Perfectly Legal by David Cay Johnston

I am reading the most interesting book called Perfectly Legal, written by NYT Tax Correspondent David Cay Johnston. It basically looks at how messed up the tax system is in the US, and how there are all these tax laws that help the ultra-rich get out of paying taxes and the middle class is the group who gets footed the bill. There was actually a law passed by (the Republican) Congress in 1997 that stopped the IRS from conducting audits based on lifestyles. They cannot audit somebody who reports a middle-class income on their taxes but has their own private jet. Think about it, who really benefits from this law? The person who actually makes a middle-class wage and cannot afford a private jet? Alternatively, does it help drug dealers, the mafia and other tax cheats? What about people who make a ton of money but only deal in cash that the IRS cannot easily trace, like strip-club owners. Now the IRS legally cannot audit a person because their assets are worth far more than their reported income.

Then there is the Bush tax cut, and I do not even want to get started on those. While on paper it may seem like the rich are paying a larger share of their income in taxes, but it is clearly not the case. With all sorts of deductions and loopholes, the American tax system is not progressive (as it should be); it is more of a flat tax, if not regressive.

I cannot wait to get to the part about the estate tax; that should be interesting to see how many Americans oppose a tax that will NEVER affect them (unless they suddenly become worth millions of dollars). I will write more as I learn more.