Deductions and exemptions in the US Tax Code have allowed approximately 21,000 wealthy Americans, including billionaires, to avoid paying ANY income tax to the US government!
How can one avoid paying taxes?
Donations to charity
Earning income overseas
Writing off doctor bills
Investing in state and local governments
This number, 21,000, is only one half of one percent of the 4 million taxpayers who make up the top 3 percent. So no one is saying that the wealthy do not pay taxes, as a group, but many pay only what Mitt Romney pays, less than 15 percent, because they do not work for a living, and instead make their income primarily on investments.
Altogether, about 3 million people who earn more than $50,000 pay no federal income taxes, while 56 million Americans who earn less than $50,000 avoid federal income taxes.
While there is a lot of anger about the 56 million, realize most of these people make so little, far less than $25,000 for most, and continue to pay medicare and social security taxes and sales and property taxes, and cannot make ends meet as it is, while the 21,000 who are wealthy and avoid taxes could contribute a decent percentage of their income, but have lawyers and accountants to avoid their responsibilities!
There is a dire need to crack down on tax avoiders, but it will not happen under a President Romney, and in fact, will only get worse if the former Massachusetts Governor is elected President, while the poor and working class will actually have more taken from them, when they already have so little!
Arcane tax breaks like carried interest are relatively new and, in essence, fund companies like Bain only risk other people’s money.
If they make those other people a profit, they get a performance fee on top of their normal fees. The performance fee is the “carried interest”.
Can’t understand why this is not treated as ordinary income, but taxed at the 15% dividend and capital gains. This is not like risking your own money.