David Cay Johnston

David Cay Johnston is a reporter for The New York Times. He writes on tax issues and recently wrote a book, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else.

Highlights from three articles he has written this year:
"The total income of Americans in 2003, adjusted for inflation, was 4 percent smaller than in 1999, new tax return data showed yesterday. While the number of taxpayers grew by 5.6 million individuals and couples, average income fell even more - by 6.5 percent - while the average wage slipped slightly, with the average job paying $5 a week less."
[Johnston, D. C. (2005, September 28). Income down from 1999, tax data show. New York Times. Retrieved October 1, 2005, from http://www.nytimes.com]

On a Congressional Budget Office report titled Effects of the Federal Estate Tax on Farms and Small Businesses:
"The number of farms on which estate tax is owed when the owners die has fallen by 82 percent since 2000, to just 300 farms, as Congress has more than doubled the threshold at which the tax applies, the Congressional Budget Office said in a report released last week.

"The estate tax raised an estimated $23.4 billion last year. Repeal would shift part of the burden of taxes off the fortunes left by the richest 1 percent of Americans, some of whose fortunes were never taxed, onto the general population. The lost revenue could be made up in three ways: through higher income taxes; reduced government services; or more borrowing, which would pass the burden of current government spending to future generations.

"Next year, when the threshold rises to $2 million per person, just 123 farms will be subject to the estate tax, the study found. And in 2009, when it rises to $3.5 million, only 65 of the nation's 2.2 million farms will be affected, the study said.

"Michael J. Graetz, a professor at Yale Law School who was a tax policy official in the administration of President George Bush, said repeal was primarily a benefit to people with large estates held in stocks and other securities, not to farmers."
[Johnston, D. C. (2005, July 10). Few wealthy farmers owe estate taxes, report says. New York Times, p. A21. Retrieved October 1, 2005, from ProQuest database.]

On the article Inflated Tax Basis and the Quarter-Trillion-Dollar Revenue Question by Joseph M. Dodge and Jay A. Soled in Tax Notes:
"Since 1997, Congress has given the I.R.S. additional funds to audit the working poor even as it has cut money for other audits. As a result, according to I.R.S. data, the working poor are about eight times more likely to be audited than investment partnerships."
[Johnston, D. C. (2005, January 24). Overstating of assets is seen to cost U.S. billions in taxes. New York Times, p. C2. Retrieved October 1, 2005, from ProQuest database.]

Dodge & Soled's article begins:
"An unpublicized problem of crisis proportions is plaguing the administration of the Internal Revenue Code, and it is costing the nation billions of dollars annually. The problem is neither hypertechnical nor hard to discern: On the sale of investments, taxpayers inflate their tax basis and do so with impunity, which results in the underreporting of gains and the overstatement of losses. How is that possible? This article seeks to answer that question, quantify the associated revenue loss, and suggest practical reforms."