Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat E verybody Else

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Penguin, Jan 4, 2005 - Business & Economics - 352 pages
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Since the mid-1970s, there has been a dramatic shift in America's socioeconomic system, one that has gone virtually unnoticed by the general public. Tax policies and their enforcement have become a disaster, and thanks to discreet lobbying by a segment of the top 1 percent, Washington is reluctant or unable to fix them. The corporate income tax, the estate tax, and the gift tax have been largely ignored by the media. But the cumulative results are remarkable: today someone who earns a yearly salary of $60,000 pays a larger percentage of his income in taxes than the four hundred richest Americans.

Pulitzer Prize-winning investigative reporter David Cay Johnston exposes exactly how the middle class is being squeezed to create a widening wealth gap that threatens the stability of the country. By relating the compelling tales of real people across all areas of society, he reveals the truth behind:


"Middle class" tax cuts and exactly whom they benefit.


How workers are being cheated out of their retirement plans while disgraced CEOs walk away with millions.


How some corporations avoid paying any federal income tax.


How a law meant to prevent cheating by the top 2 percent of Americans no longer affects most of them, but has morphed into a stealth tax on single mothers making just $28,000.


Why the working poor are seven times more likely to be audited by the IRS than everyone else.


How the IRS became so weak that even when it was handed complete banking records detailing massive cheating by 1,600 people, it prosecuted only 4 percent of them.

Johnston has been breaking pieces of this story on the front page of The New York Times for seven years. With Perfectly Legal, he puts the whole shocking narrative together in a way that will stir up media attention and make readers angry about the state of our country.

From the Trade Paperback edition.

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LibraryThing Review

User Review  - mjgrogan - LibraryThing

After reading Johnston’s subsequent Free Lunch, I assumed I’d love this book. Here Johnston condenses his experience as an NYT tax journalist in order to pinpoint the big issues – circa 2003 – that ... Read full review

LibraryThing Review

User Review  - slothman - LibraryThing

After reading Johnston's Free Lunch, I picked up a copy of this book and was again impressed with his research. The book details a number of ways that our government, under the influence of both ... Read full review


TaxesTheyre Not for Everyone1
A Nickel an Hour More2
The Rich Get Fabulously Richer3
Big Payday4
Plane Perks5
When the Old Man Is Dead and Buried6
Mr Kelloggs Favorite Loophole13
Mass Market Tax Evasion14
Getting off the Hook15
Profiting off Taxes16
Profits Trump Patriotism17
Letters to Switzerland18
Gimme Shelter19
Only the Rich Deserve a Comfortable Retirement20

The Stealth Tax7
How Social Security Taxes Subsidize the Rich8
Preying on the Working Poor9
Handcuffing the Tax Police10
Mr Rossottis Customers11
For Want of a Keystroke12
Is Reform Possible?21

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About the author (2005)

David Cay Johnston is a Pulitzer Prize-winning reporter and the author of books including the "New York Times" bestsellers "Perfectly Legal" and "Free Lunch".

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