Millionaires' audit chances fell 36% last year
Public Financing Advocates Await Bill for Congressional Contests
| Getting fed up with favors for the rich? Here’re three things one can do. We trim, blend, and append four 2009 articles from; (1) USA Today, Mar 23, on IRS audits by Sandra Block; (2) AlterNet, Apr 1,9on Geithner’s plan by Dean Baker; (3) News for Real at AlterNet, Apr 1, on closing accounts by Stephen Pizzo, author of Inside Job: The Looting of America's Savings and Loans, which was nominated for a Pulitzer; and (4) Open Secret’s Capitol Eye, Mar 26, on public financing by Michael Beckel. |
by Sandra Block, by Dean Baker, by Stephen Pizzo, and by Michael Beckel
- Millionaires' audit chances fell 36% last year
IRS audits of taxpayers with income of $1 million or more declined by more than a third last year, despite the agency's claims that it stepped up scrutiny of wealthy taxpayers.
Audits of millionaires dropped at least 36% in fiscal 2008 from 2007, according to the Transactional Records Access Clearinghouse, affiliated with Syracuse University.
The drop in audits affected returns filed by taxpayers who earned income at the height of the real estate boom, before the economy turned sour.
Wealthy taxpayers had just a 4.4% chance of being audited in fiscal 2008.
Wealthy taxpayers are more likely to hide income. Taxpayers with adjusted gross incomes of $500,000 to $1 million fail to report 21% of their income on average, vs. 7% for those earning $40,000 to $50,000, according to a 2008 analysis by Joel Slemrod, a University of Michigan economics professor, and IRS economist Andrew Johns.
JJS: Favors from the IRS, favors from the Treasury -- must be nice.
- Geithner Plan Will Make the Rich Richer!
We're still getting screwed. Treasury Secretary Tim Geithner plans to subsidize the purchase of junk mortgages and their derivatives. No one claims that spending $1 trillion will actually clean up the banking system -- only that things will get better.
Some people will get richer off Geithner’s plan. The CEOs who bankrupted their banks will continue to receive multi-million dollar salaries. Some hedge and equity fund managers could rake in hundreds of millions or even billions. And, under current law, they will pay a lower tax rate on this money than a schoolteacher or firefighter.
Every plan so far uses taxpayer dollars to subsidize the bankrupt banks and keep them breathing a little bit longer, while offering opportunities for other Wall Street actors to get hugely wealthier. Is it because officials are so closely tied to Wall Street (such as Geithner himself, Paulson before him, et al)? Maybe they just lack creativity and imagination. They did lack the ability to see an $8 trillion housing bubble, the largest financial bubble in the history of the world.
On April 11th, 2009, the public will come out in cities across the country to express their frustration and disapproval with how our elected officials have handled the economy.
- Pissed Off at Banks? Here's A Way to Get Back
Since taxpayers are now major stakeholders, we need to force the Obama administration to do to these tumorlike institutions -- currently hiding behind the myth they are "too big to fail" -- what they just did to GM. They must fire their senior management and either clean up the mess they made or face immediate seizure and liquidation.
Moving our checking accounts will do the trick. If you bank with any of these money center banks, withdraw your funds immediately. Deposit them in an independent community bank or credit union instead.
JJS: To do more, weaken the influence of big contributors on lawmakers.
- Public Financing Advocates Await Bill for Congressional Contests
House members raised an average of nearly $2,000 a day during the 2008 election cycle; for their Senate counterparts, the amount was more than double.
The Fair Elections Now Act would establish a federal fund that congressional candidates could utilize, so long as they adhered to fundraising regulations. (Public financing for presidential candidates is already available, but the 2008 election highlighted the need to modernize that system.) House and Senate candidates wishing to use the public financing system would be able to qualify by receiving a certain amount of contributions as "seed money" from donors in their home state -- with individuals contributing no more than $100 to a candidate.
Public financing of congressional races would level the playing field between incumbents and challengers and reduce the conflicts of interest between lawmakers and big-money contributors.
JJS: Maybe then we might elect officials who could grasp the wisdom of not taxing income downstream after it’s been concentrated but instead recovering society’s surplus upstream. At the root of unearned fortune is the rent spent for land and resources, including the EM spectrum and “fields of knowledge” via patents and copyrights. Those values are in the trillions each year. Imagine getting your share!
If Geithner’s bailout stays at “only” $1 trillion, that’s about $8,000 per registered voter. So, Geithner’s plan is better than real people becoming $8k richer? Making ends meet? Tossing off the yoke of debt? Replacing lost savings?
After the crash of 1929, there were occasional stock rallies, followed by fierce bears. It took 25 years (until 1954) for the Dow to regain its old peak (Greider, The Nation, Mar 30). Well before then, let’s have economic justice in place.
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Jeffery J. Smith runs the Forum on Geonomics.
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Also see: What might sound good really doesn’t work
Public dollars are already lining speculator pockets on Wall Street
Money still rules and the biggest bloc of voters stays home |
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