Thursday, December 31, 2015
Disagreement over the proper amount of taxes that should be paid is par for the course when it comes to politics but, in recent years, one particular group has been targeted over the amount in tax they pay, the super rich. In particular, the criticism has focused on the fact that their extreme wealth allows the access to tax specialist that are able to maximize savings using methods that are often dubious and not available to the general public. The penalty for a violation is not often of enough significance to deter abuse since the taxpayer has the means to fight out the case in tax court or settle for a significant reduction. In addition, the ultra rich have the ability to shift money between trust, foreign accounts, and various business entities in a manner that hides the money or drastically lowers the rate of tax paid. As we move deeper into the election season this issue will certainly grow in importance and it will interesting to see how the eventual candidates say they will handle the controversy.
See Noam Scheiber & Patricia Cohen, For the Wealthiest, a Private Tax System That Saves Them Billions, The New York Times, December 29, 2015.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.