Mon Dec 12, 2011 2:5PM GMT
The U.S. government is deeply dependent on tax revenues to reduce its $1.3 trillion budget deficit. However, the super rich in America are not paying their fair share of taxes.
Tax Inequality
More than 1,400 millionaires paid no U.S. income taxes in 2009, according to an August 2011 report from the Internal Revenue Service. Huffington Post
Twenty five percent of all American millionaires pay a smaller percentage of their income taxes than millions of middle class households. Huffington Post
The top 400 earners in the U.S. paid an average tax rate of only 18 percent. Bloomberg
Billionaires aren't the only ones that use loopholes to pay lower taxes. Thirty of America's most profitable corporations used rules like the "active financing exception" -- allowing corporations to sidestep paying taxes on overseas profits if they were derived by "actively financing" some activity or deal -- to pay less than zero in income taxes. Center for Tax Justice
280 most profitable U.S. corporations sheltered half their profits from taxes between 2008 and 2010. Citizens for Tax Justice
A 2011 report issued by Citizens for Tax Justice and the Institution on Taxation and Economic Policy suggest many of the largest U.S. corporations use loopholes and pay lobbyists to significantly reduce the amount of corporate income tax they pay. True Tax Facts
Of WIN America's 58 big firms - led by Citigroup, Hewlett-Packard, Bank of America, Pfizer, Merck, Verizon, Ford, Caterpillar, Dow Chemical, and DuPont -- 43 registered profits every single year through Great Recession hard times while evading taxes.
Lobbying for Tax Cuts
A 2011 study, which examined 280 companies that were profitable for all three years between 2008 and 2010, suggests that inefficiencies of the tax code, using tax loopholes and lobbyist influence have reduced the amount of corporate tax they pay from 35% to 18.5%. True Tax Facts
At the root of the tax evasion problem in America is a system of inverted incentives that encourages corporations to lobby for special tax breaks - and politicians to insert them into the tax code. True Tax Facts
U.S. corporations pay lobbyists. Lobbyists convince lawmakers to add tax breaks. Lawmakers modify the tax code. True Tax Facts
As Head of Americans for Tax Reform since 1986, Grover Norquist has transformed a single issue - preventing tax hikes - into one of the key platforms of the Republican Party. Norquist's biggest coup was getting more than 270 members of Congress, and nearly all of the 2012 Republican presidential primary candidates, to sign a pledge promising never to vote to raise taxes. The pledge will be hindering a solution to America's debt crisis. CBS News
In November 2011, Grover Norquist defended the effectiveness of his anti-tax pledge, and predicted it will help Republicans retain control of the House of Representatives for the next decade. He said the 25-year-old, one-sentence pledge signed by politicians, offers "credibility" to anti-tax promises. US News
WIN America group which includes 18 major corporations and 24 trade associations spent a remarkable $50 million on their “tax holiday” campaign during 2011 by hiring at least 160 lobbyists. Institute for Policy Studies
During 2011, in an attempt to get a "tax holiday" proposal into law, WIN America hired at least 60 former staffers of congressional leaders - with 42 of those formerly employed at the House Ways and Means and Senate Finance Committees, the two panels that write up all America's tax laws. Institute for Policy Studies
A 2004 tax holiday handed 843 U.S. companies a tax break that cost the U.S. Treasury $92 billion. What did American taxpayers get back? Not much. Most of the firms that claimed a tax holiday in 2004 went on to reduce their workforces - almost 600,000. Institute for Policy Studies
Tax Laws
A U.S. debt deal reached in August 2011 in Congress did not include a tax increase on the American rich due to the opposition from Republicans. Reuters
The U.S. Congress and President Barack Obama approved an $858 billion tax deal in December 2010 that critics say added to the budget deficit. Obama Stimulus Benefits
Some economists say extending the tax cuts for the wealthy in the 2010 law will cost about $80 billion by the end of 2012. American Progress
More than half of the total benefit from the tax cuts in 2010 alone accrued solely to the richest 5 percent of Americans with the middle 20 percent of Americans reaping only 7 percent of the benefit. American Progress
Payroll Tax
Payroll tax generally refers to two different kinds of similar taxes. The first kind is a tax that employers are required to withhold from employees' wages, also known as withholding tax and the second kind is a tax that is paid from the employer's own funds and that is directly related to employing a worker, which can consist of a fixed charge or be proportionally linked to an employee's pay.
Democratic and Republican lawmakers are trying to reach a deal over a temporary payroll tax cut that is set to expire at the end of December 2011. CBS News
The Obama administration says the Social Security payroll tax cut is projected to cost about $112 billion in 2012. The administration says the money that would have gone to the trust fund would be made up from general revenues, with "no effect on individuals' current or future Social Security benefits." CNN
Social Security paid out $712 billion in benefits and took in $663 billion in taxes in 2010, leaving it with a revenue shortfall of $49 billion. That's according to figures released in August by the system's trustees. But interest on its trust fund added another $117 billion, bringing the trust fund's total balance to $2.6 trillion. CNN
Under current projections, the trust fund -- created in the 1980s to prepare for the retirement of the Baby Boom generation -- will run out in 2036, the trustees reported in May. At that point, the remaining income will pay about 77% of scheduled benefits. CNN
Republican presidential candidate Rep. Michele Bachmann warned in December 2011 that the Social Security payroll tax cut "blew a hole" in the trust fund. Supporters of the tax cut says Bachmann is correct in saying the payroll tax cut will require a transfer from the Treasury to replace the money that would have otherwise gone to the Social Security trust fund. But she's mistaken when she says there's not enough money in the trust fund to cover current benefits. CNN
The Democratic plan on payroll tax cut extension in December 2011 would give a worker earning $50,000 a more than $1,500 tax cut; the GOP plan would provide a $1,000 tax cut for such an earner. A two-income family making $200,000 would reap a $6,000-plus tax cut under the Democratic plan and a $4,000 tax cut under the GOP version. Boston.com
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