George Graham

Why Do You Pay Taxes and They Don’t?

If you’re a run-of-the-mill working stiff, you probably handed over about a third of last year’s earnings to Uncle Sam, and the Republicans figure that’s not enough. As you might know by now, the Paul Ryan budget calls for higher taxes on people like you so the rich can pay less.

I wonder why they even bother. The rich already pay less than you. Many of them pay no tax at all.

You’ve heard Warren Buffet complain that his secretary’s tax rate is twice as high as his, and you’ve read about the giant global corporations that paid no US income taxes last year. Today, an ABC OTUS News report tells us that  20,752 households reported earning more than $200,000 in 2009 and paid no federal income taxes. About 1,500 were millionaires. 

According to the report, one of the millionaires who pay no income tax is Diane Hendricks, the richest woman in Wisconsin, She is worth an estimated $2.8 billion, and she wrote Wisconsin Governor Scott Walker’s campaign a check for $500,000.

Yes, that Diane Hendricks, the billionaire captured in a recent video chatting to Walker about his union-busting plans to “divide and rule” the people of Wisconsin (photo above). Of course, she paid no state income taxes. All it took to accomplish that was a tweak in her company’s corporate structure.

And her clever tax experts came up with deductions and exemptions in the federal tax code that avoided paying Uncle Sam anything, too. Hendricks was not alone. According to the news report, more than 20,000 rich Americans took advantage of the same complex web of loopholes to welch on their federal income taxes.

As you might expect, President Obama has been trying to get these rich folks to share some of the nation’s tax burden. It’s a key issue in this year’s presidential race.

Here’s how the ABC report puts it:

In the 2012 battle for the White House, President Obama has made taxing these wealthy Americans a cornerstone of his re-election campaign.

Under Obama’s tax plan, the Bush tax cuts would expire, raising taxes for married couples earning more than $212,300 by 3 percentage points. Obama also plans to enact the “Buffett Rule,” which creates a minimum tax rate of 30 percent for millionaires.

Mitt Romney takes a virtually opposite approach to tax reform for the wealthy.

His plan not only extends the Bush tax cuts, but further reduces tax rates at all income levels by 20 percent, which puts the tax rate for those making more than $200,000 at about 28 percent. Romney ardently opposes instituting a minimum tax for millionaires, such as the Buffett Rule.

Under Obama’s plan, the top 1 percent of income earners would see their taxes go up about 5 percent. Under Romney’s plan, they would go down by nearly 8 percent, according to an analysis by the Tax Policy Center.

And as for the 21,000 wealthy Americans who currently pay no income tax, Williams said, “Under Obama’s plan, these people would almost certainly pay more. Under Romney’s, they will almost certainly pay less.”

Do you wonder why the rich and super-rich are pouring gazillions into the campaign to defeat President Obama?

I don’t.

Click here to read the news story.

Click here for more about Diane Hendricks.

About the author


I am a Jamaican-born writer who has lived and worked in Canada and the United States. I live in Lakeland, Florida with my wife, Sandra, our three cats and two dogs. I like to play golf and enjoy our garden, even though it's a lot of work. Since retiring from newspaper reporting I've written a few books. I also write a monthly column for