Suppose the number of people cheating on their taxes remains perfectly constant, but that the IRS gets less money to pursue them. Then there will be fewer tax fraud cases, but the exact same amount of tax fraud.
But suppose in the real world the IRS has less money to pursue cases. Then it's reasonable there will be more cases of tax fraud as it will be easier to get away with it.
I see no reason people wouldn't respond rationally to the extra incentive to cheat on their taxes, given that they have enough money for their tax evasion to matter in the first place.
I remember reading a while ago that every $1 that goes into IRS to fund tax fraud cases yielded $1.2 in return. When that's the case, it seems like a no-brainer that it should be well-funded.
That doesn't follow, because there's a cost to the citizenry of being investigated. Also there's the increased ability of the IRS to abuse its power when you give it a bigger budget.
You're right, it certainly doesn't scale to infinity. For instance shifting the entire military spending onto IRS would be unwise. Unless we are okay with living in an IRS police state. :)
There is also the savings from people committing less fraud because they see it's harder get away with it, e.g cases against people they know like friends, relatives, coworkers.
Just to clarify, where in this thread was increasing it's budget discussed? The statement above pertains to current spending levels and it might be that the next dollar of budget put into the IRS yields $.90, but currently the IRS is assuring laws are obeyed while netting a gain to the US government. The only justification of cutting their balance (from a purely profit driven angle) is if the suspicion is that the first half of the budget to the IRS pays $2.40 per dollar and the second half pays $0 (or some similar less than dollar ratio), but this seems like a quite straight forward win.
The thing is, even if you spend $1.00 to bring in $1.01, you're still bringing in money with 1% efficiency. If you didn't care about fairness and justice at all, that would be horrible economics.
So do people who are found innocent of other crimes. Would it solve your concern to say that anyone found innocent of a government cause of action could claim costs? I've never understood why they can't frankly.
What's dangerous about it is massive budget shortfalls, not to mention unfairness, as taxes become optional for the very wealthy.
> The result is huge losses for the government. Business owners don’t pay $125 billion in taxes each year that they owe, according to I.R.S. estimates. That’s enough to fund the Departments of State, Energy and Homeland Security, with the National Aeronautics and Space Administration tossed in for good measure. Unlike wage earners who have their income separately reported to the I.R.S., business owners are often on the honor system.
Wealthy will never pay tax. Owners do not pay tax, the people who buy thier products pay the taxes which are built into profit models. If it was a question of fairness everyone would be the owner. Governments should spend only what they can collect. They can't face budget shortfalls unless they are lending in the hopes that taxes flow as they are. States are still trying to recover from borrowing against tax revenue in the 90s.
I'm not being hyperbolic. And if they are unable to do their jobs, that is quite dangerous, because then we will no longer have revenues to operate as a country.
The average $1 yielded $1.20, not every $1. The marginal rate of return surely goes down as you spend more, otherwise you could spend $10 trillion dollars and get $2 trillion for free. What would be interesting is what the marginal $1 spent yields.
That is ignoring the enormous externalized costs. I have known business to have spent hundreds of thousands of dollars in professional services when being investigated that have done absolutely nothing wrong.
As one of those former professional services providers, I can count on one hand how many former clients out of hundreds that had done "absolutely nothing wrong" and of those few clients, I can't name any that spent anywhere close to hundreds of thousands of dollars to deal with the audit.
>I can count on one hand how many former clients out of hundreds that had done "absolutely nothing wrong"
I think the person you're replying to means "violated the tax code in a minor and non-malicious way" whereas you mean "literally did not violate the tax code at all".
I'm sure he did, but I don't know any clients that were audited over "minor and non-malicious" issues. There's a materiality threshold in place before the IRS will initiate audits, due to the resources required.
Not completely true. I was randomly selected for a TCMP audit. My tax professional is hoping to keep my compliance cost under $2500, but makes no promises.
That's for a reasonably typical (and by no means aggressive tax positioned) MFJ + 2 kids return.
The TCMP audit is the random audit. It's not based on any sort of categories or taxpayer attributes. It's why its so cheap to deal with, and most people do not usually hire accountants.
I was audited by the California tax agency. I did have an error--I mistyped the code of the tax credit, so they thought I was claiming some solar energy tax credit instead of the Other State Tax credit (apparently, the line on the tax form that says the name of the credit doesn't matter; all that matters is that three-digit code). The sad part is the first I heard of the audit was when I got a letter saying "you owe us $700 ($450 in unpaid taxes, the rest in interest), pay us NOW or we will garnish your wages."
Considering that anyone who actually looked at the tax packet should have figured out immediately that the only fault was a mistranscription in the code, they must have wasted quite a bit of money to gain back ultimately nothing.
I got a scary letter from a former state I lived in saying "you didn't pay any taxes for the the year X, pay us YYYY + 20% immediately", when I had actually left the state right before the start of X, and returned shortly after X.
Thankfully I had records and an accountant, but a very stressful situation to find yourself in.
Cities do that as well. I moved out of a city, closed out my taxes but ten years later they sent a threatening letter and tax assessment. My family runs a tax firm in that city so it was just a simple email for me to make it go away but most people would have to prove they left the city. Have fun. They did this to me for years after I left the city but the ten year anniversary was totally rediculous.
They wasted about 25 cents, or the cost to print up the computer-generated notice and send it out.
A notice is not an audit. If you're being audited, you'll know. The IRS examiner auditing you will make sure you know who he/she is, and they will be your primary contact with the agency for several months.
I was audited for a mistake in the $1,000 range. I had forgotten to report one of the many 1099 forms I received one year. It seems like the IRS has systems in place to detect this kind of mistake. I paid the ~$300 I owed and went on my way.
Too bad I wasn't your client, you'd have experienced one. :)
I owned a business that was randomly selected for an NRP audit a few years back. Spent 35 grand on CPAs and defense. After 4 months of an "up to the elbow" exam of our books, received this from the IRS:
"After our audit, we are making the following changes to your return:
"
...that was it. Nothing. No changes. Not even embarrassment or "lol just doing my job, them's the breaks kid" attitude. A total goat rodeo, the entire process. Imagine having to justify every cent on the books in OR out -- for a $2MM revenue business -- 3 years after the return was filed. Seriously impossible. Worse, just before the above letter, we were offered a settlement offer from the IRS for $20K -- to make them just go away. We declined.
As a funny anecdote, I know one person who did so much wrong with his taxes for a high value personal business that he received a check from the IRS each of the 3 times he was audited after the business folded. I don't know the specifics, but apparently, his business was some sort of an anomaly and the IRS was sure that he underpaid his taxes for a number of the years the business was running. He was sort of clueless about his expenses, so when the IRS audited, they ended up finding a whole lot of expenses that he hadn't properly accounted for and when he refiled, he got a rebate check. This happened 3 times before the IRS finally accepted that his taxes were correct.
Sounds like a client base bias. Since I know two major 'red flags' for audits which are completely innocent like self-employment and making lower quarter six figures in one case resulting in multiple failed audits. Even in the sense that cost money recalculations showed that taxes were overpaid. Cynically perhaps some of them operate on 'predator logic' of going after juicy enough but lacking dedicated accountants then perhaps petty spite once they already were made fools of by. There are some definite rotten apples within the IRS.
My grandmother just helped a guy who was being harassed for $60k he did not owe. He was about to just pay it but she said "screw that" and ended up getting him cleared. $0
Does spending more on the IRS have increase those externalized costs?
Spending more, ideally, should also mean spending on simplification. Making it easier for both people and businesses to pay their due, and costlier not to. Reducing the externalities, not increasing them.
There is that cost. On the other hand, there is money, time and energy spent on facilitating tax fraud because the perception is that you can get away with it.
The same can be said about speeding tickets, that money spend on enforcement comes back. But tax collection isn't business. This is law enforcement, or at least enforcement of laws. We shouldn't judge it on its profitability. Like speed enforcement, it is something that has to be done not just for those who are caught, but to deter all the others who probably won't be caught.
There are evil implications should we judge the effectiveness of tax collectors purely on the basis of cost/gain. We don't want a situation where the IRS only ever goes after easy cases. The people who hide the most money have, by definition, the resources to hide it well. If you want the IRS to go after the big fish, they need the budget to do so. We don't want them resorting to drift-net tactics, only scooping up the easy/small fish.
No, because then you end up squandering enormous resources on trying to make sure everyone is obeying the law, and your end result is far less desirable than if you had relaxed enforcement. What you're proposing is basically a police state; those never work out well in practice.
However, you have a good point about going after big fish, because those are the ones where the gov't is losing the most money, most likely. Some drift-net tactics are OK, where you use some random spot-checking to make sure the smaller fry aren't cheating badly and scare the rest of them into being honest, but don't expend a lot of resources on it because you won't get back the money you spend. But yes, I agree, going after the big fish should be the primary strategy, even if it is much more difficult.
>> What you're proposing is basically a police state
I take it you have never lived in a "police state". I have (middle east). Deterrence is how law works in a modern society. We cannot catch everyone and so must rely on a bit of fear. Fear of being caught it why we obey laws with which we disagree. I personally may think the speed limit on a road is ridiculously low. But that limit wasn't created by the police. I obey it because I don't want to pay a fine, not because I live in a police state. In a police state rules don't matter. I'd get the speeding ticket regardless of how fast or slow I was driving.
A real police state is one where the police both enforce and write the rules, where they are no longer under the control of legitimate government. The IRS is nowhere near that. It remains totally subservient to the elected government. Its budget comes from an external source. Allow it to self-fund and that leash is gone.
What I'm claiming is that excessive enforcement isn't worth the effects that come from it. The "bit of fear" you cite doesn't require extreme enforcement, only a certain amount, so that anyone breaking the rules knows they're gambling the odds and might get caught.
When Evasion is ~40 times the IRS budget we are a long way from over enforcement. Not paying your taxes is stealing from the general public, that’s really not acceptable behavior.
> Deterrence is how law works in a modern society.
I think there's also a sense of fairness. I wouldn't like obeying a law if I knew everybody else is ignoring it and getting away with it. I'd be happier following it if I thought everybody else was. You wouldn't want to be the only bottlenose dolphin that didn't back-date your stock options.
What we're judging isn't whether we should do it because it's profitable, but how plausible claims are that we needed to cut the budget because "everyone is tightening their belts." A look at the numbers shows that explanation will not wash.
That seems surprisingly low to me. My dad used to be a tax officer in Germany and even in a bad year he'd bring in €10,000,000+. One year it was closer to half a billion.
$1 -> $1.2 seems honestly barely worse the effort considering the cost on every company that gets audited, guilty or not.
Was your dad working solo on everything he did? Did his collection numbers reflect teamwork?
You're comparing revenue on a per-producer basis to a much different number. There are support staff, programmers, benefits, buildings, etc. which all must be paid for too.
For what it's worth, this article from 2011 noting a 4:1 ROI. I'm not sure where 1.2 came from, but I was unable to find it after searching.
_ The Treasury estimates, for example, that every additional $1 invested in IRS tax enforcement beyond current levels would yield $4 in increased revenue
The point is that more enforcement deters tax evasion so effectively that it saves money, so there's no sound fiscal reason to cut the budget for tax enforcement. The entire point of slashing the budget is to make it easier to commit tax fraud.
I think you've committed oversimplification. If this relation was absolutely true then feed as much money as you can and get 20% profit. If it isn't then your point has no real basis.
This metric can be used only as the performance measurement not it's predictor.
"What people don't understand about my job is that chances are you are not the person I'm examining. I examine doctors who expense three Cadillacs, insurance brokers who claim jet skis for business use only, and real estate agents who haven't paid taxes in eight years. The public doesn't realize that tax auditors are the only people between a balanced effective tax rate among all social classes and the bourgeoisie stealing what isn't bolted down. Don't kid yourself; these people are stealing from you. This money helps pay for schools, roads and with any luck can keep mortgage interest deduction alive for a few more years. I read a report on NPR that Italy has 40% of its population evading taxes. Imagine our debt crisis if we had the same problem. (Our tax evasion rate is estimated between 8-18%).
So if you're one of those "Joe the Plumber" people who take time out of work to throw teabags at me on my way into the office in the morning: You are the middle class! I'm helping you!"
Attempting to frame it as class warfare is a perfect way to lose support from a significant portion of the US population.
"I'm Robin hood stealing from rich people" doesn't work for the people on the right who are more likely to complain more about the irs in the first place.
Joe the plumber who runs his own plumbing business and doesn't pay taxes is going to get audited as well and he's (rightfully) going to lose despite his position in the middle class.
This isn't "the bourgeois" stealing, it's anyone who deducts significant amounts of money, which is a broader/simpler message everyone can get behind. Every small business/individual contractor has the means to illegitimately write off tens of thousands of dollars.
It worked up to this newest incarnation of right wing politics. The IRS should go after the big cheese because a) they're more often stealing from us and b) the return vs cost of audit is maximized.
What sort of "promoting" of IRS tax audits and fraud cases do you think should be done?
The quote frames it as class warfare, then points out that 40% of Italy is evading taxes. So...40% of Italy is upper class? Sounds like something we should move to so we can have 40 times more people than the current 1%.
What people really don't understand is how much can be expensed by people who make a lot of money and structure their income as a business entity first.
Meals, travel, vehicles, basically everything a regular person has to spend out of their own income to survive, these people get away with expensing as business expenses.
The core problem is that businesses have to pay taxes on net while you and I have to pay taxes on gross. We need to equalize this. Either both should pay taxes on all money that goes through them (and have to change market prices accordingly) or people should only pay taxes on money they don't use in pursuit of living.
Does it matter? Those salaries are taxed. Indeed, all expenses are taxed because every dollar of expense represents a taxable gain at some point in the supply chain.
If I have expenses that cost me $150K this year but I only make $100K I often have to pay taxes. Some expenses are deductible in certain cases, but even then it isn't equivalent.
All I'm saying is that both should be treated equally, which ever option that ends up being.
You are right in that they aren't equal. The things I need to survive I'm taxed on the money I make to spend on them and then I'm taxed when I spend on it. The things a business needs to make more money, it isn't taxed on at all. If anything, the system is the opposite of what it should be. This is a way that the tax code insanely favors the wealthy, and it is so drilled into our subconscious that many see it idiotic to even question the way things currently work.
This would be chaos in most industries, where margins are razor thin. And it would be a trade nightmare, as low margin industries would just move all production offshore.
For the thin margins, imagine a company that makes 2%. But they pay 30% tax. Suddenly they’re at a loss on every sale due to tax. So thry raise price. Except every component in their chain alos does this.
You’d probably also see a lot more vertical integration. No sale, no tax. Whereas separated companies have to pay tax every time thry deal withan outside company.
But the world is not vertically integrated. So this tax plan wouldmforce america to drop best practices and go for extremely inefficient methods.
Your plan for fairness would almost certainly destroy the economy.
The middle ground we have now is personal exemptions and the standard deduction, which gives single individuals $16,000 in Federal tax-free income. Which is fair-ish. Certainly it's more fair now than when only upper-middle class people with mortgages and high property taxes were able to itemize.
You would either need to massively cut government services, or massively increase tax rates. Since only savings would be taxed, this would increase spending. In fact, you could even get the government to pay you money if you ran up extra expenses using debt and incurred a loss.
There is a reason no country in the world does OP’s proposal, or yours. They would turn things topsy-turvy.
This seems wrong. I would think you would only be able to deduct basics like food and housing, maybe vehicles, with limits. Admittedly, that does get complicated really fast. In fact, as a pastor technically working as a contractor, my dad was able to deduct housing expenses for his whole family. It's not entirely unheard of.
Also, I don't believe getting the government to pay you by deliberately incurring a loss works for business, so I don't see why it would for individuals.
You can carryforward the loss to future years to avoid taxes. You're right, it's not an instant payment, just a deferral.
It would indeed be an enormously complicated system. And for what benefit?
(Americans actually have one of the most deduction heavy tax systems in the world btw, including mortgage interest. In Canada we have almost no deductions of expenses from income tax. So our taxes are very simple. Complex taxes favour the rich, and require auditors)
So a federal B&O scheme might work if the rate was low enough. Auditing a business would be massively simplified, no need to carefully check expenses and write-offs to calculate net income. Compliance would be much easier. The question is would gross income taxation create a bigger pie, and would that pie be big enough that a low rate would substantially tax revenues.
Leaving aside other complaints, on a nuts-and-bolts level, what is your tax law-definition of the 'pursuit of living'? Does this mean I'm only taxed on what I save? (time to pursue another solid gold toilet to... live on!) Or do the prince and the pauper alike get to deduct the same 'pursuit of living' credit and pay tax any remainder?
In particular the one that aggravates me is childcare. A lawyer running their own practice can deduct their childcare as a cost of doing business. I, as a salary worker who also needs childcare as a cost of working, cannot. (Aside from the very limited DCFSA)
Individuals shouldn't be able to misrepresent personal expenses as business costs, but the amortization of a $500,000 crane also isn't all that similar to needing to eat.
Meals, travel, vehicles, basically everything a regular person has to spend out of their own income to survive, these people get away with expensing as business expenses.
That's actually not true, and is in fact the point of the IRS auditor. Namely, that people are expensing these items as business deductions when they are in fact normal living/lifestyle expenses.
A partner at a law firm can easily get away with expensing 1 of their 2 luxury cars, 50% of their meals, 50% of their travel, their home computers and software, etc. Car companies even make SUVs and Crossovers that are slightly over 6000lbs so they can be deducted as 'working' trucks for white collar workers.
When I was working as a consultant, I was able to expense most of this. The flip side is that you have to pay FICA, which is an extra 15% or so, which practically speaking, cancelled the deductions out.
But it's not; For an employee, the employer is paying 1/2 of it and the employee is paying half of it; At best, if we discount fungibility of salaries/costs for market salaries; it's an additional 7.5%
The point of the article was that they no longer have the resources to prosecute those people as a result of budget cuts.
However, those people are not getting away with expensing them, because the IRS has no statute of limitations on going after these sorts of issues (income tax returns which are fraudulent are not subject to a statute of limitations, which means that the related crimes aren't either). Basically, it's a timing issue of when they get punished for the tax evasion, though at some point the backlog gets big enough that they might have to triage out the smaller cases.
>Don't kid yourself; these people are stealing from you.
This seems like language specifically crafted to encourage an us vs. them view of taxation. Also, I notice the examples given are upper middle class/lower upper class, and not the top of top that evade the most taxes. Often legally, since there are so many massive tax loopholes that the richest get to legally avoid paying a share in proportion to the government goods and services they consume.
True, but our budget already accounts for the super-wealthy using the loopholes. It doesn't account for the merely-very-wealthy committing outright tax fraud.
The thing is, that difference between outright tax fraud and loopholes is having enough money to lobby and for lobbying to be worthwhile.
On some level it feels like punishing the poor for trying to emulate the wealthy, and the merely very wealthy (an interesting way of putting it) like lawyers and doctors often fall into the poor when you break it down to those who are truly rich or not.
No, the difference between outright tax fraud and loopholes is that one is knowingly against the rules and the other one is taking advantage of the rules.
On some level it feels like punishing the poor for trying to emulate the wealthy,
Let's get things straight: they're being punished for breaking the law, or more specifically, for fraud. The fact that they want to emulate the wealthy is irrelevant.
When the IRS is enforcing a corrupt law, it makes people who fear the corrupt law being enforced against them view the IRS as the bad guys. That it is the law only hurts the IRS's position in this. Until the IRS makes the truly wealthy pay their fair share, not their legal share, they will find themselves in a position lacking moral authority.
Put another way, yes those loopholes are legal, but so is reducing the IRS's budget until they aren't able to operate at all.
>IRS can't ever be in a position of moral authority
You are right, which is part of the reason why there is a non insignificant part of the population that wants to disable the IRS and sees them as a threat.
Same as a police officer who is sent as set of drug laws to enforce that are crafted specifically to target minorities. The only winning move is to not play, and those who don't quit begin to be seen as opponents regardless of how much the individual doesn't like the laws they are enforcing. Regardless of if you think this is a correct or incorrect way to view things, one has to accept that this does happen and it explains why entire communities turn away from the police and engage in self enforcement of their own rules and begin to craft policies such as 'snitches get stitches'.
The IRS is not enforcing a corrupt law, and the story Fox News doesn't want you to know about the IRS' conservative "charity" crackdown is that all of those charities were openly violating tax laws to the private inurement of their executives and challenging the IRS to do something about it, knowing that they had members of the House GOP in their pocket to prevent IRS action.
I wasn't speaking about that case. I was talking about how the tax law is currently written to favor some groups at the expense of other groups. And to be honest, this doesn't even have to be true. Only the appearance of it has to be seen by enough of the population for the reaction I describe to happen. Even if you think the tax law is completely fair, you would have to admit that significant portions of the population are not in agreement, and their views of the IRS will be driven by their views of the tax law.
Practically speaking, it's probably difficult for them to go after the top-of-the-top. At the low-end, I doubt many people under the 90th percentile have the ability to evade taxes, since most of their income likely comes from wages. Even if they do modify their W4 to reduce the amount taken automatically, the IRS probably has a very efficient system for finding them and forcing them to pay.
This leaves that middle ground of people who don't earn traditional wages, but also don't earn enough to employ fancy tax evasion schemes. Instead, they literally break the law and hope to evade justice long enough for it not to matter.
The people at the very top don't evade taxes. They structure to minimize and evade them. Tax evasion is for those who aren't clever enough - or spendy enough - to do it with the legal tools already available.
The key lies in the awkward distinction between tax evasion and using the tax system to minimize your tax liability. They look pretty damn similar to most people. But they're different in a very important way to the IRS - evasion is illegal and minimization is not.
And indeed, many of the examples given will likely be settled under audit instead of criminal cases; Wrote off jet skis? Oh, that isn't allowed, but I used them for business meetings, to show clients 1st hand example policies; limited criminal intentionality there.
Well, maybe if you stopped using the roads, or the airways, or the financial system, or doctors and hospitals, or anything else that is either funded by or functions efficiently and safely because of government regulations, it might be a fair deal.
But since you can't live within a country without taking advantage of the benefits the government provides, such as rule of law and a living space that's relatively safe and has legal recourse for problems, good luck getting them to stop "stealing" from you. I guess you could move out to remote wilderness region, or some country with basically no government oversight. Somehow I doubt you'll be happier there, nor that you'll be able to make nearly as much money there as you would in a country with a strong government, even if none of the money us taxed at all.
Taxes are the price we pay to support civilization, and as such it's an investment in our own current and future well-being, financial and otherwise. It's the implicit agreement you accept by continuing to live here. You can either lobby for a change, or attempt to move somewhere with different laws, but it's not theft, and acting like it is is willful ignorance of the reality we live in.
Roads are federally funded from the general fund as well as from the insufficient gas tax.
Entitlement programs like Social Security, Medicare, and Medicaid are funded mostly through individual line items, and slightly through indirect means, such as interest paid to the programs by their bond holdings.
Income taxes fund so much. You can't say it "funds only ..." because it funds almost everything. Sometimes directly, such as the military, but often times, it's indirect, such as college professors who receive grants from the NSF.
Funny, the federal income task pays for none of the items in your list. Roads are mostly state, airways are mostly private (and air transport is much cheaper and safer since deregulation), doctors and hospitals are outrageously expensive, a lot of Americans wish their taxes went towards that, they don't in any beneficial way. And...the financial system? I'm not sure what that means in this context but yea, government regulations sure saved that one from going to the shitter.
Why is it that any criticism of our current tax regime is instantly expanded to AGAINST ALL TAXATION. I'm more than happy to pay taxes I feel are reasonable in amount and directly beneficial in some way. The federal income tax is not that. Not even close. It's a money black hole that goes towards god knows what, and is a huge drag on the middle class, the people Mr. IRS in the quote is supposedly helping.
What are you reading exactly? Here's what I posted, it's short:
> Oh yea? Stop stealing 30% of my income if you really want to be helpful.
That means a ~30% levy on middle class income is pretty outrageous if that is the class of people you are intending to help. And the income tax is hardly the only federal tax. The state income tax is relatively minor compared to federal, and roads are funded via gas taxes and tolls, i.e. use taxes, which is far more direct in figuring out where your money is going. Sure the feds will kick in grants to assist with roads et al, but if that were all they were spending their income tax haul on they would not need such a high percentage to begin with.
And to be clear, all taxes are confiscatory, by definition. If you don't pay you risk going to jail, and if you resist that it will be at gunpoint. Whether one thinks that confiscation is reasonable and beneficial overall is another issue. But it's not like you can just opt-out of taxes, or death.
I certainly read "stop stealing 30% of my income" as saying that:
- the government takes 30% of my income, and
- that's stealing.
To many of us, that was the plain meaning of your exact words. "All taxation is stealing" seemed the clear not-quite-stated implication.
> And to be clear, all taxes are confiscatory, by definition.
Which definition? dictionary.com says:
> 1. to seize as forfeited to the public domain; appropriate, by way of penalty, for public use.
> 2. to seize by or as if by authority; appropriate summarily.
The first (primary) definition has an element of forfeiture or penalty; the second does not. All taxes are confiscatory by the second definition; not by the first. When you say "all taxes are confiscatory", people are apt to hear "confiscatory" in the first sense, which makes your statement wrong by definition. It also may make it claiming more than you intended it to claim.
A better alternative definition is provided by thefreedictionary.com: "2. Being or imposing an excessive or unreasonable tax or cost: confiscatory taxes; a confiscatory police." If you Google the terms "confiscatory taxation" this is the typical denotation.
I really think you are splitting hairs with these definitions. Different dictionaries have different phrasings of definitions and different "primary" ones. Most talk about taking property or appropriation by authority/government, which is exactly what taxes are.
This is all besides the point, because what I mean when I say "stealing" is "the government is taking a large portion of my income and I am receiving little to no benefit from it, and yet I am not allowed to stop paying for the lack of return for my money. In fact the first link for "confiscatory" on google provides the definition "Being or imposing an excessive or unreasonable tax or cost". That's what I see the federal income tax on the middle class as, excessive and unreasonable. Not that all taxes are necessarily bad, but that one, and the sheer amount it confiscates, certainly is.
If the claim is "the federal government is too big and expensive", then I agree with you. I think many people do. Even more would agree with you if the taxes were actually high enough to pay for all this government, instead of running a deficit every year.
The Highway Trust Fund is still a thing, and (IIUC) pays for the federal highways. The states pay for the state highways. There are probably more state highways, but the most important ones (and the most used ones) are federal.
> airways are mostly private
The planes are mostly private. Airports aren't. Neither is the air traffic control system.
I wonder how much of the chunk of federal income tax goes towards airports, rather than state funds. Regardless, if they were just paying out infrastructure costs, they would not need to take such an absurd portion of the income of the people they are supposedly trying to help. In no way does the mere existence of roads and planes prove the need for the automatic confiscation of tens of thousands of dollars a year from the fruits of a middle class person's labor.
Well, I said that airports weren't private. I didn't say that airports were federal; I'm not sure whether the majority are federal, state, or city. They sure aren't private, though.
> Funny, the federal income task pays for none of the items in your list.
It is impossible to completely separate the functioning of the current system from the way it is funding. Every single thing in the United States benefits at least in part by functioning within the system as a whole, and that includes the legal and regulatory framework.
> Roads are mostly state,
A large amount of that state funding is from grants to the state by the federal government.
Updated data from the Census Bureau's 2015 Annual Survey of State Government Finances published last week indicates that federal aid made up nearly a third of all states’ general fund revenues in fiscal year 2015. The single largest line items in states’ budgets include federal funding for transportation, Medicaid and other social assistance programs. ... The federal government distributed $41.6 billion in roadway infrastructure and highway safety funding to states in fiscal 2015.[1] The article also includes a handle by-state breakdown of funding received for transportation, and the percentage of that states transportation spending that results in.
> airways are mostly private
But the FAA regulates how planes fly, and what safety precautions must be taken.
> doctors and hospitals are outrageously expensive
But there are rules about what they must and must not do, and how drugs and treatments must be verified and what can be said about them.
> I'm not sure what that means in this context but yea, government regulations sure saved that one from going to the shitter.
It means some protections are better than none. There's a difference between being in the toilet and being flushed into the sewer.
> Why is it that any criticism of our current tax regime
Classifying taxation as theft is not "any criticism". If you use extreme, and in my eyes unjustified rhetoric, expect it to be called out.
> I'm more than happy to pay taxes I feel are reasonable in amount and directly beneficial in some way.
...and that's supposed to have been expressed by "Stop stealing 30% of my income"?
Peace, dude. That's not what I said. I agree with you on the topic of the federal income tax. I responded to your question about slippery slope arguments ("AGAINST ALL TAXATION"). These are similar to the "why don't you go and live in Somalia" stuff we get sometimes. Maybe I should have described such arguments as "totalizing" rather than "totalitarian"...
I've always wondered if decreasing the budget of the IRS enables political money laundering. Since there is less auditing of suspicious accounts, there is more room for nefarious activity.
> Starting in 2011, Republicans in Congress repeatedly cut the I.R.S.’s budget, forcing the agency to reduce its enforcement staff by a third.
Yes, but money laundering probably isn't the type of nefarious activity that the GOP is most interested in accommodating. (With one very high-profile exception.)
US election laws are pretty much swiss cheese already when it comes to the various ways dark money can be funneled and redirected, it may make it easier but you need to try really hard to actually get arrested for campaign donations... and if you do you might just get pardoned anyways.
True, although you might have more money to donate, thanks to the tax fraud, which you can then direct towards politicians who pledge to further cut the IRS' budget.
I think that's absolutely a thing, especially at the top levels of wealth. A favorable rewriting of the tax code that saves you a few hundred million could be repaid with a portion of that going to fund the politicians who helped push it through, it's like a win/win!... except that you're pushing all those costs off onto other people.
IRS enforcement budget seems to always be cut under Republican administrations. Which when you think about it, is kind of a like backdoor tax cut. Go ahead, skimp on your taxes. We're not looking.
Kind of strange they had a whole article about decreasing fraud cases, and don't mention the IRS had to apologize for aggressive targeting of conservative groups in October 2017. Maybe that's why their budget got cut?
"In October 2015, the Justice Department notified Congress that there would be no charges against the former IRS official Lois Lerner or against anyone else in the IRS. The investigation found no evidence of illegal activity or the partisan targeting of political groups and found that no IRS official attempted to obstruct justice”
They got their budget cut in retaliation for (perceived) partisan targeting by an administration on the same side as the groups they were auditing. That doesn't mean these groups weren't committing fraud, or just that they were committing fraud at a rate out of line with any other randomly selected group, just that the people who control the IRS's funding wanted to send a message to the IRS about how they should behave.
No, it was the usual right wing noise machine at work. More than 100 left-leaning groups were investigated as well. And what is completely ignored is that the root of it was a spike in PACs claiming to be charity organizations in order to hide their donor lists.
"The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses."
This is a false statement, the constitution has provisions for amendments in it, stating that income tax wasn't accounted for in the original version of constitution and amendments is accurate, but stating that it violates the constitution is incorrect.
But it was amended (amendment 16) which is constitutional given Article V
> The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.
EDIT: for those wondering the part that was unconstitutional was that the income tax is not apportioned with respect to representation.
Though part of me wonders if we would not have a more equitable system by apportioning the federal tax burden out to the states to collect for it. It'd certainly simply the lives for a bunch of Americans.
> apportioning the federal tax burden out to the states to collect for it
Under the Articles of Confederation the Federal government was funded (or not funded, as was the case) by the states directly. It's the biggest reason we ended up with a self-funded Federal government under the subsequent Constitution.
Fun fact: the Sixteenth Amendment does not give Congress the right to tax income; Congress already had that right. The sole purpose of the Sixteenth Amendment is to override the Supreme Court's Pollock decision, which held that a tax on rental income was effectively a tax on property, and as a property tax, it needed to be apportioned to the states in accordance with population.
So the Sixteenth Amendment isn't "we can collect income tax", it's "we can do whatever we want with collected income tax." Which makes the tax protestors' arguments that the Sixteenth Amendment wasn't actually properly passed utterly hilarious.
Let's take a moment to examine a similar incentive system and hopefully learn from it: Civil asset forfeiture by police, who can seize money or other assets and use them for the department.
So far, the results have been widespread abuse, especially targeting people who don't have the means and clout to fight back using the legal system.
What you propose creates the same incentives that pervert seized-asset finding of police: Big, easily-siezed assets become the priority, rather than gravity of the original offense.
That would create the exact same environment that municipalities create when they incentivize police officers to issue tickets by allowing them to keep the fees they collect.
Are you suggesting the IRS could start coming up with fraudulent charges for tax crimes and forfeit assets from individuals and companies to... well, hire more people to create more made-up charges and continue the cycle? And nobody would notice nor do anything about it? Or even happen to ask for the paper trail pointing to the original evidence? And there would be no judicial system that could step in should the whole agency start behaving irresponsibly?
Alternatively, the whatever governing body that currently keeps IRS in a budget could just hand off extra money if IRS is recovering more money than it spends. But based on your logic wouldn't that also give the IRS the incentive to fabricate more tax crimes? If they knew their budget would increase the more they recover?
The corollary to not funding IRS based on how much they can recover would be to systematically reduce the IRS budget each time they recover a sum of money from owed taxes. Only then the IRS are most certainly not incentivized to go after and to recover taxes left unpaid.
When people ask what happens when govt debt and deficits skyrocket?
This.
There will be more crime. Or at least, laws will be enforced disproportionately on vulnerable because its the vulnerable who don't have the resources to fight them.
I find it crazy that the IRS is so underfunded and every year for some reason elected officials / citizens keep pushing this narrative of "The IRS is evil!". How is keeping department continuously underfunded going to lead to any sort of improvement? Imagine if roads are full of potholes; are you just going to cut the budget of the Department of Transportation to fix the problem?
The only ones who benefit from this state of affairs seem to be people who have no intentions of filing taxes or can afford to hire other people to do it. Meanwhile the average Joe has to deal with hour long wait times, online services that do not work, month long correspondence chains that lead nowhere. Obviously business like Quicken, HR Block, etc make a lot of money off this inefficiency since they can offer a service charge to save you the headache.
It is a shame because in my experience as an accountant some local/state department of revenues are really well run and super convenient.
It is also a shame because a lot of talented people work in the IRS forensics department which in my opinion is one of the coolest jobs out there.
> How is keeping department continuously underfunded going to lead to any sort of improvement?
It doesn't, and they know that. A classic tactic is to underfund a thing you don't like, then point to it failing as an excuse for killing it outright.
A feature gets a crippled UI that makes at awkward and hard to use or even discover. Then a few months later the feature is removed because stats are showing it doesn't get used.
> A classic tactic is to underfund a thing you don't like, then point to it failing as an excuse for killing it outright.
I've seen this assertion made online a few times, but have never seen any actual examples. Are there examples that you're aware of at the federal level? Or maybe a couple at the state level? Just curious...
The most recent, high profile example would be conservatives handing out egregious tax cuts which are going to be used to balloon the federal deficit and argue that Social Security and Medicare will need to be cut "because they can't be paid for".
There is a currently-running attempt to do just this with the ACA. Various politicians keep ranting about how it is failing, and have made various changes attempting to speed that alleged failure along, and yet it stubbornly keeps working, more or less, and increasing in popularity.
>>I've seen this assertion made online a few times, but have never seen any actual examples.
You don't need examples when you can hear it straight out of the horse's mouth:
"I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub." -Grover Norquist, founder and president of conservative anti-tax organization Americans for Tax Reform
No one who is saying that the IRS is evil is saying that they're not doing a good enough job. They're making a claim about the value of the job itself.
In addition to selfish interests aligned against the IRS their past approach created a PR problem - they operate on bullying, dread, and provide poor customer service so naturally many who deal with them hate them. Dysfunctional for everyone but it is their chickens coming home to roost. I believe Machiavelli had some things to say about the downsides of ruling through fear.
The same thing has happened to (other) law enforcement creating downward spirals of trust in high crime areas. The solution in both of those cases is making reforms to restore trustworthiness and successful pursuit of heroic causes to get people to fund them more. Sadly said option is seldom taken.
That raises an interesting question: Can unlimited political money post-Citizens-United buy not just tax cuts, but outright national fiscal suicide in the form of abandoning tax collection?
If you're asking whether or not political systems are capable of causing their own completely predictable demise in general: history says yes, emphatically.
As far as purposefully starving your own government of all funds and then triggering a collapse of society, it sure seems like we're about to find out.
Many near future cyberpunk shows/novels feature a corporate congress that began after the government collapsed from debt overload and corporations decided to "help out" by taking over their role. Every year this seems to become more and more inevitable, it's just a natural progression of how things are going.
That seems to be the objective, yes - that's what people mean by "starve the beast", and all those people who object strongly to the existence or power of the Federal government.
Estonian tax and customs board has reduced its size by 30% over the last ten years all the while having cost of euro collected and percentage of euros collected figures trending up to the point of being in top three globally in both terms. Smart use of tech and a rock solid identity scheme help.
I just signed up for the IRS website and their password requirements are:
> Password Rules:
> 1) At least 8 characters long.
> 2) Must contain at least one numeric and one special character (!@#$%&). (and asterisks, which is ruining formatting here)
> 3) At least one uppercase and at least one lowercase letter.
My standard password pattern* has a different special character in it, so now I'm locked out for 24 hours because I can't remember what substitution/alteration I made! It kills me when "password requirements" purportedly for security are more restrictive on one site than the majority of others. I also infer the sites are rarely updated.
*I'm implementing Dashlane at work. To date, having a unique password for every site/service has felt secure.
So boot the whole problem by swapping from pull to push. Sales tax instead of income tax. Oh that's right, the banking industry relies on income tax to drive everyone into the arms of debt so we can fuel a constant swell of the aggregate money supply. Nevermind, the government is an out of control addict snorting the substance of easy money to prop up a debt ceiling that no longer exists.
Sales taxes are extremely regressive. Funding the government entirely through them would be a social disaster and they'd have to be wildly high to compensate for all the income that is being saved rather than spent.
It's not only about them being unable to assess if you reported all your lawful income. It may be more about whether they can assess whether you have no lawful income yet seem to be filthy rich. Remember Al Capone. He would have never got caught if it was not for being caught for tax-evasion.
Seems to me this is more a metrology problem than economic.
They've decreased the sampling rate of the measuring instrument, and cut down on the resolution by cutting a necessary input, (operating funds).
So it is a fairly foregone conclusion that a task which is heavily throttled by manpower and outdated infrastructure will lose efficacy, thereby generating lower metrics.
I can see a couple different ways to handle it. Some incredibly controversial.
A) Increase budget until we start seeing the point of diminishing returns getting out of hand.
B) Say screw it, make returns public record, open access to everyone, and either crowd-source or deputize people on a voluntary basis to help sift through the data to root out the worst offenders for further scrutiny by the what few meager resources remain.
Something has to give, and it is fairly obvious to me at least that the non-institutional taxpayer is getting handed the short-end of the stick.
Plus, it'll give companies a taste of what having their "personal data" all agglomerated in one place in front of God and everyone is like for your piece of mind.
No matter what happens, however, I'm not expecting much political will to actually remedy the problem due to a reticence to bit the hand that feeds that is industry donors.
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[ 3.2 ms ] story [ 261 ms ] threadSuppose the number of people cheating on their taxes remains perfectly constant, but that the IRS gets less money to pursue them. Then there will be fewer tax fraud cases, but the exact same amount of tax fraud.
> The result is huge losses for the government. Business owners don’t pay $125 billion in taxes each year that they owe, according to I.R.S. estimates. That’s enough to fund the Departments of State, Energy and Homeland Security, with the National Aeronautics and Space Administration tossed in for good measure. Unlike wage earners who have their income separately reported to the I.R.S., business owners are often on the honor system.
Tax Evasion is around 40 times the IRS budget and gets worse with lowered enforcement as the cost / benifit heavy favors evasion.
I think the person you're replying to means "violated the tax code in a minor and non-malicious way" whereas you mean "literally did not violate the tax code at all".
That's for a reasonably typical (and by no means aggressive tax positioned) MFJ + 2 kids return.
Considering that anyone who actually looked at the tax packet should have figured out immediately that the only fault was a mistranscription in the code, they must have wasted quite a bit of money to gain back ultimately nothing.
Thankfully I had records and an accountant, but a very stressful situation to find yourself in.
A notice is not an audit. If you're being audited, you'll know. The IRS examiner auditing you will make sure you know who he/she is, and they will be your primary contact with the agency for several months.
I owned a business that was randomly selected for an NRP audit a few years back. Spent 35 grand on CPAs and defense. After 4 months of an "up to the elbow" exam of our books, received this from the IRS:
"After our audit, we are making the following changes to your return:
"
...that was it. Nothing. No changes. Not even embarrassment or "lol just doing my job, them's the breaks kid" attitude. A total goat rodeo, the entire process. Imagine having to justify every cent on the books in OR out -- for a $2MM revenue business -- 3 years after the return was filed. Seriously impossible. Worse, just before the above letter, we were offered a settlement offer from the IRS for $20K -- to make them just go away. We declined.
Spending more, ideally, should also mean spending on simplification. Making it easier for both people and businesses to pay their due, and costlier not to. Reducing the externalities, not increasing them.
There are evil implications should we judge the effectiveness of tax collectors purely on the basis of cost/gain. We don't want a situation where the IRS only ever goes after easy cases. The people who hide the most money have, by definition, the resources to hide it well. If you want the IRS to go after the big fish, they need the budget to do so. We don't want them resorting to drift-net tactics, only scooping up the easy/small fish.
However, you have a good point about going after big fish, because those are the ones where the gov't is losing the most money, most likely. Some drift-net tactics are OK, where you use some random spot-checking to make sure the smaller fry aren't cheating badly and scare the rest of them into being honest, but don't expend a lot of resources on it because you won't get back the money you spend. But yes, I agree, going after the big fish should be the primary strategy, even if it is much more difficult.
I take it you have never lived in a "police state". I have (middle east). Deterrence is how law works in a modern society. We cannot catch everyone and so must rely on a bit of fear. Fear of being caught it why we obey laws with which we disagree. I personally may think the speed limit on a road is ridiculously low. But that limit wasn't created by the police. I obey it because I don't want to pay a fine, not because I live in a police state. In a police state rules don't matter. I'd get the speeding ticket regardless of how fast or slow I was driving.
A real police state is one where the police both enforce and write the rules, where they are no longer under the control of legitimate government. The IRS is nowhere near that. It remains totally subservient to the elected government. Its budget comes from an external source. Allow it to self-fund and that leash is gone.
I think there's also a sense of fairness. I wouldn't like obeying a law if I knew everybody else is ignoring it and getting away with it. I'd be happier following it if I thought everybody else was. You wouldn't want to be the only bottlenose dolphin that didn't back-date your stock options.
You're comparing revenue on a per-producer basis to a much different number. There are support staff, programmers, benefits, buildings, etc. which all must be paid for too.
For what it's worth, this article from 2011 noting a 4:1 ROI. I'm not sure where 1.2 came from, but I was unable to find it after searching.
https://www.cbpp.org/research/federal-tax/irs-funding-cuts-c...
_ The Treasury estimates, for example, that every additional $1 invested in IRS tax enforcement beyond current levels would yield $4 in increased revenue
This metric can be used only as the performance measurement not it's predictor.
https://www.mckinsey.com/industries/public-sector/our-insigh...
So if you're one of those "Joe the Plumber" people who take time out of work to throw teabags at me on my way into the office in the morning: You are the middle class! I'm helping you!"
https://www.theatlantic.com/business/archive/2011/09/what-pe...
"I'm Robin hood stealing from rich people" doesn't work for the people on the right who are more likely to complain more about the irs in the first place.
Joe the plumber who runs his own plumbing business and doesn't pay taxes is going to get audited as well and he's (rightfully) going to lose despite his position in the middle class.
This isn't "the bourgeois" stealing, it's anyone who deducts significant amounts of money, which is a broader/simpler message everyone can get behind. Every small business/individual contractor has the means to illegitimately write off tens of thousands of dollars.
But I'll add that every small business/contractor has the right to write off a lot of things, or portions of things that they use for business.
What sort of "promoting" of IRS tax audits and fraud cases do you think should be done?
Why are crimes for some people not crimes while crimes for others punished so harshly? How is that not unfair already?
Why? That's exactly what it is.
Meals, travel, vehicles, basically everything a regular person has to spend out of their own income to survive, these people get away with expensing as business expenses.
All I'm saying is that both should be treated equally, which ever option that ends up being.
For the thin margins, imagine a company that makes 2%. But they pay 30% tax. Suddenly they’re at a loss on every sale due to tax. So thry raise price. Except every component in their chain alos does this.
You’d probably also see a lot more vertical integration. No sale, no tax. Whereas separated companies have to pay tax every time thry deal withan outside company.
But the world is not vertically integrated. So this tax plan wouldmforce america to drop best practices and go for extremely inefficient methods.
Your plan for fairness would almost certainly destroy the economy.
The middle ground we have now is personal exemptions and the standard deduction, which gives single individuals $16,000 in Federal tax-free income. Which is fair-ish. Certainly it's more fair now than when only upper-middle class people with mortgages and high property taxes were able to itemize.
There is a reason no country in the world does OP’s proposal, or yours. They would turn things topsy-turvy.
This seems wrong. I would think you would only be able to deduct basics like food and housing, maybe vehicles, with limits. Admittedly, that does get complicated really fast. In fact, as a pastor technically working as a contractor, my dad was able to deduct housing expenses for his whole family. It's not entirely unheard of.
Also, I don't believe getting the government to pay you by deliberately incurring a loss works for business, so I don't see why it would for individuals.
It would indeed be an enormously complicated system. And for what benefit?
(Americans actually have one of the most deduction heavy tax systems in the world btw, including mortgage interest. In Canada we have almost no deductions of expenses from income tax. So our taxes are very simple. Complex taxes favour the rich, and require auditors)
https://en.wikipedia.org/wiki/Business_and_occupation_tax#Ma...
So a federal B&O scheme might work if the rate was low enough. Auditing a business would be massively simplified, no need to carefully check expenses and write-offs to calculate net income. Compliance would be much easier. The question is would gross income taxation create a bigger pie, and would that pie be big enough that a low rate would substantially tax revenues.
https://www.inc.com/manon-defelice/ceo-mom-expense-childcare...
Individuals shouldn't be able to misrepresent personal expenses as business costs, but the amortization of a $500,000 crane also isn't all that similar to needing to eat.
That's actually not true, and is in fact the point of the IRS auditor. Namely, that people are expensing these items as business deductions when they are in fact normal living/lifestyle expenses.
A partner at a law firm can easily get away with expensing 1 of their 2 luxury cars, 50% of their meals, 50% of their travel, their home computers and software, etc. Car companies even make SUVs and Crossovers that are slightly over 6000lbs so they can be deducted as 'working' trucks for white collar workers.
If it wasn't setup as the employer paying for 1/2 of it, do you not think that most workers would want to be paid 7.5% more to pay it?
However, those people are not getting away with expensing them, because the IRS has no statute of limitations on going after these sorts of issues (income tax returns which are fraudulent are not subject to a statute of limitations, which means that the related crimes aren't either). Basically, it's a timing issue of when they get punished for the tax evasion, though at some point the backlog gets big enough that they might have to triage out the smaller cases.
This seems like language specifically crafted to encourage an us vs. them view of taxation. Also, I notice the examples given are upper middle class/lower upper class, and not the top of top that evade the most taxes. Often legally, since there are so many massive tax loopholes that the richest get to legally avoid paying a share in proportion to the government goods and services they consume.
On some level it feels like punishing the poor for trying to emulate the wealthy, and the merely very wealthy (an interesting way of putting it) like lawyers and doctors often fall into the poor when you break it down to those who are truly rich or not.
On some level it feels like punishing the poor for trying to emulate the wealthy,
Let's get things straight: they're being punished for breaking the law, or more specifically, for fraud. The fact that they want to emulate the wealthy is irrelevant.
When the IRS is enforcing a corrupt law, it makes people who fear the corrupt law being enforced against them view the IRS as the bad guys. That it is the law only hurts the IRS's position in this. Until the IRS makes the truly wealthy pay their fair share, not their legal share, they will find themselves in a position lacking moral authority.
Put another way, yes those loopholes are legal, but so is reducing the IRS's budget until they aren't able to operate at all.
This isn't the IRS's job. This isn't within their authority. Under these conditions, the IRS can't ever be in a position of moral authority.
Is it possible that you may be blaming the IRS when blame might be better apportioned elsewhere?
You are right, which is part of the reason why there is a non insignificant part of the population that wants to disable the IRS and sees them as a threat.
Same as a police officer who is sent as set of drug laws to enforce that are crafted specifically to target minorities. The only winning move is to not play, and those who don't quit begin to be seen as opponents regardless of how much the individual doesn't like the laws they are enforcing. Regardless of if you think this is a correct or incorrect way to view things, one has to accept that this does happen and it explains why entire communities turn away from the police and engage in self enforcement of their own rules and begin to craft policies such as 'snitches get stitches'.
The IRS is not enforcing a corrupt law, and the story Fox News doesn't want you to know about the IRS' conservative "charity" crackdown is that all of those charities were openly violating tax laws to the private inurement of their executives and challenging the IRS to do something about it, knowing that they had members of the House GOP in their pocket to prevent IRS action.
I wasn't speaking about that case. I was talking about how the tax law is currently written to favor some groups at the expense of other groups. And to be honest, this doesn't even have to be true. Only the appearance of it has to be seen by enough of the population for the reaction I describe to happen. Even if you think the tax law is completely fair, you would have to admit that significant portions of the population are not in agreement, and their views of the IRS will be driven by their views of the tax law.
This leaves that middle ground of people who don't earn traditional wages, but also don't earn enough to employ fancy tax evasion schemes. Instead, they literally break the law and hope to evade justice long enough for it not to matter.
The key lies in the awkward distinction between tax evasion and using the tax system to minimize your tax liability. They look pretty damn similar to most people. But they're different in a very important way to the IRS - evasion is illegal and minimization is not.
And indeed, many of the examples given will likely be settled under audit instead of criminal cases; Wrote off jet skis? Oh, that isn't allowed, but I used them for business meetings, to show clients 1st hand example policies; limited criminal intentionality there.
Oh yea? Stop stealing 30% of my income if you really want to be helpful.
But since you can't live within a country without taking advantage of the benefits the government provides, such as rule of law and a living space that's relatively safe and has legal recourse for problems, good luck getting them to stop "stealing" from you. I guess you could move out to remote wilderness region, or some country with basically no government oversight. Somehow I doubt you'll be happier there, nor that you'll be able to make nearly as much money there as you would in a country with a strong government, even if none of the money us taxed at all.
Taxes are the price we pay to support civilization, and as such it's an investment in our own current and future well-being, financial and otherwise. It's the implicit agreement you accept by continuing to live here. You can either lobby for a change, or attempt to move somewhere with different laws, but it's not theft, and acting like it is is willful ignorance of the reality we live in.
The income tax basically only funds: Interest on the debt, and Entitlement programs (welfare, etc).
Entitlement programs like Social Security, Medicare, and Medicaid are funded mostly through individual line items, and slightly through indirect means, such as interest paid to the programs by their bond holdings.
Income taxes fund so much. You can't say it "funds only ..." because it funds almost everything. Sometimes directly, such as the military, but often times, it's indirect, such as college professors who receive grants from the NSF.
Why is it that any criticism of our current tax regime is instantly expanded to AGAINST ALL TAXATION. I'm more than happy to pay taxes I feel are reasonable in amount and directly beneficial in some way. The federal income tax is not that. Not even close. It's a money black hole that goes towards god knows what, and is a huge drag on the middle class, the people Mr. IRS in the quote is supposedly helping.
You originally said that all Federal taxes were confiscatory. But in your reply above you hedged by saying that most roads, etc were state funded.
> Oh yea? Stop stealing 30% of my income if you really want to be helpful.
That means a ~30% levy on middle class income is pretty outrageous if that is the class of people you are intending to help. And the income tax is hardly the only federal tax. The state income tax is relatively minor compared to federal, and roads are funded via gas taxes and tolls, i.e. use taxes, which is far more direct in figuring out where your money is going. Sure the feds will kick in grants to assist with roads et al, but if that were all they were spending their income tax haul on they would not need such a high percentage to begin with.
And to be clear, all taxes are confiscatory, by definition. If you don't pay you risk going to jail, and if you resist that it will be at gunpoint. Whether one thinks that confiscation is reasonable and beneficial overall is another issue. But it's not like you can just opt-out of taxes, or death.
- the government takes 30% of my income, and
- that's stealing.
To many of us, that was the plain meaning of your exact words. "All taxation is stealing" seemed the clear not-quite-stated implication.
> And to be clear, all taxes are confiscatory, by definition.
Which definition? dictionary.com says:
> 1. to seize as forfeited to the public domain; appropriate, by way of penalty, for public use.
> 2. to seize by or as if by authority; appropriate summarily.
The first (primary) definition has an element of forfeiture or penalty; the second does not. All taxes are confiscatory by the second definition; not by the first. When you say "all taxes are confiscatory", people are apt to hear "confiscatory" in the first sense, which makes your statement wrong by definition. It also may make it claiming more than you intended it to claim.
This is all besides the point, because what I mean when I say "stealing" is "the government is taking a large portion of my income and I am receiving little to no benefit from it, and yet I am not allowed to stop paying for the lack of return for my money. In fact the first link for "confiscatory" on google provides the definition "Being or imposing an excessive or unreasonable tax or cost". That's what I see the federal income tax on the middle class as, excessive and unreasonable. Not that all taxes are necessarily bad, but that one, and the sheer amount it confiscates, certainly is.
The Highway Trust Fund is still a thing, and (IIUC) pays for the federal highways. The states pay for the state highways. There are probably more state highways, but the most important ones (and the most used ones) are federal.
> airways are mostly private
The planes are mostly private. Airports aren't. Neither is the air traffic control system.
It is impossible to completely separate the functioning of the current system from the way it is funding. Every single thing in the United States benefits at least in part by functioning within the system as a whole, and that includes the legal and regulatory framework.
> Roads are mostly state,
A large amount of that state funding is from grants to the state by the federal government.
Updated data from the Census Bureau's 2015 Annual Survey of State Government Finances published last week indicates that federal aid made up nearly a third of all states’ general fund revenues in fiscal year 2015. The single largest line items in states’ budgets include federal funding for transportation, Medicaid and other social assistance programs. ... The federal government distributed $41.6 billion in roadway infrastructure and highway safety funding to states in fiscal 2015.[1] The article also includes a handle by-state breakdown of funding received for transportation, and the percentage of that states transportation spending that results in.
> airways are mostly private
But the FAA regulates how planes fly, and what safety precautions must be taken.
> doctors and hospitals are outrageously expensive
But there are rules about what they must and must not do, and how drugs and treatments must be verified and what can be said about them.
> I'm not sure what that means in this context but yea, government regulations sure saved that one from going to the shitter.
It means some protections are better than none. There's a difference between being in the toilet and being flushed into the sewer.
> Why is it that any criticism of our current tax regime
Classifying taxation as theft is not "any criticism". If you use extreme, and in my eyes unjustified rhetoric, expect it to be called out.
> I'm more than happy to pay taxes I feel are reasonable in amount and directly beneficial in some way.
...and that's supposed to have been expressed by "Stop stealing 30% of my income"?
1: http://www.governing.com/topics/finance/gov-state-budgets-fe...
It's no surprise, for totalitarian arguments to be made in totalitarian fashion.
Yes, but money laundering probably isn't the type of nefarious activity that the GOP is most interested in accommodating. (With one very high-profile exception.)
Or maybe the tax cuts made people more honest since their burden got reduced?
Reminds me of the stock market. You can assign whatever causality you like to changing prices.
https://www.npr.org/2017/10/27/560308997/irs-apologizes-for-...
"In October 2015, the Justice Department notified Congress that there would be no charges against the former IRS official Lois Lerner or against anyone else in the IRS. The investigation found no evidence of illegal activity or the partisan targeting of political groups and found that no IRS official attempted to obstruct justice”
They got their budget cut in retaliation for (perceived) partisan targeting by an administration on the same side as the groups they were auditing. That doesn't mean these groups weren't committing fraud, or just that they were committing fraud at a rate out of line with any other randomly selected group, just that the people who control the IRS's funding wanted to send a message to the IRS about how they should behave.
"The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses."
https://www.irs.gov/about-irs/brief-history-of-irs
> You are the middle class! I'm helping you!"
What do you expect someone working for the IRS to say? They are unconstitutionally robbing the middle class blind?
What part of the constitution are they violating?
The original constitution.
Amendments trump the original.
> The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.
EDIT: for those wondering the part that was unconstitutional was that the income tax is not apportioned with respect to representation.
https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_Uni...
Though part of me wonders if we would not have a more equitable system by apportioning the federal tax burden out to the states to collect for it. It'd certainly simply the lives for a bunch of Americans.
Under the Articles of Confederation the Federal government was funded (or not funded, as was the case) by the states directly. It's the biggest reason we ended up with a self-funded Federal government under the subsequent Constitution.
So the Sixteenth Amendment isn't "we can collect income tax", it's "we can do whatever we want with collected income tax." Which makes the tax protestors' arguments that the Sixteenth Amendment wasn't actually properly passed utterly hilarious.
So far, the results have been widespread abuse, especially targeting people who don't have the means and clout to fight back using the legal system.
No thank you.
Alternatively, the whatever governing body that currently keeps IRS in a budget could just hand off extra money if IRS is recovering more money than it spends. But based on your logic wouldn't that also give the IRS the incentive to fabricate more tax crimes? If they knew their budget would increase the more they recover?
The corollary to not funding IRS based on how much they can recover would be to systematically reduce the IRS budget each time they recover a sum of money from owed taxes. Only then the IRS are most certainly not incentivized to go after and to recover taxes left unpaid.
That doesn't make sense either.
This. There will be more crime. Or at least, laws will be enforced disproportionately on vulnerable because its the vulnerable who don't have the resources to fight them.
The only ones who benefit from this state of affairs seem to be people who have no intentions of filing taxes or can afford to hire other people to do it. Meanwhile the average Joe has to deal with hour long wait times, online services that do not work, month long correspondence chains that lead nowhere. Obviously business like Quicken, HR Block, etc make a lot of money off this inefficiency since they can offer a service charge to save you the headache.
It is a shame because in my experience as an accountant some local/state department of revenues are really well run and super convenient.
It is also a shame because a lot of talented people work in the IRS forensics department which in my opinion is one of the coolest jobs out there.
It doesn't, and they know that. A classic tactic is to underfund a thing you don't like, then point to it failing as an excuse for killing it outright.
A feature gets a crippled UI that makes at awkward and hard to use or even discover. Then a few months later the feature is removed because stats are showing it doesn't get used.
I've seen this assertion made online a few times, but have never seen any actual examples. Are there examples that you're aware of at the federal level? Or maybe a couple at the state level? Just curious...
https://www.google.com/search?q=conservatives+starving+gover...
https://en.wikipedia.org/wiki/Starve_the_beast
You don't need examples when you can hear it straight out of the horse's mouth:
"I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub." -Grover Norquist, founder and president of conservative anti-tax organization Americans for Tax Reform
The same thing has happened to (other) law enforcement creating downward spirals of trust in high crime areas. The solution in both of those cases is making reforms to restore trustworthiness and successful pursuit of heroic causes to get people to fund them more. Sadly said option is seldom taken.
As far as purposefully starving your own government of all funds and then triggering a collapse of society, it sure seems like we're about to find out.
> Password Rules:
> 1) At least 8 characters long.
> 2) Must contain at least one numeric and one special character (!@#$%&). (and asterisks, which is ruining formatting here)
> 3) At least one uppercase and at least one lowercase letter.
My standard password pattern* has a different special character in it, so now I'm locked out for 24 hours because I can't remember what substitution/alteration I made! It kills me when "password requirements" purportedly for security are more restrictive on one site than the majority of others. I also infer the sites are rarely updated.
*I'm implementing Dashlane at work. To date, having a unique password for every site/service has felt secure.
As long as my google 2fa isn't compromised, I think this is safe.
They've decreased the sampling rate of the measuring instrument, and cut down on the resolution by cutting a necessary input, (operating funds).
So it is a fairly foregone conclusion that a task which is heavily throttled by manpower and outdated infrastructure will lose efficacy, thereby generating lower metrics.
I can see a couple different ways to handle it. Some incredibly controversial.
A) Increase budget until we start seeing the point of diminishing returns getting out of hand.
B) Say screw it, make returns public record, open access to everyone, and either crowd-source or deputize people on a voluntary basis to help sift through the data to root out the worst offenders for further scrutiny by the what few meager resources remain.
Something has to give, and it is fairly obvious to me at least that the non-institutional taxpayer is getting handed the short-end of the stick.
Plus, it'll give companies a taste of what having their "personal data" all agglomerated in one place in front of God and everyone is like for your piece of mind.
No matter what happens, however, I'm not expecting much political will to actually remedy the problem due to a reticence to bit the hand that feeds that is industry donors.