Tuesday, February 19, 2013

Abolish The Income Tax

You Won’t Believe Who Is Getting Away With Paying Zero Taxes While The Middle Class Gets Hammered

Michael Snyder
Activist Post

The federal income tax is a bad joke and it needs to be abolished. All over the nation, hard working American families are being absolutely crushed by oppressive levels of taxation, and our politicians are constantly coming up with new ways to extract money from all of us every single year. Meanwhile, many ultra-wealthy Americans and many of the most profitable corporations in the country pay little to nothing in taxes. In fact, as you will see below, there are dozens of very prominent corporations that make billions of dollars in profits and yet don't pay a dime in taxes. 

Tax avoidance has become a multi-billion dollar industry in the United States. Those that have the resources to "play the game" use shell companies, offshore tax havens and the thousands of loopholes in our tax code to minimize their tax burdens as much as possible. Meanwhile, the rest of us get absolutely hammered. This is fundamentally unfair. The federal income tax system is irreversibly broken at this point, and it is time to abolish it.

If you think that the federal income tax system can be "fixed", then you probably have never studied it. Our tax code is nearly 4 million words long and it is absolutely riddled with thousands of loopholes that favor big corporations and the ultra-wealthy. We should come up with a better, fairer way to fund the government. The United States once prospered greatly without a federal income tax, and it could do so again.

Many people simply do not believe that it is possible for corporations inside the United States to make billions of dollars in profits each year and not pay a dime in income taxes.


Well, according to a report put out by Public Campaign, that is exactly what is happening. Posted below are numbers that come directly from their report. 30 large corporations are listed, and 29 of them had a tax burden for 2008 through 2010 that was less than zero even though they all made enormous profits. And all 30 of them spent more on lobbying than they did on taxes.

The numbers that you are about to see are for 2008, 2009 and 2010 combined. For "taxes paid", please note that for 29 of the corporations a negative number is given. That means that the net tax liability for 2008 through 2010 was actually less than zero.

After seeing these numbers, is there anyone out there that is still willing to claim that our tax system is "fair"?...

General Electric U.S. Profits: $10,460,000,000
Taxes Paid: ‐$4,737,000,000

PG&E Corp. U.S. Profits: $4,855,000,000
Taxes Paid: ‐$1,027,000,000

Verizon Communications U.S. Profits: $32,518,000,000
Taxes Paid: ‐$951,000,000

Wells Fargo U.S. Profits: $49,370,000,000
Taxes Paid: ‐$681,000,000

American Electric Power U.S. Profits: $5,899,000,000
Taxes Paid: ‐$545,000,000

Pepco Holdings U.S. Profits: $882,000,000
Taxes Paid: ‐$508,000,000

Computer Sciences U.S. Profits: $1,666,000,000
Taxes Paid: ‐$305,000,000

CenterPoint Energy U.S. Profits: $1,931,000,000
Taxes Paid: ‐$284,000,000

NiSource U.S. Profits: $1,385,000,000
Taxes Paid: ‐$227,000,000

Duke Energy U.S. Profits: $5,475,000,000
Taxes Paid: ‐$216,000,000

Boeing
U.S. Profits: $9,735,000,000
Taxes Paid: ‐$178,000,000

NextEra Energy U.S. Profits: $6,403,000,000
Taxes Paid: ‐$139,000,000

Consolidated Edison U.S. Profits: $4,263,000,000
Taxes Paid: ‐$127,000,000

Paccar
U.S. Profits: $365,000,000
Taxes Paid: ‐$112,000,000

Integrys Energy Group U.S. Profits: $818,000,000
Taxes Paid: ‐$92,000,000

Wisconsin Energy U.S. Profits: $1,725,000,000
Taxes Paid: ‐$85,000,000

DuPont U.S. Profits: $2,124,000,000
Taxes Paid: ‐$72,000,000

Baxter International U.S. Profits: $926,000,000
Taxes Paid: ‐$66,000,000

Tenet Healthcare U.S. Profits: $415,000,000
Taxes Paid: ‐$48,000,000

Ryder System U.S. Profits: $627,000,000
Taxes Paid: ‐$46,000,000

El Paso U.S. Profits: $4,105,000,000
Taxes Paid: ‐$41,000,000

Honeywell International U.S. Profits: $4,903,000,000
Taxes Paid: ‐$34,000,000

CMS Energy U.S. Profits: $1,292,000,000
Taxes Paid: ‐$29,000,000

Con-­way U.S. Profits: $286,000,000
Taxes Paid: ‐$26,000,000

Navistar International U.S. Profits: $896,000,000
Taxes Paid: ‐$18,000,000

DTE Energy U.S. Profits: $2,551,000,000
Taxes Paid: ‐$17,000,000

Interpublic Group U.S. Profits: $571,000,000
Taxes Paid: ‐$15,000,000

Mattel
U.S. Profits: $1,020,000,000
Taxes Paid: ‐$9,000,000

Corning
U.S. Profits: $1,977,000,000
Taxes Paid: ‐$4,000,000

FedEx
U.S. Profits: $4,247,000,000
Taxes Paid: $37,000,000 (a rate of less than 1%)

Total
U.S. Profits: $163,691,000,000
Taxes Paid: ‐$10,602,000,000

Just look at that combined total again.

Those 30 companies had combined profits of more than 163 billion dollars during those three years, and yet the combined net tax liability of those companies was negative 10.6 billion dollars.

I wish I could make my taxes look like that.

Another company that is making headlines because of their taxes these days is Facebook.

It turns out that Facebook made more than a billion dollars in 2012 but did not pay a single dime in federal or state income taxes. The following is from a report that was just released by Citizens for Tax Justice...
Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes. 
Instead, Facebook says it will receive net tax refundstotaling $429 million.
According to Businessweek, Facebook has an additional 2 billion dollars in tax credits that it will be able to use in future years...
Facebook says that it anticipates reducing its tax liability in the future by an additional $2.17 billion by using further net operating loss carry-forwards that it has banked.
And of course when it comes to abusing the tax system, the big Wall Street banks are some of the worst offenders. The following is an excerpt from a report put out by the office of U.S. Senator Bernie Sanders...

Here are just a few examples of how the corporations and Wall Street banks these CEOs work for have significantly harmed our economy and the federal budget:

1. Bank of America CEO Brian Moynihan
Number of Offshore Tax Havens in 2010? 371.

In 2010, Bank of America operated 371 subsidiaries incorporated in offshore tax havens. 204 of these subsidiaries are incorporated in the Cayman Islands, which has a corporate tax rate of 0%.

Amount of federal income taxes Bank of America would have owed if offshore tax havens were eliminated? $2.5 billion.

Bank of America has stashed $18.5 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $2.5 billion in federal income taxes if its use of offshore tax avoidance was eliminated.

Amount of federal income taxes paid in 2010? Zero. $1.9 billion tax refund.

Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits.

Taxpayer Bailout from the Federal Reserve and the Treasury Department? Over $1.3 trillion.

During the financial crisis, Bank of America received a total of more than $1.3 trillion in virtually zero interest loans from the Federal Reserve and a $45 billion bailout from the Treasury Department.

2. JP Morgan Chase CEO James Dimon
Number of Offshore Tax Havens in 2010? 83.

In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens.

Amount of federal income taxes JP Morgan Chase would have owed if offshore tax havens were eliminated? $4.9 billion

JP Morgan Chase has stashed $21.8 billion in offshore tax haven countries to avoid payng income taxes. If this practice was outlawed, it would have paid $4.9 billion in federal income taxes.

Taxpayer Bailout from the Federal Reserve and the Treasury Department? $416 billion

During the financial crisis, JP Morgan Chase received a total of more than $391 billion in virtually zero interest loans from the Federal Reserve and a $25 billion bailout from the Treasury Department, while Jamie DImon served as a director of the New York Federal Reserve.

3. Goldman Sachs CEO Lloyd Blankfein
Amount of federal income taxes paid in 2008? Zero. $278 million tax refund.

In 2008, Goldman Sachs received a $278 million refund from the IRS, even though it earned a profit of $2.3 billion that year.

Number of offshore tax havens in 2010? 39.

In 2010, Goldman Sachs operated 39 subsidiaries in offshore tax haven countries.

Amount of federal income taxes Goldman Sachs would have owed if offshore tax havens were eliminated? $3.32 billion.

Goldman Sachs has stashed $20.63 billion in offshore tax haven countries to avoid paying income taxes. If this practice was outlawed, it would have paid $3.32 billion in federal income taxes.

Taxpayer Bailout from the Federal Reserve and the Treasury Department? $824 billion.

During the financial crisis, Goldman Sachs received a total of $814 billion in virtually zero interest loans from the Federal Reserve and a $10 billion bailout from the Treasury Department.
-----

Are you starting to get the picture?

The big banks and the big corporations make billions, but they pay nothing or next to nothing.

The rest of us bust our rear ends to try to get ahead, and we get gouged by dozens of different taxes.

Over time, the percentage of the overall tax burden shouldered by corporations has gotten smaller and smaller.

Back in 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes accounted for less than 7 percent of all federal revenue.

These days, large corporations have become absolute masters at avoiding taxes. In fact, there are many international tax havens that are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.

But corporations are not the only ones doing this kind of thing.

The ultra-wealthy have also mastered the art of legally not paying taxes.

As I mentioned in a previous article, it has been reported that the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.

With that amount of money, you could pay off the entire U.S. national debt and still have enough money left over to buy every product and service produced in the United States during an entire year.

It is time to admit that our tax system is broken. Congress has had decades to fix it, and yet the abuses just keep getting worse. What we are doing is not working. We need to abolish the income tax.

If you are still not convinced that the federal income tax is an abomination and that we need to abolish it, here are some more shocking facts about our tax system from one of my previous articles about taxes...

1 - The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare's works and collected them together, the entire collection would only be about 900,000 words long.

2 - According to the National Taxpayers Union, U.S. taxpayers spendmore than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.

3 - 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.

4 - There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

5 - According to the National Taxpayers Union, the IRS currently has1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

6 - Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.

7 - In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.

8 - The IRS spends $2.45 for every $100 that it collects in taxes.

9 - According to The Tax Foundation, the average American has to workuntil April 17th just to pay federal, state, and local taxes. Back in 1900, "Tax Freedom Day" came on January 22nd.

10 - When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

11 - Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.

12 - The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.

13 - According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.

14 - Warren Buffett had an effective tax rate of just 17.4 percent for 2010.

15 - The top 20 percent of all income earners in the United States payapproximately 86 percent of all federal income taxes.

16 - Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.

Please share this article with as many people as you can. We have now entered a time of the year when tens of millions of Americans will be filling out their tax returns, and the pain of going through that process will make people even more receptive than normal to the truth about how broken our system is.

So what do you think?

Do you think that it is fair for the ultra-wealthy and hugely profitable corporations to get away with paying zero taxes while you get hammered?

Do you believe that it is time to abolish the income tax?

Please feel free to post a comment with your thoughts below...

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.


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19 comments:

Anonymous said...

Stop giving your labor (income tax) to these criminal parasites, most American's aren't even liable because they don't earn income as it is legally defined. Learn the truth and stop turning over your gross receipts to these thieves. www.losthorizons.com Learn the truth and it will set you free!

Paul Panza said...

The fed income tax never had enough states to ratify, stop funding the alien/military/industrial/complex. Check out War Resisters League website on how to withhold your fair share. Prevent your dollars from becoming blood money through non-compliance.

Anonymous said...

Do yourself a favor and stay away from losthorizons.com. The guy who ran that site is in jail, probably for life. The IRS monitors it constantly, and keeps tabs on all those who go on there gloating about their fraudulently obtained refunds. I know from personal experience that the methods described on that site do NOT work. It will only land you in tax court with a massive amount due, along with civil penalties, and a criminal investigation.

If you're looking to reduce your tax bill just move out of the USA and take the foreign earned income exlcusion.

Anonymous said...

Why punish hard work and productivity by taxing it.? All govt revenue should come from passive (or unearned) income, such as rent, dividends,etc.

Corporations, if made to pay high tax rates, will re-invest instead of awarding lavish salaries and bonuses. This will create growth and jobs.

Ordinary workers should pay no federal income tax, but folks like Romney, the Walmart heirs, Buffet, and Gates should pay 90% of their unearned income. That will force them all to get an honest job to avoid taxes.

Also, highest salaries should not be more than 10 times the average wage. If a household can't live on 500K taxfree, it is too stupid to make that much.

Punish the idle rich and make them get jobs. Reward the hardworking 150 million
Americans who give their all every day.
Dale

Anonymous said...

The only income that should be taxed is profits, rents, royalties, interest and dividends. Any individual that works for an hourly wage should be tax exempt. The government collects many other taxes from tariffs, federal excise taxes, gas taxes, utilities taxes tobacco and alcohol taxes, airline fare taxes, user fees for government services and passport fees, just to name a few. The government collects revenues from many other sources without having to tax some poor working stiff that is working for an hourly wage and trying to make a living.

Pryer to world war 2, the only people that payed income tax were corporations. The income tax on earned income from hourly wages was just suppose to be temporary to pay for the war. After the war it never has been taken off.

Anonymous said...

The US Constitution is crystal clear when it comes to taxes. It strictly forbids the taxation on the fruits of one's labor, as this is just another form of slavery.

The 16th Amendment? It's a myth, since not a single state ratified it. According to the Constitution, an amendment can only be effected when it is passed by 2/3 of BOTH Houses of Congress AND ratified by 3/4 of state legislators. Since NO state legislature has ever ratified it, the 16th Amendment - incorporating the Income Tax - is therefore null and void.

abinico said...

Working people == stupid sheeple.

William Jeffrey Fitxhugh said...

The government has destroyed many people trying to collect $100. It's time to riot and loot and get back our FICA tax back the Jewish bankers have stolen from us.

Wally P. Taylor IV said...

IT's the damn Jews that have screwed us. What they don't realize you allow people to keep more of their money and they put it back into the economy

Anonymous said...

Be cautious about proposals to drop the income tax in favor of a federal sales tax which, unless carefully written, would be very regressive. Besides, we know that TPTB want to enact some kind of global taxation scheme and are currently using the "carbon tax" theme but they would gladly use any Trojan tax horse including a federal sales tax.

In the short term, a better solution to ending income taxes lies in the strategy of directly or indirectly taking back (taxing the holy living daylights) the trillions swindled from us with a temporary 90% taxation of the uber wealthy and then break up the monopolies to decentralize the economy.

Anonymous said...

Stop bitching already. NOBODY has to pay "income" taxes, which aren't even taxes on income. How is it that tens of millions of idiots in this country are completely convinced that they are required by law to assess taxes against themselves, or pay somebody else $100 or more to do it for them, when they have never seen or read anything that says that they are required to do any such thing? Talk about complete mind-controlled stooges. And these nitwits vote and reproduce? No wonder this country is so f***ed up. Jesus Christ.

Anonymous said...

You have been told over and over that you have a right to remain silent. What does that mean? It means that you cannot be forced to tell the government anything. What does it mean to have a right to privacy? It means that what you do and how much you make are none of the government’s business. What does it mean to have a right against involuntary servitude? It means that you cannot be used/ treated as a slave of the government (or others) at least prior to being convicted of a crime.

A little book written years ago “The Great Internal Revenue Hoax Exposed”, by R. J. (Ray) Stenson gave a great start into understanding the internal revenue code. It is written in code and if you do not have the key, or the fortitude, to read Title 26 USC Internal Revenue Code until you understand its deception then you will probably forever be a slave to the communists that now own/ control you.

Articles like the above do not help. They deceive you into thinking that these large corporations need to pay more in taxes. In the end who pays these taxes? You, the ultimate consumer.

Let me give you a clue as to how federal law works. Federal law applies to federal persons, federal places, and federal subject matter. In the case of the income with regard to individuals it only applies to federally employed public servants, U.S. congress persons, those under a federal contract, as in those who volunteer. It only applies to the profits, income, gains that they may make. Income, profits, gains are synonymous terms. Labor is not taxed as the compensation that is paid is an equal trade for equal labor; i.e. no profit. Under the definition of wages the only thing that is taxed are certain benefits that a federal employee gets that he/she does not actually work for, in the way of benefits, however most benefits are actually excluded.

Were you born or naturalized on a federal military installation, Washington, D.C., Guam, American Samoa, U.S Virgin Islands, Puerto Rico, federally chartered boat, plane, etc., any place/ thing under exclusive federal legislative jurisdiction? If you do not understand the legal difference in the definitions between U.S and the U.S.A. then maybe you deserve to be a slave. I was born in a state (non-federal area) of one of the ‘united’ states of America and do not consider myself to be a U.S citizen. I do not have to leave the United States as I do not live there although I do live within the continental area in one of the 48 states. The federal government is not my government. Do you now understand how I can say this?

I owe nothing to the federal government as I get nothing from them. They have proven themselves to be my enemy, not my government. Your employer has probably been deceived into thinking it is a “federal employer” with a federal employer ID number. The company that you work for is probably falsely reporting your compensation for your labor as “income, profit, gain”. You may have unwittingly allowed it to happen by not filing a W-4 as “Exempt”, but then again, since you do not know any of your rights you could not begin to claim them. Good luck in learning who your enemies are.

Pete Price said...

When it comes to professional CPAs in Lake Worth, Florida, Lou Patten is the name you can trust. He specializes in all your State and Federal tax services. His services include individual tax return preparation & filing, corporation/ partnership/ LLC tax returns and preparation, along with much more. For more information, check him out at www.loupattencpa.com or call 561.868.0426 for free consultation.

Anonymous said...

The Federal Icome Tax is not mandatory. It is based on voluntary compliance and self assesement.

Anonymous said...

1 of the 10 platforms of the commuist manefesto is a progressie income tax.

Anonymous said...

@3:06 PM, you are exactly right. I would add that you should NEVER fill out a W-4, which is a form meant only for use by federal employees. Since you're not liable for income tax in the first place, there's no need to exempt yourself. Besides, since you're unknowingly asking to be treated as a federal employee when you fill out a W-4, that allows your company and the IRS to get away with claiming on a W-2 that every cent you earned was "wages." Get rid of that W-4, and the only number that can legally be put in that "wages, etc." box is a big fat ZERO.

I should also mention that nobody can be required to assess taxes against themselves, which I think is the most important concept to know in order to understand, from the ground up, what a scam the income tax is in the way in which it is enforced. Filling out a 1040 entails assessing a direct, non-apportioned tax not on your income, but on YOUR SOURCES OF INCOME. And, as mentioned in the Brushaber case from 1916, the income tax can only be legally imposed and enforced as AN INDIRECT EXCISE, not a direct, non-apportioned tax. The IRS loves to cite that case as establishing the constitutionality of the income tax, but they just can't seem to bring themselves to mention that part of the decision. Go figure.

berealtruth said...

The "Income" tax is a tax on Federally privileged activities. "Income" is a Constitutionally defined word because of the 16th Amendment. The Supreme Court has ruled multiple times that the 16th Amendment (most likely NEVER lawfully ratified...) did not change the U.S. Govt's powers of taxation. The average American exchanging his or her labor (our fundamental property as recognized by the so-called Founders) for agreed compensation has NO TAX LIABILITY. The Income Tax, as enforced by the unlawfully chartered non-agency, the IRS, is a DIRECT TAX which isn't apportioned to the States as Constitutionally mandated. Before the 2008 multi-multi-trillions bailout of U.S. finance, the absolutely deliberate tax fraud was the biggest crime in human history. All those swindled in this extortion scheme will need to be made whole before this is over.

Anonymous said...

I forgot to mention something about exempting yourself on a W-4 @10:56 AM. You cannot be an "exempt individual" as defined in 26 USC 7701(b)(5) without first being an "individual," and therefore subject to the IRC.

Anonymous said...

I've heard all the arguments in the comments about the tax not applying to us, and I've taken workshops on it. No one ever gives you a solid way to practically live your life without having your money stolen through withholdings or if you are a small biz owner, how to not file taxes and get away with it. How to keep the IRS agents from your door? I've given up. It's too complicated and I don't want to spend my whole life figuring out a safe way to do it.

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