:: The Rational Radical Blog ::

Wednesday, March 09, 2005

A Tax Net That Catches Only Minnows

[Former I.R.S. commissioner] Charles O. Rossotti... says that the I.R.S.'s enforcement strategy winds up scrutinizing ordinary taxpayers much more than the rich and powerful, who do not depend on wage income. In a new book, "Many Unhappy Returns" (Harvard Business School Press), Mr. Rossotti says the agency is "like a police department that was giving out lots of parking tickets while organized crime was running rampant."

Mr. Rossotti, a founder of the information-technology consulting firm American Management Systems whose skill at understanding effective organizations made him wealthy, writes that the I.R.S. "picks on the little guy" over small sums, while "largely overlooking an ocean of money hidden in business entities for which the owners, rather than the businesses themselves, were supposed to pay taxes."

As cannot be said often enough, an elementary principle for understanding the world is that systems designed by the wealthy are designed to keep them wealthy and make them more so, not the opposite.

Jack Clark 8:40 PM [+]   
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