Let's Just Be Clear On What This Means

From our President

"The American people are sold," President Obama said.

"The American people are sold, I just want to repeat that."

"You have 80% of the American people who support a balanced approach. 80% of the American people support an approach that includes revenues and includes cuts. So the notion that somehow the American people aren't sold is not the problem. The problem is members of Congress are dug in ideologically."

The point he is trying to make is that 80% of the people in the US support higher taxes as part of the deficit reduction package.  Not sure I have seen a poll number this high, but let's assume our dear leader would not lie to us.  But let's be clear on what this means - 80% of the people in the US support higher taxes on other people.

  • Dave Boz

    It may be closer to 90% agreement: Let's cut someone else's benefits, and raise someone else's taxes. Balanced approach!

  • Dan

    Warren,

    Let's be frank about who those "other people" are. They are rich people like me, whose tax rates are at the lowest levels in generations and who could afford to pay more to help the country overcome its debt problem. People much wealthier and smarter than me, like Warren Buffett, have said pretty much the same.

    I'd want to see any rise in taxes on the wealthy, however, be balanced out by a solid plan to lower spending by trillions of dollars so we don't reach this point over and over, as we have under both parties for many years. Medicare needs to be reformed, perhaps along the lines that Rep. Ryan proposed. We need to have exit strategies for our costly foreign entanglements, and we need to stop paying for Cold War weapons systems that only help defense contractors' bottom lines and have no use in modern warfare.

    That would be a start, anyway.

  • Trapper_John

    I did some quick maths this morning.

    Approx # of taxpayers (this is probably high): 200 M
    Approx # of taxpayers in top 10% of earners: 20 M
    Budget deficit: $1.3 T
    Amount of increased taxes per person to cover the deficit (only raising on the top 10%): $65,000
    Amount of increased taxes per person to cover the deficit (only raising on the top 1%): $650,000

    I know it will be a "progressive" tax increase, but still--this is real money he wants to take from real people.

  • Dan

    Trapper John,

    I'm a big MASH fan, by the way, and Trapper is one of my favorite characters (I mean the Wayne Rogers character on the TV show).

    No one is talking about covering the deficit only through taxes on the rich. That would be as radical as talking about covering the deficit only through cuts in spending.

    Most reasonable observers believe we need a balance of cuts and tax hikes.

    One easy tax hike would be to tax the earnings of people who run hedge funds and make hundreds of millions or even billions a year as income, rather than capital gains. This would indeed mean that someone who made $1 billion last year might have to pay a large amount more in taxes. However, as Buffett says, is it really fair that his secretary pays a higher tax rate than he does?

  • Russ R.

    Dan:

    "However, as Buffett says, is it really fair that his secretary pays a higher tax rate than he does?"

    Mr. Buffett analogy is bogus, as he failed to account for the effect of double-taxation on the dividend and capital gains income he earns.

    That income was already taxed once at the corporate level, at ~35%, and the remaining 65¢ was taxed again at the shareholder level, at another ~15%, leaving only 55.25¢, for a combined marginal tax rate of 44.75%.

    I doubt that his secretary's tax rate is that high, even including payroll taxes.

    Russ

    As an aside, the same double-tax effect would do a lot to explain why so many companies have increased their indebtedness, since it is cheaper for investors to provide debt capital (which is only taxed once) vs. equity capital (which gets double-taxed).

  • Trapper_John

    Dan,

    We disagree on (at least) two things then, because the ONLY true Trapper was portrayed by Elliott Gould ;).

    I guess my question is how much of the deficit is reasonable to fund through tax hikes? I'm not sure how many people make "hudreds of millions" or more per year here in the States, but I imagine it ain't many. To raise significant revenues, you have to either confiscate very large amounts of a few people's money or less large amounts of more people's money. A tax on billionaires is likely to provide symbolic pittance relative to the deficit.

    So if raising taxes will either a) not raise signficant money (taking from the few) or b) piss off a lot of people (taking from the many), why MUST our deficit be addressed through a "mix" of spending cuts and increased revenues? I don't see it, unless it's symbolic. I'm not accusing you of breeding class warfare here, but I think some are.

    As far as Buffett goes, I believe him to be a bit disingenuous with his relative tax rate argument. True tax rates are determined by tax laws that encourage Americans to do things the government wants them to do--own a house, donate to charity, etc. If he donates all his money to charity (which he seems hell bent on doing) and then turns around and says he pays no taxes, how is this any justification for raising the tax rate on everyone in his bracket?

    The tax rate he pays is less relevant than the percent of revenues that come from him and his ilk. The top 1% pay 40% of taxes. The top 10% pay 70% of taxes. What is a "fair share"?

  • Trapper_John

    Russ--you are right, of course. Hadn't read that before. I always figured it was from tax shelters and charitable giving.

  • Russ R.

    Some easy solutions that will increase revenue and reduce distortions.

    - Simplify the tax code, cutting out the countless deductions and loopholes while flattening the rate structure. (Take a look at the province of Alberta... 10% flat tax on all income above $17k.) The only people hurt by this will be tax accountants and lawyers.

    - Eliminate corporate taxes entirely (since large corporations have the least difficulty in hiring lawyers and accountants to avoid taxes), and simultaneously increase the tax on dividends and capital gains to the full rate. Result... tax gets paid only once, in the hands of shareholders who have less ability to avoid taxes through clever structuring. Also, you can enjoy a big reduction in corporate lobbying for tax breaks, since they're already paying no tax.

    - Reduce the income tax and institute a sales tax (VAT style). Economically, it's far more sensible to tax consumption than employment. (Canada went this route in the 1990s, and it's helped the federal government rein in deficits and pare down its debt.)

  • morganovich
  • a_random_guy

    "...a balanced approach..."

    Meaning what, exactly? There is no balance, when the only spending cuts are fantasy reductions in planning increases in the far future.

    Cut the federal spending to the level it was at in 1990. Shouldn't be hard - that wasn't so very long ago. That eliminates the entire deficit, no problem. *Then* raise taxes to pay down this monstrous debt that Bush 2 and Obama 1 have built up.

    Otherwise, the USA goes the way of Greece, only a few years later...

  • http://AReasonableMan.com Gil

    Everybody who thinks that it would be better for more of their own money to go to the federal government is free to contribute it.

    Seems like it's less than $2 million so far this fiscal year:

    http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm

    I don't think that will make much of a dent. Warren Buffet must have forgotten to contribute.

  • Matt

    In past deals involving a so-called ballanced approach of tax hikes and spending cuts over raising the debt limit, the tax cuts happended and the spending cuts never materialized. For any such deal to be realistic, the spending cuts must be specific and imediate and reductions in the future growth of spending don't count as spending cuts.

    Dan,

    The top 1% of income earners, earn about 19.6% of all pre tax income. That same group pays 41% of all income taxes collected by the IRS. In fact the top 1% pay more in income tax than the bottom 95% combined. Any suggestion that the wealthy aren't paying their fair share of taxes in the context that they should be paying more is an outright lie.

  • Mesa Econoguy

    Warren Buffet's faulty tax math (mentioned above):

    http://www.cato-at-liberty.org/warren-buffets-faulty-tax-math/

  • Dan

    Appreciate everyones' comments on Buffet. Interesting. And indeed, it would seem he forgot to contribute, ha ha!

    Russ R., the solution you present - eliminate corporate taxes and raise taxes on dividends and capital gains - sounds worth studying. But a lot of people are philosophically opposed to capital gains taxes because they represent "double taxation." I agree with that to some extent, and generally support keeping them low.

    Also, it would be hard to tell your average person why they should pay an income tax but GE shouldn't (not that GE does, anyway, of course, even now, thanks to their armies of tax lawyers. I'd love to put those guys out of work).

  • Dan

    Trapper,

    I love Elliott Gould, too. He's a great actor. I need to see the MASH movie again sometime, as it's been many years.

    Sorry you're not a Wayne Rogers fan. I suppose once you get used to one actor playing a role, no one else can take their place.

  • caseyboy

    A suggestion for Dan, Warren Buffet, Bill Gates and other Progressive elites who have already made their fortunes so taxing their current income isn't too painful. Why not just make a large donation to the US Treasury? You can do so online - http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm. No donation too large. Special Sucker, I mean Special Person designation for donations over $1 billion.

    Nothing to stop anyone who wants to pay their "fair share".

  • Dan

    Matt,

    The reason the top 1% pay so much of the tax is because more and more of the income produced in this country is going to the top 1%. This is part of the problem, and simply raising taxes on the top 1% isn't going to solve it, as others here note.

    There's a structural problem in this country in which the middle class is losing ground while the top 5% and even more, the top 1%, gain. It's not a formula for a successful future.

    This isn't an argument for income re-distribution or communism. It's just alarming to see the middle class falling behind in so many ways. You need a strong middle class to have a strong country, and it isn't working out that way.

  • Dan

    Caseyboy,

    Good suggestion. Maybe I should do that (but I'll leave it to Warren to donate the $1 million, as I'm not quite in the same financial boat as him, nor will I ever be!)

  • caseyboy

    Gil, I missed your post. I guess great minds think alike. To everyone else, sorry for the redundancy.

  • Dwight

    I guess I am missing something. So we are to blindly trust the government to not squander any new taxes like they have done over and over again. People sure have short memories. What is wrong with everyone.

    The only way a normal rational person would agree to this is if there was and iron clad agreement signed in blood that could not be revoked by any future congress or president. It would have to be in place and and signed off before any taxes could be raised.

    It you had a contractor on you home that was always late and way over budget, would you keep giving them more money before they demonstrated they could complete the existing work???

    Wake up people.

  • CT_Yankee

    Treat politicians like the alchoholics they are.

    If I even had a vauge belief that a guest in my home would enjoy a beer, I would be happy to offer one. If I knew my guest was an alchoholic (recovering or not), I would never offer and certainly would not provide beer even if my guest demanded one, and insisted he only wanted one, and promissed to enter a recovery program tomorrow.

    I am not, and will not become, an enabler. If a politician asks for a few trillions, or even just a couple billions or a few hundred millions, give them your immediate support for the spendaholic recovery program they always promise is comming "soon".

    No new taxes for politicians, no free beer for alchoholics. While many recovering alcoholics really have turned thier lives around and become useful members of society again, a politician used to spending other people's money for his own personal popularity finds it nearly impossible to kick the habit.

  • http://AReasonableMan.com Gil

    Maybe Obama meant 80% of the American people in his cabinet support an approach that includes revenues.

    caseyboy: No problem. Better twice than not at all.

  • Doug

    @ Dan: Wealth is created, not divided. What's your problem with how much ANYONE makes? Especially in comparison to someone else? You seem to think there's this bag of wealth that never expands or contracts, and that when one person excels and makes a bundle, he's automatically "stolen it" from everyone else. If that were so, can you tell me where this bag full of about $14T was when the pilgrims landed on Plymouth Rock on 1620?

    For instance, I can go to the beach, scoop up some worthless sand, refine and process the stuff, add some sweat, intellectual property, and spit out silicon circuits at the other end of my new factory. Just like that, I have transformed nothing into something, and I'm wealthy. If I'm REALLY good at it, I make Bill Gates- or Steve Jobs-like money, too. Now try to show me how I harmed that middle class guy in the process?

    Better yet, with my newfound wealth, I go out and buy cars, yachts, airplanes, houses, and take trips all over the country. Each of these expenditures enriches (employs) the average guy that you fret about. Again, how is this bad for him?

    The main problem infecting the country at the moment is that (federal) government spending is up 25% compared to 2007, combined with an extremely high unemployment rate brought about by new government policies designed to punish wealth creators, not to mention confiscate as much from them as their socialist base demands, killing job creation. As Warren pointed out in one of yesterday's posts, spending is massively up and the number of taxpayers is massively down. Result: massive deficit.

    Personally, I want to be surrounded by uber-wealthy people. It guarantees that I'll be fully employed and handsomely paid.

    So you go ahead and hand over all of your money to the government. If it alleviates your sense of guilt over your wealth, so be it. Just don't be so anxious to volunteer ME to pour MY wealth down your blessed government rat hole! For once, let the government eat cake.

  • Ted Rado

    I am sure 80% of the people are in favor of living beyond their means at someone else's expense. The problem is that half the people pay no taxes and hence get their government benefits with no cost to themselves. It would be fun to go to a fine restaurant and have someone else foot the bill. Wow! I could learn to love that arrangement!

  • http://AReasonableMan.com Gil

    Ted, that reminds me of this great Russ Roberts piece about the problems with dividing expenses. Even if everybody pays a share at the restaurant, things don't work out so well:

    http://www.invisibleheart.com/1995/05/if_youre_paying_ill_have_top_s.php

  • Dan

    I love when people say half the people pay no taxes. OK, what about payroll taxes? I'm not a tax expert, but doesn't anyone who works have payroll taxes for social security and Medicare? At my first job, I made $19,000 a year. And I guarantee you, even at that level, I paid taxes.

  • Rob

    "Revenue" - is this the new word for tax, which I keep hearing?!??!

  • Val

    All you rick folk that pine for the opportunity to pay more... Well go right ahead! Cut your checks right now - don't wait until April. Anything else while spouting off that tripe about being 'able to afford more and so taxes should go up' is flat out dishonorable.

  • ErisGuy

    Isn't Obama using the wrong tense? Should it be: "The American people have been sold"? The only question is to whom.

  • marco73

    I had trouble believing the 80% number when I first read it. You could poll the American people six ways to Sunday, and you could not get 80% of American adults to agree the earth revolves around the sun.

  • Ignoramus

    Can you spell M-A-D?

    This game has more than two players, and it isn't classic Mutually Assured Destruction. We're getting near its end game.

    Obama is passive-aggressive. He often won't move until he has to, by design, while talking as if he's taking action. That's very true here. Obama has yet to make a detailed budget proposal of his public, despite creating the impression that he has with a blizzard of show meetings and press conferences, following months and even years of commission studies.

    As a result of the 2010 landslide mid-terms, a large part of Boehner's House caucus are "fire eaters" on spending and the deficit. Obama acts as if the 2010 landslide never happened. For Obama, elections only have consequences when people vote the way that he thinks they should.

    In response, Boehner only has two moves at this point: 1) wait on Obama's lead, and then take the blame come August 2, or 2) pass something and then kick it over to Obama.

    So expect #2 -- Boehner will have the House pass something this week, together with the Balanced Budget Amendment. It'll be something like a $2.5 trillion debt ceiling increase with equivalent cuts and no "revenue enhancements". Boehner doesn't have the votes to include even a token amount of revenue enhancements. Many House Republicans still resist any increase in the debt ceiling at all, so this won't be easy for Boehner to get passed. So it might be a smaller package of cuts and ceiling increase, so that the debt ceiling issue would come up again during the 2012 election campaign. Some Republican Presidential hopefuls want that.

    In his Weekly Address today, Obama calls once again for shared sacrifice and compromise. He made comparisons to how in similar circumstances Ronald Reagan got a big deal done with Tip O'Neill, and Bill Clinton with Newt Gingrich. But Obama is no Ronald Reagan nor no Bill Clinton, as we'll soon see.

    So if the House acts, expect McConnell to say that he has 40 or so Senate Republicans ready to go along. Obama will then have three possible moves:

    1) Go along, and make excuses. Claim credit as much as he can.

    2) Keep the crisis going. Mail letters to seniors. Let August 2 come -- blame Republicans for checks not getting mailed. Or not pay the Chinese.

    3) Invoke the 14th Amendment "silver bullet" to blow through the debt ceiling. This is less likely now -- Geithner has made it clear that he'd quit. Even Leftist Con Law professor Larry Tribe thinks it's unconstitutional.

    Most Presidents would pick #1 -- Reagan and Clinton included. But Obama is no ordinary President.

    I expect #2. "It's the right thing to do". Obama would rather be a consequential one-term President than go down as the Democratic President who started to dismantle the Welfare State. Can you imagine Obama doing a Bill Clinton and "ending welfare as we know it". NFW!

    Given that the economy is stalled -- and Obama finally realizes how stalled it is -- "chaos" actually increases his chances at re-election, or so I expect Obama thinks. Creating and then managing chaos is what community organizers do.

    In "Sleeper" Woody Allen plays a Rip Van Winkle-like character who wakes up in a dystopic future, with hilarious consequences. The explanation for how World War III got started is that Al Shanker -- the 1960s head of the American Federation of Teachers -- "got the bomb".

    Can you spell M-A-D? Developing ...

  • Leatherneck

    How 'bout everybody --EVERYBODY--pays 10% of what they earn from any source every year?

    TC

  • CT_Yankee

    "Taxation without representation!" They did not petition for representatives in Parliament. They did not offer to tax themselves. There was reason to suspect that taxation with representation would be as distasteful to the disgruntled ones as taxation without representation.

    excerpt from a contemporary account of Revolutionary War loyalties

  • Kelly

    Hate to interrupt the tax discussion, but whenever Obama specifically repeats something, there's a high likelihood that it's a falsehood on some level. It's a rock solid tell.

  • John VI

    Why is it so MANY people hear the words "tax the rich" and immediately start naming people like Bill Gates and Warren Buffet? You do realize those guys are not "rich" right? They own and/or operate multi - BILLION dollar COMPANIES, but they themselves are not accountable for that income. Most CEO's are extremely careful to ensure thier taxable salaries are within low to middle class brackets and pay marginal tax rates below average, then have the company expense them some REALLY nice perks.( and all legally too I might add)

    The simple truth is, an individual is taxed first, then pays his expenses. A CORPORATION pays its expenses, then gets taxed on what remains.

    That means an individual that makes 100k a year and pays 50% taxes will have 50k dollars to pay his rent and buy his food for the year.

    A company that makes 100k a year can pay its ceo a salary of 20,000 a year, pay 20k a year for his home lease, buy him a 20k dollar car, send him on a 20,000 fact finding assignment in hawaii, and save 20k for his retirement. and guess how much income that company has now? 0k and pays 0 tax. and the ceo who made 100k with his company? he pays the poor mans rate on his 20k salary of 20% for about 4k in taxes. So company CEO pays 4k in taxes and hard working middle class guy paid 50k in taxes.

    And these rules will NEVER change because senators themselves use these rules to protect and build thier own wealth.

    When any politician talks about "the rich" they mean high earning middle class people. Not actual rich people. And the best part is, politically speaking, they can set the "rich" bar over the heads of the vast majority and then just let inflation kick everyone into that bracket. That basic deduction that everyone gets, something like 7-8k or so depending on your location? That was the original number put up in 1915 when they put in the first tax, you know, just on rich people. anyone making less than that was not rich and would therefore never pay tax. See? You're richer than you think!

  • Neo

    I support taxing the hell out of rich Democrats

  • the other coyote

    Reading the above comments makes me wonder:

    1. Why does anyone (Dan, Obama, Dems in general) think that the money I earned by working nights, weekends, sacrificing time with my family, belong to ANYBODY but me?

    2. I went to high school with people who had the exact same (often better) opportunities as me to get a good education and land a good job. They chose to be slackers. Why should I shoulder their load, or pay for their kids Medicaid?

    3. Every time I turn around, somebody is asking me to part with more of the money I earned through the sweat of my brow to pay for some ridiculous spending program for people who won't get off their lazy asses and make something out of themselves. Like the "Adult Baby" drawing a Social Security disability check ID'd by Senator Coburn a few weeks back. I am freaking sick of it. People make choices in their lives, and they need to live with them. You refused to plan ahead and provide for your old age? Too bad. It's your problem, not mine.

    4. And I am freaking sick of being villified for being "RICH" because my spouse and I pack our exhausted butts off to our jobs every day. It would have been really easy for us to slack off, maybe somebody stay home with the daughter, but we decided nobody was going to take care of us but us, so have been working and saving like crazy for 20 years. Now, because we were industrious and responsible, the leeches in this society want to take what we've made? SCREW YOU.

    5. According the the SS Administration, SS paid out $41 billion last month. Only half went to folks over 65. Who the hell are all these other people on the teat?

    6. Nobody should get more out of SS then they contributed. "Rich" senior should get out what they paid, and "poor" seniors need to be a wake up call for the rest of the country.

  • MikeinAppalachia

    John VI-
    The CEO in your example is in for a pretty bad time when IRS comes for its audit. All of those "perks" you cite (maybe not the trip) are taxable as income. Even the retirement credit unless the company has somehow qualified a plan that would allow such a payment.

  • Ted Rado

    The other coyotez;

    Amen, brother. If you want to eat, work. Don't freeload off those that do.

  • http://yargb.blogspot.com Knucklehead

    I don't claim this to be an exhaustive bit of research, and I made some rough counts from samplings, but it is perhaps mildly instructive.

    According to Forbes Special Report from 2010 (the latest I found) listing the "World's Billionaires", there are approximately 1,030 billionaires (measured in "Net Worth") in the world. Approximately 33% or slightly more of them are US citizens or reside in the US - but let's be patriotic and call it 400 US citizen or resident billionaires.

    The US federal deficit (doesn't count huge state deficits) for 2009 was $1.4 TRILLION (1,400 BILLIONS) and for 2010 $1.3 TRILLION (1,300 BILLIONS)- a total of $2.7 TRILLION (2,700 BILLIONS). The federal DEBT is currently $14.3 TRILLION (14,300 BILLIONS)and rising faster than I can type.

    If we presume we could somehow manage to liquidate and extract $1B from every billionaire on earth and apply it to the current DEFICIT we would not cover the deficit for 2009. If we could take $1B from each US citizen or resident billionaire we would fall a $1 TRILLION short. That's the deficit, not the debt.

    I went through the top 212 ranks of which 75 are US citizens or reside in the US. I've listed them below. According to Forbes these 75 people have an aggregate net worth of approx. $710 billion.

    Let's make some HUGE assumptions:

    1. 100% of the net worth of these US citizens or residents is 100% accessible to We The People
    2. We The People can liguidate all this net worth without destroying any value - it can be converted to cash
    3. We The People can ignore all notions of personal property and ownership and seize every billionaire's every penny
    3. The net worth of the top 75 US billionaires is 1/3 of the aggregate net worth of all US billionaires giving us a total of $2.1 TRILLION. That doesn't equal the last 2 fiscal years of deficits and is only 15% of our national debt.

    Confiscating the entire net worth of every billionaire in the US would not cover the 2009 and 2010 deficits and barely dent our debt. Make some realistic assumptions about net worth vs. liquidity and how well billionaires can hide, move, or otherwise protect their assets and we can surmise that our results would be far less optimistic.

    Clearly we have to go after those with net worth in the mere millions of dollars. Take everything they have and boil them all for soup.

    We'll need the soup since few of us will have jobs anymore.

    ----------------------------------------------------------------------------------------------------

    Rank Name Citizenship Net Worth ($B) Residence
    2 William Gates III United States 53.0 United States
    3 Warren Buffett United States 47.0 United States
    6 Lawrence Ellison United States 28.0 United States
    12 Christy Walton & family United States 22.5 United States
    15 Jim Walton United States 20.7 United States
    16 Alice Walton United States 20.6 United States
    18 S. Robson Walton United States 19.8 United States
    23 Michael Bloomberg United States 18.0 United States
    24 Sergey Brin United States 17.5 United States
    24 Charles Koch United States 17.5 United States
    33 Steven Ballmer United States 14.5 United States
    35 George Soros United States 14.0 United States
    37 Paul Allen United States 13.5 United States
    37 Michael Dell United States 13.5 United States
    43 Jeffrey Bezos United States 12.3 United States
    45 Donald Bren United States 12.0 United States
    45 John Paulson United States 12.0 United States
    48 Abigail Johnson United States 11.5 United States
    52 Forrest Mars Jr United States 11.0 United States
    52 Jacqueline Mars United States 11.0 United States
    52 John Mars United States 11.0 United States
    52 Ronald Perelman United States 11.0 United States
    59 Carl Icahn United States 10.5 United States
    62 Philip Knight United States 10.2 United States
    64 Anne Cox Chambers United States 10.0 United States
    64 George Kaiser United States 10.0 United States
    73 Sheldon Adelson United States 9.3 United States
    74 Dan Duncan United States 9.0 United States
    80 James Simons United States 8.5 United States
    85 Edward Johnson III United States 8.0 United States
    105 James Goodnight United States 6.9 United States
    109 John Kluge United States 6.5 United States
    113 Steven Cohen United States 6.4 United States
    117 Rupert Murdoch United States 6.3 United States
    117 Eric Schmidt United States 6.3 United States
    121 Hansjorg Wyss Switzerland 6.1 United States
    123 Philip Anschutz United States 6.0 United States
    123 Jack Taylor & family United States 6.0 United States
    132 Eli Broad United States 5.7 United States
    136 Harold Hamm United States 5.5 United States
    136 Steven Jobs United States 5.5 United States
    136 John Menard Jr United States 5.5 United States
    144 Ira Rennert United States 5.3 United States
    148 Charles Ergen United States 5.2 United States
    148 Pierre Omidyar United States 5.2 United States
    154 David Geffen United States 5.0 United States
    154 Jim Kennedy United States 5.0 United States
    154 Frederik G.H. Meijer United States 5.0 United States
    154 Patrick Soon-Shiong United States 5.0 United States
    171 Charles Schwab United States 4.7 United States
    171 Stephen Schwarzman United States 4.7 United States
    173 Ralph Lauren United States 4.6 United States
    176 Robert Bass United States 4.5 United States
    176 Andrew Beal United States 4.5 United States
    176 William Cook United States 4.5 United States
    176 Richard DeVos United States 4.5 United States
    176 Pauline MacMillan Keinat United States 4.5 United States
    176 Cargill MacMillan Jr United States 4.5 United States
    176 Whitney MacMillan United States 4.5 United States
    176 Samuel Newhouse Jr United States 4.5 United States
    176 Harold Simmons United States 4.5 United States
    189 Micky Arison United States 4.4 United States
    189 Robert Rowling United States 4.4 United States
    201 Henry Kravis United States 4.2 United States
    201 Dennis Washington United States 4.2 United States
    208 Lester Crown & family United States 4.1 United States
    212 John Arnold United States 4.0 United States
    212 Charles Butt & family United States 4.0 United States
    212 Ray Dalio United States 4.0 United States
    212 John Paul DeJoria United States 4.0 United States
    212 Charles Johnson United States 4.0 United States
    212 Leonard Lauder United States 4.0 United States
    212 Richard LeFrak & family United States 4.0 United States

  • John VI

    All those deductions are allowed by the irs. The company car is a time honored tradition. The company trip is easily written off as an expense as long as you travel to somewhere you can/will/do do business in or could learn about business from. You balk the most at retirement but thats an easy one also. A corporate entity, depending on structure, is allowed to invest in pretty much anything. if CEO buys 20k dividend paying stocks, REITs and various other passive income generators each year, when he "retires" as in actively stops working to build and maintain the company, those assets continue to pay out to the company which can be passed through for the same benefits, so long as he doesnt sell the company. And since those assets are in the company name, they are taxed as company income only when spent so reinvesting that income in more passive assets is untaxed until removal.

    And finally if you move ownership of the company into a living trust, it doesnt even need to pay death taxes when you die and pass ownership to your children.

    These are all legal options that the rich use to shield thier assets from government taxmen and lawyers all the time. Why do you thing no one has tracked down these peoples homes and property and broken themselves on it for a cash payday? "Hot Coffee" anyone? Its because there is NO cash to get from such a scheme. And there is no tax to collect from any scheme the government comes up with to "tax the rich".

  • markm

    John VI: It sounds like you might have been Leona Helmsley's accountant.