"We don't pay taxes. Only the little people pay taxes."

"We don't pay taxes. Only the little people pay taxes."
By Joseph Horgan, Project Director TJN-USA

For most of us "little people," we can be sure of two things: Death and taxes. For Leona Helmsley and the wealthiest few, death is the only sure thing. Helmsley's death this past week reminded us of her conviction for evading $4 million in taxes. And the infamous quote.1

The trial also increased the statures of then US Attorney Rudy Giuliani, who prosecuted the case, and Judge Walker, whose cousin, President George Hebert Walker Bush, would shortly name him to the Federal Appeals Court.

Compare the Helmsleys' evasion of $4 million to the $2 billion in legally unpaid taxes of 25 hedge fund managers (an average of $80 million each). Rather than pay 35% in income tax, they only paid 15% because they called their income "capital gains." That's putting lipstick on a pig, then claiming her as dependent.

Or, compare the Helmsleys' evasion of $4 million to the billions legally evaded by corporations in 2006. For example, Pharma companies Pfizer, Lily and Merck set aside, as a percentage of reported profits 2% ($233 million), 6% ($198 million) and 19% ($1.2 billion), respectively, for their tax payments to the United States treasury, significantly less than the 35% tax rate ($4.55 billion, $1.19 billion and $2.17 billion, respectively) that they should have paid.

Or, compare the Helmsleys' tax evasion of $4 million to the conservatively estimated $100 billion hidden in some 70 tax haven jurisdictions, each year by dozens of corporations, some wealthy individuals, terrorists, drug dealers, human traffickers, and their ilk.

Taxes are price we pay for a civil society. They pay for important programs like national defense, Medicare, Social Security, roads, bridges, and other basic infrastructure that makes for a civil society. We need to enforce our tax laws. We also need to encourage tax havens to provide transparency and allow investigations of tax evasion and illegally obtained wealth in their jurisdictions. And, we need to have a national discussion on the fairness of the top half of one percent paying less, as a percentage of their income, than the bottom 90%.

The harmful effects of tax avoidance and evasion and the lack of transparency in tax havens, need to become major talking points for candidate Giuliani and his fellow Presidential candidates, a primary issue in all debates, and a cause for vigorous enforcement, regardless of who wins in November, 2008.


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[1] Attributed to Leona Helmsley by her former housekeeper in Helmsley's trial for tax evasion.