Front page story
A big tax story on the front page of the New York Times, but not the one this weekend about President Trump. Also, 7 other things worth your time.
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Wow, did you see the big tax return story on the front page of the New York Times?
No, of course you didn’t. You almost certaintly weren’t even born, because I’m talking about the front page on October 24, 1924 — 96 years ago.
What prompted it? A law passed that year that for the first time made some tax return information available to anyone who wanted to look.
Amid concern of widespread cheating on income taxes, especially by the highest earners, Congress included the publicity provision in the Revenue Act of June 2, 1924.
“Secrecy is of the greatest aid to corruption,” a Republican senator named Robert Howell, of Nebraska, said in calling for transparency. “[T]oday the price of liberty is not only eternal vigilance, but also publicity.”
Notwithstanding the wording of the newspaper heading that October, the law didn’t actually make returns public, but it did make public some of the information contained in them — mostly the names and addresses of individual and corporate taxpayers, along with the amount of taxes they paid.
Besdies Rockefeller and the Fords, the Times printed a list of several hundred famous or wealthy people and the income taxes they paid. A few examples that might still ring a bell or be of interest today:
Murry and Solomon Guggenheim, whose family had just started to get into the philanthrophy they’re more famous for now, and who paid $346,949.42 and $300,259.00 respectively;
W.R. Grace, which I think refers to the company, not the person, since he had been dead 20 years by then, paid $121,148.61,
HRH Princess Anastasia and Price Christopher of Greece (I had to look them up, but their names stood out on the list), paid $79,632. Also it seems it should be “Their Royal Highnesses,” not HRH, but 96 years would be a little late for a correction.
Also, J.P. Morgan paid $98,643, while Charles M. Schwab paid $29,494.38—which wasn’t nothing then, but nowhere near the top of the list.
In fact as the Times pointed out, its reporters who scoured the records found two big surprises:
Some of the biggest names of the time paid fairly little tax (the reporters’ surprise on this point might reveal some naivety, of course), and
Some people who had virtually no public profile, and who the Times reporters found only by searching randomly, nevertheless paid hundreds of thousands of dollars in taxes.
Of course, the tax publicity era didn’t last long. High income-earners successfully lobbied Congress to do away with it. Today, it’s hard to imagine that federal returns might ever become public once again.
Just consider how much of a boon it would be to marketers, if suddenly the exact annual income of every single American taxpayer were made public?
That said, tax privacy is not a a global policy. Apaprently Norway and Finland make some or all return information public.
There’s even National Jealousy Day in Finland, November 1, which is the day each year on which every single Finnish taxpayer’s info is made public.
Actually, as long as I’m backpedaling on the idea that publicity is a totally bygone notion, U.S. non-profit organizations file public tax returns. Also, there have been some more recent state rules requiring disclosure.
I suppose if we thought some kind of transparency were a good idea again, it wouldn’t have to be all or nothing.
Perhaps simply putting out anonymized information about the top 100 or 1,000 U.S. taxpayers — again, not saying who they were, but providing simply the total income they reported, and the total taxes they paid, maybe how much the biggest deductions, credits, or legal avoidance strategies amount to — might encourage Americans to learn a bit more about the system.
“Person X reported $1.9 billion in income last year and paid $355 million,” for example? I think that would spark some attention.
But let’s be honest: having the names attached makes it a lot more fun.
As another, more modern Times story about the 1924 situation pointed out, there was a line of women at one New York government office on the day return data was made public that year, “to seek information about their present or former husbands.”
And if you’ve ever wondered who from your past might be checking out your Facebook profile or Googling you once in a while—imagine what would happen if everyone’s tax return information were public information again.
That said, if there’s one enduring lesson I’ve learned in 2020 it’s this: Never say anything could never happen.
7 other things worth your time
I wrote this a while back, but in light of this tax return secrecy issue, I’ll share it now. Canadian researchers correlated how boys behaved during kindergarten with their incomes 30 years later—an experiment only made possible because the Canadian government apparently gave the researchers access to individual tax returns. (Their big takeaway: boys who were more “prosocial” in kindergarten made an average of $12,000 a year more as adults). (Inc.com)
Of course, the whole reason I’m thinking about tax returns and secrecy is because of the NYT expose on President Trump’s taxes and business practices, including the allegation that he managed to pay only $750 in federal income taxes during 2016 and 2017. (NYT)
Study: Higher narcissism may be linked with more political participation. (Eureka Alert)
The Tampa Bay Lightning won the Stanley Cup over the Dallas Stars: In September. In Edmonton. Meanwhile the Miami Heat and LA Lakers play in the NBA Finals (starting tomorrow) in Orlando.
Debate tonight. Could be important. (AP)
“I risked staying in a hotel and I won't do it again for a while,” writes my friend and former colleague Chris Matyszczyk. Counterpoint: my wife and daughter and I spent a couple of days in a hotel over the weekend, part of a fairly spontaneous trip to see family and escape to Cape Cod. Assuming we didn’t get infected, I’d do it again, no problem. (ZDNet).
This just seems appropriate: Parrots at a wildlife park in the UK that were apparently trained to swear at visitors have been removed from an exhibit. (Lincolnshire Reporter)
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