According to a recently released IRS report, many of the wealthiest citizens in the United States are not paying their fair share.
It's no secret that the wealthy have long benefited from the numerous loopholes the United States tax laws make available, but a recent report, issued by the IRS, gives an even clearer look at just how little some of the nation's wealthiest people are contributing to the system.
The report shows that 1,470 millionaires and billionaires paid no taxes in 2009, instead diverting funds to charities and government bonds as well as taking cash from overseas operations. Those who did decide to pay, mostly did so at a 15% tax rate as capital gains rather than the government mandated 35% tax rate that should've been applied.
Those working in the lucrative hedge fund industry are under no real pressure to pay any taxes for their earnings. The bi-partisan approved law, passed under the Bush administration, caps taxes on hedge fund earnings at 15%. However, the tax is only applied when the hedge fund members "cash out." So, as long as they leave their money in the hedge fund, taxes are deferred. The existing tax laws resulted in a tax bill of zero for famed hedge fund manager, John Paulson, who earned about $9 billion in fees over the course of two years.
Another example of the loophole-happy wealthy is Frank McCourt, owner of the Los Angeles Dodgers, who, as divorce documents revealed, has not paid income taxes since 2004. He simply furnishes his lavish lifestyle by borrowing against Dodgers ticket revenue.
According to the laws that bind the IRS, McCourt, Paulson and many of the nation's wealthiest citizens, are completely untouchable.