I don't know - ask the McCourt's and then report back.....
To everyone who claims that our wealthiest citizens pay more than their fair share of income taxes and we should cut them a break because they're the ones who, you know, create jobs in our economy, I have four words for you:
Frank and Jamie McCourt.
The McCourts, who own the Los Angeles Dodgers (so she says; he says he's the owner and she's not), jointly pocketed income totaling $108 million from 2004 through 2009, according to documents Jamie McCourt recently filed in the couple's divorce case in Los Angeles County Superior Court.
On that sum, they paid zero federal and state income tax. Jamie suggests that some tax breaks will apply this year too.
This reminds me of the old line about how true scandal lies not in what's illegal, but what's legal. It's certainly an edifying window into the lengths some people will go to avoid paying taxes.
The court papers indicate that the McCourts deliberately structured their business at least partially to allow them to live tax-free.
Frank McCourt's lawyer, Marc Seltzer, didn't directly dispute Jamie's characterizations of the couple's tax planning or the details of their finances. He did, however, call her document filings "selective" and complained by e-mail that she made public "information which most people would respect as private."
According to Jamie, the McCourts employed two mechanisms to live tax-free. One was to claim enormous tax losses from their business, which was mostly commercial real estate before they bought the Dodgers. These could be carried forward, offsetting income year after year until they were finally netted out. Jamie's documents say that in 2008 the net loss carry-forward from previous years was $109 million -- in other words, the McCourts could have earned that much without paying a penny of income tax.
A year later, the loss carry-forward had increased to $135 million, which makes it sound as if 2008 was one horrible year. Yet according to another document Jamie filed in court, one of Frank's partnerships paid him $23 million that year.
Did the McCourts really lose $135 million in the years before 2009? Probably not in the sense that you or I suffer a loss when a dollar bill slips through a hole in our jeans, or even when we sell that stock our brother-in-law described as "a slam dunk" for less than we paid for it.
"They're tax losses. I don't mean real losses," Jamie's lawyer, Bert Fields, told me.
I can see the Huffington Post is stirring up the red ants again.
It's so easy for them to take advantage of the uninformed, especially when they don't what to understand.
With scant exception of a small amount of money (if we are to believe this biased kook of an author), every single thing they did was appropriate.
I really liked this part of the story:
"It's proper to acknowledge that tax breaks like these can have a legitimate purpose. The idea is that they encourage certain investments, such as real estate development, that may energize the economy and create jobs."
LOL, he does a terrible job of trying to sound centrist and reasonable. He should really leave that to someone who is centrist and reasonable.
<<...(if we are to believe this biased kook of an author),...LOL, he does a terrible job of trying to sound centrist and reasonable. He should really leave that to someone who is centrist and reasonable. >>
He's a kook with credentials. ;-)
Michael HiltzikGolden StatePulitzer Prize-winning journalist Michael A. Hiltzik, who writes the twice-weekly "Golden State" column most Mondays and Thursdays, has been a staff member of the Los Angeles Times for more than 20 years. In that time he has worked as a financial and political writer, as a foreign correspondent serving in Africa and Russia, and as a technology and science writer and editor. He is the author of the book Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age, published to widespread critical acclaim in 1999 by HarperCollins.
Hiltzik has won numerous awards for excellence in reporting, including a Silver Gavel from the American Bar Association and a citation from the Overseas Press Club for coverage of East Africa.
He and colleague Chuck Philips received the 1999 Pulitzer Prize for a series of articles exposing corruption in the entertainment industry, particularly in the recorded music business. Among other issues, the articles illuminated the operations of the Grammy Awards organization, the non-profit National Academy of Recording Arts and Sciences, showing that the Academy's two charities paid out to assist indigent and infirm musicians only a bare fraction of the millions of dollars it received as donations from record companies and performers, while paying its own executives lavish salaries. Other articles in the award-winning package described the shortcomings of drug detoxification programs sponsored by Hollywood institutions, and identified new forms of "payola," or illicit payments for the promotion of music recordings, in the radio industry.
He's clearly a biased kook and certainly sounds like an idiot.