Almost 1,500 Millionaires Do Not Pay Income Tax

By AMY BINGHAM, ABC News

At a time when America is borrowing about 40 cents of every dollar it spends because tax revenues cannot keep up with government spending, hundreds of America’s wealthiest households are paying no income tax at all.

According to a recently released IRS report, almost 1,500 of America’s 230,000 millionaires avoided paying any federal income tax in 2009.

So how did they do it? Were they scamming the system? Evading the IRS? Stashing their cash in elusive off-shore, untraceable bank accounts?

Actually, they were probably donating to charity, investing in local and state government bonds and making most of their money overseas.

Most of the millionaires who did not pay income tax to the IRS probably still had to hand over a chunk of their change, just not to the U.S. government, said Roberton Williams, a senior fellow at the Tax Policy Center.

Instead, many of America’s high earners pay income taxes to foreign governments because of profits from overseas investments.

“In most cases, they are paying taxes outside the U.S. and the federal government says, ‘We are not going to double tax you. If you pay tax overseas and that’s as much or more than you pay here, we aren’t going to charge you more,’” Williams said.

To read more, visit:  http://abcnews.go.com/Politics/1500-millionaires-pay-income-tax/story?id=14242254

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