7,000 Millionaires Paid Zero Taxes Last Year

[rob19]

Let's focus on these 7,000 tax payers. I think they help to show why, even if the Buffett Rule is a sensible principle, it wouldn't be a commonsense law.

As Roberton Williams of the Tax Policy Center explained to me, there are three buckets of factors that can bring taxable income down from $1 million to zero. One is tax tricks. The IRS should crack down more. Two is relying heavily on investments. The administration can try to level taxes for earned income and investment income. Third is great misfortunes. When investments lose significant income, a house or business is destroyed (i.e. a casualty loss), or a family member gets sick and incurs high medical costs for the self-insured, all these things chop away at taxable income and eventually bring a millionaire's income taxes to zero.

"You can attribute some of those 7,000 non-tax payers to investment choices they made, like tax exempt bonds," Williams told me, "but a lot of this might be unfortunate happenstance. A tornado tore through your home, you got a very expensive form of cancer, you lost hundreds of thousands of dollars in an investment. Those aren't choices people made, they're just legal deductions under the law."

The fact that 7,000 millionaires didn't pay income tax in 2011 is a Rorschach test for the Buffett Rule. Are you outraged by the figure? Then you probably think the rule should be enshrined into law. But if you see the figure as an artifact of a complicated tax code doing its best to account for a varied and complicated country of 150 million tax units, you might not be so outraged. We can, and we should, raise taxes on millions of more Americans, and we should start with the rich, because they can afford to pay sooner. But it's best to see the Buffett Rule as a political tool designed to drive a wedge between the White House and Republicans who have written off tax increases forever.

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[Valandui]

The super-rich don't pay taxes. That's how it works. When they talk about taxing the rich more they're referring to the middle class.

[MoFinz]

"According to the annual World Wealth Report from Merill Lynch and Capgemini, the U.S. had 3.1 million millionaires in 2010, up from 2.86 million in 2009. The latest figure tops the pre-crisis peak of three million."



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7k out of 3.1 million? Isn't it more likely these would be examples of the 3rd scenario?

[Valandui]

"According to the annual World Wealth Report from Merill Lynch and Capgemini, the U.S. had 3.1 million millionaires in 2010, up from 2.86 million in 2009. The latest figure tops the pre-crisis peak of three million."



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7k out of 3.1 million? Isn't it more likely these would be examples of the 3rd scenario?

That also lumps someone who has one or two million dollars and maybe owns their own business and files the business' taxes individually with the likes of Jay Rockefeller.

[MoFinz]

Kind of hard to think youre going to get more money from a shrinking source doesnt it?

But then again its more about class warfare than any attempt to correct the fiscal problems isnt it?


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[Dolphins9954]

I agree these 7,000 are getting a sweetheart deal. But guess who's giving it to them?? In the end even if we taxed those 7,000 and raised taxes on all the rich, we still fall WAY short on balancing the budget. The taxes debate is a smokescreen and distraction from what's really the problem. The government sucks with our money.

[phins_4_ever]

I agree these 7,000 are getting a sweetheart deal. But guess who's giving it to them?? In the end even if we taxed those 7,000 and raised taxes on all the rich, we still fall WAY short on balancing the budget. The taxes debate is a smokescreen and distraction from what's really the problem. The government sucks with our money.

See the point is not just taxing the rich and the budget deficit is solved. The proposal last year from the WH was simply increasing revenue and cutting line items. YOU CAN NOT FIX THE BUDGET DEFICIT ON CUTS ALONE OR ON REVENUE ALONE!!!!!

It is simple math......

Secondly, this country is the ONLY country where you pay less taxes the more money you make. It has nothing to do with the country of the free but with using the country of the free. The irony is to use all the loopholes available the upper level in society is using every government loophole, the very same government they are bitching about.

Here is my first solution: cut the outsourcing loophole to other countries. Implement an additional tax to companies who are using overseas sweatshops and overseas low wages to make more profit. Tax incentives to those companies who hire US employees. That way you are forcing companies to hire US employees which would lower unemployment rate, unemployment compensation and possible wellfare benefits. Cut the defense budget asap. Revamp the tax code so that capital gains are in a regular tax code range, not the lousy 15% or what it is now.

My next solution is to go after guys like Romney who are using "overseas investments' as a personal piggy bank. Pretax every dollar going out of the country.

Then you cut the defense budget. Reduce or eliminate our foreign involvements. It is time to let the world determine their own faith. Our time as policeman of the global well being is done. Times have changed. There is no USSR military force you have to compete with. No more unnecessary foreign wars, drone operations, covered operations etc. Done and over with.

That is just a start.....

Politically I would ban lobbyists from Washington DC. No more of this crap where a politician is in the pockets of a certain industry. All politicians are banned from owning stocks or any publicly traded or privately held stocks. You want to own stocks? Go work in the private environment. If you are in politics you serve us first and foremost and all possibilities for a conflict of interest should be eliminated.

Oh geez...I could go on....

How about we stop printing dollar bills as we need them and establish the Gold Standard?

I think I will run for office.
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[Spesh]

Thing thats so depressing about this is the 7k Millionaires who dont pay taxes will whine and moan about the "moochers" of society.

[Dogbone34]

We pay enough taxes. Too many hands in the public cookie jar.

Government can not control spending. The Fed is our dealer.

More taxes on anyone is a loser strategy that plays right into the status quo.

[MoFinz]

Does anyone actually read the links besides me?

7k out of 3.1 million .....think maybe they could have been the ones that actually lost money that year, therefore they had no INcome to tax? I dont know each of their stories, but the examples i see here of enmity towards anyone that has a certain amount of money is discouraging.