Mystery Billionaire Pays $200 M in Back Taxes (Keeps CA afloat!)

[Liberty Belle]

MYSTERY BILLIONAIRE PAYS $200 M IN BACK TAX—AND KEEPS A STATE AFLOAT

London Times (12/30/06) Los Angeles – Feeling nervous about your end-of-year tax bill? Already suffering from bouts of loathing towards Her Majesty’s Revenue & Customs?

If the answer to either of these questions is yes, then consolation can be found in California, where a mysterious “Taxpayer X” has just come clean about his income and handed over $200 million in unpaid taxes — almost single-handedly eliminating the revenue shortfall of the state.
The tax payment is so large that it would pay the annual budget of California’s National Guard three times over. And it will close the gap between the state’s projected and actual revenues from $250 million to $47 million. This will put the finances of Arnold Schwarzenegger, the State Governor, back on track — a New Year gift to compensate perhaps for the leg that he broke while skiing during the holidays.

… The payment is almost certainly related to a law signed by Mr Schwarzenegger in 2004 offering “taxpayer amnesty”, so that the very wealthy could set their taxes straight without risking fines or jail.

http://www.timesonline.co.uk/article/0,,11069-2523502,0...

[havocmom]

1. But, but, but, don't the RWers tell us the fault is always welfare queens?

You mean to tell me one fat cat tax cheat is the root of the problem? Wow, and no fines or jail? A-friggin-mazing!

I have an Austin Lounge Lizards earworm: Teenage Immigrant Welfare Mothers on Drugs. Those boys put the light on the GOP bugs with THAT song.

[pitohui]

2. wow!

as another poster said, wow, one fatcat cheat could have caused some much suffering if he had not come clean

how can one person have that much money? i can't even fathom it

[Divine Discontent]

3. how nice of

arnold to pay his tax bill... lol



www.cafepress.com/warisprofitable

[2Design]

4. my thoughts exactly n/t

[Divine Discontent]

10. giggle.... cool! n/t

[bahrbearian]

14. He granted himself amnesty too.

[devilgrrl]

21. That's the first thought that flew into my head.

Good call.

[LifeDuringWartime]

5. "taxpayer amnesty"

does this only apply to the wealthy?

[aquart]

6. Damn I'm sorry we can't put the greedy bastard in jail.

I mean, I'm HAPPY that forgiveness worked. I am. But I would have loved to hang a few billionaires just to set an example. Sigh. I never get what I want.

[bahrbearian]

15. Patience ,Patience, maybe next Christmas.

[GemMom]

7. Maybe it's ...

Michael Jackson? Wasn't he having IRS trouble?

[buddysmellgood]

8. HOLD ON ONE MINUTE! Are you telling me...(breathe) that the army of IRS people

we have...(breathe) can zero in on my $2,000 free-lance job and burn my ass for weeks, (double breathe) BUT THIS ASSHAT WITH $200 MILLION HASN'T RAISEd ONE FUCKING RED FLAG!!!! Why do we even audit anyone under a million a year if shitfucks like this are around?

[lindisfarne]

11. Doesn't surprise me one bit. Try googling for estimates of what corporations avoid in taxes

and no one goes after them.

But the article goes on to say:
Some clues do exist. State financial records show that the budget department was this year expecting to receive a windfall payment of $200 million in “audit revenue”, which usually means a payment made after a tax return has been examined by the authorities and found to be inaccurate. Audits commonly find unreported income or the claiming of too many tax deductions.

--
So in this case, the IRS did catch the individual. One - out of many, who have far more disposable income than 100,000 DUers can even imagine.

[napi21]

19. But most of the corps are doing it legaly! There's a big difference between

tax avoidancewhich is legal, and tax evasion which is most often fraud! Absolutely this individual should have paid their taxes, and depending on WHY they weren't paid, should have paid some penalties too. I have a bigger problem with Congress keeps passing tax laws that permit Corps. to legaly avoid taxes through offshore financial institutions, and special exemptions!

[tblue37]

50. I have a regular university job, with withholding and all,

but I make almost as much as a self-employed writer, editor, and tutor as I do as a college instructor. It isn't that much, but the tax bite is huge.

I try to subtract 40% from everything I earn as a freelancer, because I know that bite will be taken by the IRS. I don't even count that 40% as income. I just try to tuck it into a savings account to give to Uncle Sam in April. Even with expenses subtracted, I am probably going to owe about $6000-$7000 this year.

Unfortunately, my adult kids also need some help, so as of now I only have $3000 saved for the taxman (not one cent saved for me!). I will have to start doing some serious tucking away over the next couple of months.

But I know that the IRS is more likely to go after low-earners, especially if they are self-employed, than they are to track down high-earning deadbeats.

I mean, the IRS spends a large part of its budget trying to nail waiters and watresses who don't report 100% of their tips! A friend who had a low-earning freelance graphics business ended up nailed by the IRS in the 1980s because he didn't report 100% of his income. They have microscopes to check out every dollar for poor saps like him, but they can't see a $20 million cheater!

[judaspriestess]

51. Yup, because

the NUMBER ONE target of the IRS are sole proprietors, that is the majority of Americans. They have no protection from the IRS. This is why I advocate incorporated ones self...... Its not very expensive and you get excellent write offs. Also here in Nevada, info is not shared with the IRS.

[buddysmellgood]

9. AND ANOTHER THING! Does anyone think that this person is stepping up and

paying this tax at the expense his lifestyle? Is this person paying the tax and not taking a vacation, paying a utility bill, a piano lesson, buying a toy, eating out, fixing a car, paying a parking ticket, seeing a movie, using energy...
This person is paying because it means almost nothing to them. That is how insanely wealthy people have become while you and I pay the freight to keep the economy running whilst these asshats benefit from it.

[heliarc]

12. C'mon Ahhh-nold...

We know it was you!

[No Exit]

38. LOL! That was my guess, too!

[xchrom]

13. there are no words to express my cynicism when i read

shit like this.

[Gormy Cuss]

17. Ditto.

This mystery billionaire was lined up to pay it one month after Arnold declared the amnesty? Which came first: chicken or egg? How much did the state write off as part of this "deal?" I smell a rat.

[xchrom]

18. a. big. fat. rat.

the timing, the numbers -- etc are all extraordinarily convenient.

plus i live in cali -- and i've seen no headlines re:uber-wealthy tax deliquents.
a tax bill that comes that close to putting the entire state in jeopardy ought to have made headlines and brought snoops from all over.

[Gormy Cuss]

20. Ditto again. Not a word in our local media rags.

I'm just over the hills from ya, xchrom.

[mainegreen]

16. Soooo, have they paid their back Federal taxes yet?

I doubt it.

[justice1]

22. There is about 25 billionaires in California,

It shouldn't be that hard to figure out.

[hatrack]

23. Oh, Bravo! He's paying what he's legally required to pay!

How noble! How FUCKING NOBLE of this assclown.

Unbelievable.

[Lipton64]

30. But that's not the issue....

High state and local taxes are ALWAYS detrimental to the economic growth of a region because people have a harder time starting up businesses and buying real estate to own a home. Just look at the native-born California exodus out. Demographers repeatedly see 80+% of the population growth in the state coming from immigrants(many sadly illegal) and also from others moving into California in order to find work. But just ask some of the millionaires who have fled California for the "refuge" of Phoenix, Denver, Boise, Las Vegas, Seattle, Portland, etc.

Go ask a demographer at a state university in California and he'll confirm what I'm telling you right now.

[hatrack]

43. And your post has less than nothing to do with the OP

Here's a guy who used tax amnesty to do what he is legally obligated to do but failed to do.

Had it been you or I or anybody we've ever met who had dodged, avoided or otherwise gotten away with not paying taxes like this guy, we would be facing fines and back tax bills, potential criminal charges or at the very least an investigation by state tax officials which would involve turning over every financial rock in our lives.

What in Sam Hill does that have to do with detrimental high state and local tax rates?

And since you're from the low-tax paradise of Florida, let's see where that's gotten you and your fellow residents. These rankings are from 2004, but I'm working on short notice here.

In 2004, according to the United Health Foundation, Florida was:

42nd out of 50 states in overall health

Graduating 55.7% of incoming high school freshmen within four years = 48th out of 50 states

49th out of 50 for violent crime, which came in at 770 offenses per 100,000 residents

41st in the number of residents who lacked health insurance - 18.2%

48th in the number of cases of infectious disease - 43.8 per 100,000 residents

39th out of 50 states for children in poverty - 19.2%

33rd out of 50 states for infant mortality - 7.5 per 1,000 live births

33rd out of 50 states for premature deaths - 8,023 years lost per 100,000 population

http://www.unitedhealthfoundation.org/shr2004/states/Fl...

A veritable low-tax paradise under the palms, for sure!!!

[jamesinca]

24. I am thinking Spanos is the billionaire

the owner of the NFL team San Diego Chargers, developer and cash cow/ATM for republicans in CA. To have a state tax liability of $200 million, you have to have an income in the $10,000,000,000 range. Cripple the state you get amnesty, steal a TV you get jail time.

[Nomad559]

25. My Guess Would Be Steve Jobs

Who is this astonishingly wealthy individual, who must have earned at least $2 billion to justify such a monster payment? Was it a Silicon Valley player such as Steve Jobs, of Apple Computer, or Sergey Brin, of Google; a reclusive billionaire such as David Geffen; or someone less obvious, such as Kirk Kerkorian, the corporate raider and California-based casino mogul?


Once a thief, always a thief
http://www.democraticunderground.com/discuss/duboard.ph...

[Lipton64]

26. And they wonder why so many California millionaires are moving North and East to the Mountain states

I've heard reports that up to 60% of the growth in the states of Oregon, Idaho, and Nevada are coming from people high-tailing it out of California because of the excessive taxes.

200 million in unpaid taxes? I'm sorry but I don't think I would want to make California my primary state of residency now that I know about this mess. I've about the insane taxes and the like but this is just nuts. 200 million? Nobody should be forced to have that kind of burden TO A STATE. It's one thing if the IRS comes after your ass but if a state wants to milk you for that then it's just freaking ridiculous.

I lived in the San Diego area when I was a kid and now I'm glad I live in Florida now. Now offense to California residents on here but you folks seriously need to lower your state taxes. If I was a billionaire I doubt I would want to unload my money to the state when some charity or charities could put it to much better use feeding and taking care of the sick and poor. Not to mention many of the Hollywood stars have left the state. Clooney lives in Italy, Julia Roberts floats around her ranch in New Mexico, TomKat lives all over the place, Pitt/Jolie live all over the world as well. Man, it's no wonder they want to leave. I couldn't stand that mess.

And the Repukes are totally wrong about this all being handouts to "dopefiends and welfare recipients" and other poor Americans. Illegal immigrants, people who shouldn't even be here in the first place, are the one who are getting a lot of the money. And sorry, but that's bullshit.

[tomhayes]

27. We don't want people who don't pay their taxes in Calfiornia

Too wealthy to pay your widdle taxes?? Crybaby

[Name removed]

28. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[cally]

29. I'm trying to understand your argument and I can't

We have a tax system that depends on a some degree of honesty with paying taxes. If you fail to pay, you face criminal and financial penalties. I assume wealthy individuals have more access to accountants and attorneys.

In this case, we have a wealthy individual/corporation admitting to tax fraud. This person stole from the government by not paying their taxes. What I'm getting from your argument is that we should cap how much a wealthy person should pay because some how $200 million is too much?? Why? There should be no cap on amount paid. I would love to learn your economic argument about why it's unfair to tax wealthy individuals.

[Lipton64]

32. re:

"We have a tax system that depends on a some degree of honesty with paying taxes. If you fail to pay, you face criminal and financial penalties. I assume wealthy individuals have more access to accountants and attorneys."

Of course, to clarify my point, I was merely criticizing what I view as the outrageous taxes that people in California have to pay in terms of income taxes. Any state can say you "owe" them money and it can just be an attempted money grab. I've heard about for instance there were billionaires who had completely moved out of their home states and moved elsewhere but their homestates, often being poor and being in the Middle-American bible-belt, often claim to be "owed" back taxes. I feel it's the same way here. If one has to pay 200 million in back taxes then that obviously means that California has an excessive income tax code in terms of PERCENTAGE of one's earnings. As I pointed out, we here in Florida don't even have a damn state income tax. In other words, if I own a chain of restaurants and I clear 40 million dollars in profit for myself, my company will be taxed but I won't be taxed by my state. The feds of course will come with their hands out but why would a state ask for such a large percentage of one's income other than to blow it?

"In this case, we have a wealthy individual/corporation admitting to tax fraud. This person stole from the government by not paying their taxes. What I'm getting from your argument is that we should cap how much a wealthy person should pay because some how $200 million is too much?? Why?"

Well, for one, there aren't any billionaires to my knowledge who reside in California who have over 10 billion in assets. 200 million to somebody worth 2 billion would be a tenth of their total assets. And you pay that to a fucking state? States in my opinion shouldn't even be allowed to tax income, that's the job of the federal government. Small business owners and those "poorer millionaires" who are in the 1 to 5 million bracket can't afford to shell out every 5 years 10 percent of their total estate to the STATE without having economic consequences that will be passed on to the workers and the consumers of said business. If I lost a tenth of my assets as a business owner I would be forced to lay off employees to compensate a massive loss to a state. And then of course the state will come back for more later. The federal government already screws us in terms of percentage of taxes taken and having a state double screw us doesn't sound very fair to me.


"There should be no cap on amount paid. I would love to learn your economic argument about why it's unfair to tax wealthy individuals."

I have no problem at all taxing wealthy individuals and I support taxing them more than the middle class. The flat tax system is a joke as anybody who studies economics knows. It would fuck the poor bad. I just have a problem I suppose with the tax code that California has and if there are other states with similar tax codes then them as well. If a state can tax you 10% of your income on top of the 50+% the federal govt. takes - it soon becomes unprofitable to run a business, no? Why do you think Florida is gaining scores of wealthier people from the Southeast and from the North? They're coming here because they don't like paying state income taxes. Not to mention the warm weather...

In California it wouldn't be so bad if taxes AND spending were lower. I know if I was a billionaire I wouldn't want to pay out 200 million in state taxes. That's a bit excessive to my ear. Not to mention as I said, so much of that will go to people who shouldn't even be in this country in the first place....

[harpboy_ak]

34. Who cares about your uninformed opinion?

States in my opinion shouldn't even be allowed to tax income, that's the job of the federal government.

So much for YOUR f***ing opinion. Half the states have income taxes, and those that don't usually have horribly regressive sales taxes (like Washington's 8%), which are a far greater burden on the poor than the rich. As a matter of fact, because the 10th Amendment didn't specifically enumerate levying taxes on income as a Federal power, Congress didn't have the power to tax incomes until the 16th Amendment was passed, ONLY the states.

One reason California has a high income tax now is because of that idiot Howard Jarvis and his proposition that limited property taxes so that someone who has owned a home for many years that's valued in the millions pays taxes on a bogus "assessable value" that hasn't even kept up with inflation, much less the humongous increase in property value. Of course that loonie Jarvis didn't want to pay income tax either, being one of those folks who thinks that they shouldn't have to pay taxes to educate or jail other peoples' children.

I'll listen to your whining about illegals when Florida starts shipping 'em back to Cuba.

[boilinmad]

39. I'm confused about the cross as your avatar???...

....is that in some way representative of Jesus??? Because last time I checked, Jesus harbored no hatred for 'illegals'.......

[hedgehog]

42. Just for kicks, how in the world could one person spend $800, 000,000?

From what you said, this person had an income of $2,000,000,000. After subtracting the 50% federal and 10% state tax, this person was left with a measly $800,000,000. Buy a couple 5 million dollar houses, half a dozen cars, throw in a yacht and they would still have $700,000,000 for daily expenses.

[DBoon]

46. taxes are NOT too high in California

If you look at property taxes, per dollar of market value they are very low.

Long term property owners pay almost nothing in property taxes

Increases in property taxes are limited to 2% a year, regardless of how valuable your property becomes. There are no homeowners having to sell because of a re-assessment in California. If you can afford to buy a house here, you can afford to pay the taxes on it forever.

Now what are you complaining about again?

[mainer]

48. California can be nuts about their tax policies

I live year-round in the state of Maine, but my product (created here) is sold in every state in the country. Somehow California got it into their head that I should pay their state income taxes as well, on my entire annual income. They sent me a threatening letter to that effect. When I told them I pay my state income taxes in Maine, the woman in the California tax office said it didn't matter, I also have to pay the full California state income tax. She claimed that a commercial airline pilot who just lands a jet in any California airport is required to pay state income tax -- on his ENTIRE annual income -- to California. Even if he lives in Texas. Even if he's only in California for a total of an hour a year.

"What if he works for Delta and flies to twenty states?" I asked her.

"Then he has to pay income tax to twenty states," she said.

"But if every state charges 5% income tax, then he'll have NO income left after he pays 5% to 20 states," I pointed out.

"It doesn't matter," she said. "That's the law. Pay up."


I consulted a tax attorney who just laughed and said it was bullshit. He said that the California tax office is a bunch of hoodlums and they'll lie to get every last cent out of you, because their state is in such bad shape.

[bemildred]

31. Having those parasitic assholes leave is a blessing. nt

[krispos42]

33. The high income taxes were designed to keep the wealthy few and far between

The top tax bracket used to be 90%. It was part of the artificial governmental mechanism that kept the middle class strong and the aristocrats down, just like the inheiritence tax of 45% on assests after $3.5 million. The first $3.5 million was tax free ($7 million if married) and the balance taxed at 45%

Reagan destroyed that, making the top tax bracket 28%. And now look that the middle class and the jobs that supported it. No unions, manufacturing overseas, too many billionaires and multi-millionaires getting rich off the backs of the bottom 95% or so.

Wal-Mart's CEO makes almost $23 million a year. Where does that money come from? The rest of the Wally World workers that make an average of $9.34 an hour and work 34 hours a week, for less than $18,000 a year. And how about the flock of CFOs and VPs and other high-paying jobs over there in Bentonville, Arkansas?

I think that the federal top income tax bracket should be progressive and go up to 90% on earnings over five million dollars a year. I want these overpaid elites to stop paying themselves so much damn money! I want to see that money put into hourly employee retirement plans, better insurance coverage, and raises, and infrastructure improvements, not corporate 'pat on the back' bonuses and stock options.

I also think the first $25 thousand or so should be entirely tax-free. Call me a damn radical, but we can't have democracy with a small rich elite ruling class and a vast poor undereducated working class.

[BreweryYardRat]

35. Sounds good to me.

I'm always for breaking people who get grossly overpaid.

[krispos42]

40. Thank you. I listen to Thom Hartmann a lot :-) n/t

[BreweryYardRat]

44. Your handle isn't, by chance, a Harry Turtledove reference, is it?

[krispos42]

52. We have a winnah! :-)

[Bushknew]

45. I’d vote for that!

[entanglement]

36. $200 million in TAXES? I wonder how much the guy makes?

A few billions, perhaps?

[ellisonz]

37. Just guestimating...

He's covering up for $5-7 billion in untaxed income made off of the bounty that is the Golden State of California. Now if only he had paid up in the first place...

[Lurking Dem]

41. That's going to be a hell of a deduction

on his federal taxes this year.

[Rex]

47. Rich people get to do things we commoners can only dream of.

Like coughing up 200 million dollars. I can guess who it is.

[tblue37]

49. Now, if we could get the rest of filthy rich and the

corporations to pay their fair share of taxs, the US budget would be way better off. At one time, corporations paid 50% of the US operating budget. Now their taxes acount for only 8%, even as they rake in record profits, and the tax burden has shifted to the middle class (what's left of it!) and the working class.