Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else

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Summary: If you are wealthly, you .....
Review: Perhaps one of the most telling statements was that the overall tax burden for federal taxes is 15.3 cents, while that of the top 400 taxpayers (if the 2003 tax cuts were in effect) were 17.5 cents. When one adds in state, local, and property taxes, the poorest fifth pay 18 cents, while the richest fifth pay 19 cents. There is a great deal of background information about the effect on deferred executive compensation on corporate profits, the effect of the AMT (alternate minimum tax) on people who are not rich, and the propensity of the IRS to focus a great deal of resources on auditing the wage earner, who can hide very little of his income since it is reported on W-2 and 1099 forms anyway. But, with reduced IRS audit resources, auditing the little guy provides statistics, while the complexity of the wealthier tax shelters requires resources and reduces the numbers. But, auditing the tax shelters is where the tax recovered is greatest, but it is not often done. If the tax structure would be changed to a consumption (sales) tax, then the retiree would face double taxation since the retiree is spending after tax income for something that is then taxed. There are a lot of insights into the tax shelters available to the extremely wealthy (with an 'entrance fee' sometimes in the millions, not too many can enter into those deals). If there are tax dodges that are not caught, then it is wrong. If they are simply using loopholes then it is a value judgment although how they were created shows the power of money. If there is a bottom line, it is that adequate resources need to be made available to enforce the tax laws so that the tax laws apply to everyone. Note I term 'enforce the tax laws', not whether they are fair. If the laws are not enforced, it has the effect of allowing the system to break down. Taxes are necessary for society and society can make the rules they wish. The author also makes an interesting observation that auditors sometimes leave the IRS to set up tax shelters for wealthy clients using information they have gleaned from loopholes in the tax code. Another interesting statement is that the 'tax letters' used in setting up shelters are only opinions, but if they are written into hundreds of pages of detailed verbage, it can have the effect of getting the IRS to back down, or at the very least provide 'cover' for the client. One thing that should get most people angry is the statement that if seems that the IRS does not really penalize the abuser of tax shelters, even when they are found illegal.

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Summary: The title deceives
Review: The author, a NY Times writer, borrows from another NY Times writer to further promote the Paul Krugman school of journalism. The methodology is to take a topic that 99.9% of the population knows little or nothing about, play fast & loose with complex issues & then sell to the reader a scenario that is not even remotely accurate. But then, who cares about accuracy when hardly anyone can dispute your points? Most knowledgable CPA's, such as myself, could write a book about Johnston's distortions. This guy would love speaking to the typical leftist Times readers but he wouldn't show up at a CPA Society meeting on a bet. The biggest flaw of all is the title. In chapter after chapter every topic covered comes down to cheating, there's virtually nothing covered in the book that is perfectly legal. But "robbing from the poor to give to the rich" is a much better sales tool than "IRS does a poor job on tax law compliance". Johnston also has multiple cases of some of the most obtuse logic one could imagine. If IRS goes after a single mother to collect tax, Johnston would have you believe their purpose is to turn the money over to millionaires. There is a story that can be gotten from this book and that is that it is shameful that IRS is handcuffed by Congress in the enforcement of tax law. But Johnston's presentation, logic and conspiracy theories are laughable. Gary M Hetrick Medina, Ohio

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Summary: Informative, Helpful, and Non-Partisan
Review: Johnston states on the book jacket that he is a republican. However, this amazing book critisizes people of every political stripe. Absolutely non-partisan, It is a critical look at our tax system, and how it functions within our society. If you don't have the money to buy it, I suggest reading the chapter on "Handcuffing the Tax Police" if you like to read about governmental stupidity, or the chapter on the Earned-Income Tax Credit if you would like to see how our taxes affect the poorest members of our society.
This book has made me want to become a tax attorney and work for the ACLU. I was going to do labor studies, but taxes are much more interesting. If you like this book, I suggest "The Crisis in Tax Administration" from Brookings Institute as supplemental reading.

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Summary: Packed With Knowledge!
Review: The media and middle-class voters have blandly accepted tax cuts for the wealthy, thanks to the theory that the rich have paid more than their fair share of taxes for a long time. Nothing could be further from the truth, journalist David Cay Johnston convincingly argues. Using thorough research and startling examples, Johnston makes a persuasive case that the rich enjoy a free ride from Uncle Sam, while the middle class is saddled with an ever-increasing tax burden. Johnston takes you on a hair-raising tour of posh jets, corporate compensation committee meetings and IRS offices, piling up the evidence that the deck is stacked in favor of the rich. Johnston's strident tone grows a bit tiresome, yet the results of his reporting are sure to raise the blood pressure of anyone who hasn't benefited from a lucrative tax dodge. We recommend this trenchant book to anyone with an interest in creating a fairer U.S. tax system - or in living with the one they've got.

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Summary: Ideologies aside, Perfectly Legal is must reading.
Review: This book will get under your skin no matter your political leanings. Johnston does an impressive job of showing how our Congress has let the plurality of Americans down, though not necessarily with malice in mind. The issue really comes down to political access, and there's nobody out there pushing for the lower/middle/upper middle classes like the hordes of lobbyists and fake think tanks have done for the very rich. As long as our voices aren't heard, and complex policy problems are dumbed down with catchy marketing slogans (Death Tax vs. Estate Tax) and exaggerations of who is affected -- less than 2% of estates actually exceeded the threshold for the Death Tax to kick in, and no family farms have EVER been lost due to the tax despite assertions by the Bush administration to the contrary -- things will only get worse. Particularly damning is the impending crisis of the Alterntive Minumum Tax (AMT) that was originally designed to ensure those making $1M or more actually paid some income taxes. However, due to a number of factors, that tax is creeping in on middle and upper middle class families that can ill afford to lose the deductions to which they've grown accustom (standard deduction, child credits, mortgage, property taxes, etc.). Moreover, by 2010, the AMT will affect 73% of Americans making $100k or less. This was not the intent of the Congress, but the tax cuts afforded to the rich have/had to be paid for somehow since government expenditures certainly haven't decreased commensurate with its tax revenue reductions (from the rich that is). Those are just two of many examples of how those with the political access shape policies that only negatively affect the rest of us. Johnston makes it very clear that Democrats and Republicans are both responsible for the state of the tax code, and I hope enough people learn about this that we can make it an issue for our politicians to talk about in the near future.

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Summary: Perfectly Legal: The Covert Campaign to Rig Our Tax System t
Review: Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else by David Cay Johnston is a perfect example why laissez fair politics does not work. The Rich get richer and the tax system benefits the ones with to much money. The working man gets left out and pays the heaviest burden as always.

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Summary: "Perfectly Legal" WILL get you madder than hell.
Review: By the time they're halfway through this book, 999 out of 1000 people will be outraged at the unfairness that exists in our modern tax system. (If you're that 1 out of 1000, please visit my Wish List.) Unfairness in the sense that our tax system allows the ultra-wealthy to continually push more and more of the tax burden onto the working class. I think the author does a good job of presenting his argument, backing it up with facts, and placing sufficient blame on both major political parties that nobody could call this book partisan.