ARIENRON!
Arianna Huffington is currently running for Governor of California. Hey, who isn't? But Arianna has a very distinctive platform. She thinks we need to end corporate welfare and close the loopholes so that "big businesses carry their fair share of the tax burden".
So I was interested to learn from Thursday's Los Angeles Times that Arianna doesn?t pay any state or federal income tax. She's got a gazillion-dollar-a-month divorce settlement from the gay Republican and an 8,000 square-foot seven-million dollar home in swanky Brentwood where she throws lavish celebrity parties. But she pays no income tax because in recent years she's reported some $2.7 million in tax deductions on her business.
Wow. I wish I was in that business.
Hang on a minute, I am.
Arianna's business is the same as mine. She sloughs off opinions hither and yon, in print, on TV, on radio. Much as I do. Except she's far more prominent than I am. When you surf the channels, she's never not on. Yet her business claimed a net loss of a quarter-million dollars last year, while I paid a ton of tax. And I'm not sure I'd know how to claim over $410,363 in expenses anyway. Much to my regret, the columnar business is not the most lucrative in the world, but I've always found that, aside from coffee and typing paper, the overheads are pretty low. Arienron, I'm sorry, I mean Arianna - says the business is "cyclical" because she's been doing research. $2.7 mil seems to me an awful lot of photocopying at the library. But that just goes to show why I'm poor bumbling Dr Watson next to Arianna's Sherlock Holmes. ?Why, Holmes, what an amazing deduction!?
?Elementary, my dear Watson. By the way, did you get a receipt from that hansom cab driver??
Now The Los Angeles Times was careful not to imply that Arianna?s doing anything illegal. Just as those ?fat cats? with a mailing address in the Bahamas aren?t doing anything illegal. The only difference is that Arienron is a self-described ?compassionate progressive?, which means business regulations and social programs, which boils down to tax-and-spend liberal. And, when it comes to tax-and-spend, if you?re advocating a ton of the latter, you could at least make a contribution toward the former. The average Californian, tossing more and more of his income down the black hole of the bloated state government?s deficit, might be disinclined to take lessons in tax policy from someone who doesn?t pay any. It?s not that it?s illegal, it?s that it looks so different from the average Californian tax return.
Nor, if I were your big-time chief exec, would I take lectures from Arianna on the need to clamp down on offshore tax havens like Bermuda and the Cayman Islands. The ability of businesses to nominally ?relocate? to a Post Office box in the Caribbean is one of the few things holding the tax rates down at the only Mildly Obscenely Confiscatory level: you can imagine what they?d be like if the havens didn?t exist.
But they always will, somewhere on the planet, and so will loopholes. The more loopholes you close, the more artfully crafted new loopholes bubble up somewhere else along the way. When they drop the big one, the first things to crawl out from the smouldering rubble will be the proverbial cockroach and a brand new post-nuclear tax loophole. So when Arienron rages against loopholes for fat cats, all she means is that the fat cats are doing exactly what she does: hiring the best professional advice to arrange one?s tax affairs in the most favourable manner. By contrast, if you?re, say, a single-mom waitress at Glory Jean?s Diner out on Highway 73 just past the rusting grain elevator, you can?t access that level of advice. So you just pay up.
If only subconsciously, Arienron understands this. That?s why, justifying her tax arrangements on her website, she explained, ?The majority of my business expenses went to salaries - salaries on which my employees paid taxes.? My point exactly. In Arianna?s world, the employees pay tax, but the boss doesn?t.
That?s why if Arianna was really interested in all the little people she claims to speak for, she?d realize she?s looking at this thing upside down. You can?t eliminate loopholes, but you can eliminate the need for loopholes. When you have a low-rate simple tax code, everyone pays, even Arienron, even her fellow fat cats. The more complex it gets, the more unfair it is on those who can?t afford a tax lawyer. And the most obvious injustice in the tax code today is that it?s a huge sprawling labyrinth only the Arienrons can negotiate their way around.
It?s comical how tone deaf Arianna Huffington?s campaign has been. Arnold Schwarzenegger is trying to tap the anger that?s brought this recall campaign so far ? the people who are fed up with runaway spending, high taxes, bureaucratic featherbedding. Arianna seems to think there?s another kind of anger out there ? people who are angry because they want more government programs, more regulation, more bureaucracies, and they?d be prepared to pay higher taxes for these blessings. Hey, I would too in her shoes. After all if you tripled Arianna?s state income tax bill, you?d get ?let?s see now, three times zero equals ?zero.
The Irish Times, August 16th 2003 |
