Make Monied 'Moochers' Pay
MONTANANS, like most Americans, do not like paying taxes. But we are willing to pay taxes so long as everyone else is paying their fair share.
Yet today we find that a small number of Americans are not paying their share. In fact, they are going to great lengths - and to other countries - to avoid paying. They give up what should be their most sacred possession, their American citizenship, to find a tax loophole.
How can they do this? Section 877 of the tax code says nobody can give up citizenship to evade taxes, and it imposes a stiff penalty on those who do. But the catch is that the IRS has to prove that the primary reason the person in question left town was to evade taxes. And proving intent is virtually impossible.
That is why John ''Ippy'' Dorrance III, an heir to the Campbell Soup fortune, sailed off to Ireland with a fortune of over a billion dollars. It is why Michael Dingman is building a boat dock for his new home in the Bahamas, where he will pay zero estate tax. (One would normally have to pay 55 percent on everything in an estate - property, stocks, bonds, and other investments - over $600,000.)
Last year alone, the Treasury reports, at least 10 extremely wealthy individuals turned their backs on our country. The poorest of them owed $700,000 in income tax.
These are precisely the sort of greedy, unpatriotic people that FDR called ''malefactors of great wealth.'' Their chauffeurs drive them along roads built with money from American taxpayers. They ask the US trade representative, paid with tax dollars, to make sure foreign countries are open to their companies. They go to national parks maintained with US tax dollars. They go to beaches cleaned up with American tax dollars. But they don't want to contribute a penny.
If these fellows paid their full share, we would collect about $200 million a year. And at a time when the new Congress is cutting away at education, agriculture, and Medicare, we should remember that $200 million could mean preserving college loans for thousands of American youths. Or it could mean saving Medicare reimbursements that keep rural hospitals from closing. Or saving essential health services for the elderly.
Unfortunately, some people think this is a trivial problem. For example, Congress's Joint Tax Committee staff recently gave us this soothing report: ''Although there is some anecdotal evidence that a small number of US citizens may be expatriating to avoid continuing to pay US tax, and the amount of potential tax liability involved in any individual case could be significant, the Joint Committee Staff found no evidence that the problem is either widespread or growing.''
Well, that doesn't sound so bad. But translate it from CPA English into regular English and it is much less reassuring.
Essentially, they say that a number of extremely rich people are skipping town and evading taxes, but there are not so many of them, and the number is about the same every year. So rather than fix the problem once and for all, we can twiddle a bit with the existing law and see if it works.
That is like saying that yes, well, there is a fire in the house. But it is not a very big fire, and it only burns up a little bit of the house in any one hour. So we can take our time and experiment by scattering sand around or putting a rug down on the blaze rather than calling the fire department.
This issue is simple, and it ought to be easy to fix. We should stop fooling around and pass a good tough bill that makes sure these expatriates pay their share. We should not let one more of these opulent moochers get away with it.