Tax Day Less Painful For Top 400 Income Earners

In honor of tax day, we have quite the study on taxes. 45% of Americans pay zero tax. Then the top 400 income Americans pay just 17%, not 35%, in taxes. Why? In part, capital gains, which is taxed at a 15% rate. That's Wall Street profits folks.

The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.

That said, watch out, Republicans are out to give more tax breaks to the wealthy. Bear in mind most of America is poor, with the median income being a little over $26,000 dollars.

So, statistics like the below disguise the fact the super-rich pretty much already have most of the money in the United States.

More than half of the nation's tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes.

IRS fails government audit

Irony Alert! Please put on your Irony Goggles.
I don't have to tell you that audits suck. Just ask the IRS.

A new report from the Government Accountability Office inspected the tax agency's financial statements from the 2009 fiscal year with the exacting thoroughness of, well, of an IRS auditor, and found a few billion-dollar errors.

about that deficit... IRS Tax Revenues Fall 34%

Beyond our absurd deficit, what is more scary in this story of tax revenues falling 34% from one year ago, is that amount of money is only $138 Billion dollars. That is 34% drop off, which implies last years IRS total revenues were $405 Billion.

Think about $1 trillion. Multiple that by 12 and then see what 34% of our tax revenues in a year is. Last year's tax revenues were $405 billion. That means to just pay off $1 trillion dollars, no interest, just the principle, would have taken 2.5 years and this is before the 34% drop in tax collections. Yet the government committed to $12 trillion total in financial bail out commitments.

Oh yes, the reason IRS revenues have dropped is once again, Americans are broke and we need jobs, jobs, jobs, jobs. So here is yet another factor where everything depends upon employing the U.S. labor force.

IRS stops outsourcing private debt collection

Here's a good move, although it's more symbolic in terms of savings. IRS Stops using private contractors for debt collection:

So much for privatizing the federal government.

The Internal Revenue Service's decision this week to quit using debt collectors to dun delinquent taxpayers was celebrated by public employee unions as a pendulum shift after watching the Bush administration often opt for private contractors over federal workers to deliver government services.

From Senator Byron Dorgan's website:

Oh those Secret Swiss Bank Accounts - UBS Pays $780 Million

This is juicy. Of course there are now many countries available to hide money and avoid paying taxes. (Let's invade the Caymans?)

In UBS Will Disclose Names, Pay $780 Million to End U.S. Tax Case, Bloomberg has some real cloak and dagger details:

The bank’s Swiss advisers traveled to the U.S. a few times a year to solicit customers at art shows, as well as yachting and other sporting events, the SEC said. To conceal their activities, advisers carried encrypted laptop computers and got training from the bank on avoiding detection, the agency said.

UBS settled the probes after a series of disclosures that followed the guilty plea last June of a former private banker, Bradley Birkenfeld.