Actually, it already has been destroyed. Despite declaring $18 billion in profits in 2010, Apple paid just 17 percent in federal taxes. It socked away another $74 billion offshore and tax-free.


9. How to lower your taxes by sitting on your ass.
Back in the 1970s "hard work" wasn't just something candidates yammered about during campaigns. It was actually embedded in the tax code. Capital gains — investment income created by things like stock dividends — were taxed at a higher rate than wage income for a very simple reason.

"The theory was that it was tougher to dig a ditch than to watch somebody do it," says Robert McIntyre, director of Citizens for Tax Justice.

Missouri native Sheryl Crow benefited to the tune of $2 million on a loophole put in place by Tennessee, Kentucky and Texas lawmakers.
Kevin W. Burkett
Missouri native Sheryl Crow benefited to the tune of $2 million on a loophole put in place by Tennessee, Kentucky and Texas lawmakers.
Republican presidential nominee Mitt Romney is the poster child of offshore tax schemes.
Republican presidential nominee Mitt Romney is the poster child of offshore tax schemes.

Even Ronald Reagan knew that someone shouldn't pay less for sitting on his ass. He made the capital-gains tax the same as the highest personal rate.

But heavy protection payments have since whittled that notion of "hard work" down to a toothpick. George W. Bush finally hacked it to its current low of just 15 percent.

Officially, the theory is that lowering capital gains will spur investment, creating new companies, new jobs and prosperity for all. But most economists have found it does little to spur savings and investment.

What it does do is deliver a fortune to investment bankers and financiers. So outlandish is this arrangement that the nation's most revered investor, Warren Buffet, has called on the federal government to tax him and his super-rich friends at a higher rate.

Over 70 percent of the $100 billion that capital-gains tax breaks cost the government each year goes to those with incomes in excess of $1 million, according the Joint Committee on Taxation. Even more shocking, the 400 highest-income Americans received 16 percent of all net capital gains in 2009, a total of $37 billion.

Congressman Sander Levin, a Democrat from Michigan, has tried to shear this golden lamb by requiring those taking capital gains breaks to prove they actually invested. Yet Congressman Dave Camp, a Michigan Republican and chairman of the House Committee on Ways and Means, has blocked the bill from ever coming up for a vote.

It's probably just coincidence that since Camp entered Congress in 1993, he's taken a whopping $631,916 from the financial industry. Camp did not respond to repeated interview requests.


8. The Sheryl Crow loophole.
It pays to have low friends in high places. Six years ago legislators from Tennessee, Kentucky and Texas wanted to reward those who provide the star power to their fundraisers: country musicians. So they passed a law allowing songwriters to avoid income taxes and sell their publishing catalogs at capital-gains rates.

Suddenly, Nashville's elite could not only avoid the taxes everyone else must pay; they could also skirt their Social Security and Medicare bills.

Three years later, Sheryl Crow sold her publishing rights to one of Australia's largest banks for nearly $10 million. Her estimated savings courtesy of this congressional giveaway: $2 million.

The law, however, curiously omitted other creative types who weren't hosting congressmen's rallies. Authors, for example, still must pay standard income taxes for selling the copyrights to their books. The same goes for painters, photographers, screenwriters and sculptors.


7. Getting rich, Facebook style.
Before Facebook offered its first publicly sold stock in May, CEO Mark Zuckerberg grabbed 120 million shares for himself, then threw another 67 million shares to his employees.

It may have seemed an unusual act of generosity for a man not known for his grace. That's because it was also a multibillion-dollar tax dodge.

The public paid $38 a share for Facebook stock in initial trading. Yet via a sweet little loophole created by Congress, Zuckerberg claimed the shares he gave employees were worth just six cents a piece. By law, Facebook was allowed to deduct the difference — more than $7 billion — as a business expense.

In reality, the employee giveaway cost Facebook nothing. It neither expanded the company's expenses nor increased its liabilities. McIntyre, of Citizens for Tax Justice, compares it to an airline letting workers fly free in seats that would otherwise have been empty. The airlines don't receive a break because it doesn't cost them anything.

But thanks to some inventive paper shuffling, Facebook will receive a $500 million tax refund next year.

A similar loophole encourages companies to offer executives those bloated compensation packages.

When CEO wages began to spur outrage in the early Clinton years, Congress decided that companies could no longer deduct executive salaries over $1 million as a business expense.

But it also created a loophole that rendered its crackdown meaningless. Exempted were "performance-based" bonuses that surpass that $1 million threshold. A grand new corporate giveaway was born.

Suddenly, CEOs were being slathered with stock options. Companies expensed the giveaway without ever opening their wallets.

Last year, the five highest-paid CEOs collectively took home $232 million — while their companies received a tidy $81 million in tax breaks.


6. My other home's a yacht.
Established in 1913, the mortgage interest deduction is one of the oldest and most sacred breaks in the code. It's meant to encourage home ownership and stabilize communities.

It doesn't really work, because most people will buy homes whether they receive a break or not. Countries such as Australia and Canada have similar ownership rates to ours without offering the deduction.

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12 comments
fancypants
fancypants

@i #have @a hard time #understanding #what you idiots @are talking %about, $why can't *you write a thought !without hitting #shift@one$through*nine?

Mike_a_Mike
Mike_a_Mike

@BobJanz @CaptYonah and Obama has outsourced jobs as president.

Mike_a_Mike
Mike_a_Mike

@BobJanz @CaptYonah he released them. And the IRS would no better than a senator. They have no interest in his taxes.

egolterman
egolterman topcommenter

There are tax loopholes and Tax 'Grand Canyons'. Hundreds of millions a year pour into the Zoo and Museums and Science Center and Gardens for big tax write offs. The money grows and grows in their profit centers (parties, events, banquets) all tax-sheltered. On top of this, to promote and staff this, the taxpayers of St. Louis County layer on $70 million a year. End the Tax, they wont close, they wont charge admission, they wont miss a beat.  

BobJanz
BobJanz

@Mike_a_Mike @CaptYonah Really? Show me one! #Sensata. Trust this over #Fox #Koch Lies and Propaganda http://t.co/XJccE048 #tcot #TPP #GOP

jason1079
jason1079

 @egolterman Burn the museum!! Slaughter the zoo animals!! They are all dragging society down the drain!

mathmagician
mathmagician

 @egolterman

 Yep, Zoos are what is bankrupting this country. Hard hitting journalism... idiot.

Mike_a_Mike
Mike_a_Mike

@BobJanz @CaptYonah simply having an off shore account does mean tax evasion. If u know about the accounts, so does the IRS.

egolterman
egolterman topcommenter

 @jason1079

 No, end the corruption. That's all. End the corruption. Return money to the taxpayers. End the crooked deals. Actually take care of the animals at the Zoo not party guests. Go to the Museum but the Museum is not used to kill MUNY.

Just end the corruption.

 
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