Why cynicism about taxes is rampant

[Judge Roy Bean]

http://www.macon.com/198/story/640079.html

ATLANTA — Nearly 10 percent of Georgia state legislators are late filing or paying their state taxes, and state Sen. Robert Brown is apparently among them.

Brown, D-Macon, said Wednesday he’s not sure whether he actually owes the state or federal government any money because he hasn’t filed tax returns. He said he’s gotten extensions, but he declined to give more information or say for what years he received filing extensions.

[Burzmali]

I bet that half of them have an IQ below the average for Georgia state legislators too.

Any statistics on what percent of taxpayers get extensions, possibly by income level, in a given year?

[Judge Roy Bean]

Yet another example:

Sunday, March 8, 2009
Major Criminal Tax Fraud Trial Results In Complete Defense Victory

This past week a U.S. Virgin Island (USVI) federal jury returned not guilty verdicts on all twenty-six counts in a major federal criminal tax fraud trial. The government alleged that three individuals created and promoted Kapok, a USVI limited partnership, in order to unlawfully obtain tax benefits from a USVI economic development program. The program provided a 90 percent federal income tax credit for eligible companies and individuals. Also charged were a St. Louis area auto dealer and several companies affiliated with the defendants. The government alleged a loss of more than $75 million in federal income taxes from Kapok's participating partners.

Blair G. Brown, a partner in Washington, DC's Zuckerman Spaeder, led the defense of one of the individual's accused, with assistance from associate Lani Cossette. "This case should never have been a criminal prosecution," said Mr. Brown. "The legal standards for USVI residency and qualifying income under the economic development program were vague. All of the defendants did their best in relying on the guidance of experts. The jury also correctly understood that the defendants and similar partnerships brought substantial economic benefits to the USVI."

"The defense was a real team effort that melded the strengths of all defense counsel. Sticking together and pounding our themes-vague standards, reliance, disclosure, and benefits to the USVI-were essential," added Mr. Brown. The defense presented only two witnesses, and none of the defendants testified.

Also representing the same person as Brown were Clyde Kuehn from Belleville, Ill., and USVI local counsel Lee Rohn. Other defense counsel were William Lucco of Edwardsville, Ill.; Chuck Meadows and Josh Ungerman of Dallas; Robert Webster of Dallas; Robert Smith of Dallas; and Gordon Rhea of Mt. Pleasant, S.C. The government was represented by Assistant U.S. Attorneys from the Southern District of Illinois, where the case was originally indicted before its transfer to the USVI, and the U.S. Department of Justice Tax Division.

Point being that if you have the right legal team and the resources to pay them, you can play the tax-avoidance game.

Is it any wonder the TP/TD crowd can rally their troops around bad interpretations of the code?

[Demosthenes]

Big news in the above USVI tax scheme case!

Auffenberg juror charged with seeking bribe
By Robert Patrick
ST. LOUIS POST-DISPATCH
Friday, Jun. 19 2009
U.S. VIRGIN ISLANDS - A juror in the criminal tax trial of Metro east car
dealer Jamie Auffenberg earlier this year has been charged with seeking a bribe
from a defense lawyer, the U.S. Attorney's office said.

Auffenberg and three others were acquitted of all charges of conspiracy, fraud
and tax evasion on March 4.

They had been accused of setting up a sham tax shelter by taking advantage of
tax incentives meant to drive investors, money and business to the U.S. Virgin
Islands. Prosecutors claimed that Auffenberg and the other partners of Kapok
Inc. dodged $74 million in taxes on more than $300 million cycled through the
company.

According to an affidavit filed by FBI Special Agent Thomas Drummond, an
unnamed defense lawyer got a phone call from a female juror the evening of
March 1, asking how much that lawyer would pay for a “not guilty” verdict. When
the lawyer responded that the call was inappropriate and had to be reported to
the judge, the juror said “forget it” and “I told them that this would not
work.”

The FBI traced the call to Dorothy Hendricks' number, Drummond wrote.

Hendricks was replaced with an alternate on March 3 and the jury was told to
start over.

Hendricks later told the FBI that she had talked to another juror who said, “It
sure would be nice to make some change off of this,” suggested a figure of
$3,000 to $5,000 and said that someone would contact her.

Hendricks called the lawyer after waiting in vain for that contact, Drummond
wrote.

She also told the FBI that she believed that an unidentified person had paid
off “jurors.”

Hendricks now faces three charges: seeking a bribe as a public official,
agreeing to accept a bribe as a public official and contempt of court. Jurors
are considered public officials for purposes of bribery laws, prosecutors said
Friday.

[Brandybuck]

Less talk, more action. Flat tax. Now.

I would rather see no taxes. But that's not an option, so I will go with lower taxes (accompanied by matching spending cuts, natch). Most flat tax proposals (as well as the misnamed FairTax) are "revenue neutral" that do not change the overall level of taxation. While I like the simplification flat taxes provide, the real burden is the taxation not the filling out of forms.

[ASITStands]

Less talk, more action. Flat tax. Now.

I would rather see no taxes. But that's not an option, so I will go with lower taxes (accompanied by matching spending cuts, natch). Most flat tax proposals (as well as the misnamed FairTax) are "revenue neutral" that do not change the overall level of taxation. While I like the simplification flat taxes provide, the real burden is the taxation not the filling out of forms.

I think any sort of consumption tax puts taxpayer back in the hands of the taxpayers. It's back in the hands of the People who elect Representatives, and it becomes a political question.

"If elected Senator, I promise to lower the rate on the national sales tax 2%!" And, off we go into the realm of the People taking back some control of what happens with tax money.

It's true that spending is out-of-control (at least, in the opinion of many), and it's true that tax rates keep ratcheting higher and higher, and the code gets more complex each year.

For all intents and purposes (as I see it), we're broke! And, it doesn't appear anywhere near a resolution, and it would seem appropriate to change the tax code one way or another.

I am generally a believer in lower rates (particularly corporate and capital gains rates), and I want to see lower rates on individuals. I'm beginning to consider the idea of an income tax on high incomes and a value-added or national sales tax on everyone below the threshold.

The only proposals I've heard raise the threshold to $100,000 annual income.

[LaVidaRoja]

The biggest problem with every "flat tax" proposal is defining what the tax is levied upon. i.e. Define INCOME. If you receive a W-2, it is simple. But what about the self-employed? What about those who, in the course of their business, pay out - either as wages or commissions or any thing else, other people? Part of the reason our taxation system is so complex is because our economy is also complex.

[ASITStands]

The biggest problem with every "flat tax" proposal is defining what the tax is levied upon. i.e. Define INCOME. If you receive a W-2, it is simple. But what about the self-employed? What about those who, in the course of their business, pay out - either as wages or commissions or any thing else, other people? Part of the reason our taxation system is so complex is because our economy is also complex.

Yep. That's why some sort of consumption tax makes more sense, and it follows the logic of user fees. Instead of punishing People for earning, producing, investing or saving, regulate the amount of use they make of resources and services by taxing them at the point of sale.

Part of the problem is making a consumption tax revenue-neutral, and another part is making it progressive rather than regressive. Without the prepayment designed in the FairTax, a national sales tax equally imposed on rich and poor discriminates against the poor.

That doesn't mean I like the FairTax. I'd just like to see a system that ends the taxation on the production of goods and services, and the earning of money, as it would stimulate jobs.

[SteveSy]

Part of the problem is making a consumption tax revenue-neutral, and another part is making it progressive rather than regressive. Without the prepayment designed in the FairTax, a national sales tax equally imposed on rich and poor discriminates against the poor.

How does it discriminate against the poor? Do rich people pay less on a car than a poor person does under the FairTax? Are you coming up with this using the silly "as a percentage of income" analysis? If so, then the entire economic design is flawed. They pay less for a bigmac, coke, gas, clothing, anything to do with the cost of living, everything you can think of is less as a percentage of income also.

The truth is the poor are going to be here regardless and they will continue to be the primary reason the government spends money. If we had a nation of mostly rich people the government wouldn't need much money at all. The rich people don't have to be here, they can stick up their proverbial middle finger and tell us all to f-off.

More and more rich people are leaving and setting up shop elsewhere. Our internal industry has gone to the crapper and moved overseas...Gee, I wonder why? We're so damn friendly here.

I don't mean this as an attack, it's just annoying when people resort to that analysis. It's code for "From each according to his ability, to each according to his need", in other words, communism or strict socialism.