Heavy Lifting - thoughts and web finds by an economist
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Saturday, January 31, 2009
From ABC News:
With the unreported income from the use of a car service in the amounts of $73,031 in 2005, $89,129 in 2006 and $93,096 in 2007; the unreported consulting income of $83,333 in 2007; and the adjusted reductions in charitable contributions, Daschle adds a total of $353,552 in additional income and reduced donations, meaning an additional tax payment of $128,203, in addition to $11,964 in interest.This seems much more obviously tax evasion than what happened with our new Treasury Secretary. Let's say that you make $1m per year in income. Failing to report $93k is thus failing to report 9.3% of your income. Of course, if you make less than $1m and fail to report $93k, then you are "misplacing" an even greater percentage of your income.
Let's put this in perspective for the average person. Average household income is, let's say, $50k per year. Failing to report 9% of your income would be like "forgetting" $4,500 over the course of the year. How likely is that to have happened?
I am all for tax avoidance in which humans alter their choices and behaviors so to avoid being taxed by the authorities. Tax evasion, however, is not so benign. Moreover, the low income household who cheats on their taxes to put food on the table somehow seems morally superior to the ex-Majority Leader of the senate who fails to report $83,000 in "consulting income" earned only because of his being ex-Majority Leader.
I loved this comment from the user comments:
This really is "The Big Show". We've got spend-orama-Obama as the ring master, turbo-tax Tim as treasurer, Hillary-no conflicts-Clinton as secretary, Eric-hold on to your civil rights-Holder for attorney, and Tom-puff up the deductions-Daschel as housekeeper. How can the markets possibly be falling for lack of CONfidence?
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