Dave Barry's Money Secrets
Page 12
But it’s not just big. It’s also really, really hard to understand. Pick any random sentence from the Tax Code, and it will look something like this:
Biannually adjusted negative graduated monetary yields benefiting ordinary net gross optimization must accrue monthly aggregates.
You have no idea what that means, right? And yet this is a short and fairly clear sentence by Tax Code standards. Most of it is much worse, which means ordinary humans like you have no chance of understanding it. And the reason for this is simple: You’re not supposed to understand it. It’s designed specifically to prevent you from understanding it. That’s right: The truth is that the U.S. Tax Code is written entirely in code. Hence the name “Tax Code.”
It’s filled with secret messages that only certain people are supposed to understand. For example, the sentence printed above was inserted into the Tax Code in 1957 by a Georgia congressman named Henry Hornbucket solely to send a secret message to a secretary with whom he was having an affair. To decode Rep. Hornbucket’s message, read only the first letter of each word:
Biannually adjusted negative graduated monetary yields benefiting ordinary net gross optimization must accrue monthly aggregates.
That’s right: The entire purpose of this sentence—a sentence that, over the decades, has resulted in countless hours of taxpayer anguish, millions of dollars in accounting fees, and numerous bitter, drawn-out legal battles, and ultimately required a ruling by the U.S. Supreme Court—was so that a now-deceased politician could tell his girlfriend, “BANG MY BONGO, MAMA.”
The Tax Code is riddled with such secret messages. The entire purpose of the so-called “Tax Reform Act of 1997”—a document of more than 1,600 pages—was to enable a group of congressional interns to announce a keg party.
But secret personal messages are only one reason why the Tax Code is so huge and confusing. Another one is “loopholes,” which are special provisions that congresspersons stick in there to give special tax breaks to certain people. These loopholes are very hard for ordinary taxpayers to spot. For example, take a look at this section of the Tax Code:
SEC. 249. LIMITATION ON DEDUCTION OF BOND PREMIUM ON REPURCHASE
Subchapt. B, Part VIII, Sec. 249
Mr. Robert Fringleman of 17 Twitching Sphincter Lane, Greenwich, Connecticut, shall not have to pay any federal taxes at all, ever. Bob, thanks for the large campaign contribution! Please let me know if I can be of any further service to you or Marcia! Love always, your obedient servant U.S. Rep. Darnell P. Lungfluke.
No deduction shall be allowed to the issuing corporation for any premium paid or incurred upon the repurchase of a bond, debenture, note, or certificate or other evidence of indebtedness which is convertible into the stock of the issuing corporation, or a corporation in control of, or controlled by, the issuing corporation, to the extent the repurchase price exceeds an amount equal to the adjusted issue price plus a normal call premium on bonds or other evidences of indebtedness which are not convertible.
Once again, we have a glob of prose that makes no sense to you, a regular human. In fact, this section is specifically designed to cause you to fall asleep by the word “debenture.” That way, you are highly unlikely to notice the loophole. And where, exactly, is the loophole? OK, do you see the “line” under the words “Subchapt. B, Part VIII, Sec. 249”? That’s not a line: That’s the loophole. It’s written in tiny one-point type, which is known in Washington as the “tax loophole font.” When we magnify that little line ten times, here’s what we see:
Mr. Robert Fringleman of 17 Twitching Sphincter Lane, Greenwich, Connecticut, shall not have to pay any federal taxes at all, ever. Bob, thanks for the large campaign contribution! Please let me know if I can be of any further service to you or Marcia! Love always, your obedient servant U.S. Rep. Darnell P. Lungfluke.
The Tax Code contains thousands of these loopholes, each one giving a generous tax break to some plugged-in individual or corporation. It goes without saying that none of these loopholes applies to regular dirtbag taxpayers such as you.
So what can you do to reduce your tax burden? The best way is to keep accurate financial records and thoroughly familiarize yourself with the applicable tax laws, so you can avail yourself of every legal advantage. Like you would ever do that. This leaves you with Option B: cheating.
The trick to successful tax cheating, according to the American Society of Crooked Tax Accountants of America, is “Don’t be a moron.” You don’t want to do anything in your tax return that will raise a “red flag” and target you for an audit. Some common mistakes are:
• Using a suspicious-sounding nickname on your tax return, such as “Icepick Willy,” “Johnny Two Knuckles,” or “Martha Stewart.”
• Writing “YOU’LL NEVER CATCH ME, IRS CUBICLE-DWELLING SLUGS!” in large red letters across the front of your 1040 form.* 38
• Claiming an absurd refund amount, such as “eleven zillion dollars.”* 39
But if you use common sense and cheat in a responsible manner, you have no reason to be concerned. To quote Internal Revenue Service Commissioner Harmon Sneegart: “The odds are really good that we’ll never catch you. How the hell can we? We’re federal employees! We take two hundred fifty-three days off a year!”
So let’s take a look at the standard Form 1040 and see where you should focus your tax-cutting efforts:
Taxpayer name: Here’s a tax-saving opportunity few taxpayers take advantage of: Instead of simply writing your name, write your name plus the word “DECEASED.” This can save you big money down the road. In case the IRS checks up on you, you should also change your telephone answering-machine message to something like, “Hi, this is [your name]. I can’t come to the phone right now because I am currently dead, at least for tax purposes.”
Presidential Election Campaign Fund checkoff box: If you check this box, $3 of your taxes will be earmarked for a special fund to pay for presidential campaigns. Notice that the government does not permit you to earmark money for poor people, or sick people, or national defense. No, the government permits you to earmark money only for the purpose of enabling politicians to produce TV commercials designed to appeal to voters who have the IQ of a Vienna sausage. To make matters worse, some of this federal campaign money goes to candidates who have about as much chance of getting elected president as SpongeBob SquarePants. In 2004, for example, more than $800,000 of earmarked U.S. taxpayer dollars went to Lyndon LaRouche, a convicted felon and complete space loon who has been running for president since 1980, and who has claimed, among other things, that Walter Mondale was a Soviet agent and Queen Elizabeth II is a drug dealer.* 40 If you check the Presidential Election Campaign Fund box, it won’t affect the amount of tax you owe, but I will lose all respect for you.
Filing status: Your choices here are Single, Married, Married but Messing Around, Head of Household, Foot of Household, Native American, Presbyterian Filing Jointly, Groin of Household, Biped, and None of the Above. I don’t care which one you check. I’m still pissed off about Lyndon LaRouche.
Exemptions: This is where you tell the IRS how many dependents you have. In calculating your dependents, you should bear two things in mind:
1. The more dependents you have, the less tax you owe.
2. Nowhere in the U.S. Tax Code does it explicitly state, in so many words, that these dependents cannot be imaginary, if you are catching my drift.
Income: From a tax standpoint, income is the exact opposite of exemptions: The less you have, the better. Smart rich people have understood this for years. For example, on his 2003 tax return, Bill Gates reported a total income of $6,437.62. This was so low that even the IRS became suspicious, but when auditors attempted to examine Mr. Gates’s records, the entire U.S. government computer system (which uses the Microsoft Windows operating system) went berserk—erasing data, generating porn e-mails, launching nuclear missiles at Belgium, etc. Within minutes a high-level federal decision was made not to challenge Mr. Gates on his income
, nor his 8,257 children.* 41
Business expenses: Legitimate business expenses are tax deductible. How do we define the term “legitimate business expense”? We define it—and bear in mind, we are words in a published book—as “pretty much everything.” Be aware, however, that if you claim a large amount of business deductions, the IRS may send an agent around to check you out, and if your business does not, in a strictly technical sense, exist, it’s a good idea to be prepared:
IRS AGENT: So you’re claiming that last year, you had business expenses totaling $78,473.52 to operate a commercial snail farm?
YOU: That’s correct. I have over 37,000 head of commercial snail. The veterinary bills alone are ridiculous.
IRS AGENT: May I see this farm?
YOU: Certainly. It’s right here in the backya . . . Oh my GOD! The gate is open! They ESCAPED!
Of course there’s always the chance that, even if you cheat in a responsible manner, you’ll be called in for a tax audit. This is not the “end of the world.” Remember that, as a taxpayer, you have certain rights. For example, the auditor cannot use a cattle-prod setting greater than 5,000 volts.
So if you’re called in for an audit, the important thing is: Don’t panic. Gather up all your financial records, consult with your lawyer and your accountant, and then, on the appointed day, flee to Uzbekistan. If you get caught, remember: You never heard of this book.
18
GET RICH THE DONALD TRUMP WAY!
Whatever the Hell That Is
WHEN YOU TALK ABOUT MONEY, sooner or later the name Donald Trump comes up. Here’s an individual who has it all—a huge fortune, a vast real estate empire, a hit “reality” TV show, and a bevy of vivacious, beautiful former wives. So if you’re interested in achieving wealth and success of your own, your obvious question is: What’s the deal with his hair?
Nobody really knows. One thing is certain: His hair color is not normally found on humans. Where it is found is on troll dolls, and on certain snack foods, as exemplified by the World’s Largest Cheeto (currently on display in a bar in Algona, Iowa).
From left: Donald Trump; troll doll; World’s Largest Cheeto
Photography Credits
There’s also some question about exactly where on Mr. Trump’s body his hair originates. It appears, from the unnatural way it swoops around, to be coming from somewhere below his neck, or possibly from an entirely different person. Mr. Trump is usually surrounded by staff people; there’s a theory that one of these people is actually employed as a comb-over donor, whose hair passes down through his pants leg, across to Mr. Trump’s pants leg, and then up the back of Mr. Trump’s body to Mr. Trump’s head.
But the point of this chapter is not that, despite being a well-known billionaire who presumably has access to mirrors, Mr. Trump goes around looking like a vaguely alien life-form. The point of this chapter is to answer the question: How did Mr. Trump get so rich, and can you do the same thing, while maintaining a normal appearance?
Well, you are in luck, because Mr. Trump has written a book of advice. It’s entitled: My Name Is Not Important.
Ha ha! I am just kidding. It goes without saying that Mr. Trump’s book, like everything else associated with Mr. Trump and Mr. Trump’s empire, prominently features Mr. Trump’s name (“Trump”). The official title of his book is:
TRUMP
How to Get Rich
Big Deals from the Star of The Apprentice
The bad news is, this book is more than 240 pages long. The good news is, a lot of these pages are either blank or nearly blank, plus there are a lot of pictures, many of them of Donald Trump. Most of the book consists of very short chapters with titles like “Maintain Your Momentum,” often illustrated by anecdotes from Donald Trump’s own personal life. In one of the chapters, Mr. Trump deals directly and courageously with the issue of his hair.
I read the entire book, which took me almost one hour. If you don’t have that kind of time, but you would still like to get rich the Donald Trump way, you can simply read the bullet points below, which I believe summarize all of the key information contained in the book. If you don’t even have time to read that much, you can go directly to the parts about the hair, which are indicated by Cheetos instead of bullet points.
KEY POINTS IN DONALD TRUMP’S BOOK HOW TO GET RICH
• Money isn’t everything.
• But just for the record, Donald Trump is a major billionaire.
• You need to hire good people. Good people are better to hire than bad people.
• Stay focused! For a while in the late eighties, Donald Trump flew off to Europe to attend fashion shows, and he lost his focus. So if somebody says to you, “Hey, Bob, let’s bag the sales meeting and instead attend fashion shows in Europe,” just say no.
• Momentum is very important. Donald Trump personally knew the famous developer William Levitt, and he lost his momentum, and it sucked.
• You need a good assistant. Donald Trump had an assistant once who was a real babe, but her English was poor, so she didn’t recognize some of the famous people who called Donald Trump, including, quote, “the likes of Hugh Grant, Reggie Jackson, George Steinbrenner, Jack Welch, Paul Anka, Mohamed Al Fayed, Regis Philbin, or Tony Bennett.”
• That’s right: Donald Trump personally knows Paul Anka.
• Work hard! Donald Trump works hard.
• Be blunt! Donald Trump is blunt.
• You need to hire good people. (Yes, Donald Trump already made this point earlier, but it is very important.)
• Some ideas are good, and some are not. Know the difference! Donald Trump does.
• As has been noted in earlier chapters, it’s important to have good people around you. Donald Trump has a lot of terrific people around him, including one named Matthew Calamari, which I believe is Italian for “squid,” although Mr. Trump does not state this in his book.
• Keep learning! Learning is good. Donald Trump and Aldous Huxley (a famous author) are two examples of big learners.
• Think big! Donald Trump thinks big.
• When you ask for a raise, do it at the right time, not at the wrong time.
• Play golf. It’s terrific! Donald Trump plays golf and also owns several golf courses named after him. They’re terrific courses.
• Don’t be afraid to toot your own horn. By tooting his own horn, Donald Trump has turned the name “Trump” into a famous brand name, like “Rolls-Royce.” As Donald Trump states in TRUMP: How to Get Rich:
When I remember the line from Shakespeare’s Romeo and Juliet—“What’s in a name?”—I have to laugh. What’s in a name can be far more than either the Bard or I ever could have imagined.* 42
• When you’re a huge success like Donald Trump, critics will take shots at you. Donald Trump doesn’t care!
• Trust your gut instincts. Donald Trump does. This is based on the work of Carl Jung, a famous person Donald Trump is familiar with, like Shakespeare and Paul Anka.
• In 2000, Donald Trump considered running for president, and he had some terrific ideas, but then he decided not to, because he would have been a pathetic joke.
• No! Just kidding! He decided not to because he is too darned blunt for politics.
• You shouldn’t shake hands. Hands have germs on them, and sometimes pee. Yuck! Donald Trump has given this a lot of thought.
• One time Anthony Robbins, the motivational guy with teeth the size of storm shutters, paid Donald Trump, quote, “a great deal of money” to give a speech in front of twenty thousand people. A lot of people would have been nervous. Not Donald Trump! The speech was terrific.
• Tony Robbins is a terrific guy. Donald Trump wholeheartedly endorses him.
• When you give a speech, you should be entertaining. Examples of great entertainers are Elvis Presley, Wayne Newton, Liberace, Frank Sinatra, and Regis Philbin. “Study Regis Philbin,” Donald Trump advises.
• You need a good attitude. Here’s a direct quote from Do
nald Trump about attitude: “What’s the altitude of your attitude? Is it a high frequency or low frequency? Having a high frequency will attune you to a wavelength that exudes confidence and clear-sighted enthusiasm.”* 43
• Abraham Lincoln had a good attitude.
• You should read Carl Jung and have insights into yourself. Donald Trump does this.
• Donald Trump also reads Socrates and agrees with him.
• Make sure you have a prenuptial agreement. Donald Trump did, and boy was he glad.
• Thoreau would have had a prenuptial agreement.* 44
• Take control of your finances! Wayne Newton* 45 is a personal friend of Donald Trump’s. He was in a financial mess and asked Donald Trump what to do. Donald Trump told him: Take control of your finances! Wayne did, and it worked out. This lesson applies to everybody, not just famous celebrities.
• Donald Trump doesn’t like doctors. “I think that, generally, they are a bunch of money-grubbing dogs,” he states. He knows of a LOT of doctors who are bad. “I just can’t stand the bastards,” he notes.
• Be a good negotiator. Donald Trump is a terrific negotiator.
• Mario Cuomo is a shmuck. So is another man named Pete Dawkins.
Donald Trump likes his hairstyle. “Personally, I think it looks good,” he states.