Prometheus 6

And it can't...it took a whole committee to make this up.

The I.R.S. has told Congress that it taxes 99 percent of wage income, but only about 70 percent of nonwage income. The disparity is largely because of different reporting rules. Employers tell the I.R.S. how much workers make, but Congress trusts business owners and investors to report their income with little or no verification.

In the case of securities, the only reporting is of the proceeds from the sale of stocks or bonds. The price paid to acquire the securities is not reported and thus taxpayers can cheat by inflating the price paid.

Professor Soled said there is significant evidence that many taxpayers make up the purchase price they report.

Surprising Finding in Capital Gains Study
By DAVID CAY JOHNSTON

Capital gains are the most highly concentrated form of income, with just 10,000 or so taxpayers earning a third of all profits from selling investments and only 3 percent of gains going to people who make less than about $50,000.

So could it be that most of the tax cheating on capital gains income, as measured in dollars, is by people at the lower end of the income ladder?