If Massachusetts Senator John Kerry had escaped $500,000 in state taxes by docking his yacht in Rhode Island, the offense wouldn’t have been as serious as, say, plotting with the British against the Continental Army in 1780. But then, it was Kerry himself who upped the rhetorical ante against those who use tax loopholes for their own gain.
While running for president in 2004, Kerry frequently used the term “Benedict Arnold’’ to describe CEOs who move their companies’ operations out of the country to avoid paying US taxes. That hyperbolic characterization became embarrassing when it emerged that Kerry had accepted large campaign contributions from executives who fit the description, but Kerry was onto a real problem. As a senator, Kerry has admirably attacked those who seek out tax havens. In 2007 and 2008, he introduced legislation aimed at American defense contractors and hedge fund managers operating overseas to avoid the US tax code.
On some level, these people are acting rationally. But Kerry’s legislative work staked out an important principle: People who enjoy America’s bounty — or, by extension, an individual state’s — shouldn’t try to get around its laws. After news broke this week that state revenue officials were investigating, the senator said he would pay any Massachusetts taxes that he owes, and he insisted subsequently that he always intended to do so. But the charges of hypocrisy stick, not least because of Kerry’s “Benedict Arnold’’ analogy. The senator’s beliefs on this issue are sound. His own conduct must match up with them.
For the record: This editorial stated that Senator John Kerry offered to pay sales tax on his yacht after it was reported that the state revenue department was investigating. While the agency had begun looking into the matter, there was no official investigation.