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com Most Americans would agree that they are duty bound as beneficiaries of o ur democracy to pay taxes, and the majority of us do pay-exorbitantly. David Cay Johnston , a Pulitzer Prize-winning reporter for the New York Times, here reveals how fairness and equity have eroded from the American tax system. Johns ton describes in shocking detail the loopholes our government provides t he "super rich"--from private individuals to profitable corporations-to hide their wealth, to defer or evade tax payments, and to pass the bill to law-abiding middle-class Americans. The loss in revenue "imposes a s evere cost on honest taxpayers" through reduced services, increased fede ral debt, and a weight on the middle class that threatens to impede its ability to achieve upward social mobility. Admitting the extreme complex ity of our economy and by extension our tax code, Johnston points out th at the very wealthy do, of course, pay taxes. However, because of shelte rs that allow them to understate most of their income, they pay little m ore on average than most Americans on the dollar. This is regressive, an d unquestionably favors the superrich. Johnston includes examples of out rageous corporate malfeasance (such as companies that establish off-shor e tax addresses) and exposes the tax benefits of the particularly loaths ome practice made famous by Jack Welch, in which thousands of wage earne rs are laid off while a handful of executives are granted hundreds of mi llions of dollars through deferred compensation, company stock options, and lucrative retirement packages, all at stock holders' xpense. In addi tion to these offenses, he describes the tax evasion methods of those wh o simply defy the law and are emboldened by a beleaguered IRS that is to o underfunded to serve as an effective deterrent to tax cheats. But because those who most benefit from these laws comprise the "donor class" that supports the go vernment power structure, our prospects for reform remain very bleak. Pulitzer Prize-winning investigative reporter David Cay Johnston has been breaking pieces of this story on the front page of The New York Times f or nine years, work for which one business school professor calls him t he de facto chief tax enforcement officer of the United States. With Pe rfectly Legal, he puts the whole shocking narrative together in a way th at will stir up media attention and make readers angry about the state o f our country. Since the mid-1970s, there has been a dramatic shift in who benefits from the American economy and bears the burden of taxes. CEOs, big investors and business owners can delay paying their taxes for years and sometime s escape them almost entirely, while wage earners have their taken from each paycheck. Discreet lobbying by the political donor class has made t ax policies and enforcement a disaster. Because of obligations to these donors Washington has been unable, or unwilling, to fix these problems. The news media have largely ignored official favors to those who are sup posed to pay the corporate income tax, the estate tax, and the gift tax. Millions of families expecting tax cuts are losing some or all of them to a stealth tax that was originally enacted only to apply to the tax-av oiding rich, but that now stings single mothers making as little as $28, 000. But the cumulative results are remarkable: the 400 richest American s pay a smaller share of their income in taxes than someone making $100, 000. The 400 richest pay less and less of their income in taxes while th e middle class pays more and more. And while the incomes of the very ric h skyrocketed over three decades, the average income for the bottom 90 p ercent fell. Johnston exposes exactly how the middle class is being squeezed to create a widening income gap that threatens the stability of the country.
See all Editorial Reviews Product Details * Hardcover: 352 pages * Publisher: Portfolio Hardcover (December 29, 2003) * ISBN: 1591840198 * Product Dimensions: 92 x 64 x 12 inches * Shipping Weight: 13 pounds.
All Editions Inside This Book First Sentence: Jonathan Blattmachr walked swiftly toward the Park Avenue curb, eager to find his driver so he could be whisked away from Manhatt an to a waiting...
learn more) First Sentence: Jonathan Blattmachr walked swiftly toward the Park Avenue curb, eager to find his driver so he could be whisked away from Manhattan to a waiting plane.
Must Read, January 9, 2004 Reviewer: A reader I am a traditional conservative who has been bothered by tough coverage o f the tax code in WSJ for years, but I am deeply troubled by Johnson's b ook. I have spoken with three tax attorneys who read it and found it acc urate. It does not do justice to this remarkable popularizationof an extremely complex subjec t to say merely that we always knew that the tax system was unfair. The tax code is not understood by ANY of of ficials we have elected and rely on to represent our interests,. It is a black hole that makes incalculable (literally) national wealth disappea r from our common enterprise. While we argue about deficits or unfunded mandates, hundreds of billions of untaxed profits of the very rich are s heltered and deferred in ways unavailable to wage earners who will soon be further burdened by a perversion of the "alternative minimum tax." It is worth thousands of dollars to you, in all probability, to read this book carefully and then bring a copy to your Senators and Congressman w ith the demand that it be read. No vague review should divert every seri ous citizen from reading this clear and detailed explanation of why your government takes so much money from you while not securing your financi al future.
His privileged vantage point provides him wit h the experience and insight to write a book delineating the potential d isaster confronting America from the manipulation of the federal tax sys tem to benefit the wealthy at the expense of the rest of society. Many years ago HL Hunt, the Texas oil magnate then reputed to be the wo rld's richest man, revealed his confident arrogance about the federal ta x system, indicating that "even if they taxed us 99%" that the wealthy w ould prevail and pay nothing, leaving the rest of society to bear the re sponsibility. He had reason to be confident, as noted by Johnston's info rmative investigation. As for ferreting out tax cheats, the current IRS weakesses are appalling. Johnston noted that after locating the 16,000 w orst suspected tax cheats, the IRS then investigated only a paltry 4% of the perceived malefactors. Johnston exposes the gimmick of pandering members of Congress who showboa t on behalf of the wealthy to insure continuing tax breaks. A particular ly egregious example was the drama put on by Senator Trent Lott of Missi ssippi, who lost his Senate Majority Leader status for his tribute to fo rmer ardent segregationist, Senator Strom Thurmond. Lott's histrionics f ocused on perceived abuses by the IRS which were never corroborated. The performance related to keeping the heat on those who wanted to change t he system by presenting the image of an aggressive IRS trampling on the rights of the wealthy patrons Lott sought to protect. While focusing much criticism on presidents Ronald Reagan and George W B ush for helping skew the federal tax code in the direction of the wealth y through their massive tax cuts, Johnston notes that to attempt to focu s too much of the blame on these individuals would be a grave mistake. I t is much broader than these two individuals, as powerful as they were a nd as fervent as their efforts have been in that direction. The special interests have woven their magic in bringing prominent as well as less t han prominent Democrats and Republicans onto their team with the situati on deteriorating over a long period of time. For instance, remember foot age of so-called "seminars" at posh country club retreats? Scores of the se have been organized by the corporate sector to "inform" elected offic ials from the House and Senate on how to properly deal with the tax syst em. Needless to say, these seminars are best conducted in comfortable su rroundings. Unsurprisingly, those...
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