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.

Income taxes are at their lowest since 1950, their share of the total economy that is, according to AP article.

As a share of the nation's economy, Uncle Sam's take this year will be the lowest since 1950, when the Korean War was just getting under way.

And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.

Yet, is it fair to compare tax revenues from before the great job slaughter of the last three years? Isn't it even less fair to compare tax revenues to percentage of GDP, when more and more Americans are not sharing in the booty?

From the CBO director's blog, we can see that personal income tax revenues increased 10% from this time last year.

Receipts for the first four months of fiscal year 2011 were about $64 billion (or 9 percent) higher than receipts during the comparable period last year, CBO estimates. Nearly all of that increase was from individual income and social insurance taxes, which together rose by $60 billion (or 10 percent).

Withholding from employees’ paychecks for income and payroll taxes increased by $45 billion (or 8 percent), at least partly reflecting higher wages and salaries; the increase would have been slightly larger but for the Making Work Pay tax credit, which was in effect in 2010, and the temporary payroll tax reduction, which started in January 2011.

The Census Bureau has found State Government revenues declined nearly 31% for 2009. Guess what is causing the shortfall, unemployment. Social insurance money goes into these funds from paychecks.

Total state government revenue dropped to $1.1 trillion in 2009, a decline of 30.8 percent from $1.6 trillion in 2008, according to the latest findings from the U.S. Census Bureau. The large decrease in total revenue was mainly caused by the substantial decrease in social insurance trust revenue.

Social insurance trust revenue is made up of four categories — public employee retirement, unemployment compensation, workers compensation and other insurance trusts (i.e., Social Security, Medicare, veteran's life insurance). More details on the social insurance trust revenue will be available from the 2009 Annual Survey of State Government Employee Retirement Systems data later this winter.

State governments received nearly $1.5 trillion in general revenues in 2009, a decrease of 1.4 percent from 2008. General revenue does not include utility, liquor store or insurance trust revenue.

Total taxes collected in 2009 ($715.1 billion), which accounted for 47.9 percent of general revenue, fell by 8.5 percent from $781.6 billion in 2008. This is the first year-to-year decline in tax revenue since 2002. Federal grants ($477.7 billion) increased 12.9 percent from 2008 to 2009 and accounted for nearly one-third of general revenue.

Here is comes, your State & Local Governments are so broke, they are now squeezing people with fees, digging up cash where ever they can. They are even charging non-profits and churches.

The Wall Street Journal:

Some cities are charging religious groups property taxes on buildings no longer used for worship. Other localities are soliciting voluntary contributions. Albany, N.Y., recently passed an ordinance asking schools, hospitals and other nonprofits to contribute to city services.

In Minneapolis, residents recently began paying a street-light fee that also applies to nonprofits, which in some places pay fees for elevator safety and fire inspection.

Drainage fees that apply to nonprofits have been adopted by cities that include Richmond, Va.; Lafayette, Ind.; and Verona, Wis. Such fees are emerging now because the federal government has been cracking down on how cities handle the rain that rolls off roofs, parking lots, and other impervious surfaces, sometimes causing floods and ripping up roads. The runoff can collect debris, oil and other pollutants and ultimately drag it all into the nation's waterways.

We already know the rich and corporations got quite a haul in the tax bill. USA Today outlines some business tax credits as if the tax breaks under the great giveaway tree aren't enough.

The massive new tax bill signed into law by President Barack Obama is filled with all kinds of holiday stocking stuffers for businesses: tax breaks for producing TV shows, grants for putting up windmills, rum subsidies for Puerto Rico and the Virgin Islands.

There is even a tax break for people who buy race horses.

This is the most outrageous one, a tax break for corporations who invest overseas. Remember all of the rhetoric about banks not funding investment and growth in America, not loaning to businesses? This is the opposite, our Congress just made it pay to create economic growth abroad!

There is a generous tax break for banks and insurance companies that invest overseas, a tax credit for railroad track maintenance, more generous write-offs for upgrading motorsport race tracks,

I kid you not! Here is what this does. It's an exemption that allows banks, insurance companies and other financial firms to shield foreign profits from being taxed by the U.S. through 2011. Cost: $9.2 billion.

Now that the tax bill has passed, here come the additional Xmas gifts no one heard of.

Bloomberg outlines another gift to the rich, this time in the form of Roth IRAs.

The extension of current income-tax rates gives wealthy taxpayers the equivalent of an interest-free loan if they convert a regular Individual Retirement Account to a Roth by Dec. 31.

Investors in traditional IRAs pay taxes up front on conversions to Roth IRAs to get tax-free withdrawals later. Earners in the highest tax brackets who expected rates to rise next year were faced with reporting all the additional income from conversions on their 2010 returns. With the tax legislation, wealthy savers can now defer and use those tax dollars to earn something, according to Christine Fahlund, a senior financial planner at Baltimore-based T. Rowe Price Group Inc.

“It’s the deal of the century,” said Ed Slott, a certified public accountant in Rockville Centre, New York, and founder of website irahelp.com. “It’s like Congress is giving you an interest-free loan to build a tax-free savings account.”

What else is under that Congressional Christmas tree. How many homeless are there this Christmas, how many more layoffs, how many who cannot afford shoes?

Democrats control the Senate. So, did you ever imagine this headline from Business Week, Senate Set to Pass $858 Billion Bush-Era Tax Cut Measure Today:

The U.S. Senate today is poised to pass President Barack Obama’s $858 billion proposal to extend Bush-era tax cuts for all income levels, cut payroll taxes and extend expanded jobless benefits.

Majority Leader Harry Reid said last night on the Senate floor that the chamber will start debate at 11 a.m. on the measure. Before a vote on final passage, senators will take up three amendments, Reid said. Amendments require a two-thirds supermajority for adoption.

There are still a lot of rumblings in the House, but the above says it all about the Senate. Not that this is new, more the headlines make it more official. The Senate is as much for working people as Goldman Sachs is.

Mother Jones points out from polls, people are confused on what each tax cut even is.

Just when you think it cannot get more evil than this, news comes that it can. Via Naked Capitalism, we have this Reuters post, Secret GOP Plan to Push States to Declare Bankruptcy and Smash Unions:

Congressional Republicans appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy.

How? By denying them Build America bonds.

The most intriguing aspect of President Barack Obama’s tax deal with Republicans is what the compromise fails to include — a provision to continue the Build America Bonds program. BABs now account for more than 20 percent of new debt sold by states and local governments thanks to a federal rebate equal to 35 percent of interest costs on the bonds. The subsidy program ends on Dec. 31. And my Reuters colleagues report that a GOP congressional aide said Republicans “have a very firm line on BABS — we are not going to allow them to be included.”

No surprise since the public pension fund is one of the last hold outs for any sort of retirement, so of course it is a target. On the other hand, California, as well as Illinois refuse to deal with major costs, including their illegal immigration budget busting problems.

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.
According to the report (PDF), the IRS made a variety of accounting errors last year that "could adversely affect the reliability of its financial statements" and result in "duplicate or erroneous refunds." Among the mistakes were a "failure to record the receipt of a taxpayer’s $3 million payment" and an $8 billion discrepancy between two accounting systems tracking how much money taxpayers owe. The audit also found a $5.1 billion "unexplained variance" between the total amount the agency took in last year and the amount its detailed tax files said it took in.

David Cay Johnston is exposing YAL (yet another loophole) on corporate and master limited partnership tax structures. Like Billionaires need yet another tax break. Seems energy pipeline owners have figured out a nice little way to charge customers for energy pipeline owners personal tax bills.