Why I Pay Too Much in Taxes

[Paul S. Penrod]

On Sat, 11 May 1996, Alan Horowitz wrote:

> There's no particular need for tax fraud, except by little guys. The big 
> guys have lots of legal techniques. A prime example was the notorious 
> $1000->$100,000 cattle futures transaction that Hillary Rodham Clinto 
> did, just before entering the White House. Clearly, it wasn't an 
> investment: it was a scheme to let some rich Arkansas guy pay a bribe - 
> legally.  A cooperative broker sets up a "short" position and a "long" 
> position on a trade - then the positions get assigned, after the market 
> has made its move, such that the guy "loses" the $100k  and Hillary "has 
> a profit".
> 

The technique is called "parking", and it has been illegal for many 
years. Basically it requires at least 2 people to conduct the "resource 
shifting". Two accounts are established, one takes all losses against a 
commodity and the other gets the wins. This is rolled over almost 
exponetially by "pyramiding" contracts on margin. As such, the person or 
institution who requires the "loss" handles the losing account directly. 
The other account may or may not be handled by the first party, but they 
have access to it, or use an intermediary such as a broker to funnel the 
"wins" accordingly.


...Paul