There goes the ed money

[Peter Farruggio <pfarr@cal.berkeley.edu>]

Tax cuts for the rich + massive war spending = no 
revenue for infrastructure (schools, health care, public transport, etc)

The current maneuvering in Congress to extend the 
immoral tax cuts for the super-wealthy highlights 
the economic war against all the rest of us by 
those in power.  Here's a brief quote from the 
New York Times story about the estate tax, 
followed by two related articles.  In California 
yesterday, Gov. Ahhhnold proposed to spend $6 
billion of taxpayers' money to build new 
prisons.  No mention of building any new schools 
to replace the current crop of decrepit 
monstrosities that predominate in all of the state's urban centers.

There's plenty of wealth in the USA; but it's 
being withheld from most of the population.  Tax the Rich!

Pete Farruggio

http://www.nytimes.com/aponline/us/AP-Congress-Taxes.html
The bill links a $2.10 increase in the $5.15 
hourly federal minimum wage, phased in over three 
years, with a reduction of estate taxes. It would 
exempt $5 million of an individual's estate and 
$10 million of a couple's from taxation by 2015. 
Over the same time, the top estate tax rate would 
fall from 46 percent this year to 30 percent.

************************************************************************************************************************************************************************
July 23, 2006


I.R.S. to Cut Tax Auditors

By 
<http://topics.nytimes.com/top/reference/timestopics/people/j/david_cay_johnston/index.html?inline=nyt-per>DAVID 
CAY JOHNSTON
http://www.nytimes.com/2006/07/23/business/23tax.html?ex=1154750400&en=9449d55236477933&ei=5070

The federal government is moving to eliminate the 
jobs of nearly half of the lawyers at the 
<http://topics.nytimes.com/top/reference/timestopics/organizations/i/internal_revenue_service/index.html?inline=nyt-org>Internal 
Revenue Service who audit tax returns of some of 
the wealthiest Americans, specifically those who 
are subject to gift and estate taxes when they 
transfer parts of their fortunes to their children and others.

The administration plans to cut the jobs of 157 
of the agency?s 345 estate tax lawyers, plus 17 
support personnel, in less than 70 days. 
<http://topics.nytimes.com/top/reference/timestopics/people/b/kevin_brown/index.html?inline=nyt-per>Kevin 
Brown, an I.R.S. deputy commissioner, confirmed 
the cuts after The 
<http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=NYT>New 
York Times was given internal documents by people 
inside the I.R.S. who oppose them.

The Bush administration has passed measures that 
reduce the number of Americans who are subject to 
the estate tax ­ which opponents refer to as the 
?death tax? ­ but has failed in its efforts to 
eliminate the tax entirely. Mr. Brown said in a 
telephone interview Friday that he had ordered 
the staff cuts because far fewer people were 
obliged to pay estate taxes under President Bush?s legislation.

But six I.R.S. estate tax lawyers whose jobs are 
likely to be eliminated said in interviews that 
the cuts were just the latest moves behind the 
scenes at the I.R.S. to shield people with 
political connections and complex tax-avoidance devices from thorough audits.

Sharyn Phillips, a veteran I.R.S. estate tax 
lawyer in Manhattan, called the cuts a ?back-door 
way for the Bush administration to achieve what 
it cannot get from Congress, which is repeal of the estate tax.?

Mr. Brown dismissed as preposterous any 
suggestion that the I.R.S. was soft on rich tax 
cheats. He said that the money saved by 
eliminating the estate tax lawyers would be used 
to hire revenue agents to audit income tax 
returns, especially those from people making over $1 million.

Mr. Brown said that civil service rules barred 
the estate tax lawyers from moving over to audit 
income taxes. An I.R.S. spokesman said that the 
agency had asked for permission to allow such 
transfers twice, but that the Office of Personnel Management had not responded.

Estate tax lawyers are the most productive tax 
law enforcement personnel at the I.R.S., 
according to Mr. Brown. For each hour they work, 
they find an average of $2,200 of taxes that people owe the government.

Mr. Brown said that careful analysis showed that 
the I.R.S. was auditing enough returns to catch 
cheats and that 10 percent of the estate audits 
brought in 80 percent of the additional taxes. He 
said that auditing a greater percentage of gift 
and estate tax returns would not be worthwhile 
because ?the next case is not a lucrative case? 
and likely to be of relatively little value.

That is a change from six years ago, when the 
I.R.S. said that 85 percent of large taxable 
gifts it audited shortchanged the government. The 
I.R.S. said then that it would hire three more 
lawyers just to audit taxable gifts of $1 million or more.

Over the last five years, officials at both the 
I.R.S. and the Treasury have told Congress that 
cheating among the highest-income Americans is a major and growing problem.

The six I.R.S. tax lawyers, some of whom were 
willing to be named, all said that clear evidence 
of fraud was pursued vigorously by the agency, 
but that when audits showed the use of 
complicated schemes to understate the value of 
assets, the I.R.S. had become increasingly reluctant to pursue cases.

The lawyers said that the risk analysis system 
the I.R.S. used to evaluate whether to pursue 
such cases gave higher-level officials cover to 
not pursue tax cheats and, in the process, 
emboldened the most aggressive tax advisers to 
prepare gift and estate tax returns that shortchanged the government.

?This is not a game the poor will win, but the 
rich will,? said John Hruska, another I.R.S. 
estate tax lawyer in New York who, like Ms. 
Phillips, is active in the National Treasury 
Employees Union, which represents I.R.S. workers.

Colleen M. Kelley, the national union president, 
said: ?If these lawyers are not there to audit 
the gift and estate tax returns, then a lot of 
taxes that should be paid will go uncollected, 
and that impacts every taxpayer who is paying their fair share.?

*****************************************************************************************************************************************************************************************

Press Release from United for a Fair Economy
For immediate release - April 7, 2004
Contact: Christina Kasica, (617) 423-2148 x119


Bush Tax Cuts = Tax Shifts

http://www.faireconomy.org/press/2004/ShiftyTaxCuts_pr.html

New UFE Report: Tax Burden Shifting off Wealthy onto Everyone Else

$197 Billion in Tax Cuts to Top 1% of US 
Taxpayers as Big as States? Budget Shortfalls of $200 Billion

READ THE REPORT ONLINE 
<http://www.faireconomy.org/Taxes/HTMLReports/Shifty_Tax_Cuts.html>HERE
DOWNLOAD<http://www.faireconomy.org/press/2004/StateoftheDream2004.pdf> 
THE REPORT HERE: 
<http://www.faireconomy.org/press/2004/2004TaxDayReport.pdf>Shifty Tax Cuts
Or, email 
<mailto:bleondar-wright@faireconomy.org>Betsy 
Leondar-Wright to receive a copy by return e-mail.

BOSTON ­ A new report, entitled ?Shifty Tax Cuts: 
How They Move the Tax Burden off the Rich and 
onto Everyone Else,? from United for a Fair 
Economy (UFE) indicates that between 2002 and 
2004, the Bush tax cuts to the top 1% of US 
income earners redirected billions of dollars in 
revenue that could have eliminated virtually all 
of the budget shortfalls in the states.

?Congress had the option to send aid to the 
states to prevent $200 billion worth of service 
cuts and regressive tax increases,? said Chris 
Hartman, UFE?s research director. ?Instead, they 
gave tax breaks totaling roughly the same amount 
to multi-millionaires and the rest of the top 1%.?

The report identifies five main areas of shifting tax burden:

FEDERAL TO STATE ­ a 15% shift in tax burden between 2000 and 2003

PROGRESSIVE TO REGRESSIVE ­ at the federal level, 
a 17% decline in the share of revenue from 
progressive taxes and a 135% increase in the 
share of revenue from regressive taxes since 1962

WEALTH TO WORK ­ A tax cut on unearned income ­ 
such as inheritance or investment ­ of between 
31% and 79%, but a tax hike on work income of 25% since 1980

CORPORATIONS TO INDIVIDUALS ­ a 67% drop in the 
share of federal revenues contributed by 
corporations and a 17% rise in individuals? share

CURRENT TAXPAYERS TO FUTURE GENERATIONS ­ record 
deficits that shift the tax burden to our children and grandchildren

?When President Bush and Congress trumpet, 
?Here?s a tax cut', we say, ?Taxpayer beware!? 
said Chuck Collins, United for a Fair Economy 
co-founder. ?Unless you are super-rich, it?s a 
tax SHIFT, not a cut.  Non-wealthy taxpayers will 
pay for these tax cuts with increased state and 
local taxes or cuts in public services.?

?Between 2002 and 2004, a full $197 billion in 
new tax breaks went to the top 1% of American 
taxpayers,? Hartman commented.  ?This is money 
that has disappeared into the pockets of the very 
wealthy, making it unavailable to solve ongoing 
budget crises at the state and local levels.?

?I got a rebate check last summer for $400,? said 
Collins. ?Then my eight-year-old?s public school 
asked me to contribute money to replace worn-out 
chairs for the students.  At the same time, I 
found out they laid off the librarian because of 
budget cuts.  What good is a $400 tax cut when 
parents have to cough up additional money for 
chairs and books or else see their children go without??

The report concludes that the total federal, 
state and local tax burden has become 
increasingly the responsibility of middle-and 
low-income families in recent decades, and that 
revenues being generated by taxes are not 
sufficient to pay for existing public services. 
Work in particular is being taxed at a higher 
rate than investment.  ?I do a lot of work in 
predominantly Latino areas of Boston,? said UFE 
Education Specialist Gloribell Mota. ?Residents 
there are the working poor ­ they have jobs and 
pay taxes ­ yet are getting pennies in tax cuts 
and seeing health care services they depend on slashed.?

?The Bush administration has followed a strategy 
of starving public services by pulling tax money 
away from education and housing and giving it 
away to multi-millionaires,? said Karen Kraut, 
UFE?s State Tax Partnership director. ?States are 
suffering as a result, and people are going 
without essential services in order to fund the lifestyles of the rich.?

The report calls for tax reforms to improve the 
fairness of tax distribution and ensure adequate 
revenues. Concerned Americans are urged to pass 
resolutions in their cities and towns to stop the 
tax cuts and restore local services that have 
been affected, to call and write their 
congressional representatives to take action to 
stop the cuts, and to sign the Tax Fairness 
Pledge at www.ResponsibleWealth.org/taxpledge.

The co-authors of the report are Chuck Collins, 
UFE Co-founder; Chris Hartman, UFE Research 
Director; Karen Kraut, Director of UFE?s State 
Tax Partnerships; and Gloribell Mota, UFE Education Specialist.

United for a Fair Economy is an independent 
national non-profit that raises awareness of growing economic inequality.