http://sify.com/finance/fullstory.php?id=14784512
Summary
This article is reporting about a new study (Internal Revenue Service data) showing the rich are cheating when it comes to paying tax - hiding more of their own income. Studies show that the rich's income was between $500,000 and $1 million; however, they understated their gross incomes by 21%. The net misreporting rate includes both underreported income and inflated deductions. The IRS estimated that people understate their business income by 43% in general, and for sole proprietors, who report self-employment income underreported their income by 57%. All these years, IRS has been able to collect back all those taxes the rich people owed. Currently, the government is suing UBS for the names of 18,000 wealthy Americans who have had unreported bank accounts.
Relation to the chapter
In this chapter, we have talked about taxable earnings, which states that the employee's contributions to a registered pension fund or plan, union dues, deduction for living in a prescribed area, and deductions authorized by the district office must be subtracted before determining the tax amount. In this case, what the rich people did in the above article reported was understating their income amount so that they can get more money back with less income tax taken away from them. However, this was against the law of the Income tax act. As a result, the government took back their tax money.
Reflection
I think I do understand why the rich people do that. Who would want their money taken away from them if they've worked hard for it? I think not wanting people to take away their possessions is human nature. However, i think if giving out some part of your money so that you can help build a better community for everyone can be something good also. Look at all those parks, community centers, and transportations, and without us paying for our tax, those will not happen at all. Therefore, I find rich people being too selfish and greedy. Why not give out a helping hand to the community if they're earning so much money right? I feel glad for the government has already took back some money from them.
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4 comments:
Well, these news are appearing frequently nowadays. The irony here is, the governemnt tends to get more tax money from the rich people and the truth is that people with low or medium income are paying most of the tax money. This is technically called tax evasion. Tax evasion is a federal law but we seldom see rich people accused of tax evasion.In the United States, the IRS estimated in 2007 that Americans owed $345 billion more than they paid, or about 14% of federal revenues for the fiscal year of 2007. Also, even when rich people pay their tax money, they may have hidden bank accounts or illegal income which are not documented. I think that the government should first deal with tax evasion then think of collecting tax from us.
I am definitely surprised at how the wealthy people understate their income. If they are so wealthy, then having more tax deducted should not affect them much at all. Yes, no one wants to give their money out for taxes, but this makes me think that they are really selfish and greedy. It’s good that the government took back all the taxes that were owed. I think a greater punishment should be set because I’m pretty sure that this would not be able to stop them from understating their income, they would just keep on underreporting the numbers.
I admit that I sometimes stereotype people that are rich are selfish and snobby. In this case, the rich people who are understating their gross pay is just trying to cheat their living life. They already have enough money to more than surviving their whole life, and yet they're not willing to pay some taxes to help contribute to the country's formation of new buildings, better street roads, and such. However, I do agree of your idea of saying how every person is naturally wanting to protect their possessions. But still, it is unfair how most of the people in canada pays their taxes honestly, even the people who are struggling with their low income.
Melissa Man
Block B
Well, we should be happy that they are actually publishing articles on these issues. In countries in Asia (such as China and India), these issues are so common that they aren't issues anymore. Reporters don't even want to bother writing them out. Yes, it is fairly easy to understand the thoughts of those wealthy people, everybody is greedy. However, paying taxes is not an option, it is a responsibility. How did they get rich in the first place? Because people supported them by buying their products. I think it is very reasonable to ask them to give some back to the society. Let's face it, even if they pay all their taxes, they will still be much wealthier than the average citizens. The government should really start to treat these issues more seriously.
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