This is an add-on to my three-part series. It’s different from the other three; this time I am not responding to another blogger, but instead saying something that needs to be said about taxes.
Recently, I read a couple of books by investigative reporter, David Cay Johnston, “Free Lunch” and “Perfectly Legal.” One book details who and what are the biggest moochers and the amount they mooch from you and me. Johnston points out that the amount of your taxes that go to welfare mamas is insignificant compared to the rich guys that gobble up the free lunches. Free to them, but not free to us. As I remember, Johnston finished his book before the Bushobama bailouts resulting from the subprime scandals.
The other book details the process of extracting taxes from you and me. The most interesting part to me is the process of auditing taxes.
I’m most interested because I’ve been burnt by audits. The one I remember with the most anger was one of the many I experienced in the Reagan era.
I will never be able to prove or even know for sure that the IRS audited me continually during the 1980s to retaliate against my public criticism of the federal government’s behavior during that period. My biggest gripe then was the confiscation of my taxes to reward countries like El Salvador that murdered US citizens and sent us the bill. I do know that after I objected to such use of my taxes, the IRS increased the frequency and intensity of their audits against me.
The worst episode took place when the auditor told me to bring in items A, B, C, and D. I did exactly as she instructed. She looked at items A, B, C, and D and then asked me about items, E, F, D, and G. I told her that I had them but did not bring them in because she didn’t require me to bring them. She then said she would arbitrarily disallow the deductions I had claimed in items E, F, G and H.
I realize now I should have fought back and demanded to see her supervisor. But I was stunned into inaction that she would pull that stunt.
Johnston’s book provided me with some of the context for understanding what had happened to me a quarter century ago.
Johnston concludes that the lower one’s income, the more likely one is audited. I worked from 1980 to early 1988 at very low-paying jobs. The highest my hourly wage during that period was some $7.11 an hour and the lowest $5.50 an hour. Why did the IRS go after little guys like me?
For three reasons, Johnston says:
1)Little guys are more likely not to fight back. They can’t afford the lawyers the rich guys can and IRS agents find poor people easier to bully and therefore easier to squeeze money out of.
2)The IRS does not reward its employees for the amount of taxes they recover but from the number of cases they win. It’s a lot easier to suck up $300 from a single mom who can’t afford to take time off from work for an audit than it is to take the same amount from a corporation, which can afford lawyers to work out tax dodges and can defend it when and if it does get caught.
3)The rich guys and the big corporations have lots of clout with politicians, who can and do lean on the IRS to lay off their cronies and contributors.
Don’t take my word for it. Read Johnston’s book yourself and judge for yourself. I don’t know if the politicians were sufficiently angry at what I wrote against the government that they would use the IRS to retaliate against me. I would think that I was too little a guy for them to bother with. But the older I get, the more I realize the folly of underestimating the evils some politicians are capable of.