You already know that I consider TheDonald the most corrupt president (along with his administration) that America has endured since the days of Tricky Dick.
From his “I won the election” lies, to his spying on the opposition (he even spied on his own White House Counsel), from the corruption of the Justice Department by Casino Bill Barr… OK. Enough of that.
Except I am going to bring up one more issue that will probably piss every one of you off. Not only because it was done in almost total secrecy, but because it was already among the most vile of tax loopholes that existed in America. The fact that TheDonald (and his corrupt Treasury Secretary Mnuchin) delivered additional private gifts on the 5th of January (now you know why you never heard of it- their Insurrection of the 6th of January, 2021 buried all other news) is significant, as well.
Maybe it’s time to remind you that Secretary Mnuchin had his own private equity and hedge fund entities. So, it wasn’t hard for him (and TheDonald) to cave in to the multimillion dollar influence campaign these firms led to arrange for these private little benefits. And, you do know that this almost $ 5 trillion business segment compensates its executives to the tune of 9 or 10 digits. (For those of you not used to dealing with such large numbers, we are talking in million and tens of millions of dollars.)
Lately there has been much talk of how America does not really track the income (or wealth accumulation) of the rich. Almost everyone in America who makes less than $ 250K has no opportunity to cheat (NOTE: THAT is a GOOD thing!)- since their income arrives via paycheck (reported on W-2 forms), dividends (1099’s), capital gains on stock sales (also 1099’s), and savings interest (nowadays, with interest rates so low, the 1099 only shows about $ 10 in interest for the year- if that much).
But, folks who have private companies (those with LLC’s, S corps- with includes hedge funds and private equity) create their own reports to submit to the IRS. (These are the K-1 forms.) And, they get to determine what is deductible or not, how money gets appropriated, etc. (NOTE: President Biden wants all banks to report to the IRS the amount of money deposited in the accounts of these firms each year. Kind of like how the credit card firms must report all income received via credit cards to the IRS (1099-K forms). So, the IRS can discern if- and how much- finagling of the company finances actually obtains.)
When it comes to private equity and hedge funds, they go the routine one better. Instead of having just one partnership- they have myriads. To obfuscate the flow of money so that the IRS has a most difficult task in tracking the potential taxable profits. Moreover, partnerships are flow-through entities- that means they owe no income taxes; the profits of the partnership (or S corp) flow to the stockholders or partners- and these are reported on the self-developed K-1’s mentioned above.
Given these facts, you should not be surprised that it’s much easier for the IRS to harass (oh, wait- the IRS calls these audits) folks earning $ 25 K or less than the top 1%. How much easier? The IRS audit rate is 3:1 for those two income segments!
Which explains why some $ 75 billion is hidden from IRS tax collections by these partnerships. And, that’s without any changes in tax rates or regulations! (Consider this- that’s the size of the DOE- Department of Education- budget.)
Folks like me who know how things work (or don’t) recognize that the $75 billion is but a drop in the bucket. Private equity executives have found ways to shelter the $ 120 billion in compensation they receive annually.
Tomorrow- we’ll continue.
And the rich get richer. And a certain segment of the lower income part of our country think these people need protection and vote for those who protect them – why? why?
Alana recently posted..For When It’s Time
We have to change the rules for this segment- big time!