US Federal Income Taxes

[airboy]

Due date for US Federal Income Taxes was today.

My taxes were a quarter of an inch (or more) thick this year.  This is just the filing.  It includes tax returns for two States and my Federal Taxes.

Almost half of US Households (>45%) pay no Federal Income Taxes.

The top 1% of US taxpayers (remember 45% of households have already been omittted) paid 38% of total Federal Income Taxes.
Top 5% paid 59%.  Top 10% paid 70% of total Federal Income Taxes.

Bottom 50% of all US Households who actually paid Federal Taxes paid 2.8% of total Federal taxes paid.  This number omits those who did not even pay Federal Taxes.

Source: http://taxfoundation.org/sites/taxfoundation.org/files/docs/FF445.pdf
Latest data released by the IRS is 2012.

You can make of this what you will.  But the Federal Government runs massive annual deficits.  45% of households pay no Federal Income Taxes.  And a very small percentage of those paying taxes foot almost the entire bill.

[MetalDog]

Is there some other way to get that tax money, outside of making everyone qualify to pay Federal tax?  What about the tax paid on things you buy?  Or your payroll tax?  The government may not get my Federal tax, but enough of what I make goes through other hands than mine.  And in many cases, I am sure the government gets a cut.

[Con]

Well you should become a corporation then you wouldnt have to pay taxes either....remember corporations are people too

http://money.cnn.com/2016/04/13/pf/taxes/gao-corporate-taxes/

And even when they do pay taxes their creative but legal accounting get them to around ~25% total tax

http://www.huffingtonpost.com/entry/biggest-corporations-hiding-over-trillion-overseas_us_57100f97e4b0060ccda2c625

Its good to be in business in the US where the middle class is subsidizing these companies with tax dollars!
Worst offenders (I know this is a candidates website but hopefully this will be taken as information only).
http://www.sanders.senate.gov/top-10-corporate-tax-avoiders

Con

[Labbug]

Well you should become a corporation then you wouldnt have to pay taxes either....remember corporations are people too

http://money.cnn.com/2016/04/13/pf/taxes/gao-corporate-taxes/

And even when they do pay taxes their creative but legal accounting get them to around ~25% total tax

http://www.huffingtonpost.com/entry/biggest-corporations-hiding-over-trillion-overseas_us_57100f97e4b0060ccda2c625

Its good to be in business in the US where the middle class is subsidizing these companies with tax dollars!
Worst offenders (I know this is a candidates website but hopefully this will be taken as information only).
http://www.sanders.senate.gov/top-10-corporate-tax-avoiders



There is another way of looking at this in that if US corporations reflected the US tax paying population only 1 in 2 would be paying any income tax.

Con

[Sir Slash]

B. Sanders pays only 13.5%. They must have some good CPA's in Vermont.  :-X

[Toonces]

I'm a big fan of that postcard-sized flat tax thingy.

I don't care if you don't make much money.  Pay up, just like the rest of us dammit.

[mirth]

I'm on board with a flat tax. Everyone pays. No exemptions.

[OJsDad]

Its good to be in business in the US where the middle class is subsidizing these companies with tax dollars!
Worst offenders (I know this is a candidates website but hopefully this will be taken as information only).
http://www.sanders.senate.gov/top-10-corporate-tax-avoiders

Con

GE is at the top of Bernies list, the problem is that it's not accurate;

http://www.factcheck.org/2012/04/warren-ge-pays-no-taxes/

Massachusetts Senate candidate Elizabeth Warren evoked corporate tax punching bag General Electric Co. in a recent ad, claiming the corporate giant pays "nothing – zero – in taxes" to make a point about misplaced values. But that's not accurate.

We should preface this by saying that we are wading into a heated media debate about the amount of taxes paid by GE, and the most crucial number — the amount paid in corporate income tax — is unknown.

This much is certain: As the New York Times and others have well documented, GE has employed a number of aggressive (and legal) strategies that have greatly reduced the company's corporate tax burden.

But the claim that it pays no federal income tax at all is disputed by GE. Moreover, aside from corporate income taxes, GE pays payroll taxes, state taxes and local taxes. So Warren's blanket assertion that GE pays "nothing – zero – in taxes" is simply inaccurate.

Warren, a Democrat running against incumbent Republican Massachusetts Sen. Scott Brown, says in her ad, "Today, Washington lets big corporations like GE pay nothing – zero – in taxes, while kids are left drowning in debt to get an education. This isn't about economics; it's about our values."

The claim about GE paying no taxes stems from a March 24, 2011, story in the New York Times headlined "GE's Strategies Let It Avoid Taxes Altogether." It was part of a 2012 Pulitzer Prize-winning series titled "But Nobody Pays That" by David Kocieniewski.

According to the New York Times story, GE reported U.S. profits of $5.1 billion in 2010 (and $14.2 billion worldwide). "Its American tax bill?" asked the Times. "None. In fact, G.E. claimed a tax benefit of $3.2 billion." The company accomplished this, the story said, due to "an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore."

On April 4, 2011, Pro Publica and Fortune co-published their own analysis of GE's taxes and concluded that the New York Times had left the mistaken impression that GE got a $3.2 billion tax refund, when, in fact, it did not. The company also paid U.S. income taxes in 2010, the authors wrote.


Pro Publica/Fortune, April 4, 2011: Did GE pay U.S. income taxes in 2010? Yes, it paid estimated taxes for 2010, and also made payments for previous years. Think of it as your having paid withholding taxes on your salary in 2010, and sending the IRS a check on April 15, 2010, covering your balance owed for 2009.

GE chief spokesman Gary Sheffer told Pro Publica: "We expect to have a small U.S. income tax liability for 2010." How much? The company wouldn't say.

We emailed one of the story's authors, Jeff Gerth of Pro Publica, a former investigative journalist with the New York Times, and asked him about Warren's claim. Here's what he wrote back:


Gerth, April 23: The fact is that GE's tax returns are not public. The basis for the statement that they paid a small amount of taxes is the company's official statements to the press. The basis for the NYT's original report that they paid no taxes was a reading of their financial statements, which are not the same as their tax returns. I don't know where Warren gets her facts from.

Andrew Williams, a spokesman for GE, told us via email that "there is a lot of misinformation out there about what we pay in taxes, but at the most basic level: we pay taxes and we did not get a refund."

According to Williams, GE paid $1 billion in federal, state and local taxes in the U.S. for 2010. He declined to say how much of that was for federal income taxes, except to say that some of it was.

Williams also pointed to a company press release, from April 17, on taxes paid by GE. According to that release, GE paid an effective global tax rate of 7 percent in 2010, counting money paid "to the IRS and foreign counterparts" in other nations. That rate was particularly low, Williams said, because the company lost $32 billion in its financial business during the global financial crisis.

According to the company release, GE's effective tax rate jumped to 29 percent in 2011. The company paid $2.9 billion in worldwide corporate income tax in 2011, and another $1 billion in other U.S. taxes that year, the release states.

We asked Williams how much of the $2.9 billion in worldwide corporate taxes was paid to the U.S. government, and how much the company paid in U.S. corporate income taxes in 2010. "Like virtually all other companies, we do not break out tax data on a country by country basis," Williams said. "Instead, we disclose our worldwide payments and rates. However, we did pay federal income taxes."

We're not going to weigh in on Warren's larger point about whether corporations like GE aren't paying their fair share. That's up to voters to decide. Again, the company has clearly been aggressive in reducing its tax burden through various tax credits and deductions created by the federal government (one example is clean energy incentives). It also has been creative in moving a good deal of its profits offshore. But Warren overreached with her claim that GE pays "zero" in taxes. The company does pay payroll taxes and local and state taxes. And GE says it also pays federal income taxes. How much? We don't know, and GE isn't saying. Nor is it required to.

— Robert Farley

[Con]

Well they are obviously not paying what is perceived to be an equitable share since they are aggressively hiding the amount and proportion of taxes paid in the us 

Con

[Boggit]

I'm on board with a flat tax. Everyone pays. No exemptions.

The trouble with 'no exemptions' is that tax breaks are a tool to manipulate the economy for political reasons. You need to convince the political élite of the provenance of 'no exemptions'.

It's making people pay that is the problem. Lower down the food chain it's harder to avoid as generally the less affluent do pay their taxes, and don't get the advice to hide stuff within a balance sheet, or offshore etc.

[OJsDad]

Well they are obviously not paying what is perceived to be an equitable share since they are aggressively hiding the amount and proportion of taxes paid in the us 

Con

It doesn't matter what amount or percentage they pay, it'll never be enough in the Democrats eyes.  So it's an absolute no win for these companies to disclose the exact amount. 

[BanzaiCat]

Every so often, the argument for a federal sales tax comes up, and it makes way, way too much sense to actually be implemented by our gub'mint. The IRS is far too bloated and powerful a group to ever be done away with, though I gotta wonder if the entirety of the IRS was let go, how much in salaries that would save.

I'm sure I'm oversimplifying the federal sales tax thing, but I really think whatever it is (that, or flat tax, or some other alternate plan), it HAS to be a better alternative to this bullshit.

I've always signed up for the most deductions on my paychecks, because come tax time, we get a huge refund check - usually it was upwards of seven or eight thousand dollars. That's a lot better than paying. The last four or five years has really f*cking sucked, as that refund has been as low as $500 and upwards of $1200. This year we might get $1500 though I doubt we will. I can't help but connect this and my insurance being utter shite to the current administration, though these issues run a lot deeper than the Democrats' influence.

[Sir Slash]

I always have to pay in. I haven't gotten a refund since the 80's. My last second job was just enough to pay the increased tax rate for 2 jobs. If I actually got what I earn, I'd be in great shape. Or at least more of it. But then I'd work more and Grog less. So.....

[Nefaro]

Every so often, the argument for a federal sales tax comes up, and it makes way, way too much sense to actually be implemented by our gub'mint. The IRS is far too bloated and powerful a group to ever be done away with, though I gotta wonder if the entirety of the IRS was let go, how much in salaries that would save.

The prez added many thousands of new IRS employees a few years ago.  Maybe multiple batches IIRC, tens of thousands, since in office.

The bureaucratic bloat is only going up, as is it's tendency.  Sometimes more than others.

[airboy]

Well you should become a corporation then you wouldnt have to pay taxes either....remember corporations are people too

http://money.cnn.com/2016/04/13/pf/taxes/gao-corporate-taxes/

And even when they do pay taxes their creative but legal accounting get them to around ~25% total tax

http://www.huffingtonpost.com/entry/biggest-corporations-hiding-over-trillion-overseas_us_57100f97e4b0060ccda2c625

Its good to be in business in the US where the middle class is subsidizing these companies with tax dollars!
Worst offenders (I know this is a candidates website but hopefully this will be taken as information only).
http://www.sanders.senate.gov/top-10-corporate-tax-avoiders

Con

Con - some of what you quote is highly misleading.

The USA is about the only country in the world that taxes US based corporations on earnings not made in the USA.  As a result of this, and the highest corporate tax rate in the world (35%) the US has had a large number of corporations leave the US.  This hurts the US economy and also discourages US investment. 

For example, if you were a French corporation money you earned in the USA would not be taxed in France.  But a US corporation that earns money in France would be taxed in the USA if the profits ever flowed back to the USA and the stockholders.  This is the basis of the "hiding profits overseas" BS that the huffingtonpost is whining about.