"Perfectly Legal" by David Cay Johnston

Johnston is best when he focuses on some of the least known and most egregious perks for the wealthy hidden in the tax code. There is an engaging section on the loopholes business executives use to get great deals on corporate jets. "Under the rules set by Congress," Johnston writes, "flying in the luxury of the company's Boeing 737 Business Jet is often cheaper than the middle seat in coach on a commercial airliner." Under the tax rules, executives pay nothing to use a company's corporate jet, even if they use it for pleasure (which Johnston says is not an uncommon practice). Instead, the executive pays only income taxes on the cost of the trip -- something like $500 for a flight from New York to Paris, for example. But such a trip would cost a company's shareholders at least $30,000, and since those shareholders get to deduct these expenses from their tax returns, "all taxpayers pick up 35 percent of the true costs," Johnston writes. Taxpayers, then, pay at least 10 times as much for the executive's personal trip as he does himself.

Johnston reports that when Congress devised these rules in the 1980s, some lawmakers warned that executives would abuse them. But powerful Republicans, including Bob Dole, argued that "flying in a corporate jet was less fancy than flying in first class," Johnston writes. On the floor of the Senate, Steven Douglass Symms, Idaho's Republican senator, proclaimed that business jets were pretty ghetto: "We talk about the lavish comfort of flying in corporate jets," Symms said, "however, I think sometimes we should remember that some of these corporate jets, such as one I am familiar with in Idaho that a food processing company owns, will barely seat eight people."

It's astounding that lawmakers have so blatantly defended the privileges of the wealthy; it's more astounding, though, that the public barely reacts to such news -- and that, indeed, the federal government is now run by Republicans whose entire domestic agenda consists only of wet kisses to the wealthy. Why have average Americans stood idly by while the rich got enormously richer? This question pops up throughout "Perfectly Legal," and Johnston provides only a throwaway answer. The news media, he says, haven't reported on how rich America's wealthy people really are, and how they use their power and influence to shape public policy. Now, Johnston, if you recall, is a reporter at the New York Times -- if the media's really partly at fault for rising inequality, is he willing to shoulder some of the blame?

To be fair, Johnston is probably right that the media has something to do with this, but I suspect he's got the link backward: The problem is not that the press lacks the hunger to go after the rich (as Johnston's work proves, the press does a pretty good job of reporting on rich people's excesses). The problem is the people; we lack the drive to go after the rich, and that accounts for the current media and political atmosphere. This is a pretty straightforward observation -- when was the last time a presidential candidate ran successfully on a populist platform? (Al Gore doesn't count) -- but Johnston barely addresses it.

The problem, I suspect, is the 55,000 pages. Taxes are -- perhaps necessarily -- a complicated business, and politicians can skillfully hide huge breaks to the rich in tax packages that appear to provide much-needed help to the poor and the middle class. George W. Bush, of course, has elevated this deception to a high art. His last tax cut, which provided hundreds of billions for the wealthy, also almost fully erased the income tax bill for a family of four. You can try to tell the electorate that it's being screwed, but you'll do so at your peril.

Johnston touches on the difficulty of explaining taxes to the masses. In his chapter on the estate tax, he does note that even though the tax applies only to the extremely rich, a majority of Americans supported its repeal, many under the false assumption that they'd have to pay it when they died. (Support for the abolition increased when Republicans, on the advice of pollster Frank Luntz, began calling it the "death tax.") This is an amazing statistic; it explains why even some members of the Congressional Black Caucus, who represent almost nobody who would ever have to pay the estate tax, supported its repeal.

Johnston says that simplifying the tax code is the only way out of this mess. Complexity "benefits the rich," he writes, "the well advised and the well connected." He's right, and overhauling taxes would be a nice idea (one that, incidentally, many conservatives have been advocating for a long time). But there are huge vested interests in the current system, and unless there's a political will to take on taxes, wholesale reform is never going to happen.

What we need, really, is a gifted populist politician who can cut through the thousands of pages of tax rules to let people know that the game is rigged. And, who knows, maybe we'll get one of those in the next election. Sen. John Edwards, who can't go a minute without noting that his father was a mill worker, has been getting good marks for his "two Americas" stump speech, and Howard Dean, who has raised millions from small-time contributors, is certainly well positioned to make the flawed tax system a primary part of a race against Bush. Even front-runner John Kerry, millionaire husband to a ketchup-fortune widow, could at least potentially fight Bush on this issue.

Whether the public will respond by demanding to soak the rich, though, is anybody's guess.

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