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Well, to quote the Appellate Court Justice Learned Hand from the 1930s (at the time, he was often called the “10th Supreme Court justice”):

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.” Gregory v. Helvering (2d Cir. 1934)






> Everyone does it, rich and poor alike and all do right

'The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.' ― Anatole France


I don't understand what this quote has to do with the comment you're responding to, other than both containing the words "rich and poor alike". Care to elaborate?

The letter of the law is the same for rich and poor people but the implications are very different. Neither rich nor poor people can steal or sleep under a bridge but rich people have money and homes so those laws essentially don't apply to them.

Likewise, tax laws are the same for rich and poor people but rich people can take advantage of more loopholes and ways to structure their income to make their effective tax rate much lower. Even just owning a house gives you access to a pretty big tax "loophole" in the ability to deduct interest on your mortgage.

The problem isn't that people are taking advantage of loopholes but rather that the loopholes were created and still exist.


The tax laws relating to carried interest, for example. Everyone, rich and poor, gets to take advantage of the lower rates compared to ordinary income. Sounds equitable on the surface, but the reality is that poor people don't have investment yields that are taxed as carried interest, they have ordinary income. Rich people, on the other hand, can all but eliminate their ordinary income and the taxes on it, and instead put their money in places where it's taxed as carried interest, which is to say at a much lower rate.

I don't know what finance and investment regulations were in place when Learned Hand was alive, but I do wonder if he'd take the same position in an economy and tax regime so heavily titled to favor the wealthiest.




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