If you own stock in an American company, you should read this book. If you pay taxes in America, you should read this book. Clearly, I believe everyone should read it.
Here’s my quick review (with more details below):
David Cay Johnston, a Pulitzer prize-winning reporter formerly with the New York Times, describes what is wrong with our tax system. It taxes the poor and rewards the rich. It allows the rich and their decedents to continue getting richer while leaving middle class and upper middle class salary workers less and less to save.
Johnston covers many broken aspects of our tax system, including:
Johnston covers a multitude of topics from:
- The wealthiest Americans are getting even wealthier,
- The richest Americans pay the least percentage of their income in taxes, largely because most of their earnings aren’t classified as salary
- Wealthy executives use corporations to gain more wealth that is not taxed, gaining huge incentives such as using the corporate jet for personal travel to deferring income,
- Corporations reporting different accounts of profit to shareholders than what they report to the IRS,
- Corporations are paying less and less tax which means that people are paying more,
- Tax cuts often disproportionately benefit those making over $500,000 due to the Alternative Minimum Tax structure,
- How the repeal of the “death tax” is really a “how to make the really rich richer” because the majority of Americans, including those who need a lot of capital (like farmers) for their business, are well below the estate tax cap,
- Typically only the very wealthy are able to contribute directly to Congressional tax legislation campaigns,
- How the IRS focuses on audits instead of targeting sophisticated tax avoidance schemes that might recover billions.
- and so on.
In conclusion, Johnston says we all need to stay informed, discuss these issues widely, pay attention to tax bills being passed, push for more transparent tax law (including cleaning up our current tax law) as well as more funding to pursue the big time tax frauds.