Shelters and loopholes

[fivepennies]

Offshore Tax Havens: The World's 10 Best Tax Havens
A tax haven is of course a country or territory where certain corporate or individual taxes are set very low or do not exist at all
the super rich are depriving their home countries of large amounts of much needed public money - thus placing more of a burden on those with moderate or low incomes. We have seen this for many years in the UK and the USA, where a small proportion of people control a large proportion of the wealth yet the burden of public spending is placed firmly on those who struggle.
10. Andorra
9. New Zealand
8. Switzerland
7. Hong Kong
5. Guernsey & 6. Jersey
4. Panama
3. The Isle of Man
2. The Bahamas
1. Monaco


Reuters) - Tax and accounting loopholes that largely benefit rich taxpayers and companies cost the government $20 billion a year even as the pay gap between chief executives and employees has widened, two groups said on Monday.
http://www.reuters.com/article/2008/08/25/us-usa-tax-loopholes-idUSN2235030820080825
The biggest loss comes from a "stock option accounting double standard" that allows corporations paying executives stock options to deduct more than their actual expenses, they said.
For example, when UnitedHealth Group Inc paid CEO William McGuire 9 million stock options, it put on its financial statement that the compensation cost the company nothing, according to the Institute for Policy Studies and the group United for a Fair Economy.
But it claimed a tax deduction of $317.7 million, the groups said.
That practice alone costs the U.S. government $10 billion a year, the groups said.
A practice known as deferred compensation -- which allows executives to defer an unlimited amount of pay -- costs the government $80.6 million a year, while other loopholes bring the total lost tax revenue to $20 billion, the groups said.


Misc. blog: Then there are the myriad of laws that try to alter behavior in other "good" ways. Deductions for charitable contributions, for example, allow a wealthy family to deduct from income the value of a painting they give to a museum. Here's how to play this game, if you're interested: Buy a painting for $10,000, hold it for a year or two, get a friendly appraiser to say it's worth $60,000, and you deduct that from your reported income. That saves you more on taxes than the $10,000 you actually paid.


Misc. blog: In Colorado and I'm sure other states, there are state loop holes for folks who own large "GENTLEMAN'S RANCHES" or acres of land. My new governor in Colorado is one of these millionaires who owns 254 acres of land and didn't want to pay much in taxes for the beautiful land in our beautiful state.

First, the Governor thought, I'll say I'm a wood producer, all one has to do is produce $200.00 worth of wood to claim status as a wood provider.

But alas, the wood provider "loophole" wasn't as big as the "agriculture status" loophole. So the millionaire governor, decided to throw a couple chickens, or a goats on the land a few months out of the year and presto....he now only pays $75.00 on those 250 acres of land. Tom Cruise pays $400.00 in taxes to Colorado for his $18 million dollar spread in Telluride, using a goat to claim AG status.


Tax Deal Trust Fund Loophole Could Save Billions For Rich
Dec. 16 2010 (Forbes Magazine)
http://blogs.forbes.com/janetnovack/2010/12/16/tax-deal-trust-fund-loophole-could-save-billions-for-rich/
If the Senate-passed Obama-Republican tax deal clears the House in its current form, rich families will have until Dec. 31 to save billions in Generation Skipping Transfer Tax on money already sitting in trust funds
The GST tax, in place since 1986, is a second layer of tax applied to gifts and bequests that “skip” a generation—for example, gifts made to grandkids if their parents are still alive. The big, tax saving opportunity comes because the massive tax deal, as passed yesterday by the Senate, not only confirms a 0% GST tax rate for all of 2010, but also creates an additional loophole that wasn’t available when my colleague Ashlea Ebeling first blogged about a potential end-of-the-year “payday for trust babies”.


A tax loophole for the rich, a real estate bubble for everyone
Thursday, February 25, 2010 (Washington Post)
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/24/AR2010022404946.html
The Feb. 19 front-page article "Another wave of real estate distress" described the glut of commercial real estate and indicated that "there will be significant bankruptcies among developers and significant failures among community banks."
An Economy & Business article the next day, "Plan to boost tax on 'carried interest' stalls in Senate," described the Senate's lack of will to tax the profits of huge hedge funds, private equity, venture capital and real estate investment firms. The most vocal opponents of the tax are commercial real estate developers, who say raising taxes would "discourage investment in real estate at a time when the economy needs it most." The article further stated, "One of the incentives of investing in real estate is the capital-gains treatment."


And then there's google: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html (long but explains a lot)

The tactics of Google and Facebook depend on “transfer pricing,” paper transactions among corporate subsidiaries that allow for allocating income to tax havens while attributing expenses to higher-tax countries. Such income shifting costs the U.S. government as much as $60 billion in annual revenue, according to Kimberly A. Clausing, an economics professor at Reed College in Portland, Oregon.
Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures.

[ProgressiveProfessor]

1. Totally foreseeable when you use taxes as a means of social engineering

To use you example, to save family farms taxes were lowered on land used for agriculture. Shazamm!!! there were instantly lots of farmers.

[fivepennies]

2. Yes, its all totally foreseeable.

To regular people, anyway. Our leaders aren't much into forethought, they prefer lobbiests.

[Horse with no Name]

3. Yes. In our area (very red)

You will see pasture with a couple of cows and they receive farm subsidies.

One of our local liberal 'underground' websites (and we are talking REALLY underground 'take your county' back...real corruption/murder stuffa) listed the names of all of the republican "farmers" who were sucking the government teat while voting "against new schools for the black kids".

[ProgressiveProfessor]

4. Link to a database of farm subsidy recipients

Came from another poster here on DU, very insightful

http://farm.ewg.org/search.php?fips=00000%C2%AEionname=theUnitedStates

[fivepennies]

5. Homestead Act.debacle

http://www.enotes.com/major-acts-congress/homestead-act

By the late 1840s the homestead proposal attracted politicians who brought the subject before Congress, the most prominent being Andrew Johnson of Tennessee. Until this time the government had auctioned off public lands to the highest bidder, thereby allowing speculators to buy vast tracts of land and hold it off the market until the price rose so they could make handsome profits. The small farmer was effectively excluded from such land sales. However, by 1841 pressure on Congress to make lands available to common folk had produced the Preemption Act, by which settlers on government land could buy 160 acres for $1.25 per acre before the land was auctioned off.


Congress constantly amended the Homestead Act so as to allow settlers less time to claim their land. This opened the door for fraud. By letting settlers file for land titles early—settlers then paying a small price per acre—Congress encouraged them to make momentary improvements in order to obtain the land and settle their title to a speculator or monopolist. Congress did not encourage settlers to establish permanent farms for themselves.


the federal government in the nineteenth century lacked the personnel to adequately run the land offices. Enforcement officials were over-whelmed. This of course gave rise to cheating. Speculators, monopolists, and others used the land laws to create giant farms. So instead of the Homestead Act promoting small farms, it ended up promoting the large western ranch. Of the some 1 billion acres of public land that the government owned in the nineteenth century, 183 million acres went to railroad corporations; 140 million acres to the states; 100 million acres to Indian tribes; and 100 million acres to free farmers (the total acreage given out in cash sales). (One half of the land had not been sold because it had been reserved for national parks or was totally unsuited for agricultural development.)

So only one acre in five that the government released out of its hands went to small farmers—

[Horse with no Name]

6. Thank you! I had lost this link.

It makes me sick when I go through it and know all of the folks on this list who have NOTHING to do with ranching.:(
One guy used to live next door to me (in town) and had a couple of calves he kept in his backyard....yet received $40k.