Why You’re Paying Too Much In Taxes Today: Because Everyone from the Ultra-Rich to Illegal Immigrants Pay Nothing … Or Get Tax Refunds

Giant Corporations Scam Tax Refunds

Economics professor and former Secretary of Labor Robert Reich notes:

Many millionaires pay a lower federal tax rate than many middle-class Americans.

Some don’t pay any federal taxes at all.


Some also take advantage of tax loopholes that let them park some of their earnings in offshore tax havens like the Bahamas or the Netherlands Antilles.


Put these all together and you see why Warren Buffet, the second richest person in America, pays a lower tax rate than his secretary, as he readily admits.

State and local taxes are even more regressive. The poorest fifth of Americans pay an average state and local tax rate of over 11 percent, while the richest fifth pay only 5.6 percent. This isn’t small change. State and local taxes account for about 40 percent of all government revenues.

Pulitzer prize winning reporter David Cay Johnston reports that – in 16 states – giant companies pocket your “state income taxes”.

This includes foreign corporations.

Workers are never informed that their “state income taxes” are being pocketed. And states often refuse to make this information public, claiming that it is “proprietary information”.

In addition, big companies use a variety of international scams to avoid taxes:

The Washington Post notes:

About two-thirds of corporations operating in the United States did not pay taxes annually from 1998 to 2005, according to a new report scheduled to be made public today from the U.S. Government Accountability Office…

In 2005, about 28 percent of large corporations paid no taxes…

Dorgan and Sen. Carl M. Levin (D-Mich.) requested the report out of concern that some corporations were using “transfer pricing” to reduce their tax bills. The practice allows multi-national companies to transfer goods and assets between internal divisions so they can record income in a jurisdiction with low tax rates…

[Senator] Levin said: “This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States.”

Indeed, as … Johnston documents, American multinationals pay much less in taxes than they should because they use a widespread variety of tax-avoidance scams and schemes, including:

  • Selling valuable assets of the American companies to foreign subsidiaries based in tax havens for next to nothing, so that those valuable assets can be taxed at much lower foreign rates
  • Pretending that costs were spent in the United States, so that the companies can count them as costs or deductions in the U.S. and pay less taxes to the American government
  • Booking profits as if they occurred in the subsidiary’s tax haven countries, so that taxes paid on profits are at the much lower safe haven rate
  • Working out sweetheart deals with certain foreign governments, so that the companies can pretend they paid more in foreign taxes than they actually did, to obtain higher U.S. tax credits than are warranted
  • Pretending they are headquartered in tax havens like Bermuda, the Cayman Islands or Panama, so that they can enjoy all of the benefits of actually being based in America (including the use of American law and the court system, listing on the Dow, etc.), with the tax benefits associated with having a principal address in a sunny tax haven.
  • And myriad other scams

And see this.

Indeed, some of the world’s biggest companies not only dodge all taxes, they actually enjoy a negative tax rate … where they are paid money by the U.S. government.

Daily Beast points out:

After taking advantage of credits, exemptions, and offshore tax havens, U.S. corporations get away with paying an average of less than 13 percent, according to the Government Accountability Office. What’s more, the GAO found that more than half of them reported owing no federal taxes in at least one year between 1998 and 2005.

According to a study by the advocacy group Citizens for Tax Justice (CTJ), 26 Fortune 500 corporations paid no federal corporate income tax over the most recent five-year period. In fact, according to CTJ, they generated so many tax breaks that they reported negative taxes and often received a rebate check. As procrastinators rush to post offices and computers to file by deadline, let us pause—in anger, jealousy, or admiration—to recognize the corporations who manage to avoid the taxman.

U.S. Public Interest Research Group notes:

Tax haven abusers benefit from America’s markets, public infrastructure, educated workforce, security and rule of law – all supported in one way or another by tax dollars – but they avoid paying for these benefits. Instead, ordinary taxpayers end up picking up the tab, either in the form of higher taxes, cuts to public spending priorities, or increases to the federal debt.

USPIRG continues:

The United States loses approximately $184 billion in federal and state revenue each year due to corporations and individuals using tax havens to dodge taxes. On average, every filer who fills out a 1040 individual income tax form would need to pay an additional $1,259 in taxes to make up for the revenue lost.


  • Pfizer, the world’s largest drug maker, paid no U.S. income taxes between 2010 and 2012 despite earning $43 billion worldwide. In fact, the corporation received more than $2 billion in federal tax refunds. In 2013, Pfizer operated 128 subsidiaries in tax haven countries and had $69 billion offshore and out of the reach of the Internal Revenue Service (IRS).
  • Microsoft maintains five tax haven subsidiaries and stashed $76.4 billion overseas in 2013. If Microsoft had not booked these profits offshore, they would have owed an additional $24.4 billion in taxes.
  • Citigroup, bailed out by taxpayers in the wake of the financial crisis of 2008, maintained 21 subsidiaries in tax haven countries in 2013, and kept $43.8 billion in offshore jurisdictions. If that money had not been booked offshore, Citigroup would have owed an additional $11.7 billion in taxes.

The World’s Richest Hide $31 Trillion Dollars to Avoid Taxes

A new report from the former chief economist at the prestigious McKinsey firm – an expert on tax havens – concludes that

The Guardian notes:

A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together ….

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.

He shows that at least £13tn – perhaps up to £20tn [i.e. $31 trillion dollars] – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, “protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy”.


The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.


“The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments,” the report says.

The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry’s calculations, £6.3tn of assets is owned by only 92,000 people, or 0.001% of the world’s population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

“These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people,” said John Christensen of the Tax Justice Network. “People on the street have no illusions about how unfair the situation has become.” [Remember that rampant inequality destroys economies. And conservatives or liberals are both offended by it.]

Al Jazeera reports:

Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280bn in lost income tax revenues, according to research published on Sunday.

The study estimating the extent of global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses – puts the sum at between $21 and $32 trillion.


John Christensen of the Tax Justice Network told Al Jazeera that he was shocked by “the sheer scale of the figures”.

“What’s shocking is that some of the world’s biggest banks are up to their eyeballs in helping their clients evade taxes and shift their wealth offshore,” said Christensen.

“We’re talking about very big, well-known brands – HSBC, Citigroup, Bank of America, UBS, Credit Suisse – some of the world’s biggest banks are involved… and they do it knowing fully well that their clients, more often than not, are evading and avoiding taxes.”

Much of this activity, Christensen added, was illegal.


The research estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3 to $9.3 trillion of “unrecorded offshore wealth” by 2010.

Private wealth held offshore represents “a huge black hole in the world economy,” Henry said in a statement.

Either Eliminate Taxes – Or Tax Fairly – But Don’t Allow Fraud to Rob the Middle Class Blind

Some say that we could eliminate all taxes if we take away from the big banks the monopoly power to create credit, so that the government doesn’t have to pay trillions on interest for that credit.

Some say that income taxes are illegal, because they were never ratified by the states.

Some say that – since more than half of all government discretionary spending goes to imperial wars of adventure and most of the rest is thrown at the big banks so they can keep ripping us off – paying taxes is just propping up a destructive system.

Others – including some leading conservatives – say that the problem is that the wealthiest haven’t been forced to pay their fair share of taxes.

We’re not weighing in one way or the other. But one thing is for sure: either no one should pay taxes, or we should all – illegal immigrants, giant corporations and the super-rich – be subject to the same rules and pay our fair share.

Soaking the middle class is unfair, unjust … and unAmerican. Indeed, while the Boston Tea Party was a revolt against taxation without representation, it largely centered on the British government’s disproportionate tax breaks towards the East India Company, the giant company which dominated the tea market and hurt small American business.

Illegal Aliens Scam Tax Refunds

For years, American taxpayers have been shelling out $4.2 billion dollars per year to pay for a scam.

A report by the Inspector General found that some 2 million illegal immigrants have been receiving large tax refunds by pretending that numerous dependents live with them … when, in fact, most of the dependents live in Mexico and have never lived in the United States.

Once whistleblowers called attention to this problem, their IRS bosses told them to ignore the fraud and look the other way:

WND notes:

The problem was not a revelation to the Northern California IRS field-office worker who viewed the report: “The fraud has been going on for years,” he told WND. “Business as usual.”

“As the video indicates the Service does nothing,” he said, asking WND not use his name to avoid reprisal.

(The Federal Reserve has been bailing out foreign banks for years; but we assume that this is not a backdoor bailout for foreign nationals.)



This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.
  • jo6pac

    Well I for one don’t want to change the taxes laws because someday I might be rich, I say from my small house rent in the middle of now where.

  • Tatiana Covington

    Ho hum, life goes on, as everyone pursues his self-interest as he sees fit.

  • li zhangsan

    The Following Have To Be Among The Best Kept herbal remedies for acne Secrets In The World.
    remedies for acne

  • Yang Lin

    Products and applications of natural biological sources preservatives

    1 , lysozyme

    Lysozyme is a toxic protein , a microorganism capable of selectively decomposing the cell walls of pathogenic bacteria within phagocytic cells from the damaging effects to suppress the propagation of microorganisms .Marbofloxacin, Especially against Gram -positive bacteria have a strong lysis can be used as sake , cheese, sausage , butter , raw preservative pasta , seafood and ice cream and other foods.

    2 , Nisin (Nisin)

    Nisin is a polypeptide compound by a variety of amino acids can be used as nutrients are absorbed by the body . In 1969, the Food and Agriculture Organization / World Health Organization (FAL / WHO) Joint Expert Committee on Food Additives confirm nisin as a food preservative . March 1992 the Ministry of Health approved the implementation of the document states : ” Science can be considered as a food preservative nisin is safe .” It can effectively inhibit food spoilage caused by many Gram-positive bacteria, such as Clostridium botulinum , Staphylococcus aureus ,Aztreonam, hemolytic streptococcus, Listeria , Bacillus stearothermophilus spores growth and reproduction , especially for produce spores of Gram-positive bacteria have effects. Antibacterial effect of nisin by interfering with the normal function of the cell membrane v , resulting in penetration of cell membranes, and membrane potential nutrient loss , resulting in pathogenic and spoilage bacteria cell death. It is a non-toxic natural preservatives , no adverse effects on food color , smell, taste , texture and so on. Now been widely used in dairy products, canned products , fish products and alcoholic beverages.

    3 , Natamycin (Natamycin)

    Natamycin (Natamycin), is satisfied that he controlled fermentation of Streptomyces a white to creamy white odorless crystalline powder , usually in the presence of the enol structure . Its mechanism of action is associated with fungal ergosterol and other sterols alcohol groups binding repressor ergosterol biosynthesis,Norfloxacin, so that distortion of the membrane , resulting in leakage, causing cell death. In the bakery Dough with natamycin surface treatment significantly prolong the shelf life of action . Add the sausage, jam and other food and beverage production in a certain amount of natamycin , both to prevent mildew , and will not interfere with other nutrients.

    4,8 a polylysine

    8 a polylysine research abroad, especially in more mature in Japan, China has just started . It is a natural biological metabolic products. Has a good thermal stability and disinfection , biological preservatives having excellent corrosion resistance and great commercial potential .Natamycin, In Japan, eight have been approved by a poly-lysine added to foods as a preservative widely used instant rice , wet cooked noodles, cooked vegetables , seafood, sauce, soy sauce, fish and fresh biscuits anticorrosion .research 8 a polylysine Preservation of milk . When using 420mg / L 8 2% of a poly- lysine and glycine complex , fresh is best , you can save the 11d, and there is still a high acceptability , also found that 8 of a poly- lysine and other natural antibacterial agent used in conjunction with obvious synergies that can improve their antimicrobial activity .

    In the United States , the researchers suggested that 8 a polylysine as a preservative for foods. 8 a practice found polylysine with protein foods or acidic polysaccharides interact ,Cefdinir, resulting in loss of antimicrobial activity , and 8 a polylysine weak emulsifying capacity . 8 is therefore limited to a poly- lysine starchy foods.

    Medchemexpress Can provide the above product,its website:http://www.medchemexpress.com

  • Check out all the tax rates in the history of the U.S. in the link below. Some interesting things are the highest tax bracket under Eisenhower’s (Republican) long term was 91%. Reagan (Republican) lowered it to 28% and it’s been around that ballpark ever since. If you want to go chronologically, drag the bar all the way to the bottom and page upwards. How many people know the tax rate on the wealthiest went from 91% in the 60’s to 28% in the 80’s? Also, how could we have had a thriving economy when the tax rate was 91% on the wealthiest?

  • Paying taxes is one of those unfortunate necessities
    of life, but we shouldn’t pay more than we have to. There are a number
    of financial strategies that allow people to shield money from the IRS.

    Here is how we helped one client cut her tax consequences down to 0%.

    Make sure to speak with a financial professional about cutting your tax bill.

    James Gallagher

    The Retirement Engineer

  • Kent Harris

    Evil is knowing that every week the damn government is taking my money. Get rid of income and convert to the FairTax. Honestly, I don’t care how much the wealthy or companies are paying but how much I am having to cough it up to our government. The IRS is a bunch of corrupt criminals who should be thrown in jail.