The Cheating of America: How Tax Avoidance and Evasion by the Super Rich Are Costing the Country Billions--and What You Can Do About It

A day in the life of the fat cats. . . . The Cheating of America is another superb peice of work by Chuck Lewis and his folks at the Center for Public Integrity. The CPIers reveal (once again) the exploits of the wealthy by constantly asking the question is it tax avoidance, tax evasion or ...

Format : Bargain Price Author : Charles Lewis Number of Pages : 336 List Price: $13.95 Our Price: $16.89 Used Price : $4.45

Product Description

Charles Lewis, Bill Allison, and a team of researchers from the Center for Public Integrity -- an organization that the National Journal called "a watchdog in the corridors of power" -- investigated how millions of high-income adults and some major corporations cheat the government of billions through tax avoidance (legal), tax evasion (illegal), or tax "avoision" (catch me if you can).

Now Lewis and his team provide explosive revelations about who cheats and how they do it, from offshore banks to foreign "tax havens." Case studies of the most brazen dodgers will have taxpayers seeing red in this eye-opening report that puts the IRS on notice. Sure to enlighten and outrage, The Cheating of America is a must -- read for every citizen.

Amazon.com Review

This book is a group project; Charles Lewis and Bill Allison are the principle authors, but they have relied on an "investigative team" that includes 19 other individuals affiliated with the Center for Public Integrity, a left-of-center research organization in Washington, D.C. What they've assembled in The Cheating of America is a muckraking survey of how the rich and powerful shirk their responsibilities: "We investigate the people and companies who have benefited most from our society and our way of life and then chosen to thumb their noses at the rest of us, by paying little or no taxes." The book is full of facts and figures, many sure to outrage. The authors identify, for instance, some 45,000 tax returns filed by people earning more than $100,000 and paying less than 7 percent of their income to the federal government--compared to millions of workers who earn much less and proportionally pay much more. (One recent IRS report counted 2,680 filers with incomes of $200,000 or more claiming they owed no taxes at all, up from just 85 in 1977.)

What makes the book succeed, however, is not its careful number crunching, but all the little stories that detail "the phenomenon of tax avoidance (that's legal), tax evasion (that's illegal), and tax 'avoision' (catch us if you can)." There are the wealthy film producers who use offshore trusts and tax shelters to hide their income, the millionaire tax evaders who renounce their U.S. citizenship in order to escape making tax payments, and the accountants who help it all happen. At times, the book feels like a long Reader's Digest article, all told in the service of an outrageous conclusion: "Many of the nation's wealthiest individuals and its largest corporations are not paying their fair share of taxes today." The Cheating of America will appeal to readers who appreciated the Center for Public Integrity's previous efforts, as well as admirers of Donald L. Barlett and James B. Steele. --John J. Miller

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Customer reviews

A day in the life of the fat cats. . . . by .. (Washington, DC United States)
The Cheating of America is another superb peice of work by Chuck Lewis and his folks at the Center for Public Integrity. The CPIers reveal (once again) the exploits of the wealthy by constantly asking the question is it tax avoidance, tax evasion or somthing hazy in the middle which is refered to as avoision. The book highlights cases of people who simply aren't paying tax. The Center for Public Integrity doing what it does best . . . .taking every day public documents and going through them with a fine tooth comb - the forgotten art of investigative journalism. KEEP UP THE GOOD WORK!

A Study of Tax Evasion By The Super Affluent by .. Peter Hupalo (MN United States)

"The Cheating Of America: How Tax Avoidance And Evasion by the Super Rich Are Costing the Country Billions-And What You Can Do About It" by Charles Lewis, Bill Allison, et. al., is a well-researched overview of how some of America's wealthiest citizens and corporations avoid and evade taxation.

"The Cheating Of America" tells us that at least $195 billion a year in taxes isn't collected from the ultra-wealthy.

This means the amounts collected from honest affluent people, middle-class earners, and low-income people are invariably higher. If all the rich paid their taxes, it's estimated the average taxpayer wouldn't have to pay thousands of dollars per year in extra taxes to make up the tax shortfall.

While $1.5 billion in new wealth is created every day in the U.S., we learn the number of full-time workers living in poverty has increased from 459,000 in 1998 to over 2.8 million in 2001.

A few of the issues:

--American companies legally open non-U.S. corporations to hold non-U.S. profits. But, these companies often engage in illegal pricing schemes to inflate their foreign profits at the expense of U.S. profits, effectively transferring taxable income to the foreign corporation.

In the 1950's, corporate taxes comprised 27% of the tax revenue. By the 1990's, corporate taxes only made up about 10% of the federal tax revenue. That's about a 2/3 decrease in corporate taxes. Individual taxpayers must make up the difference.

--Nonprofit Organizations operating businesses. The book estimates that non-profits control $1.3 trillion in wealth. While many nonprofits are legitimate, many aren't.

The authors write: "...the precedent for using the cover of benefiting mankind to avoid taxes has a long, rich tradition. ... Howard Hughes, for example, set up the Howard Hughes Medical Institute, which owned the stock of his aircraft manufacturing corporation. The nonprofit medical institute gave hardly any money to charity during his lifetime, unless one considers bankrolling the reclusive lifestyle of Hughes a charitable purpose."

Some of these nonprofits are lobbying organizations and industry promotional groups (For example, lobbying for deregulation and tax cuts).

--Corporate use of "phantom losses" from transactions that lack economic substance. The Cheating Of America does a good job of discussing the problems with international banking and how some companies create many entities to try to confuse the IRS. The secretive nature of some foreign country banks makes it nearly impossible for the IRS to obtain the records it needs to properly evaluate a business's tax situation. It's estimated that $10 billion a year in tax revenue is lost to this type of tax shelter.

For example, sometimes, some foreign bank will "loan" a wealthy individual money. That money is really taxable income in disguise. And, interest payments on the "loan" are sometimes reported as tax-deductible, if the "loan" is disguised as a mortgage or business loan.

--Wealthy individuals, renouncing American citizenship to avoid taxes, but continuing to spend hundreds of days per year in the United States. (In fairness to some of the tax ex-patriots, many also faced serious legal problems because they engaged in fraudulent activity. So, avoiding criminal prosecution or civil lawsuits could also be a motive for fleeing the U.S.)

So, what can the average American do about this? Not much. The Cheating Of America devotes a short five-page chapter to discussing what you can do. First, it points out you can't benefit from these tax-evasion schemes yourself, unless you have a lot of money.

Why can't the middle-class benefit from these methods? Because they were never designed to benefit the middle class. For example, the major source of income for most people is labor. If you work for somebody else, your wages are usually reported to the government. It's almost impossible to avoid paying taxes on money earned from work. The book does point out that many sole proprietors who deal in cash underreport their income, and the book recommends paying with a check to prevent these people from under reporting income. However, this doesn't affect most of the exceptionally wealthy.

What about depositing a small amount in a foreign bank? Your money might well disappear. These banks aren't regulated by U.S. law, and many are fronts for organized crime, terrorism, and other bad behavior.

Further, it's pointed out that the wealthiest individuals can afford the best attorneys in the world to defend them in tax court. They can tie the tax court up for 20 years with tens of thousands of documents. A few million in legal fees is chump change. And, they often purchase political influence. (A few million dollars contributed to the local community of a small country--and its officials--can do wonders for helping to avoid extradition.)

Trying to put pressure on politicians to enforce existing laws and enact laws that enforce tax fairness is one possibility. The authors say asking our politicians questions and demanding answers is a good start.

Overall, I highly recommend "The Cheating Of America: How Tax Avoidance And Evasion by the Super Rich Are Costing the Country Billions--And What You Can Do About It" to all people interested in learning about tax evasion by the rich.

Great Insight into wealthy thieves...the USA is at Risk by .. ()
Thank you to the authors for their investigative approach to this book and highlighting the money trail. We have to stop the madness...Enron, Worldcom and Arther Anderson and even the execs that run these companies and the non-profits. Doesn't anyone think that "Character Counts" anymore. I like the fact that the book names the biggest offenders and how they do it.

Great premise, decent effort by .. Drew Porter (Arlington, VA)
Unlike the other reviewers, I liked this book. My biggest problem with it is its length. After hearing a few of the stories, it started to get a bit dull.

In a nutshell, this book is about people who have the money, power and lack of ethics to avoid paying their taxes. The result, of course, is that the rest of us have to make up the hundreds of billions of dollars lost.

This is muckraking in the best sense of the word. This book follows a middle class self-employed taxpayer through the bureaucratic hell caused by bad IRS advice, and her resulting tax bill and then contrasts it with the treatment big-time tax evaders get. If you are an ordinary person, the IRS will go after you. If you can afford fancy lawyers, the IRS is willing to compromise on pennies for the dollar.

This book is a better skim than a read, but it's an important message and the authors have clearly put a lot of work into it.

Muckracking Expose by .. Hulka (Washington DC)
Calling this "left-wing propaganda" and other editorial commentary in some reviews really just proves the premise that as America slips into decline, the only 'wealth' being created is tax cheating schemes, along with 'no-down-payment' real estate speculating courses, and "privatization" of public property such as utilities, or government research. This book has the scoop on all the famous tax cheat schemes, and consumer warnings against get involved in them. But precious little recommendations on how to solve the problem. But the main message of the book is that making money in America is no longer about producing a product, or providing a service, but about cheating on your income tax. Pretty much the USA is on the road toward becoming a corrupt third world bananna republic, like Mexico.