By DAVID MOON, Moon Capital Management,
April 13, 2008
He's pretty indestructible in
his action movies, and after his recent run-in with the IRS, actor Wesley
Snipes' reputation as a larger-than-life figure may grow.
grow in prison, however.
the IRS alleged that he made fraudulent refund claims for more than $11.4
million, Mr. Snipes made a number of unique arguments in his defense. Tax
evaders always do, claiming things like only citizens of the District of
Columbia and Puerto Rico are subject to federal income tax, the 16th Amendment
(which introduced the federal income tax) was not properly ratified, and (my
favorite) the Internal Revenue Code violates the Paperwork Reduction
his seemingly bizarre defense, Mr. Snipes was acquitted of all felony counts and
found guilty only of failing to file tax returns for 1999 to 2004. Still,
however, he faces up to three years in prison.
earned $38 million from 1999 to 2004, yet argued that he owed no
Apparently, the star of 'White Men Can't Jump' has his
own ideas about a 'Fair Tax' proposal. He likes the zero percent flat
to admit that the idea of a flat tax appeals to me. Maybe that's because of
where I am in life. A century or so ago, French Premier Georges Clemenceau (or
maybe Bismarck, or Churchill, or Shaw, or French historian Francois Guizot)
said, approximately, 'If you're not a socialist at age 20 you have no heart. If
you're still a socialist at age 30, you have no head.'
add that if you're still hanging onto your socialism by age 40, odds are that
you don't have a job ' or that you're woefully underemployed.
want to really irritate someone about an emotional argument, quote the Bible to
him. It even works with taxes.
the notion of a flat tax, for example. There are no examples of a graduated or
progressive tithe in the Bible. If 10 percent was good enough for the
Levites, why shouldn't it be good enough for the U.S.
Testament writers tell us of a poor widow who freely gives an inordinate
percentage of her net worth into the coffers of the state-sponsored church. Talk
about nonprogressive tax rates.
when I feel pretty holy in my reasoning, the same source can be used to shoot
down my rationale for a spiritual flat tax.
Remember the story of the rich young ruler who went to
Jesus looking for advice? 'Sell all that you have and give the money to the
That makes 36 or 39.6 percent not look so bad.
you think I'm completely jesting about a 100 percent tax, don't forget that in
1960, the top marginal tax rate in the U.S. was 91
tax. Progressive tax. National sales tax. The Wesley Snipes no-tax. Maybe we
should just figure out the cost to run the government and divide it by the
number of people in the country and send each person a bill.
do know that you and I spend an inordinate amount of our resources paying taxes
in some form.
Including the 32 percent who pay no federal income tax,
Americans pay almost 40 percent of their income on various taxes, including
federal, state and local levies.
other than this week, many of us do it without thinking much about it.
Think about that.
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).