re: #80 lawhawk

For most income tax scenarios, the IRS already has the income - wage statements are sent from the IRS and can match up with taxpayer records in their returns. Same with interest statements from banks and brokerage statements from financial services companies.

It’s just when you start dealing with significant investment income and most millionaires make more from their investments than actual wages, the long term cap gains means they pay far less on their accrued wealth in a year than 90% of Americans.

Short term cap gains are taxed at the person’s marginal tax rate, so someone who buys and holds for the long term (over 1 year) gets to save considerably - 15% instead of 35%. You can also offset cap gains with losses, so you can net out to zero, despite making money during the year. For businesses, you can also see NOLs, which is something Trumpworld took advantage of to the point of not paying any income tax at all for a decade because of billion dollar NOL (biggest single NOL individual taxpayer in our history). His business acumen sucked, but took advantage of the huge loss to write off gains over next 10 years.

that’s mostly only true for single document compliance income - like you said
w-2’s
1099’s etc

once you add an entity in the middle that involves income and expenses and recording transactions to arrive at net income, it’s a whole nother problem