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It's the Moral Question That Should Matter

September 14, 1997

In the "Money Talk" column of Aug. 17, a writer asked: "What if I exceed the $10,000 annual gift limit and fail to file a gift tax form with my income tax return? How stringently is this policed by the government?" The answer Carla Lazzareschi provided was: "Basically, our entire method of taxation is based on the honor system. You can play it straight or you can cheat. If you choose the latter course, you run the risk of getting caught." She then proceeded to outline the thresholds and probabilities that the IRS seems to use.

I am concerned about the future and sustainability of our society, and that column served to highlight it for me. I realize that the above is a common discussion between people and their financial advisors, and that the position is probably that of the major accounting trade groups, but it still seems wrong to me. The statement seems to be: "This is against the rules, but if you choose to cheat, here's what you do. And if you do get caught, be prepared to pay the fine." As if it's some sort of game. So people who follow the rules, because they're rules that apply to everybody, are inherently fools or rubes, and those that don't can enjoy an advantage in life. This attitude is especially unfair if those who don't follow the rules make that decision primarily on an economic basis: If the penalty is only a fine, then richer people will be more willing to take that gamble, and if the "house" odds aren't calibrated correctly (or are calibrated to benefit them), then in general the richer people will gain the advantage. If there were a more universal punishment, e.g., jail time or splashing violators' names in the paper, this would be more fair, or at least equally unfair.

Is this way of thinking something we should be teaching our kids? That's it's easier to rob from this store because their security isn't as good, but, of course, it's your decision? Is it something that should be in your paper? I don't think so.

ANDREW HALL

Costa Mesa

Via the Internet

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