Saturday, February 16, 2013

Facebook Pays ZERO Taxes, but Tips are Taxed

When we are paid an hourly wage of $7.25 an hour, it's taxed by the IRS as "earned income". If you are a waitress or a bartender and receive a tip, it's not considered a "gift" by the IRS, so it's also taxed as earned income. Since 2002 the lifetime exemption for gifts has stood at $1 million. But tips are not considered "gifts" by congress (those who write the tax code).

If we are laid off, we pay taxes on our unemployment checks; but if someone like Paris Hilton receives a $10 million inheritance from her parents, it's exempt from all inheritance taxes.

Corporations can write off billion-dollar salaries that are paid as stock options and dividends to their executive directors, and they call it "payroll".

Facebook is getting a multi-billion-dollar tax cut for paying co-founders like Eduardo Saverin, who renounced his U.S. citizenship to avoid paying income taxes on his capital gains...income he made from stock options and dividends.

But if I cheat on my taxes (by not reporting all my tips), I can have a lien put on my house, have my bank account frozen, have my wages garnished, and maybe even go to jail.

But tax evaders with Swiss bank accounts are offered "amnesty" -- and dummy-corporations can exist in the Cayman Islands to legally avoid taxes.

It's no wonder that the top 1% captured 121% of all income gains from 2009 to 2011.

And when everyone else was still paying taxes while losing their jobs, their homes, their cars, their savings, their spouses, and even their lives --- some members in congress were evading their income taxes and living large on someone else's money.

We can't reform the tax code until congress first reforms itself, but as we've seen with the filibuster, congress is perfectly happy with the current status quo.

John Stossel on Fox News says, "Facebook isn't doing anything wrong, they're just obeying the law."

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