Experts have long understood the broad outlines of how little the wealthy are taxed in the United States, and many lay people have long suspected the same thing.
But few specifics about individuals ever emerge in public. Tax information is among the most zealously guarded secrets in the federal government. ProPublica has decided to reveal individual tax information of some of the wealthiest Americans because it is only by seeing specifics that the public can understand the realities of the country’s tax system.
The tax data was provided to ProPublica after we published a series of articles scrutinizing the IRS. The articles exposed how years of budget cuts have hobbled the agency’s ability to enforce the law and how the largest corporations and the rich have benefited from the IRS’ weakness. They also showed how people in poor regions are now more likely to be audited than those in affluent areas.
because I certainly can't take out revolving lines of credit against our home to pay for even a subsistence lifestyle.
Money doesn't talk, it swears
It's Alright, Ma (I'm Only Bleeding)
Treasury Secretary Janet Yellen pulled off a major deal on Saturday when she led the G7 finance ministers to reverse forty years of corporate tax cuts and agree to a global minimum tax of at least 15% on multinational corporations. After the deal, Spain, which is not part of the G7, endorsed the plan. Negotiators hope to expand the deal to the G20—twenty countries whose economies make up around 80% of world trade—this fall.
This agreement is a huge deal. If accepted, it would stop countries from trying to attract multinational businesses by cutting taxes on them, a so-called “race to the bottom” that reduces the amount of tax money available for public investment while pumping money into the largest multinational corporations. In 1980, the average global corporate tax rate was about 40%. By 2020, it was about 23%. By 2017, multinational firms had about $700 billion stashed in tax havens.
Biden wants to take the domestic corporate tax rate back to 28%, hoping to raise $3 billion to pay for infrastructure and education. This plan is popular with 65% of registered voters, while only 21% oppose it, but it faces huge headwinds among Republican lawmakers, who have said that higher domestic corporate taxes would simply send businesses overseas. An international tax floor helps to defang that fear. In addition, some U.S. companies are willing to exchange slightly higher taxes for certainty in international tax rules.
Countries have talked about international cooperation on taxes for many years, and Yellen’s fast victory in finding common ground has economic experts calling it “impressive,” although much more work will be necessary to get the plan accepted by national governments both overseas and at home.
In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of “other expenses.”
In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.
Naomi Wu @RealSexyCyborg
Have you tried periodically disappearing your billionaires for weeks at a time and then sending them out on carefully scripted public appearances all twitchy and shell shocked? It *really* keeps all the other billionaires in line and paying what they should...
We know three things about the U.S. economy: The rich are getting richer, everyone else is in debt, and interest rates have fallen. Is there a connection? Yes, and the link has implications for fiscal and monetary policy.
By forcing interest rates down, extreme wealth inequality pushes the U.S. economy toward a “debt trap” that’s hard to escape with conventional macroeconomic tools, write Atif Mian of Princeton, Ludwig Straub of Harvard, and Amir Sufi of the University of Chicago in an important paper that came out earlier this year, titled “Indebted Demand.” They advocate unconventional measures such as redistributive tax policies that narrow the gap between rich and poor...
Here’s their concept: The rich can’t possibly spend everything they earn, so they save a lot. In theory those savings can be recycled into productive investment, but in practice a lot of the money finances borrowing—i.e., dissaving—by people farther down the income ladder. “A substantial amount of borrowing by households in the bottom 90% of the wealth distribution was financed through the accumulation of financial assets by the top 1%,” the economists write, citing their own prior work.
The lending from rich to poor can be indirect. For example, let’s say a rich person buys shares issued by a company. The company stashes the proceeds in a bank. The bank in turn makes a loan to a non-rich person to buy a car or a house. The borrowers have a higher propensity to spend than the lenders, but they have less money to spend because part of their income goes to debt service.
The excess of desired savings over desired investment pushes interest rates down and down until the effective lower bound of around zero. Rates can’t get much below zero because savers won’t tolerate it—they’d rather put their money under a mattress than earn a negative return on it.
Any policy that attempts to fix things by encouraging more borrowing makes things better in the short run but worse in the long run by saddling the private or government borrowers with even more debts that will eventually have to be repaid, the economists write. That’s why they favor redistribution through income or wealth taxes, which would increase the spending power of the 90%.
From the 1980s through 2007, the top 1 percent financed a large portion of the overall rise in household debt for the lower 90 percent, according to the researchers. And as the rich have accumulated capital, the less wealthy have accumulated fewer assets, which means they experience less financial stability overall. Thus, the work argues, the savings glut of the rich, and its role in financing unproductive debt and dissavings of the nonrich, leads to instability not only for the less economically privileged but also for the broad economy.
Should people like my father have to surrender up to 50% of their life savings to the government upon death?
Rich Americans pay only about 2 percent on inherited fortunes, “less than one-seventh the average tax rate on income from work and savings.”
You have your lawyer set up the trust and assign a bunch of assets to it—that could be stocks, a Picasso painting, a stud racehorse, whatever. The initial value of the assets, plus interest calculated at the outset using that month’s 7520 interest rate, gets disbursed back to the trust’s creator in annual installments (annuities) over the lifetime of the trust, which can range from two years to much longer—that’s up to you. If the assets in your Walton GRAT increase in value faster than the 7520 rate would have predicted, there will be assets left over at the end of the trust’s lifetime. Those assets go to your beneficiaries—your princelings—tax free. Better yet, they don’t count against that lifetime gift/estate tax exemption.
Share the wealth, or face the angry mobs with pitchforks and guillotines
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