From The Cagle Post: Three trillion dollars a year. That's how much the wealthiest Americans avoid through the system of subsidies and schemes and sweet deals that deprive middle-class workers of their earned benefits. That's three times more than the deficit. That's enough for a full-time job for every middle-class household in America. Here are the distressing details:
1. Tax Expenditures: $1.25 trillion
These subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes are estimated to be worth 7.4% of the GDP, or about $1.1 trillion. They largely benefit the richest taxpayers. Business subsidies bring the total to $1.25 trillion.
But there's so much more.
2. Tax Underpayments: $450 billion
According to the IRS, 17 percent of taxes owed were not paid in 2006, leaving an underpayment of $450 billion. The largest share of that came from underreporting of income.
3. Tax Havens: up to $250 billion
(a) It's estimated that between $21 and $32 trillion is hidden offshore, untaxed.
(b) 40% of the world's richest individuals are Americans. That's $8 to $12 trillion of the total.
(c) The historical annual stock market return is 6%. That's a return of $480 to $720 billion.
(d) The 20% to 35% tax loss amounts to a minimum of $96 billion, a maximum of $252 billion.
4. Corporate Taxes: $250 billion
For over 20 years, from 1987 to 2008, corporations paid an average of 22.5% in federal taxes. Since the recession, this has dropped to 10% -- even though their profits have doubled in less than ten years. The missing 12.5% on $2 trillion in profits amounts to $250 billion a year.
5. Financial Transaction Tax (FTT): $500 billion
The absence of an FTT constitutes tax avoidance. Not a penny of sales tax is paid on U.S. financial transactions, which have been estimated at about three quadrillion dollars annually, or three thousand times the deficit. No sales tax is paid despite the high-risk nature of "flash trading" that can lose entire pension funds in a few seconds.
Just a half penny from every dollar of total U.S. financial transactions would pay off the national debt -- not just the deficit, but the whole $15 trillion debt. More conservative estimates by the Center for Economic and Policy Research and the Chicago Political Economy Group suggest FTT revenues of a half-trillion dollars annually.
6. Payroll Tax: $300 billion
This extremely regressive tax costs the richest Americans only a small fraction of what everyone else pays. If the 12.4% tax (half employer, half employee) were assessed on the full $3.84 trillion claimed by the richest 10% in 2006 (instead of on $1.43 trillion: $110,000 times 13 million payees), an additional $300 billion in revenue would have been realized.
7. Estate Tax: $100 billion
A repeal of the estate tax, which is designed to impact only the tiny percentage of Americans with multi-million dollar estates that have never been taxed, would cost the nation about $100 billion per year.
The total surpasses $3 trillion. The figures may be on the high end, and there may be some overlap, and wealthy Americans may argue that much of it is legal. But the system of loopholes and deductions and exclusions is a statement by the rich that they don't have to pay for their lopsided share of benefits, and that middle-income Americans should give up their own earned benefits to pay the country's bills.
And if tax avoidance is legal it's because the people with money have redefined 'legal.'
Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.
Dwayne "Lil Wayne" Carter
Lil Wayne had an IRS lien filed with Miami Dade County in late March 2011. The lien <a href="http://www.mtv.com/news/articles/1661259/lil-wayne-tax-lien-irs.jhtml" target="_hplink">noted</a> that Lil Wayne had unpaid income taxes amounting to $3,351,078 for 2008 and $2,258,956 for 2009.
Dent was hit with a $1,160,056 federal tax lien in March 2011. The former Chicago Bears player was elected into the Pro Football Hall of Fame one month prior.
In January 2012, Lindsay Lohan reportedly received notice from the IRS that she owed over $93,000 in unpaid taxes from 2009. According to TMZ, the actress was simply unaware of the issue.
David "Sinbad" Adkins
<a href="http://realestate.aol.com/blog/2010/02/14/feeling-heat-from-irs-sinbad-will-sell-la-home/" target="_hplink">According to AOL Real Estate</a>, Sinbad was said to owe $8.5 million to the IRS in 2010 and another $2.1 million to the state of California that year. Sinbad was named as <a href="http://www.huffingtonpost.com/2009/04/12/sinbad-taxes-embarrassmen_n_185976.html" target="_hplink">one of the state's biggest tax evaders</a> in 2009.
In 2008, former Met and Yankee Darryl Strawberry <a href="http://www.nj.com/news/index.ssf/2008/02/darryl_strawberry_agrees_to_pa.html" target="_hplink">agreed to pay</a> more than $430,000 in back taxes he owed, plus interest and penaltie, for money he neglected to pay in 1989 and 1990.
Ozzy and Sharon Osbourne
According to the IRS, Ozzy Osbourne and his wife Sharon owed $1.7 million in taxes from 2008 and 2009.
Actor Forest Whitaker <a href="http://www.bvonmoney.com/2011/03/23/forest-whitaker-having-significant-tax-problems/" target="_hplink">was hit</a> with a large tax bill last year, after failing to pay $185,000 he owed to the IRS. The tax collectors in the Los Angeles County Recorder of Deeds cited Whitaker and filed a lien for the balance.
Actor Chris Tucker had a <a href="http://newsone.com/1883935/wow-chris-tucker-now-owes-over-12-million-in-taxes/" target="_hplink">tax lien filed against him in the state of Georgia earlier this year</a> for $592,594.08, plus $11,571,909.26 from the federal government for taxed owed in 2001, 2002 and 2004 through 2006.
"Baywatch" actress Pamela Anderson owed nearly half a million dollars to the IRS in 2010.
In 1974, comedian Richard Pryor was sentenced to 10 days in jail, fined and put on probation after pleading guilty to a charge of willful failure to file an income tax return, according to <a href="http://www.nytimes.com/2005/12/11/arts/11pryor.html?pagewanted=3&_r=1&ei=5090&en=ea88c61b92de25e6&ex=1291957200" target="_hplink">the <em>New York Times</em></a>.
Singer El DeBarge <a href="http://www.vibe.com/posts/nas-irs-debt-totals-more-3-million" target="_hplink">owed $354,000 in delinquent federal taxes</a> in 2010, according to Vibe.com.
Sammy Davis, Jr.
Davis <a href="http://www.esquire.com/the-side/feature/destroyed-by-the-irs#ixzz1rYjZPHxQ" target="_hplink">owed nearly $7.5 million in back taxes</a> at the time of his death.
"Pan Am" actress Christina Ricci was hit with a federal income tax lien of nearly $180,000 on her 2008 earnings.
In December 2010, actor Wesley Snipes <a href="http://www.cbsnews.com/8301-504083_162-20025363-504083.html" target="_hplink">began a three-year prison sentence</a> for failing to file income tax returns in the amount of $7 million.