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

Front Cover
Penguin, Jan 4, 2005 - Business & Economics - 352 pages
Now updated with a new prologue!


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.


What people are saying - Write a review

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


User Review  - Anonymous - Borders

The rich are getting richer and the poor are getting poorer, a fairly common phrase but especially disturbing once once realizes that 'poor' means anyone who is not rich. The author has highlighted ... Read full review


TaxesTheyre Not for Everyone
A Nickel an Hour More
The Rich Get Fabulously Richer
Big Payday
Plane Perks
When the Old Man Is Dead and Buried
For Want of a Keystroke
Mr Kelloggs Favorite Loophole
Mass Market Tax Evasion
Getting off the Hook
Profiting off Taxes
Profits Trump Patriotism
Letters to Switzerland
Gimme Shelter

The Stealth
How Social Security Taxes Subsidize the Rich
Preying on the Working Poor
Handcuffing the Tax Police
Mr Rossottis Customers
Only the Rich Deserve a Comfortable Retirement
Is Reform Possible?

Other editions - View all

Common terms and phrases

About the author (2005)

David Cay Johnston is a Pulitzer Prize–winning reporter who has been called the “de facto chief tax enforcement officer of the United States.” His most recent books, Perfectly Legal and Free Lunch, were New York Times bestsellers. He was a reporter for the New York Times for 13 years and now writes a column for Reuters. He also teaches at the Syracuse University College of Law and the Whitman School of Management, and he was recently elected to be board president of Investigative Reporters and Editors, Inc. He lives in Rochester, New York. Visit

Bibliographic information