Who's Paying Taxes?

There is a book I urgently recommend as critical reading, or at least perusal, for every person who clicks into this website.  It’s titled is “Perfectly Legal” by David Cay Johnston, Pulitzer Prize-Winner Reporter for the New York Times.  It is an expose on the U.S. tax system, but not exactly relaxed cover-to-cover reading. 

You won’t have to peruse past the jacket to learn of a CEO who built a billion dollar personal fortune without paying a dime in taxes.  You will learn of a multi-national corporation that simply maintains a Bermuda post office to escape $40 million in corporate taxes.  And as the book’s title screams out, the skillful practices of genius-level tax lawyers make a multitude of complex financial gyrations “perfectly legal”. 

Now who would you suppose might make such lavish financial practices possible for those astute enough to take advantage?  You guessed it, our illustrious congressional and presidential administrations of the last three decades, which sadly enough, include willing democrats and republicans alike. 

I cite an example given in sarcasm directly from this book:  “Looking for an investment using borrowed money?  How do these terms sound?  No interest!  No application forms!  No credit checks!  Approval is automatic!  Borrow up to 40% of you pay each year!  Borrow until you retire!  No repayment until you retire!  Available to executives, highly paid salespeople, movie stars and athletes under a 1974 federal law; sorry but congress says no other Americans are eligible for these interest free loans.” 

This privileged scenario is accomplished through a highly paid executive deferring a large portion of his income each year; thus not having to pay income tax on the deferred portion, but nevertheless, getting to invest it.  The company in turn is permitted to invest the portion the executive defers. 

However, this money cannot be deducted on the company’s tax return, so instead of deducting from its profits on the executives pay, the shareholders make up the difference in reduced dividends. 

These examples are barely a tip of the iceberg.  Another quote states, “Whether you make $30,000 or $300,000 you are being robbed because the IRS and other institutions have been systematically corrupted under both Republican and Democratic administrations to serve those who make millions” 

This book is available at the Medina County Library or can be purchased on the Internet. 

Buz Cormany
Medina, OH