Record number of rich Americans paid no taxes in 2000

[superkool]

Record number of rich Americans paid no taxes in 2000



WASHINGTON (AP) - A record number of wealthy Americans paid no income taxes in 2000, the U.S. Internal Revenue Service reported Thursday.

The number is a tiny percentage of taxpayers the government considers wealthy - those who report earning $200,000 or more. A larger, but still very small group, eliminated nearly all of their tax liability using various deductions and tax advantages. The IRS found 2,328 wealthy people avoided U.S. income taxes in 2000, the most recent year for which statistics are available. That was a 45-per-cent jump compared with the previous year.

The number of high-income Americans who avoided paying taxes anywhere in the world also increased by 45 per cent to 2,022.

Those taxpayers represent a fraction of one per cent of the 2.8 million Americans who reported incomes exceeding $200,000. Those with the lowest tax bills reported less income earned through wages and salaries than those who paid more taxes.

Among the most common way the taxpayers reduced their U.S. tax bills were deductions for investment interest expenses and medical and dental expenses.

More than one-half of those who avoided paying taxes worldwide reported income from tax-exempt interest.

The percentage of taxpayers considered wealthy has grown to more than two per cent, up from 0.06 per cent in 1977 when the IRS started compiling the statistics.

[Cedwyn]

this has *nothing* to do with war

[superkool]

Dollar-for-dollar, it's true -- the rich pay most of the taxes.

"But this is not because tax rates have gone up substantially for the rich, but because incomes have gone up much more for the rich than for the average family in the 1980s and 1990s," writes Bernard Wasow in a release from The Century Foundation.

"In 2001, the wealthiest one percent earned more than 18 percent of total pretax income and paid 25.1 percent of all federal taxes," Citizens for Tax Justice reports. "By 2010, under the already scheduled Bush tax cuts, the top one percent's share of all federal taxes is slated to fall to 23.9 percent, only slightly above the group's expected share of total income, which will exceed 18.9 percent." In other words, as their slice of the wealth pie grows, the richest Americans' tax burden is not keeping pace -- the more they make, the lower percent of their income they pay in taxes.

State and local taxes hit the poor and middle class much harder than the wealthy, according to a study released on January 7 by the Institute on Taxation and Economic Policy. "Nationwide, middle-income families pay almost 10 percent of their earnings in state and local taxes and poor families pay more than 11 percent," the report says. "But the richest people effectively pay only 5.2 percent of their income in state and local taxes."

Facts like these invite advocates of progressive taxation to press the cause in public debate and retake ground long ceded to the flattaxers and supplysiders. But first, they should read a column by David Brooks, a reasonable conservative voice among the many shrill, from the Jan. 9 New York Times.

Brooks asks, "Why don't more Americans want to distribute more wealth down to people like themselves?" His answer boils down to every American wants to be rich so attacking the rich gets you nowhere.

In rendering that conclusion, Brooks outlines the challenge for advocates of progressive taxation. They must understand "that you can run against rich people, but only those who have betrayed the ideal of fair competition. You have to be more hopeful and growth-oriented than your opponent, and you cannot imply that we are a nation tragically and permanently divided by income."

All that can be done. The president has overreached. His policies will create a few real winners and many more losers. As they say at the Pentagon, it's a "target-rich environment" -- time to muster facts and history and blow some supply side myths out of the water.

[Mike S]

Originally posted by Cedwyn
this has *nothing* to do with war

Hi Cedwyn

I think this section is being changed to "politics".

MS