20 Tax Facts That Will Astonish You
Business Insider has previously reported on 20 Tax Facts That Will Astonish You. We’ve taken the time to expound on a few of the most interesting ones. Take a look below:
1. The IRS has more employees than there are people in Flint, Michigan (106K vs. 102K).
2. You could fill Dallas with the number of accountants Americans hire to help with taxes each year (over a million).
3. Americans spend $28 billion and 8 billion hours each year doing their taxes.
4. In 1915, a Chicago lawyer said the tax form was “so complicated that it is utterly impossible to understand its meaning save by consulting a palmist.” (Back then, the tax code was 400 pages long.)
5. The number of pages in the tax code has increased 16, 775% in the past century.
According to The Economist, the code, which was 400 pages long in 1913, is now about 70,000. Nina Olson, the national taxpayer advocate since 2001, has said there there have been “something like 579 changes” to it in the last year alone.
6. 84% of people think it is not at all acceptable to cheat on your taxes.
And yet a surprisingly high percentage of people do. According to Rutgers University Law Professor Stuart P. Green, “as many as 30 to 40% of Americans” don’t pay all of their taxes. The difference between the amount of tax due to the federal government and the amount actually paid is probably around $300 billion this year.
7. 90% of people who employ babysitters and housekeepers end up cheating on your their taxes.
The New York Times reported on the “nanny tax” in 2009. Zoe Baird, President Bill Clinton’s first nominee for attorney general, Caroline Kennedy (who was running the for the New York senate) and Treasury secretary Timothy Geither have all suffered public controversy due to evasion of the tax. According to the Times, “In 1997, taxpayers filed 310, 367 household employee tax payment forms with the Internal Revenue Service. By 2006, the latest year for which data are available, the number was down to 225, 441.
8. Tax rates are declining for everyone, but especially the top 1%.
9. So how come rich people are paying more taxes than ever? Because they are gaining wealth faster than the tax rate is declining!
10. 47% of Americans pay no federal income taxes.
CNN reported this in 2009. 71 million people were estimated not to have to pay taxes in 2009. This is because of the February 2009 economic recovery package that cost about $787 billion. It’s mostly people that make up to $30,000, and half of households that make between $30,000 and $40,000.
11. A $100K earner takes home 62% in New York. She would take home 72% in Dallas.
12. The 400 best-compensated Americans earned an average of $345 million apiece (2007).
13. The average federal income tax rate for these 400 was 17%. This is down from 26% in 1992.
14. NYC has the highest corporate income tax in the world.
15. Thanks to big loopholes, GE paid no taxes on U.S. operating income of $5.1 billion. Actually, they claimed a $3.2 billion tax benefit.
According to The New York Times, G.E “has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.” G.E.’s tax department is known as “the world’s best tax law firm”; it concentrated most of its profits offshore, altogether reporting that its tax burden was 7.4% of its profits.
16. Business Insider pays more in taxes than GE.
17. Over 100 companies on the S&P 500 paid less than 20 percent in federal taxes. (The corporate tax rate is supposed to be 35 percent.) The Atlantic expounds: “While the federal corporate tax rate is nominally 35 percent, Leonhardt learns that 115 of S&P 500 companies have paid a total corporate tax rate–which includes federal, state, local, and foreign taxes–of less than 20 percent over the last five years. Thanks to loopholes–like spending a lot of money on new equipment and buildings–many companies can get past these.
18. Nicolas Cage owes around $14.6 million in back taxes. That’s more than his last movie, Drive Angry 3D, earned on opening weekend.
In 2010, he sued his accountant for letting him run up to $14 million in tax debt. These were unpaid gift taxes; Cage claimed he gave more than $1.8 million in taxes to people between 2004 and 2009. (Federal law requires that a 35% tax needs to be paid on gifts over $13,000.)
19. The top income tax rate in Sweden is 56.5%.
The Guardian reports that Swedes have the second highest tax burden in the world after Denmark, and that 48.2% of its Gross Domestic Product goes toward taxes. Most people pay anywhere between 49 and 60 percent of their income to the government.
20. There are $5 million in tax-free gift exemptions, up from $1 million previously.
The Wall Street Journal reports that, until the end of 2012, the exemption is $5 million for individuals and $10 million for couples. According to the WSJ, “it is linked with the estate tax, in order to prevent the wealthy from draining their estates before death to avoid levies.”