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Tax the (other people who are) Rich!

Write-Off: The Tax Blog

AOC is only one of many politicians who have favored increasing the tax burden on the rich, as she most recently made headlines for in her tax the rich dress. In my class I always like to point out the tax dealings of those who favor higher taxes. I highlight Hillary Clinton’s shell Delaware corporations, John Kerry’s yacht tax avoidance, John Edwards and Joe Biden’s avoidance of self-employment taxes, etc. (I also point out the tax deeds of many who favor lower taxes, but, these are less entertaining, because these folks don’t want to increase taxes on other people). I always point out that these people are doing nothing wrong. All these strategies are ostensibly legal, and, as Learned Hand famously notes, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” But, the dress affair is interesting in that it involves someone illegally evading taxes. Who?

Aurora James, the designer of the dress, featured in several of the AOC dress pictures (including the one on the left), was a bit more aggressive than the folks above in “arranging her affairs”. Allegedly, this has involved actions that have resulted in tax liens and warrants for illegally failing to pay payroll taxes, amounting to more than a hundred thousand dollars in unpaid taxes. This makes for more great classroom material. I teach an entire session on taxes and fairness, and, sum up the notion of “fairness” with a quote from Senator Russell Long, which, the James saga is really the perfect example of. In indicating who should pay tax, Long quipped, “Don’t tax you. Don’t tax me. Tax the fellow behind the tree.”

Read more about the allegations here.

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