Sunday, February 5, 2012

The 99% doesn't dodge taxes, the 1% does

A dissertation written in 2005 by Valentin Estévez at the University of Chicago found that “under Democratic presidencies the audit rate of income tax returns is higher than under Republican presidencies" and "'during Democratic presidencies the I.R.S. tends to audit fewer individual returns and more corporate returns than during Republican presidencies.”

The more one earns, the more likely they are to dodge taxes. Most of us have our taxes deducted from our paychecks and are limited as to our deductions that won't raise a red flag with the IRS.

Five years ago, the last time the IRS released a major tax evasion analysis, two analysts — IRS economist Andrew Johns and the University of Michigan’s Joel Slemrod — went through the raw IRS data and found that Americans who make between $500,000 and $1 million a year under-report their incomes by a whopping 21 percent, triple the 7 percent “misreport” rate of taxpayers making between $30,000 and $50,000, and well over double the 8 percent cheating by taxpayers making $50,000 to $100,000.

Earlier this month, the IRS announced that audit rates on tax returns reporting over $1 million a year in income have doubled over recent years. In 2011, 12 percent of millionaires faced audits, up from only 6 percent in 2009.

Any tax system that subjects rich people to high taxes is asking for trouble...or so the politicians who cater to people of means incessantly argue. The higher the tax rate on high incomes, the argument goes, the greater the incentive the rich have to waste time and energy figuring out ways to evade paying taxes.

“Conservatives tend to talk about noncompliance as if it were solely a function of tax rates,” as former Reagan administration policy aide Bruce Bartlett noted last week, a perspective that makes tax evasion “yet another excuse to cut taxes.”

If the rich politicians, bankers, and CEOs like Mitt Romney are going to evade taxes, when tax rates for the rich are already historically low, we might as well jack up the tax rates much higher.

Mitt Romney vs. the Poor

How Will Mitt Romney help the poor, when he said his focus will be on the middle-class? Most Americans are no longer "middle-class", but are now poor, or very near poor.

I'd like to know how the Republican presidential candidates such as Mitt Romney would answer this question:

"If 50% of all U.S. workers now earn less than $26,364 a year, and the poverty level for a family of four is $22,350, how can families afford their own health insurance plans when these plans averaged $414 per month in 2011, when the cost of housing, energy, and food is so high and always going higher?"

Last week during a GOP debate in Florida, Mitt Romney called these peoplefree-riders for using emergency rooms in the hospitals when they got sick or injured. Why do all the Republicans such as Mitt Romney always castigate the poor and unemployed? Because they don't want to pay their share for food stamps? Is that why they dodge taxes? To starve the poor?

* To read more about how these CEOs are rewarded for their fraudulent, deceptive, and criminal behavior (e.g. using other legal tax loopholes, government hand-outs, illegal tax evasion, etc.), see my other posts below.

More posts on Mitt Romney:

No comments:

Post a Comment