More precisely, thy name is Julia Ioffe or La Russophobe – increasingly as alike as two peas in a pod in their sneering contempt of everything Russian, their tone-deaf inability to see rampant corruption in their own homeland while they crusade against it in another’s, and their simplistic ignorance of tax law. You’d almost be able to make a case that they were the same person, except that Ioffe is well-educated (save for tax law, evidently) and generally shows it, while La Russophobe is a lazy, semi-literate boob who also shows it. In their loathing of Russia, though, as well as their pretense to a patronizing affection for it, they are on the same sisterly wavelength. If only Russia were just like America, they rhapsodize, it’d be improved out of all recognition. In that case, (a) it wouldn’t be Russia, and (b) if it adopted all of America’s bad habits and errors on the same scale, it is debatable if it would be an improvement.
Consider the latest piece of sarcastic Ioffe offal, pounced on by Larussophobe for re-chewing followed by instant laudatory reamplification in typical sycophantic hero-worship. According to The Coven, some businessmen in Russia are dodging their taxes by putting most or even all of their property and assets in their wife’s name. “Corruption!!!”, screams the Twin Harridans Anti-Corruption Task Force. Maybe so: illegal, not so much.
Here we come upon an interesting distinction – tax avoidance versus tax evasion. There is a bigger difference than mere suffixes that start with different letters; one is legal, and one is not. Tax avoidance is the restructuring or reapportioning of one’s portfolio mix or asset distribution, so as to create a new model that does not bear the same tax burden; the actual definition says, “Lawful minimization of tax liability through sound financial planning techniques…” As the definition suggests, tax avoidance is legal. Tax evasion is illegal, and defined as “Illegally avoiding paying taxes, failing to report or reporting inaccurately”. You could argue that reporting you made almost nothing while your wife made a killing is reporting inaccurately. The U.S. government frequently does, and loses every time the respondent has a decent tax lawyer. I’m sure the Russophobic Union won’t mind my using United States tax law as the benchmark reference, since they constantly hold up the United States as the gold standard: but also because if it’s legal in the USA, it’s damned sure legal in Russia. Well, except for corporations buying elections – that’s legal in the United States and is not in Russia, but we’ve already covered that in a previous post.
Just so it’s clear, courts recognize that no taxpayer is obliged to arrange his/her affairs so as to maximize the tax that the government receives. Individuals and businesses are entitled to take all lawful steps to minimize their taxes. I’m not implying the Russian government should believe Mr. Businessman made diddly for income while his wife made out like a bandit – and I’m sure it doesn’t believe it. At the same time, it’s perfectly legal, and only boneheads go out of their way to pay as much tax as possible. This particular model makes little sense from a tax perspective, as the wife would now assume the same or a similarly large tax burden, and the objective of minimizing it would not be achieved. Therefore, these examples are likely capital-gains exemptions. There is a limit on these, and for large-scale applications you can typically only do it once.
Do western businessmen reallocate assets to family members before tax time in order to legally minimize their tax burden? All the time. Income splitting presupposes the other spouse is actually working at something, which Ioffe’s sarcastic article does not specify, but I presume that’s the case. If not, that isn’t even much of an impediment – invent something for your spouse to do. Have a look sometime at how many U.S. Congressmen and senators employ their spouse or another family member as, say, their Chief of Staff.
So: tax evasion – illegal. Tax avoidance, perfectly legal and widely practiced by people everywhere who think the government already has enough money, and ought to be able to manage without driving its citizens into bankruptcy. Now that we’re au courant on tax policy, and since the Ioffe Twins brought it up, let’s move on to corruption.
Nobody in their right mind would argue America is more corrupt overall than Russia, because that isn’t the case. However, assuming that means corruption on a disgusting scale does not occur in the United States would be a misjudgment. How about, for example, Randy “Duke” Cunningham, former Republican congressman and convicted felon, who confessed to taking bribes to selectively allocate government contracts? Custer Battles, those loveable American entrepeneurs in Iraq? Former Ohio Republican Bob Ney? Pennsylvania Republican Curt Weldon? Corruption. Corruption. Corruption. And these examples (except Custer Battles) are only government figures, the vast majority of them Republicans – we haven’t even touched on businessmen and lobbyists. Each of these cases, had the culprit been a Russian, would have been good for its own 600-word hysterical the-sky-is-falling article from Ioffe or her clone, or both.
As far as these businessmens’ wives being “bad role models” – please. It’s fairly clear what the Russophobe template for good female russian role model includes. The martyred journalist, a la Anna Politkovskaya, Natalia Estemirova…..gloriously dead, in other words, or a pretzel maker in America. Even if you’re the owner, you’ll have to work every day God sends because there’s not much profit in it. A nice little job where you can work your fingers to the bone and never get above yourself – just the ticket for an immigrant. If any other Russian women have been pointed out as “good role models” by these two smug know-it-alls, be so good as to show me.
Conspicuous by their non-inclusion as role models for young female Russians are Maria Sharapova, who makes around $30 million in a good year and is one hell of a tennis player, Valerya, internationally-known classical-vocalist-turned-pop-star, artist Zinaida Serebriakov, or fighter pilots Yekaterina Budanova and Lydia Litvyak.