Reader comment on: Tax Notes's Tax Hypocrisy

Submitted by David Cay Johnston (United States), Apr 12, 2010 12:23

Stoll's cynicism here is amazing. Cynicism is bad journalism.

First, though, Stoll objects to prices he considers too high. Markets set prices. I believe in markets. And this is a market with no barriers to entry. There is an old adage: you get what you pay for. BTW, down the road TA often licenses reprints for free provided credit is properly given.

Stoll's cynicism about Tax Analysts is not support by the facts.

The enormous public service wrought by Tax Analysts in exposing secret government practices is provable and well established. Every single taxpayer in America has benefitted from the work of Tax Analysts in making the IRS and Treasury accountable. The big accounting firms have less power to manipulate the system because of Tax Analysts. And many of the readers are tax policy officials and law enforcers who rely on Tax Analysts to help them do their jobs of making the system work.

Important tax that would otherwise be ignored or manipulated gets aired by knowledgable people on all sides because of the forum that is Tax Notes and its sister publications.

Stoll is also wrong about what drives people. The top editors at Tax Analysts are tax lawyers and they could all make a lot more money by going to work helping high-income clients escape taxes through complex mechanisms. Instead they work for far less.

Congress closely regulates what people who work for nonprofits pay, so closely that for those running organizations the range of reasonableness may be as small as $5,000 up or down -- I know as a trustee of other nonprofits where I am involved in setting pay. No such system exists for profit-making enterprises, many of which make huge sums and pay no federal income taxes or even profit off taxes (see the JTC report on Enron; also Exxon's 10-k this year and in the fine print you will notice it was a net recipient of US taxes to the tune of $828 million.)

Were TA a for-profit its chief executive could, and probably would, be paid much more.

Indeed, I was asked by a top editor at The NYT when I was there why I did not leave and make a fortune in the tax business. I could, but my motive was public service and making our democracy work, not getting rich off my knowledge. Nothing wrong with getting rich and nothing wrong with devoting yourself to improving our nation and the world through journalism.

But for attitudes like mine we would not have police officers, nurses, teachers and journalists.

Not everything is about profit, unless you are a Ferengi. Service, education and religion all motivate people, too. So does family, beauty and the curioisity that in times past made "amateur" a term of respect, not the derisive it is today.

Cynicism is bad journalism. Study and a dedication to following facts whereever they lead is the heart of journalism. Experience has taught me that reality is often far different than I imagined before I started digging into any subject. In this case, again, what Stoll imagines about the dedicated people I have come to know at Tax Analysts is unrelated to the empirical reality. Dig first, write later when you have actual facts, checked and cross-checked.

Were Tax Analysts organized as a nonprofit [I think he means for-profit -- ed.] I suspect it would pay little or no tax because for an enterprise of this size it is easy to reduce any modest surplus (profits for a business) to zero or below, especially for an accural taxpayer. Stoll's ideology is blinding him and producing not journalism based on carefully tested empirical facts, but giving him and his readers the comfort of bias that comes from believing that what you imagine to be so must be and ignoring facts that show that is not, or may not, be the case.

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The Future of Capitalism replies:

It's just false that this is a market with no barrier to entry. It takes about 6 months and $50,000 in legal fees to set up a non-profit. And it's no so easy to just walk in as a new entrant and get $15 million in tax-exempt bond financing for their office, as Tax Analysts has done.

The level of self-righteousness is unbelievable: "my motive was public service and making our democracy work." How's democracy work and the public served if the only ones who can access the information are those with $2,000 a year in after-tax dollars to pay for it?

I agree with Mr. Johnston that not everything is about profit, which is why I think if his organization wants the benefit of a federal tax exemption it should take some of the money that it pays out in salaries and spend it instead on giving free or deeply discounted subscriptions to public libraries.

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Other reader comments on this item

Title By Date
This is exactly right about Tax Notes Today [59 words]Gary B.Sep 19, 2010 15:09
Game, set, match [63 words]Rich HandApr 12, 2010 17:54
The real issue [226 words]Michael TrachtenbergApr 12, 2010 17:45
⇒ pricing
[w/response] [647 words]
David Cay JohnstonApr 12, 2010 12:23
barriers to market entry
[w/response] [427 words]
David Cay JohnstonApr 12, 2010 13:07
Johnston reponds
[w/response] [1382 words]
David Cay JohnstonApr 12, 2010 10:56

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