Friday, February 27, 2009

When they Say Its "Not The Money/Its the Principle of the Thing...." Its.The.Money.

Over at Obsidian Wings a perfectly reasonable discussion of tax policy and politics was derailed by a horde of "tax is theft!" and "progressive taxation is the eeevil" types. Meanwhile, today, we learn that what ol' georgie said is true--rich people don't pay taxes at all. At least not under Republican administrations:

Stanford also told members of the Virgin Islands Economic Development Commission that his 62 companies, in which he was the sole shareholder, managed more than $30 billion and that he was ready to invest about $2 billion in the island of St. Croix and elsewhere in the Caribbean in exchange for the right to reduce his personal U.S. tax bill by 90 percent.

“I am a very large target to pay taxes” and this is a driving force” for his proposal to relocate his headquarters from Houston to St. Croix, Stanford told the commission at a public hearing on Nov. 30, 2006, according to a transcript. Nine months earlier, he began fighting the U.S. Internal Revenue Service over an unpaid tax bill that reached more than $104.2 million in August 2008.

Sure, I'd like to do that too, is it really possible?
Why, yes:

Stanford, 58, approached the U.S. Virgin Islands in 2006 in a bid to take advantage of a congressionally sanctioned economic development program there that allows people who qualify to legally reduce their personal tax bill to 3.5 percent from as high as 35 percent.

The U.S. Virgin Islands are an unincorporated American territory about 1,100 miles southeast of Miami. Its residents are subject to U.S. tax rules, though they file returns with the territorial Bureau of Internal Revenue. The federal IRS has the right to obtain tax records filed with the Virgin Islands Bureau of Internal Revenue, though it doesn’t routinely do so.

Special Incentives

The territory generally follows federal laws, but its government has the right to create special incentives to attract businesses. In 2001, it expanded a program that effectively lets hedge fund managers and other financiers who meet certain requirements to pay a 3.5 percent tax rate rather than the 35 percent they’d face in the U.S. mainland.

To qualify for the tax incentives, firms must invest at least $100,000 in the territory, buy products such as office supplies and computers in the Virgin Islands, contribute to area charities and hire at least 10 people, 80 percent of whom must be natives of the islands. [That would be eight people, just for your information]