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Massive IRS Breach or Leak against “The .001 Percent”
Propublica, a leftist media organ, has just published an article on the wealthiest Americans, based on what they acknowledge to be illegal disclosure of taxpayers’ information. They will almost certainly not be prosecuted by the leftist DOJ careerists, once again backed by leftist political appointees. The leftist White House media mouthpieces are good with the felonies and already framing this as the rich not paying their fair share.
We see the set-up for Propublica’s June 8th publication in the June 7, 2021 White House press briefing:
Q And then, secondly, the Justice Department has had a series of policy changes with regards to its relationship with reporters and pursuing reporters’ sources and possible prosecutions. I was wondering: Under this administration, will the Justice Department still be trying to compel reporters to name sources who are anonymous or unnamed in court? Will they continue to do that?
MS. PSAKI: Well, I think that the announcement from this weekend — or the statements from this weekend, which are entirely consistent with the President’s comments he made just a few weeks ago, make very clear that going forward, consistent with the President’s direction, the Department of Justice, in a change to longstanding practice, as many of you have noted in here before, will not see compulsory legal process in leak investigations to obtain source information from members of the news media doing their jobs.
That is entirely consistent with delivering on the President’s comments just a few weeks ago and entirely consistent with his policies now. It doesn’t mean — there are still — it’s an independent Justice Department. They will proceed, of course, with a range of investigations, which, as we noted in our statement on Saturday morning, we did not know about the gag order until minutes before the reporting came out on Friday night. So that’s appropriate, but at the same time, moving forward, consistent with the President’s policies, they will not be proceeding with those actions that have been consistent over the last several years.
The afternoon of publication, June 8, the White House press secretary gave the official line in response to another likely pre-cleared question:
John: (43:01)
A separate issue. There was a report this morning about basically IRS records showing that very wealthy Americans have evaded paying income tax almost altogether in certain circumstances. One, do you have any reaction just to that as a factual matter and two, are you concerned about that just from a leak standpoint?Jen Psaki: (43:22)
Well, let me take the second part first, because I think that’s important. Any unauthorized disclosure of confidential government information by a person with access is illegal, and we take this very seriously. The IRS commissioner said today that they are taking all appropriate measures, including referring the matter to investigators. And Treasury and the IRS are referring the matter to the Office of the Inspector General, the Treasury Inspector General for tax administration, the FBI, and the US Attorney’s Office for the District of Columbia, all of whom have independent authority to investigate. So obviously we take it very seriously. I’m not going to comment on specific unauthorized disclosures of confidential government information. I can tell you that broadly speaking, we know that there is more to be done to ensure that corporations, individuals who are at the highest income are paying more of their fair share. Hence, it’s in the president’s proposals, his budget and part of how he’s proposing to pay for his ideas.
Propublica claims an elevated moral mission that frees them from little things like laws:
To expose abuses of power and betrayals of the public trust by government, business, and other institutions, using the moral force of investigative journalism to spur reform through the sustained spotlighting of wrongdoing.
They claim to have a higher moral purpose in colluding in a massive series of federal felonies, publishing the tax secrets of the .001%:
We are disclosing the tax details of the richest Americans because we believe the public interest in an informed debate outweighs privacy considerations.
The article itself is a Burning Man sized straw man, deliberately substituting wealth for income and then railing against unrealized, paper gains not being subject to immediate taxation.
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
[ . . . ]
America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.
To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.
We’re going to call this their true tax rate.
If your house has increased in value this past year, that is exactly what the Squad’s wing of the socialist Democrat Party is actually targeting to partially pay for their fundamental transformation of America under their rule. If your retirement fund and any investment, even a gold coin or so, appreciated in value, pay out, sucka!
What were these records, and how did Propublica get them? The authors are confident they will face no investigation, no prosecution, so they are proudly publishing under their real names. They shift voice when talking about how they got all this data.
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.
[ . . . ]
The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.
[ . . . ]
In the coming months, ProPublica will use the IRS data we have obtained to explore in detail how the ultrawealthy avoid taxes, exploit loopholes and escape scrutiny from federal auditors.
[ . . . ]Tax information is among the most zealously guarded secrets in the federal government. ProPublica has decided to reveal individual tax information of some of the wealthiest Americans because it is only by seeing specifics that the public can understand the realities of the country’s tax system.
[ . . . ]
The tax data was provided to ProPublica after we published a series of articles scrutinizing the IRS. The articles exposed how years of budget cuts have hobbled the agency’s ability to enforce the law and how the largest corporations and the rich have benefited from the IRS’ weakness. They also showed how people in poor regions are now more likely to be audited than those in affluent areas.
[ . . . ]
ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions. ProPublica reporters spent months processing and analyzing the material to transform it into a usable database.
So, Propublica told a story the IRA careerists wanted told, portraying the agency as hobbled by budget cuts. Then raw computer data from IRS secure systems was pulled on all Americans above a certain income level. That series of illegal acts, one per taxpayer whose records were improperly accessed, copied and transmitted, almost certainly required a senior IRS career official’s access. Or, the IRS was hacked by someone with the level of sophistication we expect from China or Russia.
But wait, these men, the .001%, are almost exclusively leftists, parlor pink if not mansion Marxists. So, is this the left mindlessly eating its own? Or is this the Squad cadre moving against the older cadre of social venture capitalists, funders of the Clinton and even Obama factions? It is too soon to tell, but do not just sit back with a bucket of popcorn, since the real target is every American who has the smallest bit of the American dream, from a house to a little retirement nest egg. If Bezos owes on his unrealized wealth, than you owe, right now, on the current appraisal of your home and the paper increase in your retirement and any investment portfolio.
Steven Hayward points out the history of the income tax as clear evidence of where a wealth tax will rapidly trend:
Published in EconomicsAny readers out there looking forward to paying taxes on the increased value of your home and other fixed assets? Because if you think any wealth tax would be limited to just the super rich, I have a history of the income tax I’d like to show you from back when it was first instituted, and estimated to affect only a tiny percentage of Americans (ProPublica actually reports this: “In 1918, only 15% of American families owed any tax”), and then at a rate that would never exceed 10 percent.
I don’t like to see laws broken, particularly knowingly and deliberately. I also think the income tax is perhaps the very worst manner of financing government.
I think all necessary government functions could be financed by a transaction tax on the exchange of goods and services and a use tax on land and natural resources. Tax on income and wealth is not needed.
I saw that first in Epoch Times. Let the lawsuits begin. I want to see George Soros’s response.
Amen. And the national media ran with it without so much as a whisper about the illegality or the wealth vs income difference.
The ABC national evening news breathlessly reported that “The wealthiest Americans pay less tax than most Americans”
If we had an honest Congress, they would have prepared reports on the effective tax rates of these 0.001%. But, Congress does *not* want us to know that someone can have $10B in income and pay 2% on that. Where do I sign up to pay 2%?
I cant decide if there are no honest people in Congress, or if the corruption is too vast for the few honest people to expose it.
Let’s change the tax code so that the 1% and Congress and their staff have to make summaries of their tax returns public.
This is a classic case of how the left rationalizes law-breaking in support of issues that they support. Serious hypocrisy.
And it’s worth pointing out how much in taxes these guys–none of whom are on my Christmas card list– actually pay. That should be the story, but, of course, isn’t.
Except no one has $10B in annual income here. No one. They may have paper gains in stock value, but they would have to sell to see that become spendable income.
On the other hand, I feel somewhat vindicated. When some assured us that if Donald Trump were to release his taxes all sorts of illegalities would be revealed, I stated that if anything were actually there his tax returns would be leaked in a heartbeat. This shows that the IRS is still the den of political vipers we all believe it to be.
The income of most billionaires is capital gains, taxed at 20%, rather than wages. If that billionaire has capital losses, they can be written off against some of those gains, and can be carried forward to future years. The wealthy can time their gains as they wish as well as their losses.
Actually, from what I saw, they were paying an effective Federal income tax rate of 18 – 25%
Example … over the period examined, Bezos’ total income was 4.22 billion and he paid 973 million in federal income tax. That’s an effective rate of 23%
Bloomberg’s effective rate looks like it’s 2% because they are only looking at US taxes paid. Because Bloomberg has worldwide income he pays foreign tax. That 10 billion income is his worldwide income. But the 292 million mentioned is only the US taxes paid. The US taxes global income, but gives you a tax credit for foreign taxes paid. So his effective US rate is 2 – 3%. But we have no idea how much he paid overseas.
But Propublica knows, because they got the raw data. So they lied even bigger here.
The effective tax rate of tax returns filed with the IRS with adjusted gross income over 1,000,000 is about 30% Those returns account for about 1/3 of total income taxes paid.
Returns with AGI of 100,000 and over account for 85% of income taxes paid.
https://www.irs.gov/pub/irs-soi/18in11si.xls
What makes you think that is what it’s for?
We can’t say they lied, because there are many lines with an income total. What we should care about is “taxable income” and taxes due. Maybe he gave a *lot* of money to charity. Dunno. From the data provided he paid 2% while Musk paid 30%. All I am sure of is that Congress is full of corrupt politicians and some sunlight will reduce the corruption.
To the US. The narrative mentions credits for taxes paid to foreign governments. So, yes, they are concealing the truth.
Oh wow. I understand credits for taxes paid to us states, but credits for taxes paid to foreign countries?
Exactly.
Donald Trump has been living under a continuous IRS audit at least 14 or 15 years–it was at 10 years when he ran in 2016, and that was 5 years ago. I am sure there is an IRS legal department devoted to Donald Trump and The Trump Organization. I imagine he has an extensive accounting legal team on his side.
If there were anything there that was illegal, frankly, the error would be on the IRS side because they have been calling the shots.
And asset valuation always comes down to the subjective opinion of the estimators.
I know it keeps several occupational industries afloat and those work diligently to keep the system from changing. There’s another thread by @markcamp discussing inflation, the monetary form of which is coupled with the income tax to fleece the American people.
Just the yearly work and the angst alone burdening individuals should be enough to demand the abolition of the income tax system.
Yes. Same idea. There is honor among thrives. The thieves agree to only steal from us once. There are double-taxation treaties between virtually everybody and everybody else. These are especially important for the US. Unlike virtually every other country, the US taxes residents on their global income wherever it was earned. While other jurisdictions tax on income earned within their jurisdiction. So if Bloomberg earned billions in the UK, the UK would tax him on that income. And so would the US. If he paid the UK tax, he could take that amount as a credit against the tax due to the US. I’m sure there is some arbitrage about who to pay and where to use the credits. But the point is that his US tax return starts with ‘earned income = 10 billion’ and ends with ‘taxes due US = 280 million”. And Propublica is reporting that. What they are leaving out are the credits and deductions in the middle.
Typical. They report the truth, and nothing but the truth…but never the whole truth.
I know nothing of truth beyond what I see with my eyes and I’m not certain of that.
The Fair Tax is a great alternative . . .
In the beginning taxation was all about raising revenue. In the post-WWII world it’s all about control. It is the government’s carrot and stick. Tax breaks for things they want, fines on activities they don’t want.
And with the adoption of Modern Monetary Theory, the only reason our fiat currency has any worth. Without it the greenback would be Zambian wallpaper.
I just made a comment on another thread asking when are we going to go ahead and call banks another branch of government. They are a big part of the control function.
I always feel so secure with my govt.
I don’t get it. If this data was in the hands of the IRS, then would not the IRS would have already reviewed the filing and taken action if something was illegal? It is not as if a billionaire’s return would get lost in the shuffle with a bunch of e-filed EZ forms.
Congress, in its infinite wisdom, imposes sizeable tax rates then festoons the tax code with goodies and deductable provisions that are just their way of saying “Wink, wink. Just kidding about that rate, you super rich guys. We only meant to screw the uppity layers of the middle class.” That some rich guy wound up paying a lower rate than a senior postal worker with four kids is not news.
This is what I found so amusing in the struggle to get at Trump’s tax returns. The IRS gets an opportunity to question the tax return, and that includes anything they uncover that is missing from the return. All those other interests are looking for any connections that yield them some advantage, political attacks or other.
I had a similar reaction. If no wrongdoing on the part of these taxpayers is alleged/discovered (and let’s not forget that tax avoidance is not synonymous with tax evasion, even though they seem to be used interchangeably by the PP folks), then ProPublica’s beef is with Congress and the laws they passed. You can’t get angry at taxpayers who are following the laws as written to their advantage. If you don’t like how a particular provision worked out in practice, then change the damned law.
It is a bad system very well designed to serve the kind of government we have been evolving.
That’s the point of the post. They AREN’T paying a lower rate than a senior postal worker. But Propublica has ginned up the story to make it appear that way. They are really paying an effective rate of 20-30%. (Your senior postal clerk is probably at about 10-12% effective rate)
Ahhh … the IRS is entirely apolitical. We know nothing. Obama did not weaponize us!
Assuming the data ProPublica is reporting is real (as I learned from corporate rumor mills, many “reports of . . .” are pure fabrication), it’s not the argument over tax rates that should bother the general public – it’s that someone can get their hands on your information, and hand it over to people who want to do you harm. ProPublica is demonstrating that the person who wants to get you fired from your job, or has a property line dispute with you, or wants to undermine your business can get your income tax information so they can publish it and use it against you. That should bother the ordinary citizen.