Customer Reviews

The Great American Tax Dodge: How Spiraling Fraud and Avoidance Are Killing Fairness, Destroying the Income Tax, and Costing You

5 star:		(3)
4 star:		(2)
3 star:		(2)
2 star:		(3)
1 star:		(1)

 

 

Before I read the book, I had the (mistaken) belief that all income tax evaders had an equal chance of an IRS Audit. I now see that the IRS is set-up to audit citizens that can't afford lawyers--the book has good evidence for that, the kind you can find for yourself.

Unfortunately, the book isn't totally solid. It rightly points out that the current tax system is unfair for the un-wealthy, and I think the authors provide fairly good evidence that this unfairness is largely due to a congress that has created a behemoth tax code while simultaneously stripping the IRS of its ability to enforce it. Unfortunately, though, there were times that some claims went un-referenced (e.g., past tax code), which left me wondering about what was "factual."

The book is biased towards blaming the wealthy for lobbying congress while dumping billions into tax shelters (this bias, nonetheless, seems well supported), but the book isn't about wealth bashing--it is about the notion that in our country, to some extent, we are all our neighbor's helper, and to cheat taxes is morally incomprehensible and consequential. They point to the ills of society fostering an environment for cheaters of all kinds...from tax evaders to cheating college freshman, as evidence for the cheater's mentality. In this regard, the book has a pessimistic view of a human nature that always reduces itself to the "lowest common denominator" (i.e., if the wealthy cheat on taxes, why shouldn't I?). The authors pose good arguments against flat taxes and sales taxes, while supporting a progressive tax such as our current tax structure. They argue that the current tax code is too complicated and should be simplified. This complication is largely do to the history of special interest groups successfully lobbying for tax loopholes. Overall, I know more about taxes (and tax evasion) than I had before the book.

Barlett and Steel won two Pulitzer prices for journalism so you know their work is high quality. This book will offend some readers, especially the devious rich and the gray-area almost-crooks. But I hope it will anger the hard working stiffs in the middle class who still believe paying taxes is the price of having a good society. The authors make a convincing case that Congress does not care to make the system just or fair and that America is in danger of moving toward the Banana Republic and some-European-countries model where if you pay your taxes honestly you are considered a fool. How bad it has gotten can be seen in the case of our famous former president, who managed to leave his presidency in such a sleazy way. The book came out last fall and maybe Bubba read the pages on Marc Rich, who could be described as a crook and an enemy of America. But that didn't stop our president from granting him a pardon. Could a $450,000 donation to the Clinton library and some $150,000 donated to Hilary's senate campaign have anything to do with that? Of course not. I give this book five stars because it is well researched and well written, fascinating from beginning to end. See what a boon the Internet has become for tax cheats. See how venerable Swiss banks are only too happy to help you hide your undeclared income. See how Congress crippled the IRS. We now have the best government and representatives money can buy and nobody cares. Almost nobody. A man like Sen. McCain is a miracle, because he is one of the solutions. Read this book. It's terrific.

The major portion of the book confirms our suspicions of the massive tax avoidance and evasion that is extant in the U.S. today. I found much of the material to be revealing of the methodology used by rich and poor to escape the responsibility of paying ones dues.
The authors lost me in their attack on VAT ( National Sales Tax ) which has worked successfully in tne United Kingdom and in Canada. These countries are way ahead of us in Social Services. Any tax plan will have its defects, but this is one way to avoid the off shore plans, and the refusal to even submit the 1040 form.
The final chapter devoted to the authors' solution to the problem is a joke. If you take one suggestion after another it is clear that our economy will not tolerate their badly constructed cure. I think that they were just in a hurry to close out the book and had really ill considered, ( or no ), advice from seasoned economists. These two chapters left me with a feeling of let down and disappointment. I had hoped to find some well constructed answers to a pernicious problem. But they offered none.

While there are some short-comings with this book, the overall general idea rings true, and their evidence supports the claim. The book does not aim to be a fix-all for the numerous troubles that ail american democracy. Rather, it simply aims to expose yet another example of class preference in American society.

Like the legal system, the tax code works more to one's advantage the more money one has. That is the simple premise of the book - not government gridlock, not class jealousy, and certainly not socialism. The authors argue from the simple point of showing how wealthy individuals take great advantage of our tax code. And while it does suggest a certain conclusion, I would argue that it is common sense and logic that they use to arrive at the fact that this is but one more way the wealthy absolve themselves of any responsibility in society.

In the end, it is an informative read, but should not be taken by itself. It should be read in conjunction with other works on the tax code, gov't spending, and other problems that plague American society and allow the wealthy to keep distancing themselves, and avoid responsibility.

Just read the last two chapters, "How Congress plans to increase your Taxes" and the final chapter on their solution. These authors show how Congress is crippling the enforcement of tax cheats by the rich, even granting them loopholes so they pay even less than they should. The flat tax and national sales tax are shown to be the shams they are, the rich will get very rich and the poor and middle class will take the burden of the lost taxes from the rich. Don't believe me, read the book. Why did Warren Buffett endorse Gore saying he (Buffett) pays less taxes than his secretary? Because this is all true, Congress has always made the tax laws favor the rich, hiding it in complex regulations that only the rich can afford the lawyers and accountants to figure out. They pay less taxes and now the Republicans want to make the income tax so difficult that the rest of the country can be sold a bill of goods that repealing the income tax and putting in a flat tax will help the middle class instead of the truth that it will devastate the middle class. Buy the book, get the book from the library, but read the book before you vote!

This is a most peculiar book on the subject of condemning U.S. income tax dodging. At one level, the book does a fine job of conveying the magnitude and ways that people cheat on their taxes by not filing returns, filing fraudulent returns, and not paying taxes. At another level though, the book could serve as a guide to successfully becoming one of these cheaters. I really wonder what the agenda is for this book. I graded the book down one star for providing too much information about how to use these illegal tax dodges. I think this book will just make the problem of cheating worse.

To that ambivalent reporting about tax dodges by the authors in the book are added occasional references to the need to narrow the gap between the rich and the poor (or at least keep it from becoming too wide) as a necessity for democracy. This belief leads to an argument for a progressive income tax, supported by substantial withholding in all areas and few deductions. I think the authors raise an important and serious question here about democracy, but unfortunately they do not address it seriously here. They simply assert the conclusion without considering specifics. I graded the book down one star for this weakness in failing to develop the book's thesis, as well.

Where is the line between when democracy is improved or harmed by income and wealth differences? I frankly don't know, but would like to. I think the issue is a complex one. I don't think it hurts democracy for Bill Gates to be the wealthiest American. In fact, it probably encourages people to want to learn and invest in the New Economy. On the other hand, it undoubtedly would be awful for the wealthiest American to be a publicly immoral person who flaunts not paying taxes. I suspect that the answer to the issue raised by the book depends a lot on who the wealthy are, how they behave, and how they are perceived.

One part of the book's argument struck me as being false: The assertion by the authors that tax cheating means that honest tax payers pay more in taxes. While that statement has a certain surface logic, my impression is that Congress raises or lowers taxes because of whatever plays well with the electorate. Right now, higher taxes are in favor to reduce the Federal debt and to retain Social Security and Medicare benefits. Even if everyone paid taxes honestly now, I doubt if we would get a tax cut anytime soon.

That argument about paying other peoples' shares is also misleading in another sense. If you have any system where taxes are to be paid voluntarily by individuals, there will be cheating. The cheating just changes with the form of the tax system. The authors point out that cheating in all areas of life is rampant right now. Cleaning up the tax code would just send the cheating in a new direction. Obviously, taxes need to get paid or the government cannot function. 'What's the most efficient and effective way to get that done?' is the right question, in my view.

The obvious drawback of a sales tax is that it means that those with the lowest incomes pay the highest percentage of those incomes in taxes. That limitation could probably be overcome by having progressive tax rates on luxury items (beginning around the median price paid by everyone). But a sales tax should reduce cheating, and be less costly to pay and collect. Also, the chances of abuse in tax collection should be a lot less, which would satisfy everyone. The authors miss the cost of the current system in taxpayer compliance. A more efficient and effective system would undoubtedly save me money at some point.

I heartily agree that Congress creates most of the problems by making the tax code too complex, too much in favor of special interests who give large donations, and in making enforcement all but impossible by not funding the IRS. But Congress will probably do the same with any tax code.

What was totally missing from this book was any consideration of how a tax system affects the growth of the economy and how spending power is affected for each person. Some tax structures will encourage faster growth while others will discourage it. Some will increase inflation while others will decrease it. Tax systems are both political and economic quesions. To only focus on the former is a mistake that this book has made. I was tempted to grade the book down one more star, but realized that many would feel that this question was outside the scope of the book's title -- even though it is implied by the argument in the text.

In the same way that a consensus finally built to eliminate the federal deficit, I am sure one will eventually be built to improve the tax structure. But I think the authors are on the wrong track with their ideas here. They are denying the problems that led to the current system in their proposals, while focusing on two few of the right questions.

All in all, I thought The Greedy Hand was a much better book in this subject area. If you skip The Great American Tax Dodge all you will do is delay the day you find out how to use some of these illegal methods. Whether you do or don't use those methods, naturally, is up to you. I hope you decide not to. The fact that it is easy to cheat means that being virtuous is more to be esteemed in others and in yourself.

In considering the widespread attitude of approving one's own cheating when it is not detected, you should ask yourself the question of how we can improve behavior and trustworthiness in our society. Obviously, the main improvements have to come from each of us through our personal decisions and actions. How can you become a more trustworthy contributor to yourself, your family, your friends, your co-workers (if you have them) and your community?

Well, the ideas presented in this book about people defrauding the system are worth wild, no honest person is in favor of that. But their ideas on how to "fix" the problem are returning the marginal tax rates to the pre 1981 Reagan tax reform. There is no mention that these ultra high marginal rates actually collected LESS money from the "wealthy", because they had many more loopholes to avoid the 80% marginal rates. They also don't mention that if indeed, the marginal rate on for example stock market gains were 70%, who would bother to invest? Conservatives will not like this book, liberals will.

The authors just added to the indignation I share with fellow citizens over the failure of the rich and powerful to pay their fair share -- or even not to pay anything. It is a corollary that capitalists love to play with other people's money. It is also a habit to force the tax burden on to those less able to defend themselves politically. Perhaps we have to have a complete tax revolt and abandon withholding tax. The rich would have much to lose in anarchy.

The authors obviously are politically to the left. Their book is full of class envy. They are obsessed with the rich getting richer, and they clearly want the rich to share it all. Simply put, they have a socialist agenda, and they wear it on their sleeves.

I would ask, "What is wrong with being rich?" All of us in this country have the same opportunity to be rich. If you are rich, you had better be a philanthropist or the authors of this book will hate you.

The authors are for more taxation. In one fit of left leaning hyperbole, they expend several pages to tell us that we actually pay proportionally less in federal taxes than we ever have, and then, almost as an afterthought,devote a few lines to tell us that with all the other taxes, state and local, we pay proportionally more than we ever have. Come on guys, your shtick is socialism with a capital S.

I have often wondered how offshore tax havens work, and who uses them. This book, while not full of technical expertise on how these loopholes work, does provide insight into the scope of the problem and what is or isn't being done to correct it. The book also provides insight into where these tax havens are. All in all, a rather lopsided, uninspirational book for which the only redeeming value is to provide sensational material for the curious, and fodder for the crooked. I was curious.

There is a clear need for a comprehensive book on tax policy as both left-wing critics (close the loopholes) and right-wing critics (simplify the code) agree there is a problem. This book fails to fulfill that need. Instead we get the typical divisive, envy-baiting attacks on people of achievement. Taxes take a large percent of our income and yes, most countries are worst. However, when we look at the wealth we've accumulated and the services we enjoy we see how little of our material well being comes from our tax dollars. Consequently, people are outraged at the government and the high taxes we pay. The authors try to divert our outrage from the government to our neighbors. Let's remember that this country has not had an income tax for most of its history.

For a better book that leaves out the class-warfare see "The Greedy Hand" by Amity Shlaes. For a significantly better book that has the correct moral focus see "Your Money or Your Life" by Sheldon Richman. For a moderate proposal see "Flat Tax" by Robert Hall & Alvin Rabushka.