April 15th, the dreaded tax day, is nearly upon us and an article from the San Fransisco Chronicle this month expands on the fact that nearly half of Americans (consumers) pay no federal taxes while the top 10% earners (producers) pay 70% of the taxes. And those taxes are going to go higher so those top 10% will be burdened even more. As the burden becomes greater, more of the producers are giving up their citizenship in hopes they can preserve their capital. Most producers do not mind paying a reasonable tax, but when they are marginalized, treated as idiots, called names by those on the dole, while they are the ones paying the bills, it is understandable why so many want to get out.
Excerpt: About 47% of Americans will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability.
The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education...
It is a system in which the top 10% of earners — households making an average of $366,400 in 2006 — paid about 73% of the income taxes collected by the federal government.
The bottom 40%, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.
"We have 50% of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation. Read more here.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.
"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
And Bob Bauman write in his news letter this week that more than 500 people have revolted against taxes in 2009 by giving up their U.S. citizenship, more than the last two years put together.
Growing frustration with the growth of government has spawned hundreds of “individual tax revolts” in recent months.
Last week, the Dow Jones Newswire reported that 500 people worldwide renounced their U.S. citizenship or permanent residency in the 4th quarter of ‘09. That’s more than in all of ’08 and ’07. The article attributed this exodus to “looming U.S. tax increases and a more aggressive posture by the Internal Revenue Service towards Americans living overseas.”
Certainly, diversifying overseas is a smart option. Yet if severing all ties with the country of your birth seems drastic, there is good news. You don’t need to pull up stakes permanently from the U.S. to keep more of what you earn and protect your wealth.
There are a multitude of legal, current techniques and strategies you can use to pay far less in taxes while safeguarding your financial privacy and assets—even in an era of growing government.
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