Nearly half of China's millionaires consider emigration

Πηγή: newKerala
Nov 1 2011

Nearly half of Chinese millionaires consider emigrating abroad and 14 percent have already emigrated or applied for it, a survey showed.

Forty-six percent of the 980 respondents said they intended to emigrate in the survey jointly conducted by the Hurun Research Institute and Bank of China from May to September. The survey findings have been published in the Private Banking White Paper 2011.

The survey targeted China's "high net worth individuals" with personal asset above 10 million yuan (USD 1.58 million) in 18 major cities including Beijing, Shanghai, Wuhan, Nanjing, Dalian and Suzhou, reported Xinhua.

The average age of the respondents was 42, with personal assets worth more than 60 million yuan on an average.

According to the survey, one-third of the respondents claimed to have overseas assets, mostly in real estate, accounting for 19 percent of their total investable assets.

Half of the respondents said the reason why they invested abroad was to give their children better education opportunities.

FACT CHECK: Are rich taxed less than secretaries?

President Barack Obama gestures while speaking in the Rose Garden of the White House in Washington, Monday, Sept. 19, 2011. (AP Photo/Evan Vucci)

Πηγή: AP
By STEPHEN OHLEMACHER

Sep. 20 2011

WASHINGTON (AP) -- President Barack Obama makes it sound like there are millionaires all over America paying taxes at lower rates than their secretaries.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said Monday. "That's pretty straightforward. It's hard to argue against that."

The data tells a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

In his White House address Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the "Buffett rule," named for billionaire investor Warren Buffett.

The rule says, "People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay."

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

The latest IRS data is a few years older - and it's limited to federal income taxes - but it shows much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.

The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.

"People who are doing quite well and worry about low-income people not paying any taxes bemoan the fact that they get so many tax breaks that they are zeroed out," said Roberton Williams, a senior fellow at the Tax Policy Center. "People at the bottom of the distribution say, but all of those rich guys are getting bigger tax breaks than we're getting, which is also the case."

Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates.

"So it really depends on what is your profession, where's the source of your income, what's the specific circumstances you face, and the averages won't really capture that," Geithner said.

Almost 1,500 Millionaires Do Not Pay Income Tax

Πηγή: ABCNews
By AMY BINGHAM
Aug. 6, 2011

At a time when America is borrowing about 40 cents of every dollar it spends because tax revenues cannot keep up with government spending, hundreds of America's wealthiest households are paying no income tax at all.

According to a recently released IRS report, almost 1,500 of America's 230,000 millionaires avoided paying any federal income tax in 2009.

So how did they do it? Were they scamming the system? Evading the IRS? Stashing their cash in elusive off-shore, untraceable bank accounts?

Actually, they were probably donating to charity, investing in local and state government bonds and making most of their money overseas.

Most of the millionaires who did not pay income tax to the IRS probably still had to hand over a chunk of their change, just not to the U.S. government, said Roberton Williams, a senior fellow at the Tax Policy Center.

Instead, many of America's high earners pay income taxes to foreign governments because of profits from overseas investments.

"In most cases, they are paying taxes outside the U.S. and the federal government says, 'We are not going to double tax you. If you pay tax overseas and that's as much or more than you pay here, we aren't going to charge you more,'" Williams said.Mark Robyn, an economist at the Tax Foundation, said this foreign income tax credit avoids the problem of double taxation."That generally seems like a pretty acceptable feature of a tax code -- to avoid unfairly taxing people twice for the same income," Robyn said.But the foreign tax credit could be just one of many reasons that almost 1,500 millionaires are not paying U.S. income tax, Robyn said.

"A lot of factors go into it," he said. "High-income people have lots of income sources that the average person like you or me doesn't really experience."

Millionaires are more likely to qualify for tax deductions, for example, by earning non-taxable income from interest on state and local bonds or donating to charity.

"There are a whole bunch of provisions in the tax code that lower people's taxes," Williams said. "And those disproportionately go to people with higher incomes."

For example, a couple that earns $2 million could pay no U.S. income tax if they donated $1 million to charity, making that half of their income non-taxable; if they earned most of their income from capital gains or dividends, which are taxed at a lower rate; and if they paid taxes on overseas investments, thereby qualifying for a foreign tax credit.

But these millionaires are not the only Americans skipping out on federal income tax. A full 46 percent of the population pays zero income tax. The vast majority of these income-tax-free households have low incomes and qualify for child tax credits.

Income tax is a small slice of the complex tax pie, however. Even those that don't pay it are still on the hook for payroll tax, which funds Medicare and Social Security, excise taxes on gasoline, cigarettes and alcohol, and sales tax.

While most lawmakers have said they support reforming this complicated tax puzzle, exactly how to change the tax code is highly disputed.

GOP presidential candidate Michele Bachmann, a former IRS tax attorney, said she would revamp the tax code if elected by lowering overall tax rates and getting "rid of all the deductions" so that more people paid into the system.

"In my perfect world, we'd take the 35 percent corporate tax rate down to nine so that we're the most competitive in the industrialized world. Zero out capital gains. Zero out the alternative minimum tax. Zero out the death tax," Bachmann, R-Minn., told the Wall Street Journal's Stephen Moore in June.

The Tax Policy Center estimated that eliminating just the capital gains tax would allow 23,000 more millionaires to skip out on paying income tax.

Former Minnesota Gov. Tim Pawlenty, who is also running for president, took it a step farther, suggesting in a June speech at the University of Chicago that not only should capital gains taxes and the "death tax" be eliminated, but interest income taxes and dividends taxes should be cut as well.

Those cuts, he said, would help simplify the "9,000-page monstrosity" that is the U.S. tax code. It would also enable the government to create just three tax brackets, instead of the current six, and reduce overall rates, he said.

According the Tax Policy Center , Pawlenty's proposal to eliminate those taxes on investment income would allow about 50,000 more millionaires to avoid paying any income tax.