I think it only human nature to feel offended when we dutifully pay our taxes every year, only to learn that some very wealthy person paid little or no tax. This week, for example, a story in Pro Publica revealed that Colorado’s Governor Jared Polis paid no taxes in 2013, 2014, and 2015, and local media went nuts. Outrageous!
But paying no taxes is not, in itself, a crime. Or so it seems to me. Wealthy people can hire the very best tax accountants to exploit in every way possible the tax laws and loopholes available to them. And with due diligence it may happen that their net tax due in a given year is $0. That’s not a crime if it’s all done correctly and legally, if all taxable income is reported, etc.
The crime is in not accurately, properly reporting the amount of taxable income, the actual value of investments, properties, etc. When the numbers are played with, values distorted, income hidden in offshore accounts, etc., it likely becomes criminal.
So I’ll admit that while a report of no taxes paid irks me, it may be entirely legal. That’s why we insist on the release of tax returns from public officials. An examination of those returns can reveal illegalities. If all is legal, fine. The official may be embarrassed, may incur a political liability, may suffer a tarnished public image, etc., but paying no taxes is not necessarily illegal.
The problem then is not wealthy people taking every advantage of the tax laws. It’s the laws themselves. Those with exploitable loopholes must be changed. Or abandoned. Or replaced.
Meanwhile, law number one must require the release of tax returns by any candidate running for public office.
In and of itself, not paying taxes is not a crime. How that zero tax liability was determined may be. The voters have a right to know.
I’m just an envious peon, as are most of my fellow citizens. And I’m really lousy with numbers. But I do believe the wealthy have the right to spend their legal income in any way they wish — even space tourism (though it really pains me to say that). And I do believe that as much as I may hate it, they have the right to use all available legal tax loopholes — just as you and I would — to reduce the amount owed.
Obviously then, the tax laws need to be changed, and the politicians need to be held accountable. It’s just a damned shame that the politicians make the tax laws.
And that’s the biggest loophole of all.