Tax Rules for the Rich are Different, Just Ask Commerce Nominee Pritzker and Senate Candidate Gomez

[marmar]

from Citizens for Tax Justice:



May 16, 2013 04:02 PM |


First it was Mitt Romney, and now two more aspiring public servants are in the spotlight for questionable tax maneuvers – Penny Pritzker, President Obama’s Commerce Secretary Nominee, and Massachusetts Republican Senate candidate, Gabriel Gomez. The complex tax avoidance strategies exercised by both these two candidates for federal office demonstrate the stunning extent to which wealthy individuals of all stripes can play by a different set of tax rules than everyone else.

Avoiding Every Last Penny of Taxes

While many wealthy families go to great lengths to avoid taxes, the Pritzker family (most famous for it’s ownership of the Hyatt hotel chain) is unique in its role as “pioneers” in the use of offshore tax shelters. Many of its existing offshore trusts were set up as long as five decades ago, and some have allowed the family to continue benefitting from tax loopholes that have long since been closed.

As the graphic below from a 2003 Forbes story details, one of the primary ways the Pritzker family uses offshore trusts to avoid taxes is by having income from their businesses funneled into offshore trusts. Those trusts then pay debt service to a bank, owned by the family trust, that loans that money right back to the business. The upshot is that all the taxable profits disappear and the family wealth accumulates unabated. A more recent Forbes article looking at the Pritzker family fortune notes that these trusts were not at the margin but rather “played a substantial role in the growth of the Pritzker fortune.” The same article notes that this fortune makes up the vast majority of Pritzker’s $1.85 billion empire and has allowed 10 members of the Pritzker family to earn a spot on the list of Forbes 400 richest people in America.



When the New York Times asked Penny Pritzker for her thoughts on the ethical implications of her family’s use of offshore trusts, she remarked that the trust was set up when she was only a child, after all, and that she does not control how the offshore trusts are administered. Her continued vagueness on these issues makes it likely that she will face more questions about her views of offshore tax avoidance more generally next week when she goes before the Senate for her confirmation hearing. ......................(more)

The complete piece is at: http://www.ctj.org/taxjusticedigest/archive/2013/05/tax_rules_for_the_rich_are_dif.php#.UZWbLjcrTTq

[rhett o rick]

1. What's the difference between Mit Rmoney and Penny Pritzker?

Gotta say, Mit's hair is great.

[BrotherIvan]

2. So will the confirmation be unanimous?

Who can argue with an actual .001% er?

[tclambert]

3. The Tax Code is, what, 4 million words long? How much of that provides tax breaks for the poor?

Yeah, you know the loopholes and special tax breaks and "incentives" almost all benefit the rich.

Four million words. At 500 words per page, that comes in at 8,000 pages. For comparison, the King James Bible has about 800,000 words. And way more of it favors poor people.

http://www.politifact.com/new-jersey/statements/2013/may/02/leonard-lance/leonard-lance-claims-federal-tax-code-contains-4-m/