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Post by revirdsuba99 on Jun 8, 2021 14:23:14 GMT
A WHOLE lot to read about who does, mostly doesn't pay Federal income taxes and how..(legally) In 2007, Jeff Bezos, then a multibillionaire and now the world's richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes. Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row. *** Certainly, there are illegal tax evaders among them, but it turns out billionaires don't have to evade taxes exotically and illicitly — they can avoid them routinely and legally. Most Americans have to work to live. When they do, they get paid — and they get taxed. The federal government considers almost every dollar workers earn to be “income," and employers take taxes directly out of their paychecks. *** So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it. For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and thus, income tax. www.rawstory.com/secret-irs-files/
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basketdiva
Pearl Clutcher
Posts: 3,611
Jun 26, 2014 11:45:09 GMT
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Post by basketdiva on Jun 8, 2021 14:32:06 GMT
Nothing new about this. The rich pay big bucks to people to know all the ins and outs of the tax rules.I've been seeing these stories for years.
ETA- I'd like to know how the confidential information was obtained.
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Post by busy on Jun 8, 2021 14:47:00 GMT
Net worth is not income. Paying taxes on unrealized gains would be shitty for everyone. I'm a big proponent of tax reform - like increasing capital gains rates, closing a lot of loopholes, and other things - but the only way to address this "avoidance" being described is taxing unrealized gains and that's just plain wrong IMO. We'd also have to allow writing off unrealized losses and everyone would have a heart attack if the ultra rich could do that. I believe that group should be paying a lot more but this isn't the way IMO.
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Post by elaine on Jun 8, 2021 14:53:27 GMT
Net worth is not income. Paying taxes on unrealized gains would be shitty for everyone. I'm a big proponent of tax reform - like increasing capital gains rates, closing a lot of loopholes, and other things - but the only way to address this "avoidance" being described is taxing unrealized gains and that's just plain wrong IMO. We'd also have to allow writing off unrealized losses and everyone would have a heart attack if the ultra rich could do that. I believe that group should be paying a lot more but this isn't the way IMO. Agreed. I’m a big proponent of a flat tax and closing loopholes. The wealthy in the article aren’t doing anything shady. They are manipulating/using the tax code how it is written. And the tax code is written that way because we allow for lobbying of Congresspeople and for PACs to fund their campaigns.
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Post by revirdsuba99 on Jun 8, 2021 15:07:00 GMT
I said it was legal in the first few sentences. The IRS also has their hands tied. Is the article perfect, no, but it does explain some of why and how the taxes work.
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Post by mom on Jun 8, 2021 15:08:36 GMT
I guess I don't see the big deal if they are doing it legally? Don't want them to do it? Close the loopholes. I am hardly a multi millionaire but I pay someone to make sure I am paying the lowest amount possible and that I get every (legal) loophole available to me.
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iowgirl
Pearl Clutcher
Posts: 4,112
Jun 25, 2014 22:52:46 GMT
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Post by iowgirl on Jun 8, 2021 15:15:42 GMT
but it turns out billionaires don't have to evade taxes exotically and illicitly — they can avoid them routinely and legally. I am a long way from a billionaire, but I spend a lot of time and have a great accountant that helps up get as close to possible to a zero or very low tax bill. If our income is going to be such that we will end up paying a large amount of tax on, we work to find expenses that will bring that total down. We pre-purchase our farm inputs. So in November and December, we sit down and figure out what we will be planting the following spring. How many acres of soybeans and how many acres of corn (there are a lot of factors determining what crop is planted on what piece of ground). We pre-purchase all our seed. Then we also pre-purchase our fertilizer and chemicals. We will also purchase all the fuel we will need for the following year. I buy Ag diesel, road diesel and gasahol in bulk. Then we look at how these purchases has offset out income. If we need more expense, we look at pre-purchasing cattle feed. Car dealers know that a LOT of new pickups will be sold in December, because that is another expense that can offset income. We have to be conscious all year of how the income/expense ratio is going. Some improvements like installing drainage tile, or new buildings, etc. need to be planned out. Our income happens about twice a year. We market our livestock Jan-Mar. So all income from that is paid in those three months. Grain is harvested in the fall, but we may or may not sell it. It can depend on overall price of the grain. How much storage is going to cost us (as we have very little on farm storage). And then again - income is not a guarantee! It is entirely possible to for expenses to out pace the income. Those are not great years. You also have to start looking at what you are purchasing. It, of course, needs to be a deductible expense. But sometimes you may be better off paying the income tax. It can be a long and complicated process, and it is the worst part of farming (for me). So these big guys are not doing anything wrong, as long as they are following the regulations. They are (hopefully) infusing the economy with money that they are spending to offset their tax bill. And just an FYI on farmers trying to avoid paying a large income tax bill- don't forget we have to pay a VERY large property tax bill. We pay many 10's of thousands of dollars in property taxes every year. This supports our schools, roads, fire departments, etc.
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Post by revirdsuba99 on Jun 8, 2021 15:44:22 GMT
I'm sorry I posted this .... I thought it might be helpful for others to understand how some pay no taxes. I did not know the details. I DID NOT SAY IT IS ILLEGAL!!
But I will not delete my post.
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Post by elaine on Jun 8, 2021 16:19:49 GMT
I'm sorry I posted this .... I thought it might be helpful for others to understand how some pay no taxes. I did not know the details. I DID NOT SAY IT IS ILLEGAL!! But I will not delete my post. No one is criticizing you for posting this article. Really. I’m not sure why you are responding so defensively. People are simply stating, in a non-judgmental way, the things that the article doesn’t say. The article is a good example of how one can present/interpret data/facts in a way that makes biased conclusions. They presented truths, but only partial truths. The rest of us have rounded out the picture with additional facts/truths. No one is saying that you did or said anything wrong.
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iowgirl
Pearl Clutcher
Posts: 4,112
Jun 25, 2014 22:52:46 GMT
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Post by iowgirl on Jun 8, 2021 16:32:14 GMT
I'm sorry I posted this .... I thought it might be helpful for others to understand how some pay no taxes. I did not know the details. I DID NOT SAY IT IS ILLEGAL!! It's a great discussion topic! I didn't feel like you were saying it was illegal at all! I think some (a lot, most?) news sources try to sensationalize topics and I love it when a good discussion can be had about it. That is one of the great things about the Peas!
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Gennifer
Pearl Clutcher
Posts: 4,986
Jun 26, 2014 8:22:26 GMT
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Post by Gennifer on Jun 8, 2021 16:35:50 GMT
I’m with you, revirdsuba99. Just because something isn’t illegal doesn’t mean it’s ethical or moral. But I also don’t believe one can amass that kind of wealth by being an ethical or moral person, either. 🤷🏼♀️
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Post by Darcy Collins on Jun 8, 2021 16:36:09 GMT
I'm sorry I posted this .... I thought it might be helpful for others to understand how some pay no taxes. I did not know the details. I DID NOT SAY IT IS ILLEGAL!! But I will not delete my post. It's not just that it's not illegal - it's a ridiculous article as it's using unrealized gains to argue a "true" tax rate. Your house increased in value $10,000 last year - no you didn't sell it, no you have no actual increase in cash in your bank account but the paper gain is $10,000. You owe the IRS $2,000 on that increase- how do you feel now about taxing unrealized gains? It's no different when someone's stock changes in value. They pay taxes on the REALIZED GAIN - ie when they actually sell the stock. So no just because on paper someone's wealth increased $50 million they don't pay taxes on it - and as busy pointed out - if you want to go down that road, it'll be wonderful when the IRS starts writing giant checks to all these wealthy individuals when they have paper losses. There's a whole lot wrong with our uber complicated tax code, taxing unrealized gains will only make things worse.
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Post by freecharlie on Jun 8, 2021 16:45:58 GMT
I didn't read the article. Are they really "secret" and if so, I have a huge problem with a leak.
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Post by Darcy Collins on Jun 8, 2021 17:00:10 GMT
I didn't read the article. Are they really "secret" and if so, I have a huge problem with a leak. They refuse to disclose how they obtained the data - and Bloomberg specifically commented "The release of a private citizen's tax returns should raise real privacy concerns regardless of political affiliation or views on tax policy. In the United States no private citizen should fear the illegal release of their taxes. We intend to use all legal means at our disposal to determine which individual or government entity leaked these and ensure that they are held responsible."
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Post by andreasmom on Jun 8, 2021 17:10:47 GMT
Net worth is not income. Paying taxes on unrealized gains would be shitty for everyone. I'm a big proponent of tax reform - like increasing capital gains rates, closing a lot of loopholes, and other things - but the only way to address this "avoidance" being described is taxing unrealized gains and that's just plain wrong IMO. We'd also have to allow writing off unrealized losses and everyone would have a heart attack if the ultra rich could do that. I believe that group should be paying a lot more but this isn't the way IMO. I think this is super important to say this again. Bezos is worth billions. That does not mean he has the actual cash in the bank. He has stock. He is worth more when stock price increases and less when it decreases. He should pay taxes only when he sells stock but not on unrealized gains/losses. I agree he should pay his taxes. On their income. Not on their investments or on the company’s income (Amazon should be paying those taxes, not Bezos)
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Deleted
Posts: 0
Apr 18, 2024 0:36:31 GMT
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Post by Deleted on Jun 8, 2021 17:54:28 GMT
It's good to buy the laws. The rich have been doing it for centuries.
It is immoral to pay NOTHING toward society. Those who do it (and crow about it) disgust me.
IME, they tend to be the same ones who view "immorality" as what you do w/your genitals w/other consenting adults.
Paying NOTHING toward the courts, the roads, the air/water safety, law enforcement is DISGUSTING.
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Post by freecharlie on Jun 8, 2021 18:10:25 GMT
I didn't read the article. Are they really "secret" and if so, I have a huge problem with a leak. They refuse to disclose how they obtained the data - and Bloomberg specifically commented "The release of a private citizen's tax returns should raise real privacy concerns regardless of political affiliation or views on tax policy. In the United States no private citizen should fear the illegal release of their taxes. We intend to use all legal means at our disposal to determine which individual or government entity leaked these and ensure that they are held responsible." I hope they find the people responsible and they are prosecuted. It is not okay, no matter who's are leaked. I do believe those running for and holding political offices should be required to disclose.
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Post by papersilly on Jun 8, 2021 18:47:26 GMT
sorry, i haven't read the article yet but jeff bezos (and the like) are not run of the mill people who go to H and R Block to get their taxes done. there are accounting firms devoted to the rich and their sole job is to maximize the use of tax laws to their clients' favor. for this, the rich are happy to pay millions in accounting fees. kind of ironic right? bezos will pay millions in accounting fees not to pay a dime in federal taxes. i'm sure he feels it's worth every penny too. most of all, the breaks he's getting are not illegal. if people don't like the breaks, get the tax codes changed.
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Deleted
Posts: 0
Apr 18, 2024 0:36:31 GMT
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Post by Deleted on Jun 9, 2021 20:26:29 GMT
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scorpeao
Pearl Clutcher
Posts: 4,521
Location: NorCal USA
Jun 25, 2014 21:04:54 GMT
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Post by scorpeao on Jun 9, 2021 22:01:00 GMT
sorry, i haven't read the article yet but jeff bezos (and the like) are not run of the mill people who go to H and R Block to get their taxes done. there are accounting firms devoted to the rich and their sole job is to maximize the use of tax laws to their clients' favor. for this, the rich are happy to pay millions in accounting fees. kind of ironic right? bezos will pay millions in accounting fees not to pay a dime in federal taxes. i'm sure he feels it's worth every penny too. most of all, the breaks he's getting are not illegal. if people don't like the breaks, get the tax codes changed. My sister's boyfriend is wealthy. He ended up owing $65K in taxes this year and he was pissed saying had he known he would've bought another 'work' truck. How nice, you find out you owe taxes and can buy a $65K truck so you don't have to pay taxes...meanwhile, a few years ago I owed $1200 as a single parent and I was crying, wondering how the eff I was going to find that money.
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Post by sasha on Jun 9, 2021 22:04:48 GMT
Pisses me off that I paid more taxes!
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Post by revirdsuba99 on Jun 9, 2021 22:51:43 GMT
Or single mom who made minimum wage, made a mistake, repeated it a second year and DID NOT know until 5 years later when the IRS hits you with back taxes, interest(compounded) plus penalties...more often then not, when the little guys make mistakes, not deliberate, the bigger guys do it on ourpose. You hear all those commercials where if you owe over $10,000 the IRS will make a deal ... But if you are under that the IRS wants it all, including the interest and penalties.
The little guys pay it, with sweat while being terrorized! The IRS does not go after many of the big guys who fight tooth and nail with more complicated forms ... They get away with it!
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Post by papersilly on Jun 10, 2021 0:13:17 GMT
sorry, i haven't read the article yet but jeff bezos (and the like) are not run of the mill people who go to H and R Block to get their taxes done. there are accounting firms devoted to the rich and their sole job is to maximize the use of tax laws to their clients' favor. for this, the rich are happy to pay millions in accounting fees. kind of ironic right? bezos will pay millions in accounting fees not to pay a dime in federal taxes. i'm sure he feels it's worth every penny too. most of all, the breaks he's getting are not illegal. if people don't like the breaks, get the tax codes changed. My sister's boyfriend is wealthy. He ended up owing $65K in taxes this year and he was pissed saying had he known he would've bought another 'work' truck. How nice, you find out you owe taxes and can buy a $65K truck so you don't have to pay taxes...meanwhile, a few years ago I owed $1200 as a single parent and I was crying, wondering how the eff I was going to find that money. The crazy thing about wealth is that wealth begets wealth. Their money makes more money without much, if any more, effort on their part. During the pandemic, while many businesses closed and people lost their jobs, the rich got richer. After the mid-March crash, the markets took off. Wealth increased while the rich slept. Passive wealth. The rich own real estate that appreciates in value thus increasing their net worth. More passive wealth. They get tax breaks for being business owners or property owners. Add that to their net worth also. Meanwhile, single mothers like you can't get a leg up because the tax code doesn't favor you and was not lobbied for in Washington by rich Senators and Congressmen who just look out for their own.
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inkedup
Pearl Clutcher
Posts: 4,837
Jun 26, 2014 5:00:26 GMT
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Post by inkedup on Jun 10, 2021 0:27:02 GMT
Net worth is not income. Paying taxes on unrealized gains would be shitty for everyone. I'm a big proponent of tax reform - like increasing capital gains rates, closing a lot of loopholes, and other things - but the only way to address this "avoidance" being described is taxing unrealized gains and that's just plain wrong IMO. We'd also have to allow writing off unrealized losses and everyone would have a heart attack if the ultra rich could do that. I believe that group should be paying a lot more but this isn't the way IMO. You're a lot more learned about this than I am. Do you have any ideas for how this disparity can begin to be addressed? And I ask with no snark.
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MerryMom
Pearl Clutcher
Posts: 2,534
Jul 24, 2014 19:51:57 GMT
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Post by MerryMom on Jun 10, 2021 12:52:48 GMT
End tax avoidance! Please watch this video by Rutger Bergman at Davos a few years ago. youtu.be/r5LtFnmPruU
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iowgirl
Pearl Clutcher
Posts: 4,112
Jun 25, 2014 22:52:46 GMT
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Post by iowgirl on Jun 10, 2021 13:21:38 GMT
My sister's boyfriend is wealthy. He ended up owing $65K in taxes this year and he was pissed saying had he known he would've bought another 'work' truck. How nice, you find out you owe taxes and can buy a $65K truck so you don't have to pay taxes...meanwhile, a few years ago I owed $1200 as a single parent and I was crying, wondering how the eff I was going to find that money. If he is making that kind of money, he is not managing it well. If he doesn't know he needs an expense to offset that tax bill before it is too late. I hope it was a lesson learned. Our tax bill (Federal) was around 12K this year. That is way more than we usually have to pay, but it made more sense to pay it, than to find any more expenses that were not necessary. But it would have been paying closer to what he paid, if we had not kept up our book work and knew what purchases were needed to offset the income. This year won't be a problem. We are doing some major infrastructure improvements on buildings, etc - so the money has already been spent! This year will be a net loss for sure.
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Deleted
Posts: 0
Apr 18, 2024 0:36:31 GMT
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Post by Deleted on Jun 10, 2021 14:26:45 GMT
Funny how when "the little guy" spends money taking care of their home it's not tax deductible eta: in that tax year in part or in whole. As a business can.
Hey, they spent money. They helped the economy, right?!?
But, it's not for A BUSINESS.
When it's for A BUSINESS suddenly the money spent is more special.
We all spend money - but we don't all buy the laws to make sure our money spent on shoring up the BUSINESS of raising a good family is tax deductible.
(while also paying property taxes, sales taxes, utility taxes, gas taxes, etc.)
Such a f(#$*ing scam.
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scorpeao
Pearl Clutcher
Posts: 4,521
Location: NorCal USA
Jun 25, 2014 21:04:54 GMT
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Post by scorpeao on Jun 10, 2021 14:31:29 GMT
My sister's boyfriend is wealthy. He ended up owing $65K in taxes this year and he was pissed saying had he known he would've bought another 'work' truck. How nice, you find out you owe taxes and can buy a $65K truck so you don't have to pay taxes...meanwhile, a few years ago I owed $1200 as a single parent and I was crying, wondering how the eff I was going to find that money. If he is making that kind of money, he is not managing it well. If he doesn't know he needs an expense to offset that tax bill before it is too late. I hope it was a lesson learned. Our tax bill (Federal) was around 12K this year. That is way more than we usually have to pay, but it made more sense to pay it, than to find any more expenses that were not necessary. But it would have been paying closer to what he paid, if we had not kept up our book work and knew what purchases were needed to offset the income. This year won't be a problem. We are doing some major infrastructure improvements on buildings, etc - so the money has already been spent! This year will be a net loss for sure. I bet there are a lot of people who live right above the national poverty line that would like to make purchases to offset their income, but the tax code doesn't favor them.
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Post by Really Red on Jun 10, 2021 14:38:34 GMT
Funny how when "the little guy" spends money taking care of their home it's not tax deductible. Hey, they spent money. They helped the economy, right?!? But, it's not for A BUSINESS. When it's for A BUSINESS suddenly the money spent is more special. We all spend money - but we don't all buy the laws to make sure our money spent on shoring up the BUSINESS of raising a good family is tax deductible. (while also paying property taxes, sales taxes, utility taxes, gas taxes, etc.) Such a f(#$*ing scam. Yup. Did you hear that Bezos took the full child credit for his kids? Unbelievable.
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Post by busy on Jun 10, 2021 14:46:23 GMT
Net worth is not income. Paying taxes on unrealized gains would be shitty for everyone. I'm a big proponent of tax reform - like increasing capital gains rates, closing a lot of loopholes, and other things - but the only way to address this "avoidance" being described is taxing unrealized gains and that's just plain wrong IMO. We'd also have to allow writing off unrealized losses and everyone would have a heart attack if the ultra rich could do that. I believe that group should be paying a lot more but this isn't the way IMO. You're a lot more learned about this than I am. Do you have any ideas for how this disparity can begin to be addressed? And I ask with no snark. I appreciate the compliment, but it’s not really true. I understand tax rules and how to interpret returns reasonably well from my time as a commercial lender. However, tax POLICY if a very different animal. I have some ideas about what I think should change - increased marginal tax rates at high incomes, capital gains should be counted as regular income above a certain threshold, etc - but I would not call them especially learned opinions
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