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Thursday, October 28, 2010

Tax-Dodging or Legal Use of Tax Code?

by Daniella Nicole

I recently heard a campaign ad in which an attack was launched against a candidate for ‘using a loophole’ to avoid paying sales taxes on a high-end purchase. The rest of the ad talked about the seniors and others who are struggling to buy groceries.

The two are completely unrelated and the whole thing brings up an interesting point. When you use the legal loopholes and advantages set up in the tax code, are you a tax-dodger? If the code is set up to allow for certain allowances, avoidances and deductions, are you a tax-dodger when you use them?

I certainly use the itemized deductions I am legally allowed to claim in order to reduce my tax burden. I claim my legal dependants and use any other allowances or deductions I am legally allowed to use. Am I a tax-dodger?

I try to keep up on the latest changes in the tax code and keep them in mind as I conduct personal and private business throughout the year, in the hopes my tax burden will be affected in my favor by doing so. Am I a tax-dodger?

I don’t think its fair to call someone who is using the legally allowed means of reducing taxes a ‘tax-dodger’. By that same token, if someone is breaking the law or just not paying the taxes they legally owe, I would say that is tax-dodging.

I think we need to be careful about making accusations about others and when believing the claims others make. I would say that without proof the gentleman attacked in the ad broke the law, the campaign ad was completely off-base and morally reprehensible.

How do YOU define “tax-dodging”?

Image Credit: U.S. Department of the Treasury. Public Domain. Wikimedia Commons.

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