The Cheating of America: How Tax Avoidance and Evasion by the Super Rich Are Costing the Country Billions--and What You Can Do About It
by Charles Lewis

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Book Reviews of The Cheating of America: How Tax Avoidance and Evasion by the Super Rich Are Costing the Country Billions--and What You Can Do About It

Book Review: The Hunt for Loopholes and Ways to Avoid IRS Notice
Summary: 3 Stars

The book builds from two faulty premises. First, that it is a civic duty to pay income taxes just as progressively as the face of the tax law suggests. Most people would agree that if there are legal ways to pay less, that people are entitled to use them. Much of what is condemned in this book is not even controversial in terms of its legality. Honest differences may occur in how these alternatives are applied. Second, that few people should be able to escape the IRS's reach. To do that, we would either have to use a much simpler tax system (like a sales tax) or audit almost all medium and large income taxpayers. That later alternative would require an enormous increase in the size of the IRS and reduce the pleasure of being an American. We would have a tax police state focused on everyone's tax life. I think that few would want to live with that, even if they were not a target in a given year. We've all read the horror stories of what happens now to some unlucky people who run afoul of the IRS.

The book begins with an example of how a complex tax system can go wrong. A woman got a retirement fund distribution, and didn't know how to pay taxes on it. She called the IRS, got faulty advice, and then was hounded to pay up. The IRS mistake was no defense. So, the downside of the current system is that it can victimize those who do not know about taxes. This means we are headed towards a world in which almost everyone who pyas taxes has to employ tax professionals.

I certainly agree with the authors that the egregious tax cheats should be stopped. Interestingly, I'm not so sure that can be accomplished. I am even less sure that it will reduce my taxes. There is a tendency for government to collect as much revenue as possible, even when revenue increases.

I think the book should have focused more on how the current tax system is headed for a collapse because of its complexity and rapid increase in illegal ways to avoid it, and that fairness and funding the government require a new and simpler tax system.

After you have finished this book, also think about how the balance of fairness should work in government. How many guilty people should go free so that one innocent person is not punished? How much discretion should police and prosecutors have? How hard should the IRS try to collect before settling with the unsophisticated?

What is your fair share of the community's burdens? Are you meeting it?

Donald Mitchell, co-author of The Irresistible Growth Enterprise and The 2,000 Percent Siolution

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