Tag: taxes

From a New York Times profile of how multibillionaire heir and man-of-leisure Ronald Lauder avoid paying taxes on his income.

The tax burden on the nation’s superelite has steadily declined in recent decades, according to a sliver of data released annually by the I.R.S. The effective federal income tax rate for the 400 wealthiest taxpayers, representing the top 0.000258 percent, fell from about 30 percent in 1995 to 18 percent in 2008, the most recent data available.

And the economy tanked.

“There’s real truth to the idea that the tax code for the 1 percent is different from the tax code for the 99 percent,” said Victor Fleischer, a law professor at the University of Colorado. “Any taxpayer lucky enough to have appreciated property is usually put to a choice: cash out and pay some tax, or hold the property and risk the vagaries of the market. Only the truly rich can use derivatives to get the best of both worlds — lots of cash and very little risk.”

The story praises Lauder for making charitable donations of money and art to certain causes, the philanthropic way to tax avoidance. However,

“It’s admirable when people back their charitable impulses up with donations,” said Scott Klinger, tax policy director of the group Business for Shared Prosperity. “But the tax code shouldn’t allow the wealthy the kind of loopholes that let them, essentially, force other taxpayers to underwrite donations to their pet causes.”

So when you joke and mock the Occupy protesters for being a bunch of unwashed nouveau hippies with no point or direction, consider for a moment that the system is now rigged in favor of the very rich – especially those who make money from money.  When you look at the taxes withheld from your paycheck each week, or fill out your 1040 on TurboTax, remember that you pay a larger share of your income to the IRS than the superwealthy.