Weekly Audit: The Shocking Truth About Taxes

 

By Lindsay Beyerstein, Media Consortium blogger

The super rich are different from you and me. For one thing, their tax rates are lower.

According to IRS statistics, the nation’s top 400 taxpayers increased their average income by 392% and slashed their average tax rate by 37% between 1992 and 2007, Dave Gilson reports inMother Jones. Furthermore, when you factor in payroll taxes, the tax rate for Americans earning $370,000 is nearly equal to the rate for those making between $43,000 and $69,000 a year.

Meanwhile, at TAPPED, Jamelle Bouie notes that, in 2007, more than 10,000 Americans reported incomes of $200,000 or higher and paid no income tax at all. These lucky ducks are known to the IRS as HINTs, which stands for High Income, No Taxes.

Pseudo-farms of the rich and tax-dodging

The ultra-rich are using deluxe hobby farms to dodge millions of dollars in taxes, Yasha Levine reports for The Nation:

Take Michael Dell, founder of Dell Computers and the second-richest Texan, who qualified for an agricultural property tax break on his sprawling 1,757-acre residential ranch in suburban Austin and saved over $1 million simply because his family and friends sometimes use the land as a private hunting preserve to shoot deer. Or take billionaire publisher Steve Forbes, who got more than a 90 percent property tax reduction on hundreds of acres of his multimillion-dollar estate in upscale Bedminister, New Jersey, just by putting a couple of cows out to pasture.

Agricultural tax breaks were originally designed to help farmers stay on their land as suburban sprawl grew up around them. As neighborhoods shifted from rural to residential in the 1950s and ’60s, farmers struggled to keep up with rising local taxes.

So, who’s a farmer for tax purposes? Levine reports that the standards are ridiculously low in many states, like New Jersey, where a yard full of weeds can qualify as a farm.

Worst of all, tax breaks for faux farms are depriving public schools of billions of dollars of desperately needed revenue. In Texas–which loses over a billion dollars a year in property taxes from pseudo-ranches of the rich and famous–hundreds of public school students are taking to the streets to protest massive proposed layoffs of teachers and support staffers, Abby Rapoport reports in the Texas Observer.

Tax me, I’m rich

A group of self-proclaimed “trust fund babies” is demanding higher taxes, Pete Redington reports for Working In These Times:

Resource Generation recently teamed up with another nonprofit that organizes affluent activists, Wealth for the Common Good, to form a Progressive Tax Campaign. They will be organizing and advocating a change in the policy, laws and perceptions of our tax system. Specifically, the campaign aims to draw attention to the social services that taxing the wealthy could fund, and advocates higher tax bracket rates for top income earners, as well as higher taxes on investment income.

Major debt

Student loan debt is likely to reach $1 trillion this year, outpacing credit card debt for the second year in a row, Julie Margetta Morgan reports for Campus Progress. Student loans can be a smart investment if they lead to a lifetime of higher earnings. However, Margetta Morgan notes, the average bachelor’s degree holder will shell out $250 a month for a decade to pay back the loan.

Many Americans won’t pay off their debt until their own children are in college. President Obama was still making payments into his late 40s.

As college tuition continues to rise, we can expect students to borrow even more for their education in years to come. Much of this debt is guaranteed by the taxpayer. Margetta Morgan argues that colleges should be doing more to educate students about smart borrowing.

The economics of happiness

Kristy Leissle reviews the new documentary, The Economics of Happiness, for YES! Magazine. The film argues that community is the foundation of happiness and that globalization is the enemy of community. The movie also examines what ordinary citizens can do to nurture their own communities.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

One Factor Behind America’s Poor K-12 Education System

During my high school years, I had the acquaintance of a fellow student – a person who still holds a strong presence in my memory. This person was one of the most ambitious, most determined individuals in the school; today she goes to one of America’s top universities. She may very well be the next president of the United States – and this is a serious statement.

One day this student asked me an interesting question: “What do you see me doing when I’m fifty years old?”

I teased, “I see you as a high school English teacher.”

She laughed, “I would kill myself if that happened.”

This simple sequence provides a powerful illustration on why America’s K-12 education system is so bad. The best and the brightest view teaching K-12 as a demeaning profession. Go to a class in Harvard, for instance, and ask what the students there want to do after they graduate. There will be lots of future investment bankers, lawyers, and politicians. There will probably very few K-12 teachers, if any at all.

In the countries with the world’s best education systems, places like Finland and Singapore, the conversation above makes no sense. Ambitious, talented people – like the classmate mentioned above – actually want to be teachers in Finland and Singapore. In America this isn’t the case.

This is a big reason why America’s public education system is so weak. A strong education system has good teachers. Logically, a country in which talented people want to be teachers will have good teachers. A country in which talented people belittle the K-12 teaching profession – say, a country like the United States – will probably not have good teachers.

The college system provides another example of this. In America being a professor is quite a desireable job; a lot of very intelligent people dream of teaching college students. Not coincidentially, America’s university system is the best in the world.

The great conundrum, then, is making the K-12 teaching profession desireable to people like the classmate mentioned above. In other words, one needs to change the culture. That is a very hard thing to do. Short of boosting teacher salaries to lawyer-like levels – something which will cost at least several hundred billion dollars, and which nobody is thinking about even in their wildest dreams – there is no easy solution in sight.

There is, of course, more to the problem of American public education than this. Education involves not just teachers, but students as well (indeed, students are actually more important than teachers). Even the best teachers cannot make gold out of students who just do not care for school. And, if one is honest, there probably is also something to the claim that American students are generally less motivated than students in, say, South Korea.

--Inoljt, http://mypolitikal.com/

 

 

Guns and Butter

We are spending $2 Billion a week in Afghanistan. If you want to see zeros, that's $2,000,000,000.00 a week. It also means $104 Billion a year.

Meanwhile, we can't afford to keep our education budgets in functional condition. We can't reduce our National Debt. We can't bring down our operating deficit. And we are spending a fortune on foreign servicing (read China) of our debt.

There's more...

Guns and Butter

We are spending $2 Billion a week in Afghanistan. If you want to see zeros, that's $2,000,000,000.00 a week. It also means $104 Billion a year.

Meanwhile, we can't afford to keep our education budgets in functional condition. We can't reduce our National Debt. We can't bring down our operating deficit. And we are spending a fortune on foreign servicing (read China) of our debt.

There's more...

Speaker Pelosi, War Funding Next Week is No "Emergency"

House Speaker Nancy Pelosi says she is committed to passing an emergency war supplemental before the July Fourth recess, Roll Call reports.

Let us be perfectly clear, as President Obama might say. There is no "emergency" requiring the House to throw another $33 billion into our increasingly bloody and pointless occupation of Afghanistan before we all go off to celebrate the anniversary of our Declaration of Independence from foreign occupation.

There's more...

Diaries

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