"Real rich people figure out how to dodge taxes," – Bush

Excellent post, mugz.

I think it's interesting that George W. Bush appears to have so little respect for authority, and expects everyone to automatically hand him respect, such as his implication that criticizing the president is tantamount to treason.

I was raised to respect the office, but I am having a hard time respecting a man who has a life history of snubbing his nose at the system and has felt he can get away with anything because he is a Bush. I am truly hoping the American people are wise enough to see to it that this man sees the door in January.

I agree that this is an excellent post.

The tax laws really frustrate me because they are constantly changing and ever since 1992 when I first started filing my taxes, it seems that there is another law that gets on the books that is geared to the rich.

I remember when I first filed, I was able to get a renters credit because I was renting a room. The next year that disappeared. You get nothing unless you own a house.
The same currently goes for leasing a car. If you dont own your own business, you cant write off anything except for your yearly license. However, if you own your own business and lease a car, everything is a tax write off (I mean everything - Gas, Maintenence, Monthly Lease payment, etc).

The part that really ticks me off is owners of Hybrid cars can get up to $2000 the year they purchase the car. After that they get nothing.
However, owners of big honking gas guzzling SUV's can claim a write off every year with some tax loophole.

And you wonder why there is no incentives to get the American public off of a 100+ year old technology such as fossil fuels.

Every other technology has moved forward except for this. That is because the really rich people are the oil barons and they have moved up so far in society that they are preventing this technology from disappearing just so they can stay rich.

Who knows, some day one of them might even get into the White House.

Thanks for your comments guys...

Tax laws are very easy to change as you successfully pointed out... It just seems subject to change for the benefit of those who are making the laws...

Very disenchanting for the little man.

BAM!!!

Nice I like how you incorporated yet another of his outrageous comments into the title. I'm part of the ever shrinking middle class in America and I am just amazed with how easily this President maintains control. If Clinton where doing the same the Republicans would have stopped at nothing to impeach him , oh wait they did impeach him n/m

I wonder how much cheating goes on by wealthy Democrats, and their billionaire wives...

Which is worse, people who don't believe in taxes and who take advantage of loopholes, or people who make imposing taxes on people their life's work, and pay as little as possible themselves?

I think while you have an admirable attitude, Muggaz, it is pretty naive. Do you think the Kennedys or the Rockefellers steadfastly refuse all tax loopholes?

I think while you have an admirable attitude, Muggaz, it is pretty naive. Do you think the Kennedys or the Rockefellers steadfastly refuse all tax loopholes?

Baker - are the Kennedy's and Rockerfellers in a position to change these tax loopholes?

I dont really care who is or who isn't in a posistion to make enough money to be above the masses as far as tax goes, all I know is that George W. Bush is President of the USA right now, and he is resigned to the fact that these loopholes exist, and people are going to take advantage of them, including his family... along with many democrats I am sure.

What George W. Bush should be doing - or any policy maker for that matter, is working their hardest to expose these loopholes, to make sure EVERYONE, whether you are a Bush, Kennedy or a Rockerfeller is paying the right amount of taxes.

BAM!!!

Gosh, I think perhaps some context needs to be added. I suspect that he was referring to the obvious - that the very wealthy are best positioned to find a way around high tax rates. They can afford to hire the brainpower to do so. I suspect he was also alluding to the counter-productive nature of a highly-complicated tax code. Patching the loopholes has never worked as every patch seems to create a new hole; getting Congress to get rid of them has so far been impossible. When the code gets simple enough and the rates get low enough, the rich no longer have an incentive to avoid them - at some point it becomes less expensive to pay taxes than to pay the cost of dodging them. I certainly can't say where that breakpoint might be (not rich enough, obviously), but I think the concept holds water. Unfortunately, the industry dependent on the tax code's complexity is too large & powerful for any real change to occur easily. He may not have stated it very eloquently , but he stated a simple truth. I've yet to see any of the "real rich" who mock him so mercilessly step up and voluntarily pony up more taxes. If they really believe the rich are undertaxed, let them whip out the old checkbook & send it in.

0.02

Cheers,
Daiwa

"Baker - are the Kennedy's and Rockerfellers in a position to change these tax loopholes?"

As ranking members of the US Senate and leaders in the Democratic party, I'd answer with a resounding "yes". Oddly, the Congress is in the business of making law, and the President signs it or vetos it when they bring it to him.

I find that the one blind spot people seem to have. I'd like to know how the President would have more power to close tax loopholes than the Congress. Then we can move on to all the questions of "education" and other state-level systems that people constantly blame the Presidency for...

Muggaz - just what exactly would the "right amount of taxes" be?

Cheers,
Daiwa

Muggaz - just what exactly would the "right amount of taxes" be?

I dont think the issue is the "right amount of taxes" as everyone starts out by paying a percentage of their base salary depending on their tax bracket.

The issue is what they are allowed to write off their taxes.

Unfortunately, if you dont own a business you cant write off that much except maybe your house, your kids, etc.

Now if you own a business, you have a lot more things you can write off. I think this is where most rich people start to work in the loopholes.

Republicans generally believe that by giving the rich a tax cut (which are mostly referring to people that own a business) that they will in turn spend more money into the economy and thus help the economy by hiring more workers, purchasing more goods for their business, etc.

In a perfect world, this model will work. However, we dont live in a perfect world.

By just looking at what is going on in the country (like Enron for instance) we are seeing a trend where the rich are just plain greedy. (Their 8 billion dollars in the bank is not enough) so they take the tax cuts, put that money in the bank to generate more income, and in turn send jobs out of the country (to save them more money to put in the bank), and in turn purchase cheaper goods out of the country (to save even more money to put in the bank).

You just have see what is going on to see that the jobs are not being created as everyone is expecting, and that there are more and more instances of corporate corruption going on to see this is exactly what is happening.

Now before you ask how much is the right amount of taxes, just ask yourself, if you had 8 billion dollars would you really need more.
As part of the disappearing middle class, I can say that if I had just 8 million dollars I would be set for life, even if half of it went to taxes.

Great article Muggaz! No matter how people may want to try to twist things around, it's plain to see there is a problem with the President of The United States making this statement. And he has power here. People like to act like he is this powerless puppet up there. He may be a puppet, but this one has a powerful agenda. He and his have found many ways to get all the things done that they want done.

Most politicians, even rich ones, don't go out of their way to exploit tax loopholes. They know their tax returns are released during campaigns, and being seen as a tax evader is political death.

Any way you slice it, that's a pretty stupid statement Bush made. "The rich are screwing you" is not a theme the incumbant usually wants to hit on.

Great article Muggaz, and it's even worse in my country. Our Prime Minister make Bush look like Gandhi on this one. Paul Martin owns a shipping empire registered in Bermuda. No one really knows what he's worth because all of his money is offshore, but a quarter billion US may not be far off. I've seen estimates that 40% of the wealth in North America is offshore in tax havens. Anyhoo, taxes are a touchy subject: the IRS's supralegal powers are legendary. Very few people go to jail in my country for tax evasion, so I think the level of evasion is likely higher here.

On a smaller scale, 'the professional class' has tax advantages that Joe Lunchpail doesn't. For example, it's not uncommon here for software developers on contract to buy a SUV, slap a www.myconsultingcompany.com sticker on it to make it a work vehicle in the eyes of the taxman, and write it off. A white collar worker taking $6000 a year in morally ambiguous but legal deductions like food, booze, and travel expense has the same effect on the treasury as a welfare bum scamming the system for $500 a month. Which one do you hear people complaining about?

I have to agree with President Bush here, though; I'm fortunate to live in a country where gambling income is tax free

No matter how you slice it, whatever loopholes or whatever you think there are, "the rich" (the top 5%) pay over half the federal taxes. So they're definitely paying more than their share.

Whether or not the wealthy as a class are paying their share--I have no idea how to define what their fair share would be, anyway--I think we probably all agree that the amount paid shouldn't vary arbitrarily by whether someone happens to be engaged in activities favored by some quirk in the tax code. Pork is pork, whether it takes the form of government spending giving money to a particular favored industry or government tax cuts aimed at not taking money from a particular favored industry.

Good grief. Way to completely miss the point of his statement.

The point of the statement was that raising taxes on the rich would accomplish little under the current tax laws, due to the fact that the rich are able to avoid paying a large percentage of their taxes.

This has nothing to do with political party, it is because the rich hire accountants and money managers and such who know how to keep the majority of their cash/income in tax free brackets.

That was the point of the remark.

Vincible has hit the nail on the head - the only sane solution is to get rid of the thousands of pages of convoluted tax regs & truly make it simple. Won't hold my breath, since we don't live in a sane world, but the notion of moving from taxing income to taxing consumption in some fashion has merit & should be explored further. Would do a lot to take the whole class warfare thing off the table. And Draginol is correct - funny how the rich are rich-man Kerry's whipping boys when they are already carrying the bulk of the load.

Cheers,
Daiwa

I am extremely wealthy but still I pay in the name of tax. Every year I have to spend on hookers and holidays for numerous tax inspectors from our dear old Inland Revenue, all in the name of tax evasion!

Don't say the rich don't pay through the nose my dear boy.

I dont have a problem with the rich getting a tax cut provided they use the tax cut in the interest of helping America as a whole. For example by infusing that money back into their companies by creating more jobs and purchasing more goods. Not using a loophole to get their wives SUV as a tax write off even when they arent using for the business.

Giving a company a tax cut to ship jobs to India does not help the American economy no matter how you slice it.

I mean really, what is India giving back - Absolutely nothing.

A tax cut to companies that keep jobs in the states is a much more helpful situation.
It will increase the size of the middle class, that in turn will allow the middle class to spend more money on things like vacations, cars, computers, etc that will move the economy forward.

I mean really, what is India giving back

Indian food, I myself enjoy certain dishes, and I know a lot of people who are just crazy about the stuff.

Bush's program became immediately clear once he took office. He pushed tax cuts for teh wealthy, opposed strict enviromental regulations that would cost omney for teh business interests, and planned to "privatize" Social Security by having the retirement funds of citizens depend on the stock market. He moved to increase the military budget, and to pursue the "Star Wars" program though the consensus of scientific opinion was that antiballistic missiles in space could not work, and that even if the plan worked, it woudl only trigger a more furious arms race throughout the world. If you ask me, bush as a president was just another replica of his father. He supported the corporate control of the economy and used more money on military than on the needs of children throughout the country. Just like his father bush didn't have a plan for free national health care, for extensive low-cost housing, for dramatic change in environmental controls. Both supported the death penalty and the growth of prisons. Both favored a large military establishment, the continued use of land mines, and the use of sanctions against the innocent people of Cuba and Iraq.

Indian food, I myself enjoy certain dishes, and I know a lot of people who are just crazy about the stuff.

I dont agree with you on that one.

We tried Indian food once at our house and BOY!!!!! - India definately has Iraq beat on the WMD!!

Luckly we avoided invasion because we promised not to try Indian food again.

Some great discussion here guys...

The point that seems to be missed by the pro-Bush in this thread is that whilst he has acknowledged these loopholes exist, he has no intention of exposing them...

If I was a member of the American public, that's where my interests would lie - in having a dedicated president who want's 'liberty and Justice' for all... How come invading another country isn't too hard, but really sitting down, and nutting out known existing tax loopholes gets put into the 'too hard' basket...

No one is saying it is easy, but surely people would like to know something is being done, rather than a blatent disregard of the problem...

BAM!!!

Giving a company a tax cut to ship jobs to India does not help the American economy no matter how you slice it.

Where did this myth come from? I don't believe there is any such tax policy which rewards companies for shipping jobs to India or anywhere else, although they certainly avoid the matching Social Security tax, don't they? Not to mention lowering their cost of labor. The real problem here is that we've been insulated from global labor reality for so long that dealing with labor competition is very difficult for us. Despite that, the trend to "offshoring" as many call it is actually a tiny fraction of jobs, far fewer than the cassandra's would like us to believe. On the other hand, has anyone mentioned here lately that the Heinz companies have eleven or so factories overseas, far more than they have in the states? Seems reasonable to have local production overseas for overseas markets, but take a look at that ketchup bottle occasionally & see where it's made.

Cheers,
Daiwa

Pork is pork, whether it takes the form of government spending giving money to a particular favored industry or government tax cuts aimed at not taking money from a particular favored industry.

Do you have children? Is it fair that people with children got a $500 per child tax credit last year and people without children don't? Is it fair that people get to claim dependents? Why should Joe and Jane married childless couple be taxed more than Bill and Jill married with 5 kids?

I don't think some of you have thought this through to its logical conclusion. The tax system is already full of exceptions all the way down the line. 

What we do know, however, is that the wealthy pay lots of taxes. Lots more than the average person (even as a percentage of income). And they receive the same (or less) services than everyone else. 

Should the rich also pay more for their cable TV? Electricity? Food? Where do you draw the line?