Paying Taxes: Are We All Hypocrites?
So there have been a lot tax scandals involving politicians recently—I’m talking about the drama of Tim Geithner and Tom Daschle. Both men supposedly “forgot” to pay taxes on certain items (a limousine was one of them I believe) and it almost cost Geithner his job. Daschle, on the other hand, didn’t make it—he got fired.
Lots of people have written about this and most of the articles I’ve read are angry about it. It’s understandable—these guys are making tons and tons of money, so why don’t they pay the taxes they owe? It’s the same level of hate that CEOs and other rich people see coming their way whenever they do something similar.
The pattern seems to work something like this: if you’re rich and you try to get out of paying your taxes, then you are a tax cheat and deserve to jailed and barred from re-entering humanity.
And humiliated in the papers.
Which, you know what? I can understand that. I can sympathize. Maybe I don’t feel as strongly about it as a lot of people do, but I get it: it’s frustrating when the people that are already rich try to get away with stuff to make them even richer. Even Warren Buffett would agree.
Meanwhile, we’re struggling to make ends meet and try to carve out a better life for ourselves. All the while, dutifully paying our taxes.
Right?
Well, sort of. This is where I see some hypocrisy with the people that get so angry and direct such harsh words towards these rich tax evaders. Most of them want to pay as little in taxes as possible.
There are online boards filled with people talking, asking questions, posting loopholes, and trying to squeeze as much as they can out of their tax return. They don’t want to pay their taxes either.
Granted, it’s on a different scale, but otherwise it’s the same concept. Why don’t you just pay what you owe and be done with it if you’re so hardcore about the rich paying theirs?
Just because they’re making more (and thus “saving more” on their taxes), doesn’t make it any worse than any of us “cheating” on our taxes.
I’ll be the first to admit it. I’ve asked questions and gone online trying to find a way to pay less in taxes. We all do, to some extent.
If I was filthy rich, I’d hire someone I trust to do my taxes and I’d tell them, “Do whatever it takes for me never to be in trouble. No mistakes. Just pay what I owe. Or else…”
That’s just me though.
This post has been included in the Don’t Mess With Taxes Carnival.
February 5th, 2009 at 7:57 am
I thought the whole point of being an American is being a hypocrite.
I got not beef with these guys trying to slip something past “the man” even if they work for that same man.
Personally, I blame the 60,000 page tax code we have in this country.
February 5th, 2009 at 1:49 pm
WC,
Wanted to share a quote with you that is on my website – I heard it first year of law school and it has stuck with since,
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
Judge Learned Hand (seriously, that is his name)
February 5th, 2009 at 7:29 pm
My Journey: That’s a great quote. An even better name!
February 6th, 2009 at 9:19 am
I think there’s a HUGE difference in seeking to reduce your taxes as much as legally possible, versus avoiding taxes. If Geithner or Daschle had set up elaborate corporate structures to minimize the taxes they paid for nannies or compensation-in-kind, respectively, fine. But they simply didn’t pay taxes where taxes were due. HUGE difference in my book. And let’s face it, when Daschle was a senator he sat on the finance committee that oversaw – you guessed it – the writing of the tax code.
No excuse for public servants who want to be influencing tax law – they HAVE to be pure as the driven snow. Geithner should be ashamed, frankly, and grateful that his nomination got hurried through before all of these other tax-problem candidates came up, otherwise he would’ve been off the team, too.
February 6th, 2009 at 12:32 pm
When I read this post I immediately thought about the Learned Hand quote but My Journey already has it posted. There is a big difference between legally reducing your taxes and just not paying taxes you owe.
I won’t owe any federal income tax this year because my income is too low. This method of avoiding taxes has some obvious drawbacks but it is easy to implement.
February 7th, 2009 at 12:52 am
I find the concept of taxes to be insulting. By the government taxing my income and purchases, it is insinuating that it has ownership over these things. The money I make is MINE, and the government shouldn’t get any of it.
I don’t think that the real question is whether or not we are hypocrites. I think the real question is “Why do we even accept the legalized theft that is taxation?”
February 7th, 2009 at 11:43 am
I agree with Steve on this: it’s two different things to minimize and to evade. But that line seems to be so blurry. Maybe it’s the complicated tax code. I mean, sometimes the only difference between minimizing and evasion is whether you get caught or not.
February 8th, 2009 at 6:02 pm
I love this topic because I KNOW there is such huge hypocrisy on it–I used to prepare taxes for a living.
On a recent CNN poll 9 in 10 Americans said it is not OK to cheat on your taxes. I think the answer would have been a little different if asked differently:
1. Have you ever employed a housekeeper, nanny, gardener or other household employee and paid them over $1,600 in the year? Did you pay Social Security Taxes, withholding taxes and Unemployment taxes. If not, you are a tax cheat.
2. If you are self-employed and you performed work for which you did NOT receive a 1099 (under $600 in the calendar year), did you report that income? If not, you are a tax cheat.
3. Have you ever won any money at a gambling casino? Did you pay tax on the winnings, if not, you are a tax cheat.
4. Have you ever ordered something on an internet site and not paid state sales/use tax on the item? Did you then file the appropriate form with your state to remit the tax you owe at the end of the year? If not you are a tax cheat.
5. Have you ever given household items to a charity and then guessed (rounded up) at the value of such items to report them on your tax return. Or just made some up? You are a tax cheat.
6. And not specifically taxes here, have you asked all nannies, housecleaners, and gardeners to provide you with an Immigration form I-9? If not, you may have illegally employed a foreign worker.
7. If you haven’t paid some of the taxes which I noted above, are you going to go back and amend your taxes to pick up the taxes you owe? You are a tax cheat.
8. If you would go back and amend, would you go back and remit the tax for a year for which the statute is closed (one of the issues with Geithner)?
You get the picture. I think there are a lot more than 1 in 10 people in the U.S. that are ignoring the rules. And these are just the ones I can think of off the top of my head!
February 14th, 2009 at 9:57 pm
If you want to see a hypocrite just look in the mirror. Nothing like stumbling onto a rant by some self-righteous fool. You get a stumble thumbs down from me. You won’t ever be rich so don’t worry about it.
February 16th, 2009 at 12:11 am
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