Earning $200,000 a Year, Paying No Taxes: Chart of Day
Share | Email | Print | A A A
By Joe Mysak
June 10 (Bloomberg) -- Mrs. Dodge lives.
The CHART OF THE DAY shows the number of U.S. tax return filers with incomes of $200,000 and more who pay no income taxes worldwide, according to the Internal Revenue Service’s Statistics of Income Bulletin. The IRS said the main factor in reducing taxes on those 4,322 returns in 2006, the latest year for available data, was tax-exempt interest.
“Because they do not generate alternative minimum tax adjustments or preferences,” the analysis of high-income tax returns for 2006 said, “tax-exempt bond interest, itemized deductions for interest expense, miscellaneous itemized deductions not subject to the 2-percent-of-adjusted-gross-income floor, casualty or theft losses, and medical expenses (exceeding 10 percent of adjusted gross income) could, by themselves, produce nontaxability.”
More than 6 million returns showed they received tax-exempt interest of $72.9 billion that year. The IRS started asking individuals to report how much they earned in tax-exempt interest for tax year 1987.
As for Mrs. Anna Thompson Dodge, she was frequently cited during the 20th century by critics of the municipal bond market who wanted to end the tax-exemption on state and local bonds, which they viewed solely as a tax-shelter for the rich.
According to the obituary published in the New York Times on June 4, 1970, after her husband, automotive pioneer Horace E. Dodge, died in 1920, “the $59 million Mrs. Dodge inherited was put into tax-free municipal bonds. The money was said to have earned on the average of $1.5 million a year, and Mrs. Dodge never had to pay a federal income tax.”
To contact the reporter on this story: Joe Mysak in New York at [email protected].
Last Updated: June 10, 2009 06:30 EDT
Share | Email | Print | A A A
By Joe Mysak
June 10 (Bloomberg) -- Mrs. Dodge lives.
The CHART OF THE DAY shows the number of U.S. tax return filers with incomes of $200,000 and more who pay no income taxes worldwide, according to the Internal Revenue Service’s Statistics of Income Bulletin. The IRS said the main factor in reducing taxes on those 4,322 returns in 2006, the latest year for available data, was tax-exempt interest.
“Because they do not generate alternative minimum tax adjustments or preferences,” the analysis of high-income tax returns for 2006 said, “tax-exempt bond interest, itemized deductions for interest expense, miscellaneous itemized deductions not subject to the 2-percent-of-adjusted-gross-income floor, casualty or theft losses, and medical expenses (exceeding 10 percent of adjusted gross income) could, by themselves, produce nontaxability.”
More than 6 million returns showed they received tax-exempt interest of $72.9 billion that year. The IRS started asking individuals to report how much they earned in tax-exempt interest for tax year 1987.
As for Mrs. Anna Thompson Dodge, she was frequently cited during the 20th century by critics of the municipal bond market who wanted to end the tax-exemption on state and local bonds, which they viewed solely as a tax-shelter for the rich.
According to the obituary published in the New York Times on June 4, 1970, after her husband, automotive pioneer Horace E. Dodge, died in 1920, “the $59 million Mrs. Dodge inherited was put into tax-free municipal bonds. The money was said to have earned on the average of $1.5 million a year, and Mrs. Dodge never had to pay a federal income tax.”
To contact the reporter on this story: Joe Mysak in New York at [email protected].
Last Updated: June 10, 2009 06:30 EDT
