used options—nonqualified stock options (NQSOs)—executives are taxed at the personal income tax rate on option profits (the difference between that stock price and the exercise price times the number of options) when the options are exercised. The company receives a parallel deduction against corporate income at that point. If the executive continues to hold the shares after exercise, any subsequent appreciation is taxed at the capital gains rate in the usual way. In 1993, an additional feature was added to the tax code [Internal Revenue Code section 162(M)] that disallowed a corporate deduction for any executive pay above $1 million that is not performance- based. While this rule affects executive salaries, most bonuses qualify as performance-based, and standard stock options automatically qualify. Therefore, this provision gives companies with highly paid executives an incentive to give more pay in the form of bonuses and stock options...Here's a summary of another Executive Excess report:
According to Executive Excess, the most expensive CEO pay tax loophole is something called the stock option accounting double standard, which is a discrepancy in accounting rules that allow companies to value stock options on their grant dates, not on the day executives cash them in. Since the value of the stocks usually rise, the company avoids paying taxes on the higher value. The report estimates that this double standard accounts for half of the $20 billion in lost tax revenue.Now, that first article was written (I'm fairly sure) in 1999. The second was written in 2007. What happened in between? The Economic Growth and Tax Relief Reconciliation Act of 2001.
The other loopholes and their cost to taxpayers include:
Preferential capital gains tax treatment of “carried interest,” a pay practice for private investment fund managers that allows them to count significant income as capital gains instead of professional fees. The report says this practice costs taxpayers $2.6 billion in unpaid taxes a year.
Unlimited deferred compensation accounts, a perk for CEOs at large companies, which costs $80.6 million in lost revenue. The median value of top executives’ deferred payments is $4.5 million, according to Equilar, a pay analysis firm, yet most taxpayers are limited to a $15,500-a-year maximum they can shield in a tax-deferred 401(k) account.
Even more deferred compensation is stashed in offshore accounts. The study says it costs taxpayers $2.1 billion a year, but a recent Senate investigation pegs the price at $100 billion a year.
Unlimited deductibility of executive compensation, which allows companies to deduct the cost of executive compensation from their income taxes, as a business expense, which costs $5.2 billion annually.
three blind mice: In a progressive society [like Sweden in particular] EVERYONE pays a lot of tax.Sweden has the world's lowest Gini coefficient (23). The US's is nearly double that (45). It makes sense that the tax curve appropriate for Sweden would be flatter than the tax curve appropriate for the US.
American liberals only want to tax the rich and that shit is old and tired.In the US, the rich have all the money. You can't get blood from a stone. Raising tax rates on the lower classes will not raise a significant amount of additional revenue (lower bar).
Paying taxes is also a legal requirement. Actively working to get around the law -- obeying the letter of the law but not the spirit of the law -- doesn't sound like good business or good corporate citizenship.But not following the letter of the law in this case means paying taxes that you don't owe. You're giving the government money that it doesn't even want and isn't asking for. How is that following the "spirit" of the law?
we need to form an adjunct agency within the IRS filled with altruistic former Google programmers that create algorithms to change the tax loopholes every year to make it cost prohibitive for corporations to hire armies of lawyers and accountants to find the loopholes.Why not just remove them entirely? Simplify the tax code and get rid of all the loopholes. That's what needs to be done, and the people responsible for that are members of congress. What we need to so is close corporate loopholes.
American liberals only want to tax the rich and that shit is old and tired.I don't think you understand how much more money the rich have in this society. Something like 400 individuals control 50% of the wealth. more wealth then the bottom 50% of the population. 400 people.
I've said it before, and I'll say it again: this is one of the most fucked up things about the USA.It's not cheating the government to follow the letter of the law. You are giving them the money they asked for.
Corporations/CEOs/the wealthy using every trick -- legal and illegal -- in the book to not pay taxes or cheat the government? That just makes sense, and who wouldn't do it?
You can't use what percent of wealth the rich control as justifying a tax on income, because although you have a strong correlation between the two, you'll end up pretty damned disappointed when you discover that taxing the top 1% at even 100% won't even cover the current budget deficit.No, but the top quintile takes in enough income each year to eliminate the deficit quite handily without historically abnormal increases. That's why the Bush era tax cuts account for about 50% of our deficit, you know?
Fair point, but you still need to keep in mind exactly who you refer to here. That top 1% only means "over $380k"... Damned good money, but not exactly "stupid rich". For the top quintile, you have a lower cutoff very near $100k - Again, certainly not hurting, but you can't just throw them in the same ballpark as CEOs and pro sports heroes and call it good.Oh, I'm definitely keeping that in mind. That's why I support a progressive tax system: our current one is progressive in the income tax portion, but regressive in the payroll tax portion. The end result is that the various quintiles in the US tax base pay roughly equal shares over the overall tax burden.
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posted by michaelh at 2:13 AM on September 1, 2011