IF AMERICANS REALLY UNDERSTOOD THE INCOME TAX.

IF AMERICANS REALLY UNDERSTOOD THE INCOME TAX by John O. Fox Westview Press, $30.00

ON MY DESK AT HOME SITS A small faux rock, a flat black sheet with broken edges and a maze of tiny white symbols etched into its face. It is a replica of the Rosetta stone, famed as the key to unlocking the hieroglyphic language of ancient Egypt. Less well-known is the text on this stela, a convoluted and flowery pronouncement in which a pharaoh claims credit for the prosperity of the people and then makes a grant of tax relief to the priests on whom he relied for the flow of revenue to his government and for ensuring the fealty of the people to his administration.

As it says in Ecclesiastes, there is nothing new under the sun.

There are, however, always new stories, and the ones told in The Cheating of America were chosen to make your blood boil. They are tales of the rich and powerful who granted themselves tax relief and found themselves in battle with the IRS. Their schemes are available to anyone willing to dig through the mountain of paperwork at United States Tax Court and other government offices in search of nuggets of fact.

Through a lot of hard work, the authors and their team expose loopholes big enough for the late Larry Hillbloom to fly his DHL Worldwide Express right through. There are the schlock movie makers, best known for resurrecting Sylvester Stallone's star, who with a patina of legitimate accounting glossed over massive tax evasion, and bought a guilty plea to a mere misdemeanor. And there is the inept government pursuit of Joe Conforte, the taxi driver-cum-whorehouse entrepreneur whose Chicken Ranch made him millions of untaxed dollars, which he now enjoys in Brazil.

Oh, and the outcome of these cases? Mostly the tax avoiders won and got to go on, their pocketbooks nicked as much or more by their lawyers as the government.

While the book focuses on the way the law, and the IRS's budget and rules, are weighted in favor of rich tax evaders, there are also a few stories of big-time losers in the game of moving symbols around on a piece of paper to make tax bills vanish. One of them is Gary K. Bielfeldt, a speculator in Treasury-bill futures from Illinois corn country who amended his tax returns to label himself a dealer, rather than a trader, in the government debt markets. He asked for a refund of $81 million and ended up paying $50 million extra and now says the world would be a better place if someone would eliminate the IRS.

As an expose, this book is a first-rate read. Unfortunately, while it is superb at turning up the heat, it is less good at throwing light on the forces at work beyond the court records.

Take the tale of George B. Kaiser, an Oklahoman who drives around in jalopies and who in 1989 reported a taxable income of just $11,669. The authors note that his taxable income was less than what the typical full-time bank teller earned in adjusted gross income. Despite using different measures of income, the comparison is apt; that same year Kaiser bought himself a bank for $61 million.

The bank had been run into the ground when he was on its board and then was resuscitated by the Federal Deposit Insurance Corporation. After Kaiser bought it, he returned it to such glowing financial health that his investment quickly ballooned 15-fold to nearly a billion dollars. Meanwhile, from 1986 through 1991, he reported an average of $860,000 in negative income. Amazingly, five of those six years were after the 1986 Tax Reform Act, which demolished tax shelters.

Unexamined, however, is whether the government rules that let rich folk like Kaiser get by have any economic or social rationale behind them. Is there any justification for these ploys that the rich exploit? Kaiser, for one, appears to be obeying the rules, although he has used the considerable political power his wealth brings to get some of those rules refashioned to his liking. Still, is there a rationale for the rules that have so richly rewarded Kaiser, made Ken Dart a resident of Belize, and moved so many manufacturing jobs overseas? Or, like the designated-hitter rule, are these tax rules pure abominations? Lewis et. al don't say.

In John O. Fox's book If Americans Really Understood The Income Tax, we get insight into the issues that underlie the outrages articulated in The Cheating of America.

Like the Center for Public Integrity's investigative team, Fox thinks politicians have unfairly tilted the tax code for the rich. Laws have been crafted that dribble out benefits to the many while reserving the big grants of tax relief to those with the resources and skilled advisers to navigate through a rough sea of complex rules and into a safe harbor of legal tax avoidance.

Fox, a Washington tax lawyer, throws a great deal of light, and virtually no heat, on these issues even though he makes it clear that he has an agenda not much different from that of Lewis and Allison. Fox sees a tax code overwhelmed with inequities. But he also sees the reasons those inequities got there, including the economic theories at work.

Fox neatly describes the basic issue and then, with meticulous organization and clarity, explains the underlying issues. Here his work is invaluable.

And, admirably, he shows excesses in the cases made by advocates from various viewpoints, including those he favors. He favors progressive rates in which those who make the most pay higher marginal rates, but he faults liberals for giving short shrift to classical economic theorists who say that lower rates will bring greater wealth, more opportunities, and more overall income. Many leading advocates on tax policy often avoid substance, assisted by far too many in the Washington press corps, including both kinds of broadcast reporters: The many actors posing as reporters and the competent journalists who, in the struggle to get air time, must present sound bites instead of sound insights. And not a few reporters have adopted the language of advocacy, instead of the neutral language of journalism, as in those who substitute the "death tax," sans quote marks, for the estate tax.

Fox understands that the average member of Congress knows about as much about tax policy and administration as the average bank teller knows about running George Kaiser's bank. Of course, your average bank teller doesn't make tax law. Fox wants to change that by translating the arcane language of tax into plain English and then explaining the principles of tax in concise and illuminating language.

His book, read carefully, could equip even average people to educate their lawmakers about basic tax-policy fairness.

Fox is weakest on the mortgage-interest deduction and others subsidies for homeowners, yet even here he is very good. He shows how the middle class's favorite tax break is overwhelmingly a benefit to those who make more than $200,000 a year, and how the subsidies distort the housing market in painfully expensive ways. Fox would retain subsidies, but he would replace the interest deduction with a tax credit, which means rich and poor alike get the same dollar-value subsidy, and he would cap the subsidy at a mortgage on a $100,000 house. The effects of such a shift on housing prices in the short run, the pain that ceiling would cause in urban markets and whether any fixed cap is a good idea in tax policy, deserve much more analysis than Fox provides.

Overall, Fox favors broadening the tax base so rates can be lowered. As he notes early on, one way to look at taxes is through two doors, one marked "the tax-all room" and the other labeled "the tax-haven room." In 1997, more than $3.4 trillion in individual income passed through the "tax-all" door while nearly as much, $29 trillion, passed through the tax-haven door.

Not all tax favors flow to the rich or even to the middle class. The top one percent, the richest 1.25 million taxpayers (most of whom are married couples) pay more than a third of all income taxes. If their income keeps rising at eight times the rate of everyone else, they will pay a much larger share in just a few years. A family of four does not pay income taxes until it makes about $28,000, provided it applies for the earned income tax credit, a form of negative income tax that has done more than any other government program in recent years to lift people out of poverty and to encourage work.

Yet many people believe that they work until mid-May just to pay taxes because of the "Tax Freedom Day" publicity stunt, which innumerate reporters fall for every year. The fact is that those on the bottom half of the income ladder have earned a year's worth of federal income taxes before January runs out and many of those on the lower rungs who have children and apply for the negative income tax do not work a minute to pay income taxes. In a country with marginal income tax rates that range from less than zero to 41.05 percent, Tax Freedom Day endures only because most journalists have forgotten their junior-high math and do not seem to mind that their ignorance makes them look, well, ignorant.

Near the end of their book, Lewis and Allison ask a series of questions that "no one in Washington is particularly able or anxious to answer."

They urge voters to contact their lawmakers and demand that they say if they favor "upholding the current tax laws today for all Americans? Politicians should be asked bluntly whether or not they favor increased enforcement of the existing laws. Do they think the poor should be audited more often than the rich? Should billionaires be able to renounce their U.S. citizenship to avoid taxes, and still be able to return home for months on end because the law barring their re-entry is rarely, if ever enforced? Expect considerable squirming, hemming, and hawing."

I think not. How easy it would be for our legislators to answer the first question by saying that, of course they favor upholding the laws, casting off another sound bite on their unwavering support for law enforcement. Our elected representatives in both parties have already told us, with the budgets they have adopted, the real answer. They want very little enforcement of the tax laws, except against the working poor. As the spokesman for House Speaker Dennis Hastert said recently, there is no clamor on Capitol Hill for more income tax audits.

The advice in both of these books, that citizens get involved in their government and give voice to their concerns and outrages, is sound. But just how would an ordinary citizen go about asking her representative, much less her senator, for an audience? Many of our elected representatives complain that they spend more time than they want with the donor class, though not so much that they have exercised their power to banish them to the far rooms of the public's house on Capitol Hill. Many have, however, supplemented the old round file, and the boilerplate response letter, with voice mail and Internet baskets that can filter unwanted contact into the digital round files and boilerplate email of our silicon age.

After you have filled yourself with outrages from the first of these books and taken a quick course in tax policy from the second, try getting an appointment to tell your lawmaker face-to-face just what you think about the design of our tax system and what you think ought to be done about it. If you are John Q. Citizen, instead of John Q. Donor, lots of luck. As with the pharaoh who had his tax policy writ in stone many centuries ago, Mr. Citizen will discover that tax relief goes first to those who, like the priests of ancient Egypt, ensure that the leader retains his position.

DAVID CAY JOHNSTON covers the IRS for THE NEW YORK TIMES.