It is true that many such abusive tax shelters are already illegal. The problem is that every time we shut down one scheme, tax dodgers come up with more. And that is not by accident. One Big Five accounting firm reportedly requires its very smart staffers to come up with at least one of these economically stupid but tax wise corporate tax dodge ideas per week. I would call that a whale-sized gulp of arrogance toward honest taxpayers everywhere who dutifully file returns every April 15 and have to make up for the taxes that some improperly dodged.
Complicated tax dodging schemes impact ordinary taxpayers in at least two ways.
They must both make up for the revenues that tax cheats fail to provide, and they must pay more for enforcement. In one prominent tax shelter case, the cost of a federal victory this summer, after prolonged litigation, was over two million dollars. Amazingly, some actually rely upon such law enforcement successes as justification for opposing reform. Indeed, the creativity and speed with which new and more complicated tax shelters are devised is remarkable. Following judicial and administrative rulings, tax shelters are repackaged and remarketed with creative titles like sequels to bad movies.