Policing America’s Plutocracy

By SAM PIZZIGATI

Law enforcement officers should enforce the law. America’s hardliners on immigration really believe that, and so does President Trump. They want local police out looking for illegal immigrants and actively helping “the feds” deport them.

Local police officials – in many communities – would much rather not. Kansas City chief of police Terry Zeigler, for one, doesn’t see deporting immigrants as part of his job description.

“Everybody wants to live the American Dream, that’s why they come here,” Zeigler just observed, “and as long as they’re not committing crimes, we’re okay with that.”

Zeigler’s perspective – which is shared by many big-city police chiefs – frustrates the officials that President Donald Trump now has running U.S. immigration policy. And new polling shows that hefty swatches of the public share that frustration.

The law’s the law, many Americans clearly feel. Local police shouldn’t be allowed to pick and choose which laws they enforce. And hence, they should start coming down hard on the dirt-poor people who violate federal immigration law.

But why? Especially when no one’s clamoring for local police to enforce the federal laws rich people break.

And rich people do break federal laws – most notably on taxes – all the time. America’s mega-rich regularly park their assets in offshore tax havens, where their wealth can earn income that federal tax collectors can’t touch or even see.

This illegal tax evasion has been going on for some time. Alarm bells were ringing back in the late 1930s when Treasury Secretary Henry Morgenthau briefed President Franklin Roosevelt about the dummy offshore corporations wealthy Americans were starting to set up.

Those bells are ringing even louder today.

“The schemes to evade taxes have become more numerous and complex, the number of offshore jurisdictions with little or no taxes or responsible government supervision has increased, and the amount of taxes now evaded has grown in proportion,” as Morgenthau’s son, New York prosecutor Robert Morgenthau, put the matter a few years ago.

The economist Gabriel Zucman estimates that the global rich have hidden away 8% of the world’s wealth, about $7.6 trillion. They’re illegally saving themselves at least $200 billion a year in taxes.

Rich Americans figure to be doing a good bit of that saving – the United States hosts more $100-million fortunes than the world’s next nine richest nations combined – but we don’t know exactly how much.

The IRS does try to estimate how much in overall federal taxes owed goes unpaid. One academic analysis of the IRS data concludes that Americans reporting between $500,000 and $1 million of income are underplaying their real incomes by a whopping 21%, triple the “misreport” rate of taxpayers making between $30,000 and $50,000.

What could local law enforcement in the United States do to get at this chronic law-breaking by the rich on federal taxes?

A few years back, officials in Italy, a country notorious for tax evasion, had law enforcement personnel swoop down on luxury ski resorts and seaside spas to ferret out evidence of tax evasion. At one resort, police found 42 super-luxury cars — average price, over $250,000 — registered to owners reporting less than $25,000 in income.

Local police in the United States could conceivably do likewise. On the highways, for instance, they could keep a special eye out for speeding high-priced luxury cars, then pass the driver data to the IRS for special audit attention.

America’s rich – and their benefactors in the new Trump administration – would almost certainly erupt in immediate outrage at a crackdown along those lines. And we can well understand why. After all, to paraphrase the late tax-evading billionaire Leona Helmsley, everybody who’s anybody knows that “only the little people” should ever face crackdowns.

Sam Pizzigati, an Institute for Policy Studies associate fellow, edits TooMuchOnline.org, an online weekly newsletter on excess and inequality, and he co-edits Inequality.org. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Email editor@toomuchonline.org.

From The Progressive Populist, April 1, 2017

Populist.com