I borrowed my title from the author of this article because it appears taxes are optional for the high income group. The distorted perception that the rich get richer and the poor get poorer stems from articles like this. While I’m quick to blame the media, this time they might be right. Distorted perceptions usually carry some merit.
The Bush Tax cuts have favored the rich, and are making CPAs worth their weight in gold. In conjunction with loopholes in the Alternative Minimum Tax (some of which were passed during the Bush Administration), the Bush cuts have made it possible to hide their earnings once again.
Here’s an example: In the wake of Hurricane Katrina, Congress passed a tax bill making charitable contributions not hitting the limit of tax deductions for the year. We can only deduct so much charity from each tax year, except after Katrina. OK, great, that helped create an influx of money to the region. NOT! Congress didn’t include a measure to limit it to Katrina charities. So everyone got a free ride and those impacted by the hurricane probably didn’t get nearly as much as Congress intended.
Remember the Alternative Minimum Tax was designed to tax the wealthy, however Bush created another loophole in 2004 with the American Jobs Creation Act. This allowed for tax credit increases on money made overseas. Tax credits on this line item increased 2,600% the next year. There is an argument about being taxed twice (in the other country and then again here), but I pay taxes twice every time I buy something (income tax on the money in my account + sales tax).
While the article is meant to outline these more recent tax holes, I’m here to tell you that the underclasses (myself included) have never been able to take advantage of many tax loopholes, thus creating the argument we stand with today. Check out the article and note the quote at the bottom:
“My sense of it [the tax loopholes] is that the people who introduce these provisions know exactly who is going to benefit”
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. |
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