CNN business contributor Andy Serwer cast aspersions on investor Boone Pickens, a contributor to the MRC's Free Market Project, for using perfectly legal tax deductions to lower his 2005 tax liability. He reminded viewers that it wasn't illegal, but that it "raised questions." But Serwer found nothing questionable in tax sheltering last December, reports the Free Market Project's Amy Menefee:
CNN’s Serwer advised his viewers to get “cute” with the tax code on the Dec. 26, 2005, “American Morning.” He wasn’t talking to billionaires, of course, but ordinary individuals who apparently, in his estimation, deserve to save money. Serwer encouraged his viewers to “Maximize those charitable deductions, your 529 college plans for the kiddies. And your gift exclusion, anyone in America can give anyone else $11,000 tax free.” He gave further advice on how to “lower your 2005 tax bill”:
“If you’ve lost some money in stocks this year and want to just sell those dogs, do it before the end of the year, because you get those capital gains this year, $3,000. And then you can be left – the capital gains can be held over, if it's more than $3,000, until the next year. Now, what about some expenses? You should pre-pay them. This – again, accelerate those deductions. If you’re going to be paying, prepaying taxes on a quarterly basis, do it in December. Also, the same thing with mortgage payments. Do it in December so you can write it off. And lower your 2005 tax bill. And, you know, April 15 is around the corner.”
Yet, Serwer and the Times skewered Pickens for using existing legal tax breaks when making charitable contributions.
“Boone kinda taking advantage of the hurricane relief tax code provisions to do this,” Serwer said, to which Miles O’Brien chimed, “Ouch.” He continued groaning with disapproval as Serwer described the tax break.
For the full article, visit FreeMarketProject.org.