Newspapers are starting to search out new angles for tax season. Or more accurately, dig up stories they did a few years ago. With income tax bills percolating at the legislature, there's more stimulus than usual to write about tax issues.
So what am I doing? Playing with the Comic Life application that came with my new Mac. This will do for making comics what Blogger and Typepad did for blogging, which could be seen as good or bad. Here's an early page from my first comic in progress: The Shaper.
But back to business.
The Pittsburgh Post-Gazette reported on a year-old study on tax cheating conducted by some professors at Youngstown State University. Not too astonishingly, it determined that the profile of the typical tax cheat was a high-tax-bracket male, under 50, with a complex return, who was easily able to pay the correct amount.
Based on 2001 returns, the IRS estimated underpayments on federal taxes of $290 billion. This seems to confirm that the most cost-effective way to recover money is to audit more high dollar returns.
Of course, those are precisely the returns that have received less scrutiny under the Bush Administration.
The pressure to cheat, [study co-author Dr. Joe] Antenucci said, comes from the big payoff.
"The top tax rate is 35 percent. In this investment environment, people scratch to make a 5 percent to 8 percent return, and there is 35 percent sitting right there."
Self-employed people who deal largely in cash also have the opportunity to short the tax man, but if we collect every last dollar from house cleaners, hair stylists and cab drivers, it will take a lot more enforcement to recapture relatively little revenue.
Another interesting finding: That overstating charitable contributions — especially church donations — is the most common way to cheat.
And finally, cheats justify their behavior with excuses that sound very much like those of the anti-tax crowd: the system is unfair and the government is wasteful, so they are simply righting a wrong by cheating.
