We value all of our employees...really

The older I get and the more I find out how things work, or don't work, in this world, the more depressed I get sometimes. I look forward to the day when I've aged sufficiently to start caring less about what's going on in the world and more about mortgage rates and china patterns.

So, I guess the winner for the most honestly named tax-evasion scheme is the "Dead Peasants" policy. Companies like Dow Chemical would take out life insurance policies on their rank-and-file workers, no matter how infinitely replaceable they are to the company (an alternate name for this scam is the "Dead Janitor"), and most probably without the knowledge of the worker. When that worker goes toe-up, the company collects, even if the worker lived long into retirement. Of course, they are not making any money off the insurance companies with this. The insurance companies are their accomplice and takes a cut of the action. Nope. This is a scam to rip off the government, as companies get a deduction on the premiums they pay and the payout is tax-free.

No one knows how many corporate-owned policies are issued on executives versus rank-and-file workers. Wal-Mart alone had taken out about 350,000 such policies between 1993 and 1996. Nestle USA had policies on 18,000 workers in 2002, The Wall Street Journal reported. Enron had $500 million in policies on workers.

Sales of the policies came to a virtual standstill in September 2003, according to the insurer trade group ACLI, when the Senate Finance Committee approved legislation that would have taxed payouts made to companies if the employee had left more than a year earlier. That indicates that most policies aren being sold to protect companies financially against the loss of key current employees.

Strong insurance industry protests led the powerful committee to reconsider its action. Further work on the issue has been postponed until 2004, and indications are that the senators are oftening?on the idea of greatly restricting the policies, said Jack Dolan, ACLI spokesman.

The audacity of lobbying in favor of such a transparent evasion is mind-boggling. The knowledge that, up to 2004 at least, such shameful lobbying has worked is to stop the United States Congress from cracking down on the practice is depressing, to say the least.

(Via Kevin Drum, who wrote about how Jack Abramoff and Ralph Reed thought this scheme was so awesome they tried to copy it.)