Avoiding taxes is as American as apple pie

The Leckey File

Your Money

July 04, 2004

Americans are very patriotic - except when it comes to paying taxes.

As Mark Twain put it, "The difference between a taxidermist and a tax collector is that the taxidermist leaves the skin." Anger over taxes spawned our very republic.

"Taxation without representation" was the cry at the 1773 Boston Tea Party. Patriots dumped 342 crates of British tea into Boston Harbor to protest a Tea Act that raised the price of all tea except that produced by one British supplier.

Mobster Al Capone was infamous for his violent and illegal Prohibition liquor trade, but was ultimately found guilty of income tax evasion. He was sentenced to 11 years in prison and fined $80,000 for not filing between 1925 and 1929.

"The income tax law is a lot of bunk," Capone said. "The government can't collect legal taxes from illegal money."

Taxes may trip up former Tyco International Ltd. chief executive L. Dennis Kozlowski, who allegedly shipped a $3.95 million Monet painting to New Hampshire to avoid paying $325,000 in New York state sales taxes.

Even law-abiding American investors fall prey to our nation's avoid-taxes-at-all-costs philosophy. They stash money in low-yield tax-exempt money-market funds or tax-exempt bonds even though their personal tax bracket isn't high enough to merit it.

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