Number of American's Who Don't Pay Taxes, Blah, Blah

Find any guy with a misspelled protest sign, a gun around his waist, a teabagger hat and either a staring eagle or Don't Tread on Me shirt and he will probably tell you that the number of people who don't pay income taxes has "doubled" since 1970 or whenever. Well, for one, it hasn't actually doubled but at it's lowest point to it's highest point it is close. And of course, what they won't tell you is that of the 235,413 taxpayers earning $1 million or more in 2009, 1,470 of them were part of that number that paid 0 taxes! But that's ok because they are rich and the government should only take money from people who can't afford it.

What they think is that taxes on the rich (and even on themselves) have gone up and up since the 1970's (but they haven't) and the people on welfare/not working has just gone off the charts and there is some sort of wealth and income redistribution network of Black Shirts who beat rich people for their hard earned money that they all worked so hard for and hand it over to people who watch Jerry Springer all day and feed their kids Flamin' Hot Cheetos they bought with their food stamps. Some more informed people will blame it on child tax credits and even mortgage deductions and just say that a family with a house and kids who earn $50,000 per year should still pay federal income taxes but most will blame it on the scenario I described above and scream about how unfair the system was to the "job creators(wink, wink)"and those with personal responsibility(to not be born poor and black). Yes, you have to love the irony of the "pull yourself up from your bootstrap" Republicans crying about how something isn't fair...But that is beside the point. They also complain that it isn't fair that 1% of the population pays 39% of all taxes and that over 40% of the population has little to NO tax liability(though they apparently think it's completely fair for corporations to not pay taxes).

Well, here is the reality of all that: Yes, someone making $50,000 per year with a kid and mortgage gets a tax write off on both the kids and the mortgage. But what they don't tell you is that a billionaire with a Summer home, Ski Chalet and year round home gets 3 mortgage deductions...Up to $1 million per home. And a couple earning up to $110,000 per year still gets a child tax credit as well. But with the mortgage deductions, the higher your tax bracket, the more of a credit you get and of course you get a bigger deduction in taxes on your $1 million dollar home, than a guy does on his $200,000 home...The the richer you are and the more homes you have, the more you benefit from this tax credit. But that isn't really why fewer numbers of people are paying a higher percentage of our taxes. That was just to show you that rich people get some of the same deductions as everyone else, it's just that they make so much more, that more of their income is taxable...And I don't know about you but I think that would be a good problem to have. I would gladly keep 85% of $4 million dollars per year (cause the rich really only pay an effective tax rate between 10.5-16%) than 100% of $50,000. So anyway, this is one of the reasons the tax liability for many people have decreased...These tax credits and write offs...But the rich get them too so fair is fair...And the richer you are and more houses you have the more you benefit from these credits and then these properties can generate even more income for you making you that much richer....And what happens when you make more money? You pay more in taxes. Duh!

And that's my next point. One of the main reason the richest 1% of this country has been paying a larger share of the tax bill is just that, they are making more income! The amount of people paying or not paying taxes is completely irrelevant. When they say over 40% of the people pay no taxes that sounds staggering but wouldn't it be more staggering if I said 99% of the population paid only 1% of all taxes and the richest 1% paid 99% of all taxes!! That sounds like a socialist utopia right?? Well, actually, it would be a capitalist utopia because what that would tell me is that 1% of the population earned 99% of all income...And you thought it wasn't fair when they had to pay 99% all those taxes!!! You can't get water from a stone! 80% of American families own less than $250,000 of wealth, the bottom 20% have nearly 0 wealth. However, the top 10% receive 48.5 % of all reported income ('05) and own 71 % of all wealth.

Well that is what is happening in our country. Beginning in the late 70s and early 80s era of Reaganomic union busting, the income for the wealthiest American's in the country started to increase dramatically...The income for the middle class stayed relatively stagnant even though they got more educated, became more productive and worked longer hours and went further in debt...To rich bankers. So again, do you want to talk about fair?? But that is why the rich continue to pay a larger percentage of taxes; because they pay themselves more and the rest of us less.

Here are the numbers to support the fact that the reason the rich are picking up a larger share of the taxes paid simply because they are paying themselves so much more and poor people whose jobs got outsourced by the rich guy, so he could get richer, are no longer earning enough to owe income taxes.

In the 1970s, the average CEO made 30 times what an hourly worker made. Today, a CEO makes 300 times what an hourly worker makes.

From 1960 to 1969 the bottom 90% of income earners saw 65% of all wage increases while the top 10% got 12% of the income increases but from 2002-2007 the bottom 90% got 12% of the increase in income while the top 10% got 65% of those increases.

In the 1950's, 35% of the American labor force belonged to a union, it is now at 11% and 6.9% in the private sector.



4.2 million fewer taxpayers reported wages in 2009 than in 2007; the jobs just aren't there anymore and the ones that are, are at retail stores selling the products made in China the employee used to make himself and thus this job pays far less and typically comes with fewer benefits.

In 1977 the income share of the top 1% was at about 10% of all wage earners, today it's 24%, back to where it was just before the stock market crash of 1929 and the Great Depression.

In 1965, manufacturing accounted for 53% of the economy, by 1988 it only accounted for 39%, and in 2004, it accounted for just 9%.

A study by the universities of Cornell and Massachusetts-Amherst found that India alone may be responsible for up to 700,000 outsourced jobs from America as of 2005

Between 1979 and 1999(at the beginning of the outsourcing trend) the Bureau of Labor Statistics found that 31 percent of workers displaced by trade, mostly in the manufacturing industries, were not fully re-employed. Only 36 percent of workers soon found jobs that matched or increased their wages

In 2004, average employee compensation in the U.S. fell for the first time in 14 years

Where as the average salary in manufacturing was $51,000, the average wage in the service industry(medical, hospitality, construction) is now $29,000

Forrester Research conducted a study that found 12,000 to 15,000 service jobs are outsourced from the US per month.

From 1983-1998 the change in net worth for the bottom 40% was -76% but the change for the top 1% was +42% and those numbers are probably far more drastic today.

In the same time period, the change in income from the bottom 20% was -5% while the top 5% saw a 64% increase

Nearly 80% of all economic gains made in the past thirty years have gone to the richest 1%

The capital gains taxes now are 1/3 of what they were under Reagan and the top income tax rate is 50% lower than what it was in 1970. So the tax rate on the rich has certainly not increased.

What this data shows is:

A. The rich are paying themselves more and paying their employees less and therefore the taxable income base has shifted towards the ones making the most money.
B. The rich are exporting once well paying jobs and the savings is going into their pockets and not necessarily being passed on to the consumer (are your Levi jeans and tennis shoes any cheaper now than when they were made in the US?)
C. The tax rates on the rich have not gone up and the American worker didn't just decide to not work and stay at home and watch The View, they simply have no job to go to.

The bottom line is that the number of people paying or not paying taxes is completely irrelevant. If the rich want to pay a smaller percentage of America's tax liability, they need can merely stop earning so much income that was once paid to their employees who used to be part of the tax base but since they now no longer can afford to live off their incomes,or their jobs outsourced all together, they have thus been removed from the tax base.

Or you could use the restaurant analogy: Three guys go to a restaurant, one got valet parking, orders a surf and turf, a $100 bottle of wine a desert and brandy...The other two took the bus, ordered a burrito and PBR, the check comes, it's $200....How should this check be split?

The people complaining about such a small percentage of people picking up 40% of the tax burden would tell you that it isn't fair that a guy who only only represented 1/3 of the group should have to pay for 75% of the meal....A Democrat would tell you the guy who got the most should have to pay the most and a Republican would say that everyone should pay 1/3 of the bill.

It's pretty simple when you think about it.

So the next time some Koch sucker or Teabagger tells you the tax code "isn't fair", give him a good cock punching and tell him that it's only because the incomes in this country aren't "fair".

9 Things the Rich Don't Want You to Know About Taxes

9 Things the Rich Don't Want You to Know About Taxes.

This is basically the same things I always talk about. Basically, you are being lied to.

Corporate Tax Bills Passed on to the Consumer

http://money.cnn.com/galleries/2010/news/1004/gallery.top_5_tax_bills/index.html?source=cnn_bin&hpt=Sbin

So the one company on this list that actually pays US income taxes is the one who routinely tops the list of selling the cheapest products. The Exxon's and Chevron's of the world actually get money back from the government yet those savings were not passed on to the consumer...And the Teabaggers are complaining that the Federal Government taxes too much? These are some of the biggest corporations in the world. Looks like the federal government offers too many tax breaks, loopholes and credits as opposed to taxing too much.

Thoughts on the Teabaggers

As I watch a streaming feed from a zoomed in Fox News Camera of a small crowd of white people made to look like a large crowd I can't help to laugh at the irony of the whole thing. Here is why:

A. It's the middle of the day and none of these people seem to be at work. If they aren't at work, then they aren't paying taxes any way. Maybe if they worked a little more and therefore made more money, maybe they wouldn't be so worried about taxes. That being said, as of April, Obama's tax cuts kick in to over 95% of all Americans. I certainly don't see any of the elite 5% in this crowd so what are they so angry about?

B. Some lady just got off the mic talking about how we need to support the troops; where do you think our tax money goes?? You can't have it both ways. Either you pay your taxes and the troops get body armor, or you don't pay taxes and the troops don't get the support they need. Now, one could argue that without all the taxes paid to the federal government, they could have never waged such a war in Iraq to begin with. This however, certainly is not the anti war crowd, just the opposite.

C. I am looking at a sign that says "Obama = United Socialist States of America"; when it comes to wealth distribution from the working class up to the rich, you know the trend Bush started with his no strings attached round of corporate bailouts, I would agree that we have become this reverse version of Socialism where money trickles/gushes from the bottom up. However, Obama is not the one who started that original trend of wealth redistribution; that was Reagan.

D. Where were they in November? You know, when every il-run company and its subsidiaries were running to the Bush Administration, and Paulson handed billions of no strings attached dollars to AIG so they could pay the $12.9 Billion they owed to his former company Goldman and Sachs (sound familiar?)? I get it; it was ok when the good ol boy Republican was doing it but not when the black guy does it.

E. The Boston Tea Party was not even about paying taxes, it was mainly about taxation without representation. The United States has a representative government. I know it didn't feel that way for the last 8 years and apparently our leaders are chosen in some cases as opposed to elected but in theory, we don't live under a system of taxation without representation. But not only that, the colonists were also protesting the fact that the British wouldn't allow the colonies to grow their own tea or import it from anyone except the British East India Company.

So I really don't get what this is supposed to be about. They cry when we can't bomb Korea, they cry when our education system sucks and pumps out kids who can't even find their own state on a map, they cry when a bridge collapses and kills a bunch of people but they don't want their taxes, or the taxes on the rich, who benefit the most from our American system, to pay more taxes. Maybe they think we should only raise taxes on people who don't make any money? I'll bet that would raise the revenue they need to build that missile shield they all so desire. What do you think; could they squeeze 500 Billion out of the poor?

Also, do they even care to know what would happen if AIG would have collapsed taking everyones 401k and the economy with them? What other options did we have other than another Great Depression? AIG provided insurance and investment products to over 45 million individual and institutional clients. If they want to be outraged don't do it on the steps of the White House, do it on the steps of Joe Cassano's house (the tax cheat head of AIG's financial products division) and Edward Liddy's, the CEO. Drag them out into the streets Somali style and things will change. They are the ones who got us into this mess, not Obama. I mean, protesters stood out in front of the White House protesting Iraq for 8 years but a lot of good it did them.

Here's a video of some Florida Teabaggers who were blindsided by truth and reality. I know, trying to introduce reality to a crowd like this is like trying to fit a round peg through a square hole.


More lies from the conservative media elite and the unbiased Fox News network:



And now, for even more conservative irony:


And one more thing, anyone who thinks this is some grass roots, populist movement is being lied to.

http://www.nytimes.com/2009/04/13/opinion/13krugman.html?_r=2

Wealth and Taxes

Lately, Limbaugh and others are concerned that their, not your, taxes are going to go up and you, not them, may benefit from this. They call this wealth distribution. The fact is, wealth distribution has been alive and well in this country every since the Reagan era but in reality, what wealth the poor and middle class had has been distributed to rich people and some of that has been made possible through the taxes. Clearly free trade, deregulation of financial markets and plain old fashioned greed are also culprits.

Here are some facts about wealth and taxes:

Currently, the top earners in the US earn 440 x the amount of the bottom 50%, a number which has doubled since 1980. Or you could say a CEO earns 440x the amount as their employees. So much for trickle down economics; gush up is more like it. In 1982 the top 15 wealthiest people owned $92 Billion and by 2000 their wealth increase to $1.2 trillion so the Clinton tax rates, which Obama wants to return to, weren't hurting them at all.

During WW 2 and the Korean wars the top tax rate was 90% and the economy was booming.

Over the last 50 years the top tax rate has continued to decrease from 90% to 35%. In 1980 the top rate was 70% which declined all the way down to 28%. We call those the deficit years. Through most of the Clinton years, the ones with a balanced budget, the top rate was 39.6%.

Obama proposes to restore the 39.6% tax rate on the top 1% and a 36% (1% increase) on the top 2% and lower taxes on everyone else in 2011. Capital Gains will be 1/3 the rate it was under Reagan yet the right still spins this as a tax increase.

80% of American families own less that $250,000 of wealth, the bottom 20% have nearly 0 wealth.

The richest 10% of families own 85% of all outstanding stock and 90% of all business assets. These are the guys conspiracy theorists talks about.

Eight of the top fifteen richest people in America inherited their wealth and never worked a day for it. The Estate Tax only affects 2% of the population, which accounts for over 45% of all wealth, and never exceeds 50%.

The top 10 best paid CEOs in the US made more than a half billion dollars in 2007 while the profits for their companies shrank dramatically.

In 2007 Rick Wagoner, CEO of GM, announced the closing of 4 plants producing SUVs and trucks, posted a 39 billion dollar loss and increased his pay by 64% to 15.7 million.

The CEO of KB homes earned $24.4 million in 2007 while his company lost $930 million and 60% of its stock value.

So, who are the rich? Who will be affected when Bush's tax cuts expire?

The income bracket for the top 1% income earners based on 2005 numbers is $364,657 per year all the way up to 100 million per year and beyond.

The top 1% receive 21.8 % of all income and own about 39% of all wealth in the U.S and pay 39% of all taxes.

The top 5% make about $145,283 per year, pay about 59% of all taxes and own about 59% of all wealth.

The top 10% receive 48.5 % of all reported income ('05), own 71 % of all wealth and pay 70% of all taxes.

The top 0.1 % receives an average salary of 5.8 million per year and up.

In 2005 incomes (reported incomes) rose 9% but the bottom 90% of income earners saw a .6% decrease while the top 1% saw a 14% increase and this is the new trend.

The top 300,000 income earners in America received more income than the bottom 150,000,000 Americans.

According to the US Census Bureau, people in the United States living at 50% or less than the poverty line (the extremely poor) went from 3.3% in 1976 (7 million), to 5.2% in 2007 (15.5 million)

35% of the poor in the US are children under the age of 18. And no, they aren't poor because they are lazy and unwilling to work.

In 2007, 46.8% of the people living in poverty worked, 10.9% worked full time, year around, probably a lot harder than you or Rush Limbaugh works. In 1978 the percent of full time workers in poverty was at 7.7%.

58% of Americans between 25 and 75 will spend at least one year below the poverty line.

The US has the highest rate of relative poverty in the industrialized world.

Only 21.5% of the people over the age of 16 living in poverty didn't work at all

Under the Clinton tax rates poverty hit a 26 year low in 2000 and has risen since then.

The poverty level for a family of 3 is $17,600.


So what exactly are rich people worried about?

Lesson: Trickle down economics is a myth. By giving rich people more money and lowering their taxes, they only got greedier and outsourced American jobs to the Chinese. Upon doing that, they have just transferred the wealth of the middle class to themselves, the rich. Oh ya, and when you loose your job and can no longer pay your mortgage, the same rich guy will come and repossess your house thus transferring even more wealth to the rich.

The Tax Myth

I am sure you have or will see this chain letter at some point in your life. Its a dumbed down version of how the US tax system supposedly works. Here is the way most people saw it:

Understanding the Tax System:
This is a VERY simple way to understand the tax laws.
Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this.

The first four men -- the poorest -- would pay nothing;
The fifth would pay $1:
the sixth would pay $3;
the seventh $7;
the eighth $12;
The ninth $18. >
The tenth man -- the richest -- would pay $59.

That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement -- until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20. "So dinner for the ten only cost $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six -- the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fairshare?" The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would end up being *paid* to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing,
the sixth pitched in $2,
the seventh paid $5,
the eighth paid $9,
the ninth paid $12,
leaving the tenth Man with a of $52 instead of his earlier $59.

Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth. "But he got $7!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!" "That's true!" shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They're $52 short! And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.


Here are the problems with this low brow nonsense:

1.The top tax rate is now only 35%, not 59%

2. The guy who paid 59 % of the meal was eating lobster and drinking Chimay, the 4 guys who ate for free had PBR's and a burrito, I'm not saying that isn’t still a good deal but we all know that looking at what everyone paid, the free guys weren’t eating the same stuff as the guy paying $59.

3. The poor guys in this story still pay taxes; They pay sales taxes, gas taxes, cigarette taxes, liquor, real estate(if they own it), phone tax, utility taxes, etc.

4. During WW11 and through the Korean War and into the 60s, the top tax rate was over 90% and the economy didn't collapse (just the opposite), rich people didn't quit the work force and retire or move to Mexico. To say we can't tax rich people because they will stop working or leave the country is ridiculous. Of course, one of the reasons why personal income taxes are so high is because corporations, the ones the 10th guy works for, incorporates their businesses in the UAE and the Cayman Islands. These situations came about when we started taxing corporations less, not more and of course when Reagan made it easier to companies to exploit tax loop holes.

5. The guy who paid 59% also probably paid the owner off under the table, or "invested" in the restaurant (perhaps similar to donating to an election campaign) and therefore expected something in return when he ate at the restaurant which was one of the reasons he got the 20% discount in the first place. Sure other people benefited as well, but who benefited the most?

6. The restaurant who gave that discount probably had a good year and or had a decrease in price of expenses and therefore made a wise decision to reward faithful customers when they could afford to. Due to war and military contractors, no costs have gone down for the US. In fact we have one of the largest deficits in history. Last time we were spending money on a war that lasted for over 3 years that’s when the top 1% paid a 91% tax rate. We actually won those wars.

7. The aforementioned Deficit weakens the value of the US dollar thus making imports from Mexico and other countries more expensive. That expensive produce, the electronics, auto parts etc. don’t affect the bottom line of rich people who buy them (besides maybe French and Italian wines and Bently's) but add up to a family that is scraping by.

8. Tax cuts, or at least Republican tax cuts, don't work like they do in this story. There isn't a number out there which is then divided between us all. First of all, the story should have started with the owner saying I am going to give you a percentage discount, not a dollar amount discount. In that case, if he was using Bush's tax model the middle guys would get a 4% decline (as opposed to a 100% decline) in their price while the richest guy would get a 19% decline in his price instead of the 12% described in the story. That's how taxes really work, it's not an equal decline in everyone's taxes like the story would suggest. The ones who make and paid the most not only save the most money because its a larger number but they also get a bigger percentage discount than the person trying to figure out how to pay for their kids college. That is what isn't fair about the Bush tax cuts, not only is it not an equal dollar amount (which is fine) but it's not even an equal percentage decrease.

9. That being said, the Bush tax cuts don't really work like that either. The story would be more accurate by saying the guy who pays more gets more in tax cut savings but not only that, the owner would have also given the top payer (or anyone who drives a luxury car for instance) free valet parking and desert while the other 9 guys still had to pay for parking and then walk to the rest of the way to the restaurant and only received a mint at the end. Oh, and in order to give the rich guy free valet service, the owner had to take the forks and eating utensils from away from the 4 poorest guys and served their dinners on dirty plates and wouldn't give them a doggy bag for leftovers for their children.

10. Besides, if the 10th guy left, the bill wouldn't be the same for 9 guys eating burritos as it would for 10 guys. In fact, without his lobster, Valet parking, expectations, etc., the bill would be much lower.