Question of the Day - 07 November 2021

It's kinda amazing how much our income tax compliance depends on voluntarily doing what's required. The IRS does not have enough staff to monitor every single US taxpayer, even with the aid of their antiquated computers. The penalties if you are caught are severe enough that most people do comply, fear is a strong motivation. But if you cheat at less than a ridiculous level you have a good chance of not getting detected. We're one little cog among millions, that means that unless you do something outrageous you won't get noticed. I'm not advocating tax cheating, just saying the IRS cannot possibly monitor every single tax return with 100% thoroughness. That's my personal opinion, your mileage may vary. 

In the case of gambling winnings, it's the unfair way in which gambling winnings and losses are treated. Year 1, you have your regular (let's say job) earnings of $100,000 and you win $50,000 betting on the Super Bowl. The IRS says your income is $150,000--fork it over, pal. Year 2, the same job income, but this time, you lose your $50,000 Super Bowl bet. The IRS says your income is $100,000--fork it over, pal, and don't talk to us about your gambling losses. In other words, when you win, we want our cut, but when you lose, that doesn't count.

And yeah yeah, you can itemize, but only to offset wins in the same year, and only at the cost of your standard deduction. I can only surmise that the IRS screws gamblers because of some perception that gambling income is "dirty" money or something.

After watching a program the other night about how the top of the top of the wealthiest in the US pay no income taxes, and the lower of us suckers pay the freight for them and their special interests, I wonder if there are certain computer staff that 'handle' those top of the top accounts.

I always 'knew' the rich guys got off light on taxes, but this program opened my eyes even wider.  Not that I can do anything about it. 

Candy

There is an organization, the members of which adhere to the ideology that the rich and huge corporations paying no taxes is an intrinsic good and/or are in the employ, overt or surreptitious, of those wealthy entities.

What you can do is not vote for members of that organization when they run for public office. (I can't name that organization, because doing so would be, uh, political.)

I agree that you or I trying alone to change this would be like an ant trying to move the Great Pyramid. However, maybe if enough of us ants get together...

Does anyone educate themselves anymore?

Reality, what the data shows: more than 100 million U.S. households, which equates to 61% of all taxpayers, paid no federal income taxes in 2020 according to a report from the Tax Policy Center. Look it up. Previous years it was more closer to 50%. 

Expand your "wealthy" hatred net as the vast majority of these zero federal tax payers are low and middle income. 

One should distinguish between high earners who pay no income tax (because they are skilled at using loopholes to evade it) and low earners who pay no income tax BECAUSE THEY HAVE NO INCOME TAX LIABILITY.

In other words, I'm not going to direct any "hatred" to a single mother who uses the Earned Income Credit and Child Tax Credit to reduce her tax liability to zero. I'll save that "hatred" for the guy who makes $20 million a year and pays no taxes whatsoever on it. Especially if he's orange.

Also DUHHH...in 2020, there were far more people who didn't have enough income to owe federal taxes than in prior years. So of course, the percentage was higher.

https://taxfoundation.org/publications/latest-federal-income-tax-data/

There are about 250 million adults age 18 and older in USA. Of those, about 144 million paid income tax. 

According to TaxFoundation.org, in 2018 (the latest year tax info is avail) there were about 144 million taxpayers in the US. The top 1 percent paid a greater share of individual income taxes (40.1 percent) than the bottom 90 percent combined (28.6 percent). In 2018, the top 50 percent of all taxpayers paid 97.1 percent of all individual income taxes, while the bottom 50 percent paid the remaining 2.9 percent.

Lots of interesting facts at the above link.

Your obsession with the "orange man" is well known. And frankly appears to be very unhealthy and obsessive. Do you have any hobby outlets?

I commented that aside from 2020, still almost half of US taxpayers don't pay any income tax. This is a fact. If you think that someone who makes poor decisions in life deserves a break from their taxes, or people who chose to stay in low income jobs should get a break and pay no taxes while using services in the US that our taxes pay for, we agree to disagree. If you want fair, EVERYONE in my view should pay taxes.

As for the high income tax earners not "paying their share", they aren't following legal deductions just like low and middle income earners do, your assumption is obviously a bias and emotional without the use of facts. On the "pay your fair share" nonsense, rokgpsman says it well from actual data you can look up if you care to educate yourself and stop spewing your obvious "the rich are evil" nonsense as they most of the taxes. 

It's true there are some wealthy individuals that pay little or no income tax. That's because a big part of their wealth isn't from earned income like you or I get from a job. Most of their wealth is in investments like stock or real estate or other things. Our income tax system is primarily for earned income. So guys like Elon Musk and Jeff Bezos have legal tax strategies that only put a small portion of their wealth into taxable income. There's plenty of high income people like doctors, lawyers, architects, athletes, entertainers, etc that pay a boatload of income tax. We hear about the ultra-rich guys and companies that don't pay much income tax, that happens and some of it is due to offshore sheltering of money. But a big reason they can do this is in how the US tax code is written and the legal methods that smart tax advisors apply. The IRS would be all over the guys that pay no income tax if it was illegal. A big majority of high income people pay lots of income tax.