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Drudge Retort: The Other Side of the News
Sunday, October 24, 2021

Catherine Rampell: Once upon a time, Republicans portrayed themselves as the party of small government and family values. Recently, though, GOP leaders have been cobbling together a new coalition, welcoming insurrectionists, white-nationalist tiki-torchers and people who think Bill Gates is trying to microchip them. The latest recruit to the Big Tent? Tax cheats.

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Each year, about $600 billion in taxes legally owed are not paid. For scale, that's roughly equal to all federal income taxes paid by the lowest-earning 90 percent of taxpayers, according to Treasury Department data.

These unpaid taxes - often called the "tax gap" - are predominantly owed by wealthy individuals. The richest 1 percent alone duck an estimated $163 billion in income taxes each year.

To be clear, rank-and-file wage-earners are not necessarily more honest or patriotic. It's just much harder for them to shortchange Uncle Sam. Workplace grunts have taxes automatically withheld from their paychecks. And, critically, most labor-related income - as well as income from dividends, interest and other sources - gets reported to the Internal Revenue Service through W-2s, 1099s and other common tax documents.

There are some types of income, however, for which little or no third-party reporting exists. These income categories " including partnership, proprietorship and rental income " accrue disproportionately to high earners. The government has much less ability to tell when these filers are misreporting; as a result, they can more easily get away with cheating.

And some of them do.

Tax cheating is not a victimless crime. When (disproportionately high-income) people don't pay their bills, everyone else must pay more to fill the shortfall.

Democrats want everyone - but particularly those with the most wealth - to pay their appointed share in taxes. Republicans don't - falsely scapegoating the Dems desire to focus enforcement upon the wealthy as the attempt to ensnare W-2/1099 workers with excess scrutiny.

Republicans suck at this whole "One nation..." thing.

#1 | Posted by tonyroma at 2021-10-24 08:07 AM | Reply

Republicans raised my taxes so no I will never think of them as a party of lower taxes or even a party that supports tax cheating least for average Americans.

#2 | Posted by Tor at 2021-10-24 10:57 AM | Reply

Maybe all movie prop guns unless otherwise needed should start being entirely made of rubber and having pink handles that look like a dick.

#3 | Posted by Tor at 2021-10-24 11:08 AM | Reply

A rebrand is not necessary, they always were.

#4 | Posted by bat4255 at 2021-10-24 12:33 PM | Reply | Funny: 1

Not paying any taxes means you're smart. Master at navigating the Byzantine tax code. Literally every Republican believes this.

Except when poor people don't pay (income) taxes. Then it means you're a parasite on society.

#5 | Posted by snoofy at 2021-10-24 01:11 PM | Reply

It's those same wealthy tax cheats who contribute $,$$$,$$$ to the election and re-election of the politicians who pass tax law. So . . . why would those same politicians kill their golden goose? It's a vicious circle?

#6 | Posted by Twinpac at 2021-10-24 01:32 PM | Reply | Newsworthy 1

The most screamingly obvious one is GRATs.

Under a Grantor Annuity Trust, Sheldon Adelman put $8 Billion into a GRAT, then disclaimed it. What happened then? It passed to his kids. No inheritance tax, not even a gift tax ... saving billions.

Meanwhile, if you or I gift someone $16,000, it could be subject to gift tax. So could the lunch you picked up. And the birthday card you sent.

Why wasn't this obvious loophole in the tax code immediately fixed when the courts deemed it legal? Because every person affected is a member of the "political donor class". It's a safe to assume the vast majority of folks with net worths above $30 million have them. Republican authors of the last

If you're looking for proof Congress is bought and sold, look no further.

#7 | Posted by Danforth at 2021-10-24 01:56 PM | Reply | Newsworthy 3

From investipedia:

GRATs are especially popular with individuals who own shares in startup companies, as stock price appreciation for IPO shares will usually far outpace the IRS assumed rate of return. That means more money can be passed to children while not eating into the grantor's lifetime exemption from estate and gift taxes.

This is how Peter Thiel got a billion dollars into a Roth IRA, when annual contributions over the years have ranged from $2000 to $7000. IPO Shares.

#8 | Posted by Danforth at 2021-10-24 02:00 PM | Reply | Newsworthy 1

IPO Shares.

#8 | POSTED BY DANFORTH

Pre-IPO, and even pre-first seed round if I remember correctly. He bought them at or near par value which is pretty awesome.

#9 | Posted by GOnoles92 at 2021-10-24 02:25 PM | Reply

" ... pre-first seed round if I remember correctly"

Wow. And probably a gazillion shares.

Plus ... remember when Romney was running for President, and he released several years of tax returns, but not the most recent, when he'd gotten the Bain payout?

That's because Bain was treated like a LTCG, and this wasn't too long after the Bush Bust of 2007-2008. Romney simply sells enough "down" investments to offset the $10-20MM gain, pockets the payout, buys back the old investments 31 days later, and pays no taxes. And it's all perfectly legal.

His only exposure is if the sold investments rise during the interim month, so in almost all cases, the tax savings swamp any missed gains. And if the markets drop during the month out, he either buys more, or gets back the same portfolio for less cost; another advantage.

#10 | Posted by Danforth at 2021-10-24 03:26 PM | Reply

^"Republican authors of the last..."

...several tax codes have refused to eliminate it.

#11 | Posted by Danforth at 2021-10-24 03:40 PM | Reply

The Rotten Core of the Republican Party

Resistance to taxation is the rotten core of the modern Republican Party. Republicans in recent decades have sharply reduced the federal income tax rates imposed on wealthy people and big companies, but their opposition to taxation goes beyond that. They are aiding and abetting tax evasion.

Republicans have hacked away at funding for the Internal Revenue Service over the past decade, enfeebling the agency. When the rich and powerful open loopholes in the tax code, Republicans reliably fight to keep the loopholes open. Indeed, they valorize Americans who find ways to pay less, a normalization of antisocial behavior that may be even more damaging than the efforts at bureaucratic sabotage.

Cutting taxes to starve social programs is, by itself, a threat to the sustainability of the American experiment in multicultural democracy. In enabling resistance to lawful taxation, Republicans are engaged in an even more direct assault.

Having failed to constrain government spending through the democratic process, they are seeking to undermine government.

Seems that this thread of current importance is quite a popular topic as Minority Leader McCarthy blatantly lies that Democrats are targeting average workers instead of those successfully dodging their tax paying responsibilities - ie. the donor class and uber-wealthy.

#12 | Posted by tonyroma at 2021-10-24 07:55 PM | Reply

buys back the old investments 31 days later, and pays no taxes. And it's all perfectly legal.

His only exposure is if the sold investments rise during the interim month, so in almost all cases, the tax savings swamp any missed gains. And if the markets drop during the month out, he either buys more, or gets back the same portfolio for less cost; another advantage.

#10 | POSTED BY DANFORTH

Avoided the wash sale if he played it right (and I would bet he played it right). I'm always fascinated by these aspects of personal financial management.

#13 | Posted by GOnoles92 at 2021-10-24 08:36 PM | Reply

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