The loopiest tax loophole of all

by David Grand
May 20, 2009

I give you three guesses, and the first two don't count. You're right if you said, it's the off-shore, tax havens that more and more U.S. corporations have, according to a 2008 Senate report, used to avoid the tax man, to the tune of about $100 billion annually, or twice as much as Bernie Madoff made off with in his Ponzi scheme.

That sleazy, tax-cheating loophole game has been going on for as long as I can remember, albeit it's all perfectly legal. And any hopes I had that Congress would pounce on that loophole like a dog on a bone failed to muster enough votes year after year. That old axiom that "you don't bite the hand that feeds you was no doubt the motivating reason for the thumbs down votes.

But at long last, there's been renewed interest shown by current administration in cracking down on corporate abuse of overseas tax loopholes, regardless of the major collision it'll have with corporate America and their Republican supporters in Congress. (It's estimated that could produce $210 billion in new tax revenues over the next decade).

Now, I've always believed as Will Rogers said, that the income tax has made more liars out of the American people than golf has."

The facts would seem to bear that out, what with the IRS reporting an annual $300 billion gap between what taxpayers owe and what they pay. And in that regard, I would respectively suggest to the president that he set a example in his "own garden of evil," by requiring Federal employees, who owe billions in unpaid taxes to cough up the money el pronto. (Delinquent employees in the Postal Service alone owe nearly $3 billion, which may explain why they move so quickly in delivering mail, out of fear of being confronted by an IRS agent.)

Along those same lines, he should instruct the Treasury Secretary not to dispense any more bailout money to the 13 firms who owe more than $220 million in back taxes. With his close ties with Wall Street, however, I fear he might balk at doing so.

So as not to leave you shaking your heads in despair over the inequities in the tax system, I thought I'd pass along a few of the lighthearted quotes I've collected on the subject of taxes, which still bring a smile to my face, as I hope they will your's:

• "Next to being shot at and missed, nothing is quite as satisfying as an income tax refund." F.J. Raymond
• "I'm putting all my money in taxes; for it's the only thing sure to go up." Anon
• "Patrick Henry should come back to see what taxation with representation is like." Anon
• "The only thing that hurts more than paying an income tax is not making enough to have to pay an income tax." Lord Thomas R. Duwar
• "Nothing makes a man and a woman feel closer, these days, than a join tax return." Gil Stern
• "The reward of energy, enterprise and thrift--is taxes." William Feather
• "I'm proud to be paying taxes in the United States; but the only thing is, I could be just as proud for half the money." Arthur Godfrey
• "The primary requisite for any new tax law is for it to exempt enough voters to win the next election." Franklin P. Adams
• "Governments last as long as the under-taxed can defend themselves against the over-taxed." Bernard Berenson.