Subsidy System for Super-Wealthy Americans, IRS Winks at Rich Deadbeats

[G_j]

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/04/11/INGV560VO41.DTL&type=printable

http://www.commondreams.org/headlines04/0411-05.htm

Published on Sunday, April 11, 2004 by the San Francisco Chronicle
Stroke theRich

IRS has Become a Subsidy System for Super-Wealthy Americans
IRS Winks at Rich Deadbeats

by David Cay Johnston

The federal tax system that millions of Americans are forced to deal with before April 15 is not at all what you think it is. Congress has changed it in recent decades from a progressive system in which the more one earns the more one pays in income taxes. It has become a subsidy system for the super rich.

Through explicit policies, as well as tax laws never reported in the news, Congress now literally takes money from those making $30,000 to $500,000 per year and funnels it in subtle ways to the super rich -- the top 1/100th of 1 percent of Americans.

People making $60,000 paid a larger share of their 2001 income in federal income, Social Security and Medicare taxes than a family making $25 million, the latest Internal Revenue Service data show. And in income taxes alone, people making $400,000 paid a larger share of their incomes than the 7,000 households who made $10 million or more.

While millions of Americans in the last quarter-century debated about who shot J.R. and scurried for news about who would be Jennifer Lopez's next lover, Congress quietly passed tax laws that shift the tax burden from the 28,000 Americans in households with incomes of $8 million per year or more.

..more..
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(speaking of taxes)

Check your returns: your taxes weren't cut, just shifted.

Shell Game

Chuck Collins is program director at United for a Fair Economy and co-author, with Bill Gates Sr., of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes (Beacon, 2003).

http://www.tompaine.com/feature2.cfm/ID/10222

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Tax Shift #1: From Federal Taxes to State Taxes. Since 2002, state governments have closed $200 billion in budget gaps by raising taxes and cutting services. During those same years, newly enacted federal tax cuts delivered about as much money—$197.3 billion—in new tax breaks for the wealthiest 1 percent of Americans (households making more than $337,000 a year). In essence, Bush chose to force tax hikes in the states in order to give tax breaks to multi-millionaires.

Tax Shift #2: From Progressive to Regressive Taxes. President Bush has focused on reducing income tax rates. But 71 percent of us pay more in payroll taxes (Social Security and Medicare) than in income taxes. Payroll taxes are regressive: high-income people pay a lower tax rate than low-income people. The opposite is true of progressive taxes, such as federal income, corporate and estate taxes. Since the early '60s, this trio of progressive tax rates has dropped precipitously. But the regressive payroll tax rate has risen.

Tax Shift #3: From Taxes on Wealth to Taxes on Work. Politicians talk about the virtues of hard work, but their tax policies speak otherwise. Between 1980 and today, the main tax rate on work income—the payroll tax—has jumped 25 percent. In the same period, top tax rates on investment income and large inheritances have been cut between 31 and 79 percent.

This tax shift from wealth to work means that a person who derives millions of dollars in dividend income solely from his investments now pays a marginal tax rate of just 15 percent. Compare that with a schoolteacher with an adjusted gross income over $28,400 who pays a payroll tax rate of 15.3 percent, plus a marginal income tax rate of 28 percent, for a total marginal rate of more than 43 percent!

Tax Shift #4: From Corporations to Individuals.....
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