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:

Any 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.

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  1. Bob Thompson Member
    Bob Thompson
    @BobThompson

    Miffed White Male (View Comment):

    Bob Thompson (View Comment):

    Goldgeller (View Comment):

    Miffed White Male (View Comment):

    Clifford A. Brown (View Comment):

    Stina (View Comment):

    Ekosj (View Comment):

    DonG (2+2=5. Say it!) (View Comment):
    From the data provided he paid 2%

    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?

    If you earn income in a foreign country, that country is going to tax you. So, it would be unfair for Uncle Sam to then tax you again, on foreign earnings, as if you had not already paid tax. If foreign governments tax at an equal or higher rate to the U.S., then the tax you would owe here, on foreign earnings, gets cancelled by the tax you already paid on foreign earnings.

    Back in the late 1990s, due to a spin-off of a part of a company I once worked for and owned some stock in, I had shares of a company in the UK. The dividends paid on that stock had UK withholding against them.

    Rather than having to file a UK tax return to get my $50 back (or whatever it was), US tax law allows you take a credit for the amount of foreign tax withheld.

    Not exactly the same thing, but same principle.

    I earned like 20 bucks in a foreign stock I bought and I had to pay Turbo Tax more than that just to file it! That’s insane.

    I will say that we will all end up at least filing taxes and we can argue about who should pay taxes later. But the tax code is political instrument, not just a monetary one. The system is literarally meant to be gamed. We should change it but we shouldn’t be mad at people playing a game buy its own rules. You can change the rules. But asking rule abiding rich people to abide by the rules but in a way that makes us feel good misses the point. I want that Rand Paul Carly Fiorina post card tax system. But a lot of people (even those who think they don’t depend on the government) will get their ox-gored and so there is no real will for that.

    I think I am hearing a lot of agreement here that income tax is a bad approach for raising revenue for government.

    It’s the worst approach, except for all the others.

     

    We have some states that use income tax and some that use other means. Most of my conservative acquaintances prefer the states that do not have income tax. Some of them have made moves to reside in a state with no income tax.

    • #61
  2. RufusRJones Member
    RufusRJones
    @RufusRJones

    If the government does anything beyond actual public goods and doesn’t keep actuarial systems completely funded, it is regressive. It makes society go backwards. The debt keeps going up, and the government keeps running out of money. You can look at the IRS data. There is no more money to get. Now they want wealth taxes. It’s insane. It’s all facilitated by the Fed Dual Mandate and it makes people want socialism.

     

    Government Is How We Steal From Each Other™

    All Journalists Are Statists™

    The Government Is Running Out Of Money™

    Everything Moves Towards Communism All Of The Time™

     

    • #62
  3. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    Bob Thompson (View Comment):

    Miffed White Male (View Comment):

    Bob Thompson (View Comment):

    Goldgeller (View Comment):

    Miffed White Male (View Comment):

    Clifford A. Brown (View Comment):

    Stina (View Comment):

    Ekosj (View Comment):

    DonG (2+2=5. Say it!) (View Comment):
    From the data provided he paid 2%

    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?

    If you earn income in a foreign country, that country is going to tax you. So, it would be unfair for Uncle Sam to then tax you again, on foreign earnings, as if you had not already paid tax. If foreign governments tax at an equal or higher rate to the U.S., then the tax you would owe here, on foreign earnings, gets cancelled by the tax you already paid on foreign earnings.

    Back in the late 1990s, due to a spin-off of a part of a company I once worked for and owned some stock in, I had shares of a company in the UK. The dividends paid on that stock had UK withholding against them.

    Rather than having to file a UK tax return to get my $50 back (or whatever it was), US tax law allows you take a credit for the amount of foreign tax withheld.

    Not exactly the same thing, but same principle.

    I earned like 20 bucks in a foreign stock I bought and I had to pay Turbo Tax more than that just to file it! That’s insane.

    I will say that we will all end up at least filing taxes and we can argue about who should pay taxes later. But the tax code is political instrument, not just a monetary one. The system is literarally meant to be gamed. We should change it but we shouldn’t be mad at people playing a game buy its own rules. You can change the rules. But asking rule abiding rich people to abide by the rules but in a way that makes us feel good misses the point. I want that Rand Paul Carly Fiorina post card tax system. But a lot of people (even those who think they don’t depend on the government) will get their ox-gored and so there is no real will for that.

    I think I am hearing a lot of agreement here that income tax is a bad approach for raising revenue for government.

    It’s the worst approach, except for all the others.

     

    We have some states that use income tax and some that use other means. Most of my conservative acquaintances prefer the states that do not have income tax. Some of them have made moves to reside in a state with no income tax.

    One of the reason Property taxes are so unpopular is because they are unrelated to cash flow.

     

    • #63
  4. RufusRJones Member
    RufusRJones
    @RufusRJones

    One of the reason Property taxes are so unpopular is because they are unrelated to cash flow.

     

    The only way this is logical is if they tax you just enough and do the right things with it to buoy the property value. I don’t see it getting framed that way very much.

    • #64
  5. Clifford A. Brown Contributor
    Clifford A. Brown
    @CliffordBrown

    Goldgeller (View Comment):
    But a lot of people (even those who think they don’t depend on the government) will get their ox-gored and so there is no real will for that. 

    Yes. AND. The tax profession appears, even more than the legal profession, to be susceptible to automation, capturing most rules in a series of logic gates and generating a plain language user interface that just keeps asking questions until it has walked you through every issue. See TurboTax and all its rivals. True, there is a professional level set of programs (for things like the non-profit annual compliance report Form 990 and associated attachments). AND. Even that level involves automation, reducing billable hours for professional tax preparers/accountants. Indeed, at that level, the real guild protection is the IRS rule that the individual submitting such returns through such software must be fingerprinted, background checked, and then approved by the IRS.

    All these expert-in-a-box systems offer human expert backup and review. However, that is still at a fraction of the old billable hours and compensation, I believe.

    In short, much of this clerical/white collar profession has been “coded.” Or so it appears to this observer half way on both sides of the desk. (I have prepared a 990 for my VFW post for a couple years and am now staring down the need to outsource or get certified due to a new IRS rule mandating electronic filing via professional level software.)

    On the low end, the IRS has partnered with six e-filing software companies to offer FREE state and federal returns for taxpayers with AGI under about $75,000 — varying depending on the partner company. I am not sure of the incentives, but this means potentially cutting out a lot of low level, simple return preparation from small tax preparers/ accountants. The only barriers there are habit and basic literacy/fear of looking up a government website.

    • #65
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