Republican Sen. Lauch Faircloth, facing defeat in 1998 by Edwards, charged that his challenger "has avoided paying taxes, shortchanging seniors." Edwards shot back with a response of a young man who had proved himself a virtuoso in pleading before juries: "I have paid every dime of Medicare taxes I owe and am required to pay by law. If Lauch Faircloth wants to make negative personal attacks, he needs to do it to my face in debate."
Faircloth, a self-made and largely inarticulate businessman, was not about to take on silver-tongued Johnny Edwards in debate -- and Edwards knew it. Whether his tax avoidance was perfectly legal, however, remains unknown in the absence of an IRS audit. The government's position is that dummy corporations such as John R. Edwards, P.A., must pay its sole employee a "reasonable" salary. Tax practitioners told me that paying a $1.1 million salary out of $11.1 million net income may not pass the "reasonable" test.
Manipulating the IRS code to maximize his personal wealth comes at the peak of a campaign where Edwards has raised himself from the lowest of also-rans to become a strong runner-up by propounding his concept of "two Americas" -- including one America where the rich play dirty tricks on the other America. In an early presidential debate in Columbia, S.C., last May 3, he promised "a better life for our families" that would be "based on the values of hard work and responsibility, not accounting tricks and corporate greed."
There is no record that Edwards, during his six years in the Senate, ever even considered legislation to close the giant loophole of the personal corporation. He must know that loophole well, because he is a lawyer who took advantage of it. He has not been seriously challenged on this so far, but surely will if he is put on the ticket in Boston this summer.
Bernie Sanders and Robert Reich Are Confused by Economics. And Government. And Reality | Seton Motley