Taxing the Rich

"Operating largely out of public view — in tax court, through arcane legislative provisions and in private negotiations with the Internal Revenue Service — the wealthy have used their influence to steadily whittle away at the government’s ability to tax them. ... Whatever tax rates Congress sets, the actual rates paid by the ultra-wealthy tend to fall over time as they exploit their numerous advantages. ... Having helped foster an alternative tax system, wealthy Americans have been aggressive in defending it. ... Having helped foster an alternative tax system, wealthy Americans have been aggressive in defending it. ... After all the loopholes and all the lobbying, what remains of the government’s ability to collect taxes from the wealthy runs up against one final hurdle: the crisis facing the I.R.S. ... Between 2010, the year before Republicans took control of the House of Representatives, and 2014, the I.R.S. budget dropped by almost $2 billion in real terms, or nearly 15 percent. That has forced it to shed about 5,000 high-level enforcement positions out of about 23,000, according to the agency."
- Noam Scheiber and Patricia Cohen, For the Wealthiest, a Private Tax System That Saves Them Billions, NYT, Dec. 29, 2015

"One reason is that our political system is increasingly driven by money: Tycoons can’t quite buy politicians, but they can lease them. Elected officials are hamsters on a wheel, always desperately raising money for the next election. And the donors who matter most are a small group; just 158 families and the companies they control donated almost half the money for the early stages of the presidential campaign.

That in turn is why the tax code is full of loopholes that benefit the wealthy. This is why you get accelerated depreciation for buying a private plane. It’s why the wealthiest 400 American taxpayers (all with income of more than $100 million) ended up paying an average federal tax rate of less than 23 percent for 2013, and less than 17 percent the year before."
- Nicholas Kristoff, America the Unfair?, NYT, Jan. 21, 2016

... France's unwieldy administration, a patchwork of provinces, municipalities, judicial territories and bishoprics... had grown steadily more complicated and arcane. Nothing, in fact, was more bewildering than the absurd array of taxes, both direct and indirect, shot through with anomalies, and from which the nobility and clergy were largely exempt.
- Caroline Moorhead, Dancing to the Precipice, HarperCollins, 2009, p. 10, describing pre-revolutionary France

It is a club that includes some of the world’s richest people. There are dukes, sheikhs, flamboyant entrepreneurs — even Queen Elizabeth II and other members of the royal family.

What they have in common besides ownership of some of Britain’s finest estates... is their legal status as farmers, which means they are on the dole for European Union farm subsidies.

The queen’s idyllic 20,000-acre estate at Sandringham is among the huge holdings supported by the annual payouts....

At a time when even the Conservatives... have declared war on the growing wealth inequality and the inequities of capitalism, there is a rising clamor to stop, or at least curb, the handouts to the titled, and entitled.
- STEPHEN CASTLE, ‘Brexit’ Threatens Subsidies for U.K.’s Landed Gentry, and Queen, NYT, SEPT. 3, 2017

But most of the wealth they acquire is not taxed as income. This situation — generous exclusions from income taxes combined with easy evasion of estate and gift taxes — has given the wealthiest a free pass on the costs of running the country. ...
Jeff Bezos, the founder of Amazon, is the ultimate example of the successful entrepreneur. With wealth topping $160 billion, Mr. Bezos is not only the wealthiest American, but is also estimated to be the richest person in the world.

This enormous wealth has not resulted in much in the form of income taxes. Unlike many European countries, the United States does not tax the value of a person’s property; income taxes are due only if Mr. Bezos sells his stock. Mr. Bezos need not sell his stock in order to enjoy its value, because the tax rules allow him to borrow against the stock tax-free. Most troubling, Mr. Bezos and his family can avoid all income taxes on the growth in the value of his stock by holding it until his death. His heirs will then be treated as if they had purchased the stock at its market price, allowing them to sell it without owing any income tax.
- Ray D. Madoff, Trump and the Failure of the American Tax System, NYT, Oct. 11, 2018

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