Police the Plutocrats

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Donald Trump’s White House wants to see local cops crack down on poor people who break federal laws on immigration. Why not a crackdown on the rich who scoff at tax laws?

Law enforcement officers should enforce the law. America’s hardliners on immigration really believe that. They want their local police out looking for “illegal immigrants” and actively helping the feds deport them.

Local police officials in many communities would much rather not. Kansas City chief of police Terry Zeigler, for one, doesn’t see deporting immigrants in his job description.

“Everybody wants to live the American Dream, that’s why they come here,” Zeigler observed. “And as long as they’re not committing crimes, we’re OK with that.”

Meanwhile, the super-rich, like the late tax-evading hotel heiress Leona Helmsley, tend to see themselves as above the law and beyond its reach.

Zeigler’s perspective, widespread in big-city police chief ranks, frustrates the officials that GOP President Trump now has running U.S. immigration policy. And new polling shows hefty swatches of the public share that right wing frustration.

The law’s the law, many Americans clearly feel. Local police can’t be allowed to pick and choose which laws they enforce. They need to start coming down hard on the dirt-poor people who violate federal immigration law.

But why? No one’s asking local police to enforce the federal laws that rich people break.

And rich people do break federal laws — most notably on taxes — all the time. America’s mega-rich regularly park their assets in offshore tax havens where their wealth can earn income that federal tax collectors can’t touch or even see.

This illegal tax evasion has been going on for decades. Alarm bells were ringing back in the late 1930s when Treasury Secretary Henry Morgenthau briefed President Franklin Roosevelt about the dummy offshore corporations wealthy Americans were starting to set up.

Those bells are ringing even louder today.

“The schemes to evade taxes have become more numerous and complex, the number of offshore jurisdictions with little or no taxes or responsible government supervision has increased, and the amount of taxes now evaded has grown in proportion,” as Morgenthau’s son, New York prosecutor Robert Morgenthau, put the matter a few years ago.

Economist Gabriel Zucman, now an assistant professor at the University of California at Berkeley, estimates the global rich have hidden away 8 percent of the world’s wealth, or about $7.6 trillion. They’re illegally saving themselves at least $200 billion a year in taxes.

Rich Americans figure to be doing a good bit of that saving: The United States hosts more $100-million fortunes than the world’s next nine richest nations combined. But we don’t know exactly how much.

The IRS does try to estimate how much in overall federal taxes owed goes unpaid. One academic analysis of the IRS data concludes that Americans reporting between $500,000 and $1 million of income yearly underpay their real incomes by a whopping 21 percent, triple the “misreport” rate of taxpayers making between $30,000 and $50,000.

What could local law enforcement in the United States be doing to get at this chronic law-breaking — by the rich — on federal taxes?

A few years back, officials in Italy, a country notorious for tax evasion, had law enforcement personnel swoop down on luxury ski reports and seaside spas to ferret out evidence of tax evasion. At one resort, police found 42 super luxury cars — average price, over $250,000 — registered to owners reporting less than $25,000 in income.

Local police in the United States could conceivably do likewise. On the highways, for instance, they could keep a special eye out for speeding high-priced luxury cars, then pass the driver data to the IRS for special audit attention.

America’s rich, and their benefactors in the Trump administration, would almost certainly erupt in immediate outrage at a crackdown along those lines. And we can well understand why. After all, to paraphrase the late tax-evading billionaire heiress Helmsley, everybody who’s anybody knows that “only the little people” should ever face crackdowns.

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Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches

Union Matters

An Invitation to Sunny Miami. What Could Be Bad?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

If a billionaire “invites” you somewhere, you’d better go. Or be prepared to suffer the consequences. This past May, hedge fund kingpin Carl Icahn announced in a letter to his New York-based staff of about 50 that he would be moving his business operations to Florida. But the 83-year-old Icahn assured his staffers they had no reason to worry: “My employees have always been very important to the company, so I’d like to invite you all to join me in Miami.” Those who go south, his letter added, would get a $50,000 relocation benefit “once you have established your permanent residence in Florida.” Those who stay put, the letter continued, can file for state unemployment benefits, a $450 weekly maximum that “you can receive for a total of 26 weeks.” What about severance from Icahn Enterprises? The New York Post reported last week that the two dozen employees who have chosen not to uproot their families and follow Icahn to Florida “will be let go without any severance” when the billionaire shutters his New York offices this coming March. Bloomberg currently puts Carl Icahn’s net worth at $20.5 billion.

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