Log Out

Tax duckers: Rich and disgusting

Billionaire Ty Warner, who grew wealthy from Beanie Babies, evaded taxes by hiding as much as $107 million in an offshore account. He pleaded guilty, paid $53 million in penalties, and drew two years of probation.Warner is the latest in a long string of rich Americans who cheat on taxes, which forces other Americans to make up the sums the evaders don't pay. Forbes magazine, which focuses on wealth, compiled a list including these examples:
  • Leona Helmsley: She enjoyed a fortune from hotels and New York buildings - and sneered privately that "only the little people pay taxes." She spent 18 months in prison and died in 2007. Her will left nothing to two grandchildren, but provided $12 million for her Maltese dog.
  • Igor Olenicoff: About $200 million from his California real estate empire was concealed in foreign accounts. He pleaded guilty in 2007 and paid $52 million in penalties, but avoided prison.
  • Samuel Wyly: Last year, the Securities and Exchange Commission filed a civil suit accusing Wyly and his late brother of hiding $550 million in sham trusts in the Cayman Islands and on the Isle of Man. Wyly is disputing the allegations in court.
  • Haim Saban: He gained $1.5 billion by selling Fox Family Worldwide to Walt Disney Co., then put the windfall into an illegal shelter. He was forced to pay $250 million in penalties - then became a crusader against illegal tax shelters.
In addition to billionaires who are prosecuted or sued, various others elude taxes through perfectly legal loopholes. Here are examples cited by Forbes:Mrs. Horrace Dodge, widow of the car tycoon, put her $59 million fortune into tax-exempt bonds, so she escaped taxes on $1.5 million yearly interest income. Her case helped spur Congress to pass the alternative minimum tax.Kenneth Dart, heir to a Styrofoam cup fortune, renounced his U.S. citizenship and lived in the Central American country of Belize, a tax haven.
Stephen Schwarzman, a Wall Street fund manager (who blew $3 million on his 60th birthday party in 2007), became enraged when President Obama tried to close a loophole that let fund managers pay just 15 percent tax on "carried interest" income, instead of 35 percent. Schwarzman compared the tax change to Hitler's invasion of Poland.Estee Lauder and her son cashed in hundreds of millions worth of stock, using a technicality to avoid capital gains tax. Congress changed the law to prevent recurrences.Charles and David Koch, billionaire backers of far-right politicians, were accused of paying no corporate taxes by organizing their vast holdings as an "S corporation," a designation mostly for small firms. But their general counsel replied that they do, in fact, pay some corporate taxes.Most West Virginians don't have huge fortunes and can't hire experts to find ways to duck taxes. Average folks should resent the plutocrats who avoid paying their share to support their country. 
Show All Comments Hide All Comments

User Comments

More News