Features
- Cover Type: Hard Cover with 352 pages
- Published by: Portfolio Hardcover December 25, 2003
- Written in: English
- ISBN 10 Number: 1591840198
- ISBN 13 Number: 978-1591840190
-
Book Dimensions:
8.9 x 6.2 x 1.4 inches
- Weighs: 1.2 pounds
Product Review
Most Americans would agree that they are duty bound as beneficiaries of our democracy to pay taxes, and the majority of us do pay--exorbitantly. But what about those who do not pay their fair share? 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. Johnston describes in shocking detail the loopholes our government provides the "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 severe cost on honest taxpayers" through reduced services, increased federal debt, and a weight on the middle class that threatens to impede its ability to achieve upward social mobility. Admitting the extreme complexity of our economy and by extension our tax code, Johnston points out that the very wealthy do, of course, pay taxes. However, because of shelters that allow them to understate most of their income, they pay little more on average than most Americans on the dollar. This is regressive, and unquestionably favors the superrich. Johnston includes examples of outrageous corporate malfeasance (such as companies that establish off-shore tax addresses) and exposes the tax benefits of the particularly loathsome practice made famous by Jack Welch, in which thousands of wage earners are laid off while a handful of executives are granted hundreds of millions of dollars through deferred compensation, company stock options, and lucrative retirement packages, all at stock holders' xpense. In addition to these offenses, he describes the tax evasion methods of those who simply defy the law and are emboldened by a beleaguered IRS that is too underfunded to serve as an effective deterrent to tax cheats. Johnston calls for a complete overhaul of the system. But because those who most benefit from these laws comprise the "donor class" that supports the government power structure, our prospects for reform remain very bleak. --
Silvana Tropea
From Publishers Weekly
Since he began writing about taxes for the
New York Times in 1995, Johnston's investigative reporting has earned two Pulitzers. The journalistic legwork informs every page of this expos‚ of the ways in which, he says, America's taxation system is stacked in favor of the wealthy. Johnston evades the imposing abstractness of the tax code by keeping the story focused on individuals, from working-class parents facing audits to Internal Revenue Service officials desperate for the resources to revamp their procedures. Chapters addressing the inability of the IRS to go after the worst tax cheats, thanks in part to opposition from grandstanding members of Congress, are particularly effective in putting a spotlight on the problem, but there's plenty of space given to revealing how canny tax attorneys come up with legal (and barely legal) ways to get around the system. And for those who can afford it, he reports, there's always a new dodge available once the law has caught up to the latest tricks. At some points, dealing with numbers becomes unavoidable, but even here Johnston displays a knack for breaking the story down into easily grasped components. Though the tax cuts engineered by Presidents Reagan and George W. Bush receive most of the criticism, Democrats come in for their fair share of opprobrium. Genuine reform, he suggests, will require serious and sustained attention from the public, not just reflexive griping. His book is a thoughtful overview for any citizens willing to educate themselves on the issue.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Reader Reviews
David Cay Johnston has received two Pulitzer Prizes for his economic writing in the New York Times. His privileged vantage point provides him with the experience and insight to write a book delineating the potential disaster confronting America from the manipulation of the federal tax system to benefit the wealthy at the expense of the rest of society. Many years ago H.L. Hunt, the Texas oil magnate then reputed to be the world's richest man, revealed his confident arrogance about the federal tax system, indicating that "even if they taxed us 99%" that the wealthy would prevail and pay nothing, leaving the rest of society to bear the responsibility. He had reason to be confident, as noted by Johnston's informative investigation. As for ferreting out tax cheats, the current IRS weakesses are appalling. Johnston noted that after locating the 16,000 worst 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 showboat on behalf of the wealthy to insure continuing tax breaks. A particularly egregious example was the drama put on by Senator Trent Lott of Mississippi, who lost his Senate Majority Leader status for his tribute to former ardent segregationist, Senator Strom Thurmond. Lott's histrionics focused on perceived abuses by the IRS which were never corroborated. The performance related to keeping the heat on those who wanted to change the 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. Bush for helping skew the federal tax code in the direction of the wealthy through their massive tax cuts, Johnston notes that to attempt to focus too much of the blame on these individuals would be a grave mistake. It is much broader than these two individuals, as powerful as they were and as fervent as their efforts have been in that direction. The special interests have woven their magic in bringing prominent as well as less than prominent Democrats and Republicans onto their team with the situation deteriorating over a long period of time. For instance, remember footage of so-called "seminars" at posh country club retreats? Scores of these have been organized by the corporate sector to "inform" elected officials from the House and Senate on how to properly deal with the tax system. Needless to say, these seminars are best conducted in comfortable surroundings. Unsurprisingly, those who cooperate find themselves back in office, assisted by special interest largesse. Those who do not generally find themselves out of office. Grover Norquist is a successful tax lobbyist with his own think tank. He is a prominent adviser to Bush, Cheney, and Rove. Knowing how the system is played, Norquist has referred to bipartisan congressional cooperation as "date rape." As for basic federal programs enjoyed by taxpayers, such as park systems and educational benefits, Norquist takes a harsh view. He has stated his desire that federal government activity, absent defense spending and anti-crime activity, belongs "flushed in a toilet bowl." He knows that if the system is top heavy enough in the corporate direction, with the middle class confronting the burden, that a plutocracy will result more in the tradition of eighteenth century France's pre-revolutionary phase than the New Deal, Fair Deal, and New Frontier administrations of presidents Roosevelt, Truman, and Kennedy. You see, France can be used as a sensible model, after all, by Bush partisans! Freedom fries, anyone?
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