Published on

Spending Millions to Save Much More: How the Uber-Wealthy Avoid Paying Their Fair Share

New York Times investigation reveals how richest Americans exploit tax system in order to shield tens of millions

An elite group of the richest Americans has created "a kind of private tax system," according to the New York Times. (Photo: Philip Taylor/flickr/cc)

A special report out Tuesday from the New York Times shines a light on the so-called "income-defense industry," which exploits "a dizzying array of tax maneuvers" so that the uber-wealthy can shield their fortunes. 

"Operating largely out of public view — in tax court, through arcane legislative provisions, and in private negotiations with the Internal Revenue Service — the wealthy have used their influence to steadily whittle away at the government’s ability to tax them," write Times reporters Patricia Cohen and Noam Scheiber. "The effect has been to create a kind of private tax system, catering to only several thousand Americans."

That elite group, the Times points out, is also "providing much of the early cash for the 2016 presidential campaign," in the hopes of influencing tax policy and keeping large loopholes in place.

Common Dreams needs you today!

The income-shielding maneuvers, which range from organizing one's business as a partnership to capitalizing on "a range of esoteric and customized tax deductions that go far beyond writing off a home office or dinner with a client," are largely unavailable to the average taxpayer, due to cost and complexity.

The ultra-wealthy "literally pay millions of dollars for these services," Jeffrey A. Winters, a political scientist at Northwestern University who studies economic elites, told the Times. In return, he said, they "save in the tens or hundreds of millions in taxes."

Indeed, Victor Fleischer, a law professor at the University of San Diego who studies the intersection of tax policy and inequality, told the Times: "We do have two different tax systems, one for normal wage-earners and another for those who can afford sophisticated tax advice. At the very top of the income distribution, the effective rate of tax goes down, contrary to the principles of a progressive income tax system."

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do. Without Your Support We Simply Don't Exist.

Please select a donation method:

Share This Article