By New Times
By Connor Radnovich
By Robrt L. Pela and Amy Silverman
By Ray Stern
By Keegan Hamilton
By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
Actually, it already has been destroyed. Despite declaring $18 billion in profits in 2010, Apple paid just 17 percent in federal taxes. It socked away another $74 billion offshore and tax-free.
Who covers the difference when Apple pretends to be Irish? That would be you.
9. How to lower your taxes by sitting on your ass. Back in the 1970s, "hard work" wasn't just something candidates yammered during campaigns. It was actually imbedded in the tax code. Capital gains — investment income created by things like stock dividends — were taxed at a higher rate than wage income for a very simple reason.
"The theory was that it was tougher to dig a ditch than to watch somebody do it," says Robert McIntyre, director of Citizens for Tax Justice.
Even Ronald Reagan knew that someone shouldn't pay less for sitting on his ass. He made the capital gains tax the same as the highest personal rate.
But heavy protection payments have since whittled that notion of "hard work" down to a toothpick. George W. Bush finally hacked it to its current low of just 15 percent.
Officially, the theory is that lowering capital gains will spur investment, creating new companies, new jobs, and prosperity for all. But most economists have found it does little to spur savings and investment.
What it does do is deliver a fortune to investment bankers and financiers like Romney and Warren Buffett, both of whom pay lower rates than their secretaries.
Of the $100 billion this costs the government each year, nearly 40 percent goes to just the 400 highest-income Americans.
Congressman Sander Levin (D-Michigan) has tried to shear this golden lamb by requiring those taking capital gains breaks to prove they actually invested. Yet Congressman Dave Camp, a Michigan Republican and chairman of the House Ways & Means Committee, has blocked the bill from ever coming up for a vote.
It's probably just coincidence that since Camp entered Congress in 1998, he's taken a whopping $631,916 from the financial industry. Camp did not respond to repeated interview requests.
8. The Sheryl Crow loophole. It pays to have low friends in high places. Six years ago, legislators from Tennessee, Kentucky, and Texas wanted to reward those who provide the star power to their fundraisers: country musicians. So they passed a law allowing songwriters to avoid income taxes and sell their publishing catalogs at capital gains rates.
Suddenly, Nashville's elite could not only avoid the taxes everyone else must pay; they could also skirt their Social Security and Medicare bills.
Three years later, Sheryl Crow sold her publishing rights to one of Australia's largest banks for nearly $10 million. Her estimated savings courtesy of this congressional giveaway: $2 million.
The law, however, curiously omitted other creative types who weren't hosting congressmen's rallies. Authors, for example, still must pay standard income taxes for selling the copyrights to their books. The same goes for painters, photographers, screenwriters and sculptors.
7. Getting rich, Facebook-style. Before Facebook offered its first publicly sold stock in May, CEO Mark Zuckerberg grabbed 120 shares for himself, then threw another 67 million shares to his employees.
It may have seemed an unusual act of generosity for a man not known for his grace. That's because it was also a multibillion-dollar tax scam.
The public paid $38 a share for Facebook stock in initial trading. Yet via a sweet little loophole created by Congress, Zuckerberg claimed the shares he gave employees were worth just six cents a piece. By law, Facebook was allowed to deduct the difference — over $7 billion — as a business expense.
In reality, the employee giveaway cost Facebook nothing. It neither expanded the company's expenses nor increased its liabilities. McIntyre compares it to an airline letting workers fly free in seats that would otherwise have been empty. The airlines don't receive a break because it doesn't cost them anything.
But thanks to some inventive paper shuffling, Facebook will receive a $500 million tax refund next year.
A similar loophole encourages companies to offer executives those bloated compensation packages.
When CEO wages began to spur outrage in the early Clinton years, Congress decided that companies could no longer deduct executive salaries over $1 million as a business expense.
But it also created a loophole that rendered its crackdown meaningless. Exempted were "performance-based" bonuses that surpass that $1 million threshold. A grand new corporate giveaway was born.
Suddenly, CEOs were being slathered with stock options. Companies expensed the giveaway without ever opening their wallets, leaving taxpayers to subsidize caviar compensation plans.
Last year, the five highest-paid CEOs collectively took home $232 million — while their companies received a tidy $81 million in tax breaks.
6. My other home's a yacht. Established in 1913, the mortgage interest deduction is one of the oldest and most sacred breaks in the code. It's meant to encourage home ownership and stabilize communities.
It doesn't really work, since most people will buy homes whether they receive a break or not. Countries like Australia and Canada have similar ownership rates to ours without offering the deduction.
But at least congressmen back in 1913 occasionally tried to do something beneficial to the country. Today's Washington is more interested in exploiting such beneficence. Take the yacht deduction.
The luxury sailing industry was able to buy its way into the mortgage break when Congress officially declared boats as homes. But not just any boat. The rules require they have sleeping quarters, a kitchen, and toilet, leaving just 3 percent of U.S. boat owners to qualify.
Romney claims he will keep the richest in America paying Sixty Percent?
Romney pays what less than Fourteen Percent?
Right Romney we don't think your Lying.
Sorry Romney I am a Hard Working American, you know, one of the Forty-Seven Percent you don't care about.
Romney provides no discussion or answers for the urgent issue of the day - the broken criminal justice system that is devouring America.
2012 Sundance Docs Pt.1 - Eugene Jarecki "The House I Live In" starts at 24:45 min. mark) and Kirby Dick (The Invisible War) - YouTube
If Flipflopper Mitt gets in we the middleclass will have to support his rich friends so our taxes go up while the rest sat on lazy behinds
The biggest tax loophole that needs to be closed is to start requiring people on all public assistance to pay their fair share of taxes. For example, if somebody gets $600 a month in Section 8 housing payments and another $300 in food stamps, that is $900 a month in taxable income that must be paid because if my job only paid me that same amount I would have to pay taxes.
Presidents are limited to what they can do on their own; they need Congress and the House of Representatives approval to get things done. Oboma doesn’t appear to know how lead or to work together; and remember that Barack Hussein Obama has increased taxes by 2 trillion dollars and increased the national debt by 6.5 trillion dollar in only 4 years. Even bumbling Bush didn’t do that much damage in 8 years. Mitt Romney says: this is what I plan on doing. He will meet with the Democrats and Republicans and together they will work out how to accomplish what he wants to do. There is going to have to be changes to the social programs and nations spending. The government can’t keep giving out more than it takes in. The Democrats do not appear to understand that if they keep this up, soon there will be nothing left to give away. We will be totally bankrupt and owned by China, wait and see how much free cheese you get when China is running the U.S.A.
Barack Hussein Obama has been a very destructive force to the U.S. economy; he has already added 6.5 Trillion dollars to the national debt. If by chance he gets re-elected and then he doubles the national debt. It will be too late to say…Oops! Beware of the Enemy from within!!
Now don't let me hear you liberals complain about tax loopholes because you people are the ones who want to exploit them. If the Republicans want to close any loophole you complain but yet if you try to close it it is okay? You don't really want any loopholes closed, you just act like you do. The biggest loophole that must be closed is anchor babies, welfare and public assistance. Time to put a stop to all of them.
The author confuses the mortgage deduction with the taxpayer subsidizing the underlying home (or yacht). The mortgage interest deduction subsidizes the cost of a loan not the house (or yacht). If Steve Ballmer paid cash for his $200M yacht he gets no mortgage interest deduction and if he financed the entire $200M he runs up against the $1M max.
Then there is the matter of the mortgage interest deduction phasing out for people with an adjusted gross income > $166K. Since Steve makes far in excess of $166K he probably faces the maximum reduction of 80% of his itemized deductions so for that $200M mortgage on his $200M yacht he would get the same mortgage interest deduction as someone making < $166K who owned a $200,000 house.
So much for the taxpayers subsidizing that $200M yacht.
If this were a creative writing class I'd say you get an A+ for imagination and nonsensical comparisons! For example the $500 per week unemployed electricians taxable income compared to $120 million tax incentive for building a stadium.
The taxes due on $500 per week or $26,000 per year with zero deductions and zero dependents filing single equals $2006 or 7.7% of their gross income. The $500 per week is money in his pocket and he doesn't have to do anything for it. He doesn't have to pay any employees or take any risk of any kind other than not being able to find a job when the benefits run out.
The stadium deal is not money in the team owners pocket. The stadium is owned by the City of Oklahoma City and it also plays host to major concerts, family and social events, conventions, ice shows, civic events and sporting events from local universities and high schools.
The team actually pays rent to use the stadium and the residents of the city actually voted to increase their sales tax 1% to pay for the renovations.
Again it's not income or cash in the team owners pocket merely a place for his team to play that they rent.
I'm sure this logic is lost on you and a complete waste of my time. There are many more examples in your article that are possibly technically correct but in truth the outcome is much different that you write.
Although the core of your article is right on the money... the tax laws are ridiculous at best stupid at worst.
My question is this... What's it got to do with Romney? He hasn't been the one writing the tax laws in this country!!! For you to even suggest that he or any other politician including the current president can single-handedly change the tax code is moronic!
Current party in charge couldn't do it when they controlled the office of the President, The House and The Senate. Maybe I should say they wouldn't do it. The truth is there is very little incentive for the congress to make the changes we all want because we don't hold them accountable for much in most cases.
Go out and ask any ten people on the street and see it they can name our 2 senators and 8 representatives. My bet is most don't even know how many we have much less which party they represent or how they vote on any issue.
In my humble opinion it's lame journalism to link anyone Romney included to this article. But then I guess you gotta get your shots in justified or not!
Good luck with this one... I have a feeling it's going down to the wire!
@ghostme15 Romney's 47% is the "easy" pickings for the mass industrial prison complex that is America -- #1 Jailer in the World -- a shameful and immoral condition in the "land of the free" (a myth).
@kerry.penn Have been watching President Obama with New Jersey Governor Christy touring the devastation by Hurricane Sandy. Looks like the President got FEMA in action to help the people.
@kerry.penn GOP troll.
Have you ever considered gettig a "JOB"............................LOL
Oh that is BS that taxpayers are not subsidizing that yacht. Sure IF he paid cash for it we would not be subsidizing it, but he didn't and with the tax loophole being in existence it's an incentive to finance it that people will take.
Your second paragraph is just as much BS. Ok, he makes enough to force him into the same mortgage interest deduction as someone making >$166k who owned a $200,000 house but it's still taxpayers subsidizing a $200M yacht no matter how you slice it. Just because he is paying the same as anyone else would is not the point. The taxpayer IS subsidizing that yacht.
You are really picking at straws in an attempt to spin this but it's just not working.
@HermanBernstein I have a good job. Do you have one?
@Flyer9753 How much welfare do you cost the taxpayers?
@Flyer9753 No, it is taxpayer's subsidizing the interest on a $200,000 loan.
Not a $200,000,000 yacht.
In fact no different than if he bought a $200,000 vacation home and financed it. Exactly the same size deduction.
But it sure sounds impressive to say $200M yacht. Wow! Steve Ballmer is getting a tax break on a $200M yacht, oh my! Yep, at 4% interest it would knock $8000 off his income and save him maybe $3000 on his tax bill.
No different than the tax deduction you get on a $200,000 loan on your house.
Sucking Joe Arpaio's Johnson is not a real job.
hmmm... let's see... I have owned my own business since 1992, I started it entirely with my own funds, no loans. We have been profitable since 1995 and employ 22 full time employees all of them with profit sharing and health care.
I have never taken any welfare assistance, nor student loans or tuition assistance or anything else. I bought my house for cash.
So the answer is none.
How much welfare do you cost the taxpayer?
Tomato, tomato and exactly what is wrong with this country.