In keeping with the “American way”: A slap on the wrist for the rich and political class and punishment to the fullest extent of the law for the plantation workers of Slavelandia. On the tax front, while the IRS will destroy the lives of the peasants cheating, failing, or unable to pay taxes, the richest steal as they wish.
The top 1 percent of Americans fail to report about 21 percent of their yearly income by using sophisticated strategies available to the upper class – such as offshore tax avoidance commonly missed by audits – according to the Wall Street Journal.
The paper, citing a study by the IRS and economists at the London School of Economics, reported the top 0.1 percent’s unreported income could be twice as high as earlier believed by the agency. The University of Chicago Booth School of Business ran a report in 2014 that identified the 0.1 percent as those families that earned at least $1.5 million a year, or about 160,000 families. The top 0.01 percent, or 16,000 families, had an annual income of $7 million, the report said.
Daniel Reck, the report’s lead author, said many of these Americans have used partnerships and other entities to avoid taxes, which could be tougher for the IRS to identify:
“There is more revenue than you might have thought at the very top… What’s needed is a broader strategy that involves increased scrutiny of pass-through businesses [and] investments in the comprehensive audits that the IRS does in its global high-wealth program.”
PUBLISHER’S NOTE: Back in the 1950s, the 1 percent were taxed at a 91 percent tax rate according to a study by Thomas Piketty/Emmanuel Saez. Today, the top 1 percent paid a 26.8-percent average individual income tax rate.
As for the 1 percent among the gambler class (i.e., hedge funds), according to Investopedia, hedge fund managers are compensated using carried interest:
“The income they receive from the fund is taxed as a return on investment as opposed to a salary or compensation for services rendered. The incentive fee is taxed at the long-term capital gains rate of 23.8%—20% on net capital gains and another 3.8% for the net income tax on investments—as opposed to ordinary income tax rates, where the top rate is 37%.
This represents significant tax savings for hedge fund managers.”
Thus, we propose the billionaire and gambler hedge-fund class be taxed at the 1950s’ 90-percent rate and all of the off-shore and other tax loopholes designed for the 1 percent to beat the system be eliminated.
