Essay on Fairness of Our Taxation System

Is Our Taxation System Fair? Every government collects taxes from its citizens in order to be able to fulfill its responsibility of providing proper roads, water, sanitation facilities, health care and education to the public. The government would need billions of dollars to carry out all its duties and it is due to the tax payers’ money that all this work is done. So, citizens are expected and mandated by law to pay the appropriate taxes. They have to pay taxes to their local state or county governments as well as to the federal government in certain instances. Many people do not like the idea of paying taxes, of course. They hope that they could keep all their earnings to themselves. They feel that it is not fair for the government to grab a large percentage of their hard-earned money. They sometimes compare the tax percentages in other countries and feel that the amount of money they pay is too high when compared to the other nations. But all said and done, taxes are extremely essential for the smooth running of a nation. Without taxes, the government would not be able to fulfill its obligations. It is necessary for us to get a proper perspective of why taxes are inevitable. Although we do not like the fact that we have to part with our earnings to support the government, we still have to see this as a benefit. In fact, we are paying the government to provide all the infrastructural facilities that we enjoy in our day to day life. If we can see taxes as a fee that we spend on ourselves for our own benefit, much like the money we pay at a restaurant to have a nice meal, we would find it easier to pay our taxes without feeling the pinch.

Study On Mr Madoff And Ponzi Schemes Finance Essay - Free Essay Example

On March 12, 2009, Mr. Madoff pleaded guilty to all 11 felony counts charged against him, which includes securities fraud, money laundering and perjury. On June 29, he was sentenced by a federal judge to the maximum prison term of 150 years without bail or parole. He began serving his sentence four months later in October. The criminal case is U.S. v. Madoff, 08-cr-00213, U.S. District Court for the Southern District of New York. From the 1980s through December 11, 2008, Madoff ran a massive Ponzi scheme to solicit billions of dollars of funds. On December 1, 2008, BLMIS delivered statements to 4,800 account holders showing they had total balances of almost $65 billion. The firm held a small fraction of that balance. Madoff took money from everywhere including, individuals, charities, trusts and pension funds. He didnt invest the funds as promised used them for his own gain. He falsely promised to gain high return rates, which was as much as 46%. Madoff created a br oad infrastructure at BLMIS to give the impression he ran a legitimate investment advisory business in which client funds were actively traded as he had promised (Voreacos, 2009). He had many back office employees who werent technically qualified for the job. He told workers to generate false client account statements that reflected false returns and supposedly showed the firm bought and sold securities. Madoff allowed the transfer of $250 million from clients investment funds to his market making and proprietary trading businesses. Those transfers gave the false appearance that he was doing business in Europe on behalf of investors. Madoff lied over and over to the Securities and Exchange Commission (SEC) in writing and sworn testimonies. He caused the creation of false financial statements about the business. As mentioned, he was charged on 11 counts. Here is a summary of each count: Count 1, Securities Fraud: Bernard L. Madoff Investment Securities Inc. (BLMIS) was a bro ker-dealer with three types of business: market making; proprietary trading; and investment advisory services. Madoff Securities International Ltd. (MSIL) was a U.K. affiliate engaged in proprietary trading. Count 2, Investment Adviser Fraud: From at least the 1980s through December 11, 2008, Madoff acted as an investment adviser for clients of BLMIS and employed devices and schemes to defraud clients and prospective clients. Count 3, Mail Fraud: On December 1, 2008, Madoff caused to be sent via the U.S. Postal Service a false and fraudulent account statement from BLMIS to a client in New York. Count 4, Wire Fraud: On Aug. 5, 2008, as a part of a scheme to defraud, Madoff caused $2 million in investor funds to be wired from Bloomington, Minnesota, to New York. Count 5, International Money Laundering to Promote Specified Unlawful Activity: From 2002 to December 2008, Madoff caused the transfer of funds from the BLMIS investor account in New York to MSIL accounts in London , and from those accounts to BLMIS accounts in New York. The money was derived from fraud in the sale of securities and theft from an employee benefit plan. Count 6, International Money Laundering to Promote Specified Unlawful Activity: From 2006 to December 2008, Madoff caused the transfer of funds from BLMIS investor accounts in New York to MSIL accounts in London, then back to New York to give the false appearance that he was operating a legitimate investment advisory business. From 2002 to December 2008, he caused funds to be transferred from BLMIS accounts in New York to MSIL accounts in London, and from there to purchase and maintain property and services for the personal use and benefit of Madoff, his family members and associates (Voreacos, 2009). The money was derived from fraud in the sale of securities and theft from an employee benefit plan. Count 7, Money Laundering: On April 13, 2007, Madoff caused $54.5 million to be transferred from a BLMIS investor account in New York to a BLMIS account in London. The money was derived from fraud in the sale of securities and theft from an employee benefit plan. Count 8, False Statements: On Jan. 7, 2008, Madoff caused the filing with the SEC of a Uniform Application for Investment Adviser Registration. The form falsely stated that BLMIS had custody of advisory clients securities. Count 9, Perjury: On May 19, 2006, Madoff made numerous false and misleading statements under oath to the SEC. He falsely testified that his firm executed stock and options trades on behalf of investment advisory clients; had custody of assets managed on behalf of those clients; and used the same trading strategy for all its investment advisory clients. Count 10, False Filing With the SEC: On December 20, 2007, Madoff caused the filing of a false and misleading certified BLMIS audit report. Count 11, Theft From an Employee Benefit Plan: On September 24, 2008, Madoff stole $10 million in pension fund assets sent to B LMIS by a master trust on behalf of about 35 labor union pension plans. In May 2010, nearly 700,000 Madoff investors outside the United States settled agreements, receiving about $15 billion. The total shown on Madoffs investor account statements right before the collapse in 2008 was nearly $65 billion. Irving H. Picard, the court-appointed trustee representing Mr. Madoffs victims in the United States, has collected to date about $10 billion through settlements and asset sales. Mr. Picard estimated the total cash losses in the fraud at $20 billion (Washington, 2011). In December 2010, Mr. Picard launched several lawsuits, including one that was after $1.6 billion in damages from Sonja Kohn, a banker in Australia. He accused her of heading a 23-year conspiracy that played a central role in financing the Ponzi scheme. After the deadline, it appeared that at least 1,000 individual civil lawsuits would arise. Although many likely to be settled by negotiations, the rest will probab ly be contested. In February 2011,ÂÂ  bank documents released as part of Mr. Picards lawsuit prove that bank executives expressed many red flags about the legitimacy of Madoffs investment business more than 18 months before his Ponzi scheme came to light, but continued to do business with him. Another lawsuit, in federal bankruptcy court on February 4, involves the owners of the New York Mets. Mr. Picard accuses them of being so wrapped up in the enormous profits they earned while investing over decades with Mr. Madoff that they ignored the red flags that might have warned them that he was operating a fraud. Its also being rumored that now the Mets may be up for new ownership. In his first interview since his arrest in December 2008, Mr. Madoff asserted in February that unidentified banks and hedge funds were somehow complicit in his elaborate fraud, an about-face from earlier claims that he was the only person involved (Washington, 2011). His family being involved in sus picion in involved, he went on to mention that his family members knew nothing about his crimes. With his ill practices, his family has also faced numerous lawsuits, potential to lose most of their assets. Madoff also spoke about dealing with several banks pointing to their willful blindness and went on to say, They had to know, but the attitude was sort of, If youre doing something wrong, we dont want to know. While he admitting his guilt in the interview and said nothing could excuse his crimes, he focused his comments on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme. After deceiving federal regulators and investors for at least 16 years, he would certainly be branded as a liar by defense lawyers if he appeared as a witness against any defendant in a courtroom (Washington, 2011). Mr. Madoff sai d he was determined to help the efforts to recover lost assets. He also said that Mr. Picard was seeking far more money than was needed to resolve investor claims. In addition to the customer claims for the cash losses, the Madoff estate also faces claims by unpaid vendors and landlords, who cannot recover until all the valid customer claims are paid. In prison, Madoffs access to the outside world is limited and monitored. All visitors must be approved by prison authorities, who also screen his collect calls and his incoming and outgoing e-mails and letters, though interviews with lawyers like Mr. Picard and his colleagues are less restricted and can be conducted in private (Washington, 2011). U.S. v. Madoff, 08-cr-00213, U.S. District Court for the Southern District of New York (Manhattan). https://www.bloomberg.com/apps/news?pid=newsarchivesid=a6Osnj.SoYdMrefer=home https://topics.nytimes.com/top/reference/timestopics/people/m/bernard_l_madoff/index.html https://www .npr.org/templates/story/story.php?storyId=106039332