Book Review:
The Great American Tax Dodge

Mar 5, 2001

If Congress passes Bush’s tax plan, it will only further tilt a tax system that already favors the rich.

This "tilt" was exposed in a book which came out last year, The Great American Tax Dodge, written by Donald Bartlett and James Steele. These same authors, a decade ago, won a Pulitzer Prize for their series, "America: What Went Wrong?"

The authors start their book by making a bold statement, "At least $3,000 of what the average person pays in yearly taxes goes to cover taxes that other people should pay–but don’t. If you earn less than $40,000 a year, like most people, that’s just about every dollar you pay in federal income tax." They estimate that there is 300 billion dollars in unpaid taxes every year; enough, as they put it, to provide health care for the 44 million people in this country without health insurance.

The IRS estimated that in 1996 over a thousand families with income over $200,000 paid no taxes. But the authors state this is the tip of the iceberg, as this only includes those who filed a return and somehow got out of paying taxes. This didn’t even count those who never filed a return.

A popular scam is to hide money in overseas bank accounts. The only people usually able to do this are people who have the means to do so.

The book outlines the finances of one of New York’s richest families, the Wendensteins. A rich family with a private art collection worth at least six billion dollars, who own a castle in France, property in Switzerland and a 66,000 acre ranch in Kenya. Despite all this they paid no taxes, and didn’t even file a tax return.

The authors stated that there is a double standard when the IRS finds someone who owes taxes. For regular people, the IRS figures out what they owe and then demands payment. For the rich, they let the person, or rather their accountants, figure it out, and these returns receive LESS scrutiny than people who file their taxes on time.

In The Great American Tax Dodge, the authors over and over give examples of situations where either laws were written to deliberately favor one or a few wealthy people, or one or a few businesses.

The Tax Reform Act of 1986 gave all sorts of tax breaks to special interests. And in the years since, numerous tax breaks that favored one small group or another have been written into the tax laws. This book points out the many times these laws just happen to favor a person or a corporation which gave big political contributions to the politicians.

The examples in the book are too many to cite. But rest assured, the authors make their point that the tax system is already tilted to favor certain people at the expense of everyone else.

The Great American Tax Dodge is worth reading, if only to understand to what degree, and how, the tax system has been molded in the interests of the wealthiest people.