Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich and Cheat Everybody Else (英語) ハードカバー – 2003/12/1
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Identifies practices of discreet lobbying and tax policy manipulation that have been occurring since the mid 1970s and how they have resulted in benefits for the wealthiest people in American society, identifying ways in which the working class is being made to pay the majority of the nation's income taxes. 35,000 first printing.
David Cay Johnston won a Pulitzer Prize and shared in another for his investigative reporting in The New York Times, for which he has written since 1995. Prior to that he wrote for the Philadelphia Inquirer, the Los Angeles Times, the Detroit Free Press, and the San Jose Mercury News. Johnston is a frequent guest on NPR's Fresh Air.
There is a class war going on in this country and it began when some of the rich decided that the fruits of their own efforts was not enough.
Mr. Johnson observes that "our tax system now forces most Americans to subsidize the lifestyles of the very rich, who enjoy the benefits of our democracy without paying their fair share of it's price."
There are examples of tax "engineers" that for a large fee will share schemes that allow tax evasion by exploiting a plethora of tax loopholes.
Of the many means employed to cheat on taxes, the deferral of compensation was an interesting and very common method. The battle over jet-travel perks was another expensive tax avoidance controversy.
The chapter "Big Payday" on executive's compensation was an eye-opener.
Is anyone worth some of these compensation packages? No! But that's corporate greed in it's most blatant form. The author demonstrates that greed is not owned solely by corporations and is often not easily detected. It is also rarely prosecuted.
Some more of the topics that struck me the most are:
The myth of the estate tax causing a loss of family farms. Most interesting is the the reason why the rich like Warren Buffett, George Soros, and Bill Gates, Sr. support the estate tax. Mr. Johnston states a disturbing fact- "Some of the biggest fortunes in America have never been taxed, not even once."
The hidden side-effects of the Alternative Minimum Tax or otherwise called the "Stealth Tax".
How tax evasion vehicles are promoted by tax advisers and large financial firms in an open fashion. Some of those advisers were former IRS employees. The 861 position was investigated.
The business philosophy employed by a few notorious CEOs which basically amounts to squeezing the pay and numbers of workers and then rewarding the executive on a ridiculous level.
How patriotism (remember the old logo "Made in America?) has taken a back seat while American corporations "expatriate" offshore.
The details of oil companies tax dodging schemes such as claiming profits in a foreign country and claiming expenses in the U.S.
The "moral hazard" of the limited liability partnerships(LLPs).
These partnerships limit the accountability of partners, removing potential incentive to monitor each other.
"What is in short supply in America is not capital, but income- at least for the half of Americans getting by on less than $28,000 per year- and educated minds. But our policy is aimed at more capital in the hands of the few, not at higher incomes for most so that they can acquire more assets..." Page 312-313.
"Transparency is good for the taxpayers overall, bad for the favored few." Page 315.
Those are a few of the astute observations made by the author.
If you only read one book the politics of taxes and the rich, I recommend reading "Perfectly Legal" by David Cay Johnston!
Some of the chapters I found most interesting were on how CEOs have enough flexibility to defer their income almost indefinitely to avoid paying taxes on anything they aren't ready to spend, and on how the IRS enforcement budget is mis-allocated - they have plenty of funding to audit the poor, but real-estate partnership returns aren't even matched up with individual income tax returns to make sure they're consistent. If that sounds interesting to you then you'll enjoy the book; if it sounds boring then you might not.