Scooping the US Tax System 1
In Covering Taxes, What’s Legal is Often as Much a Story as What’s Illegal. James B. Steele won two Pulitzer Prizes for his coverage of the U.S. tax system. As the debate over taxation heats up, he shares tips and investigative strategies.
by Chris Adams, National Press Foundation
IRS records might reveal more than you think. While individuals’ taxes are often shielded from public view, information on the system is in the public record. James B. Steele and partner Donald Barlett won two Pulitzer Prizes by specializing in tax policy and tax avoidance. They crunched the numbers themselves from publicly available sources, such as the Internal Revenue Services’ statistics of income. These contain information on the value of certain tax breaks, income and deductions taken by high earners, and data by geographic areas. “It doesn’t take a math whiz,” Steele said. “… The mathematics of taxes is not really that complicated.”
Information on individual taxpayers is sometimes obtainable through Tax Court and tax legislation. The U.S. Tax Court, part of the federal judiciary, is often overlooked by reporters. Sleuthing through tax legislation can reveal special provisions that benefit a handful of individuals or businesses, or even just one. One Barlett & Steele Pulitzer was for stories on “rifle shot” provisions in tax bills that were narrowly crafted to help selected insiders. One such provision singled out “a decedent who resided in Tarrant County, Texas, and died on October 28, 1983, at the age of 75, with a gross estate not exceeding $12.5 million, and the individual is the decedent’s surviving spouse.” The language in the tax bill was public; the reporting task was to determine who benefitted from it.
Focus on the numbers, not political ideology. While tax policy is often intertwined in left-right battles, Steele said numbers tell the story. “Don and I have been called a lot of names over the years, because we talked about how the progressive income tax to our mind is the fairest of all,” he said. “I think the only — the best way — to avoid it is to not talk about the theory of those things, but just show who would benefit from the tax cut or who would not benefit from a tax cut. … The way the tax code has been structured the last 40 years or so, to me it’s the greatest single driver of income inequality in America.”
Develop a “documents state of mind.” Steele counseled investigative reporters to start by finding the documents that allow them to write with authority. “Don and I years ago adopted something which we called a ‘document state of mind,’” Steele said. “We just assumed the information was out there somewhere; it was just a matter of finding it.” Use documents and data journalism to propel your reporting beyond anecdotes to evidence. Talking with people is important, but documents enable you to make an independent assessment of a source’s veracity. “Reporters often ask themselves, ‘Is this person lying to me?’” Steele said. “What we know over time is some of the greatest hustlers in this world are absolutely totally convincing.”
And of course, never assume anything. Nearly every journalist has a story from an early-career goof that sticks with them long past the mistake. Steele’s is from a stint on the obituary desk at The Kansas City Star, when the city editor called him out for spelling the name “Smythe” as “Smith.” “From that little simple lesson, I’ll never assume how somebody’s name is spelled,” Steele said. “I’ve taken that over the years to many other things. Never assume where you will find information, never assume who will talk to you, and never assume that you even fully understand a subject.”
Speaker: James B. Steele, Two-Time Pulitzer Prize Winner; Author, “America: What Went Wrong? The Crisis Deepens”
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