According to an article in The Star yesterday, from an article in Bloomberg News (ironically enough), 5 days earlier, more and more high-earning Americans are avoiding income tax altogether. (I say ironically enough because Bloomberg News is rather famously owned by the uber-wealthy billionaire Michael Bloomberg).
The article:
IRS Finds One In 189 High Earners Paid No 2009 U.S. Tax
The percentage of U.S. taxpayers reporting adjusted gross income exceeding $200,000 who paid no U.S. income taxes increased in 2009 to 0.53 percent from 0.51 percent, meaning that one in 189 high earners avoided taxation, an Internal Revenue Service study found.
My point in mentioning this today is not to rail against the wealthy who are, more and more, escaping and evading taxes altogether but to ask the rather salient and altogether appropriate question--doesn't it make sense that we have a national "minimum tax" for both individuals and corporations so that these wealthy people can and do pay their extremely fair share for a) being in America and b) having access to all the benefits therein like our schools, sewer systems, air traffic, all other infrastructure and--maybe most important of all, our markets?
Doesn't this make sense?
I'd propose that it kick in when people make over, say, $200,000 or $250,000 annually and when corporations do the same. (This might have to be tweaked for the corporations, I'm not a tax expert).
It's just logical.
First of all, they can afford it and second, it really is their duty to pay at least SOME taxes in order to enjoy--and maintain--all we have here. And by "some", I mean a 20% minimum. That's still a bargain.
No more skipping out totally on taxes. It's the right thing for them and for the nation. No matter how many deductions you pull out of your hat, there's a 20% minimum income tax.
Someone needs to propose such a thing.
And please, whatever you do, don't tell me it punishes success.
Don't even.
Link to original story: http://www.bloomberg.com/news/2012-05-29/irs-finds-one-in-189-high-earners-paid-no-2009-u-s-tax.html
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7 comments:
Deductions and tax credits should stand or fail on their own--they are either a good idea and worth the loss of tax revenue, or they aren't--it shouldn't matter where the revenue comes from.
And if you say that businesses can only deduct 20%--is that of revenue or income? If it is of income, how will you be distinguishing income from revenue?
You read me wrong. I'm not saying businesses can only deduct 20% of either revenue or income. I'm saying, no matter what they deduct, they pay a minimum of 20% in taxes--I'd say of income. That way they can deduct all they want, sure, legally, but they'll still pay this minimum.
It's still a low rate and they should have to pay, again, for being here--out of patriotism and duty, if nothing else--but also for access to our markets and to support the infrastructure a good, working economy and nation needs.
MR
I didn't say that right--I meant businesses can only take enough deductions to reach 20%.
The question remains--how do you propose to distinguish income vs revenue?
When a company sells $1000 worth of office furniture--do you want them to pay $200 in taxes? Or can they deduct the wholesale cost of the furniture? The salary of the salesman? The mileage on his SUV? The cost of the warehouse? Advertising?
At what point do these deductions go from legitimate deductions for business expenses to 'not paying their fair share'?
I don't think it is possible to distinguish whether a deduction comes from income or revenue.
You seem to be complicating things to make it easier to say no.
20% of income, period.
If I sell $5,000,000 of furniture and my profit is 30%, that is $1,500,000. I would pay $300,000 in taxes, period.
That's fair. I contend that's very fair, with history as my verification.
If you sell 5,000,000 of furniture that cost you 2,500,000--what is your profit?
Should have predicted silence here.
Obviously you have to factor in other expenses beyond the wholesale price of the merchandise to come up with profit--advertising, salaries, warehousing, office space, transportation, etc.
Net profit, gross profit, net income and gross income are all different, and all calculated by starting with total revenue and deducting different things.
You want business to pay at least 20% of something, you admit that maybe it shouldn't be revenue--So which deductions from revenue count, and which ones don't?
I thought we were, for all practical purposes, done with the conversation, that's all.
I'm saying a base 20% tax on all profit, after expenses, that's all. We all need to pay for the privilege of being here and living in the country. Isn't that a good, patriotic, right thing to do? How else do we afford good schools, infrastructure, etc? Shouldn't GE and all other companies have to pay at least something in order to access our markets?
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