Friday, February 1, 2008

Taxing Criminal Activity into Legitimacy

Dear George,

Have you ever wondered what, exactly, constitutes a crime? Oh sure, there are laws on the books that designate certain activities as criminal, but your administration has shown us that the law need not be a burden. Why, then, is it that a given activity is criminal in one context, but perfectly legal in another context?

There is a common thread that runs through criminal activity that might help us answer this question. Crime is a greed-driven economic phenomenon. The aim of every crime is to generate a maximum profit through a minimum of activity. Why spend eight hours flipping burgers at McDonalds when one can make the same money snatching a well-heeled purse; why spend a lifetime toiling away at a mind-numbing white-collar job when one can make more money landing a government contract.

The difference between a purse snatcher and a CEO is that the CEO either pays taxes or has found numerous legal loopholes to evade them, and the purse snatcher neither pays taxes nor files them. And that, Big Guy, is the difference between legal and illegal criminal activity.

Why did Al Capone end up in jail: because they nailed him for tax evasion. Nonpayment of taxes is the ultimate crime against the State. This is why Wall Street gets a free pass while drug dealers are hounded and persecuted. Were the dealers to start paying taxes, the State would start to look upon them as capitalists instead of criminals.

Occasionally, a tax-paying entrepreneur in nailed, but that is usually when his activity is of a nature that could agitate the mob. Then you have populist prosecutors like Eliot Spitzer whose hobby is indicting business executives. But these are exceptions. As long as their money is either taxed or squirreled away in an off-shore tax haven, the State turns a blind eye on their activities.

And when they are prosecuted, the result is usually a six-figure fine which sounds like punishment to the proles, but it little more than chump change to the executive. This is because fines in this country are fixed dollar amounts that have little impact on the corporate bottom line. Fines will never draw blood until they are based on a hefty percentage of a corporation’s profits.

Some have suggested that the corporation is a modern-day mafia. This implies that were the mafia to start paying its taxes, it would be treated like a corporation. From a purely ethical point of view, there is little difference between running numbers or drugs and manufacturing cluster bombs. If you pay your taxes, you are a pillar of society; if you don’t, you are a criminal. The morality of your activity is a matter of complete indifference.

So, as you prepare your 2009 budget, think of the potential tax revenue that remains untouched. Once you are able to convince the drug cartels to pay their taxes, you’ll be able to save a fortune by declaring victory in the War on Drugs.

Your admirer,
Belacqua Jones

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