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The IRS Tried to Take on the Ultrawealthy – It Didn’t Go Well

260 points by iron0013 8y ago

yardie 8y ago
I recently called the IRS and by the end of the call I felt really bad for them. The agent that picks up immediately tells you there ID# even before their name or any formal greetings. I know it's tax season and they are harried. But speaking with him he just felt worn down, and it was only 10AM! And having to use your ID# for every call dehumanizes you. It's the same way we treat prisoners, only referring to them by their DoC number.
- duxup 8y ago
  > And having to use your ID# for every call dehumanizes you. I used to work in a call center. Scripts and giving an ID is brutal. It generally has a negative connotation for the folks taking the calls as well. They know the process is there for someone to come down on them if someone complains. Any positive reinforcement is at best a virtual high five as people are FAR more likely to complain than complement, even if you do a great job. I worked at a call center once where I got a negative report when a report came back from someone doing follow up customer satisfaction surveys. The quote from the person they called: "Please stop calling this number, I am not Joe and i don't own a X computer." Nobody could do anything about it, the report stood... it was not possible to remove such an obviously bogus report because management was worried someone might abuse that system. Call centers are metrics hell.
  - SideburnsOfDoom 8y ago
    > Nobody could do anything about it, the report stood... management was worried someone might abuse that system. In Europe, you can do something about it. The magic words are something like "In terms of General Data Protection Regulation (GDPR) I invoke my right to be forgotten. Please erase this data, and you will be in violation if you keep calling me". Then it's the other way around - management would be right to be worried if they're not complying with that.
    - duxup 8y ago
      I think there might be a misunderstanding here. I'm not sure GDPR applies to employer's holding information about employees.
      - johannes1234321 8y ago
        Yes, GDPR applies, but GDPR allows storing "required" data to full fill the (employment) contract. What data that might be is debatable.
        duxup 8y ago
        Presumably peformance data is required. Otherwise I would expect you'd have the absurdity of: "Delete all my data!" "See I didn't do anything wrong, you've got nothing on me!"
        SideburnsOfDoom 8y ago
        The more usual example is: if I buy a fridge from you, I can't then insist on right to be forgotten and then ask for repairs under warranty later. The seller has a right to keep a record of purchase for that legitimate interest. https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/lawful-basis-for-processing/legitimate-interests/ https://ico.org.uk/for-organisations/guide-to-data-protectio... That would apply to employee, yes.
      - SideburnsOfDoom 8y ago
        > I'm not sure GDPR applies to employer's holding information about employee Above: > "Please stop calling this number, I am not Joe and i don't own a X computer." Right, I don't understand how that describes an employee. To me that seems to describe a person who could assert their rights under the GDPR to not be called any more.
        duxup 8y ago
  - bitwize 8y ago
    There's some company somewhere that thinks I own a Honda. I keep getting calls about Honda recalls. The exact model changes from year to year. Nice to know that despite the rep's assurances that I would be removed from the system, in 2049 I'll still be getting calls because the new Honda Accord has a faulty quantum tunnelling distributor, irrespective of whether I own a Honda or any car.
    - swozey 8y ago
      I get these calls/letters almost weekly on my 2018 vehicle with an added unlimited warranty. "Your 2018 Wranglers warranty has expired!" I'm guessing they'd happily sell you a fake or worthless warranty for a non-existent Accord.
      - ericlewis 8y ago
        I get these too, and I’ve never owned a car in my entire life.
- deleted 8y ago
  [deleted]
- chrisseaton 8y ago
  How else should they let you note who you spoke to? Using their actual name? They're not unique. You need some kind of reference number on each call. I'd love it if each call I had to make to a company started with a call ID number and then I got emailed a transcript and recording afterward. I think some call centres give staff pseudonyms so they're unique.
  - ajdlinux 8y ago
    Most call centres I deal with will happily give you a call reference number on request, rather than saying it first thing upon picking up the phone. That seems... more natural and human, even if it's a bit less efficient.
  - ben_w 8y ago
    Name is good. You don’t need a customer-facing GUID, you can automatically keep track of which customers were connected to which call centre person. You could easily combine that with the automated transcription you’re suggesting, which I also like. Heck, make it an MP3!
    - chrisseaton 8y ago
      > You don’t need a customer-facing GUID They don't need it, but I do. > you can automatically keep track of which customers were connected to which call centre person But I want to keep track. I don't care how they keep track. I want to be able to say 'on call XYZ we agreed this' rather than saying 'I spoke to someone called John Smith on Tuesday please look it up in your log'.
      - ben_w 8y ago
        “Hi, I’m calling about the same thing as last week” “<Caller ID says your perferred name, and you were talking with Mr ExampleName about your contract> Hello Mr Seaton, how can I help you today with your contract?”
        8y ago
- MuffinFlavored 8y ago
  their ID
Nasrudith 8y ago
I see the tax issue as a cybersecurity analogous issue - the complexity gives room for exploitation. A refactor could help alleviate many of the issues but that would be a very difficult task even without regulatory capture and perverse incentives.
- jacobush 8y ago
  To riff on that, the complexity is a feature. For some.
  - Bombthecat 8y ago
    Well, in IT it definitely is :)
jacobush 8y ago
Oh, this adds another twist to why taxes are so complicated in the US. If the IRS was not bogged down in the tax reports of commoners, they might have more time for mischief, like pursuing Schaeffler and friends.
- mistrial9 8y ago
  hm - please consider that a founding principle of the United States was to remove a class system of families; therefore 'commoner', heraldry and family crest, titled names and the knighting system, are all explicitly removed.
  - asark 8y ago
    If you reveal your class by your outrage at the very topic, you reveal it also by the way you define the thing that's outraging you. At the bottom, people tend to believe that class is defined by the amount of money you have. In the middle, people grant that money has something to do with it, but think education and the kind of work you do almost equally important. Nearer the top, people perceive that taste, values, ideas, style, and behavior are indispensable criteria of class, regardless of money or occupation or education. One woman interviewed by Studs Terkel for Division Street: America (1967) clearly revealed her class as middle both by her uneasiness about the subject's being introduced and by her instinctive recourse to occupation as the essential class criterion. "We have right on this street almost every class," she said. "But I shouldn't say class," she went on, "because we don't live in a nation of classes." Then, the occupational criterion: "But we have janitors living on the street, we have doctors, we have businessmen, CPAs" [...] Being told that there are no social classes in the place where the interviewee lives is an old experience for sociologists. "'We don't have classes in our town' almost invariably is the first remark recorded by the investigator," reports Leonard Reissman, author of Class in American Life (1959). "Once that has been uttered and is out of the way, the class divisions in the town can be recorded with what seems to be an amazing degree of agreement among the good citizens of the community." [...] The special hazards attending the class situation in America, where movement appears so fluid and where the prizes seem available to anyone who's lucky, are disappointment, and, following close on that, envy. Because the myth conveys the impression that you can readily earn your way upward, disillusion and bitterness are particularly strong when you find yourself trapped in a class system you've been half persuaded isn't important. When in middle life some people discover that certain limits have been placed on their capacity to ascend socially by such apparent irrelevancies as heredity, early environment, and the social class of their immediate forebears, they go into something like despair, which, if generally secret, is no less destructive. -- from Paul Fussell's Class: A Guide Through the American Status System, Chapter 1, "A Touchy Subject" (typed in from the book, any errors probably mine)
xiphias2 8y ago
The tactics used for lowering taxes looks like a great target for WikiLeaks. The more people use the same tactics, the less efficient it is for billionaires.
- wl 8y ago
  These kinds of tactics usually require a lot of time from tax attorneys and only work in uncommon financial situations. If you've just got W2 income, there's probably not much you can do.
- AlexTWithBeard 8y ago
  How to lower your taxes using the same tactics as billionaires: step 1. Hire a team of accountants and legal advisors
  - ryandrake 8y ago
    Is that really all it is, though? Hire wizards and they cast spells to make your taxes lower? I think being able to lower taxes has more to do with your billionaire status (there are more loopholes and deductions for wealthy people) and less to do with hiring professional help. Nearly 100% of my income is W2 labor, and I always do my own taxes. A long time ago I thought I'd hire a CPA to do my taxes, to double check that I was doing mine optimally. Total waste of money. He cost about $400 (I understand that's a pretty good bargain these days), and found no additional deductions, and was kind of a pain to deal with. For working class and middle class people, there really aren't that many ways to get creative with your income to reduce your tax bill.
    - AlexTWithBeard 8y ago
      It's not about some special status, it's purely about money: casting the magic tax-lowering spell requires a lot of mana. I'm sure your accountant could have set up a charity, put most of your assets there, the charity would hire yourself as an independent contractor... But it will cost more than it's worth.
  - 8y ago
jerkstate 8y ago
This is what people who argue for the expansion of the welfare state don't understand. The ultrawealthy will always find ways to protect themselves from taxation (as they did back in the days when "tax rates" were "80 to 90 percent" as they love to tell you) and the brunt will be borne by people like me, who are relatively comfortable in providing for my family but still worry a lot about saving adequately for retirement and college payments down the road (which if I am restricted further from doing properly, will simply increase the burden on the welfare state).
- matchbok 8y ago
  We do not have a welfare state. There are simple ways to get people to pay their taxes, there simple isn't political will.
  - deleted 8y ago
    [deleted]
- maxxxxx 8y ago
  What do you propose? Shut down the welfare state and stop taxing rich people since they will evade taxes anyway?
  - jerkstate 8y ago
    No, I think civilized countries absolutely need a strong social safety net, and rich people should pay their fair share, but increasing spending before proving that you can get the rich to pay is putting the cart before the horse (and moves the burden to people who have don't have access to the tax avoidance techniques that the rich do)
    - maxxxxx 8y ago
      I don't think you can make a social safety net dependent on your ability to make the rich pay their taxes. Both problems should be attacked in parallel.
mbostleman 8y ago
I wish a switch to a consumption tax would get more (or any) traction. It seems like it would solve so many problems, be more efficient, and considerably more liberal. Unfortunately the institution that is the IRS, the government's addiction to its citizens' private information, and the financial services / tax prep lobby are likely impassable obstacles.
- atonse 8y ago
  This idea is appealing to me as well but unless it's based on your income (hence yet another progressive tax), such a tax hurts the poor disproportionately.
  - mbostleman 8y ago
    Yes, if income is used as the base in the calculation, consumption taxes are always regressive. How workable it would be, I'm not sure, but the FairTax proposal included a refund to all households equal to the tax on purchases up to the poverty level. So, effectively, income up the poverty level is tax free, thus making it progressive.
  - jbattle 8y ago
    This could get complex fast, but if the consumption tax was graduated according to a subjective measure of how critical the need was ... Food purchases get taxed at 1% Car purchases get taxed at 2% First home purchases get taxed at 3% Second home purchases get taxed at 6% Private airplane purchases get taxed at 99% that sort of thing
    - nemo44x 8y ago
      I don’t like it. Who gets to decide what tax rate each thing gets? There are just so many things. Make it flat at 20% for any time money is traded for something. This would be for toilet paper to a house to a political donation and include capital gains profits. Everything is taxed at 20%. Then eliminate income and corporate taxes. States can define other taxes like local income tax, property tax etc. Then every adult gets a check for 20% of the agreed upon poverty level in January. Now taxes are not tied to income, to only those that work or capitalize, etc.
tmp09211 8y ago
The pain of Trump's tax law in California can't be understated ...the cap on SALT deductions means that you cannot deduct more than $10k in income + property taxes anymore, which barely covers an average base salary for many people. Double taxed on income we'll never see.
atonse 8y ago
When I read this, yet again I think of all the wasted incredible brains and talent that end up in ad-tech companies like facebook and google. All this brain power could be used to help with this sort of injustice, in what seems to be essentially a battle of brains (IRS lawyers vs rich people's top lawyers). But then the gov needs to find a way to competitively pay for this stuff.
- deleted 8y ago
  [deleted]
- rorykoehler 8y ago
  The best idea i’ve heard is to abolish taxes and print money instead. Inflation becomes the tax and you just print enough to provide the services that are critical (health, police, fire, Ubi etc). That way you wouldn’t have to waste the brain power on pointless legal squabbles (antechamber on the other hand...).
  - elcomet 8y ago
    It's a regressive tax, as it affects everyone at the same rate. Modern tax systems are progressive, ie people get different tax rates depending on their income.
    - ijpoijpoihpiuoh 8y ago
      "As it affects everyone at the same rate." That's a flat tax. A regressive tax is one that affects the poor more. However, you are right that it is probably regressive, since the rich normally place more of their wealth percentage-wise in non-cash assets than poor people do.
      - wavefunction 8y ago
        A flat tax is regressive in nature since the wealthy demand a greater share of the services provided by civil society.
mywittyname 8y ago
I feel like neutering the IRS is going to have long-term negative impacts on the country. I hate taxes as much as anyone, but I do think the IRS has been a force for good in our country. Not just by ensuring that wealthy people make investment in our society without the expectation of direct financial return, but also by virtue of being a powerful enough to tackle corruption. The anti-tax rich are totally fine with continuing to shovel government money into their pockets, via contracts, grants, etc. Which suggests that a greater share of the cost burden of enriching these people will fall to regular Americans.
- jimmy1 8y ago
  > but also by virtue of being a powerful enough to tackle corruption. After all, it was tax evasion of all things that brought down Al Capone.
- mrfredward 8y ago
  Yes, weak tax enforcement shifts the tax burden from dishonest people to honest people. Unfortunately, giving funding to those scary tax collectors doesn't make for much of a political slogan.
zdragnar 8y ago
Wealth and income are two different things. Think of income taxes as regulatory capture by those who already have money. The higher the taxes, the greater wealth inequality becomes. Once you have a lot of wealth, you can afford to stop and start new efforts at getting income, while everyone else is stuck taking a salary (and if they're lucky, stock / 401ks). That flexibility lets them stay ahead of the tax laws that keep everyone else down.
clarkevans 8y ago
The Land Value Tax (https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax) should be considered: It's progressive. It's hard to conceal/evade. It muffles speculation bubbles.
- chongli 8y ago
  The problem with this is that a huge amount of wealth today is not in the form of land, it's in the form of capital (physical, cash, and equities) and a lot of that is located off-shore. Yes, the Apple UFO campus is extremely valuable land but it's a very tiny fraction of Apple's overall wealth.
  - arethuza 8y ago
    Why not a War on Off-Shore? [NB I seem to remember that David Brin's novel Earth has something like this where WW3 is everyone-vs-Switzerland - or something like that].
  - gwern 8y ago
    > The problem with this is that a huge amount of wealth today is not in the form of land, it's in the form of capital (physical, cash, and equities) That's a feature, not a bug, of the LVT. The entire point is to tax something which is inelastic and won't cause deadweight losses by people not creating it (capital like physical or equity, or human capital, or labor for that matter). We want there to be lots of that kind of capital.
  - dredmorbius 8y ago
    Citation requested. (I've looked for wealth distribution by asset class. It's remarkably hard to find.)
    - myroon5 8y ago
      as of 2016: https://www.claconnect.com/-/media/cla-image-repository/general/illustrations_and_objects/the-investable-universe.jpg https://www.claconnect.com/-/media/cla-image-repository/gene...
dalbasal 8y ago
Re: the term "abuse" rather than a more concrete term like "violation." About 10 years back, Bono (of U2) was being interviewed on irish tv. They asked about U2's business interests (real estate and hotels), taxes, and overseas holding companies... with a "why don't you pay taxes in ireland" implication. Bono started with a generic "U2 is a Businezss" answer but he ended with a (IMO) an honest point that people avoid making.. because it's kind of an admission of guilt: "Look... We (ireland) manipulate our tax rules for all sorts of gain^. How can it be ok for the country but not U2?" We're an extreme example, but not that extreme. American politicians have also been big believers in complex tax reforms/policies as a way of tweaking all sorts of economic results. We can't have it both ways. Either we have a "the rules are the rules" approach or we have a principled approach. You can't appeal to the "spirit" of a soulless ruleset. ^We have a highly "engineered" tax system, designed to encourage foreign revenue to be silmultaneously booked and not booked in ireland. >30% of ireland's gdp is Leprechaun money, according to Paul Krugman & some oecd economists. It's here, but not real. Try to touch it, and it will vanish. A lot of these rules relate to IP which is why the biggest companies utlizing irish tax shenanigans are apple, google and other techcos. Music is also IP.
- viivaux 8y ago
  > "Look... We (ireland) manipulate our tax rules for all sorts of gain^. How can it be ok for the country but not U2?" I'll answer that Bono - because no one in Ireland asked for us to be run by leprechaun economics; that decision was taken by blatantly corrupt political parties that form a golden circle fueled by brown envelopes, protected by even more blatantly by corrupt police and state / billionaire owned media. Normal people in Ireland :pay their fucking taxes: and he should too.
  - lostlogin 8y ago
    > no one in Ireland asked for us to be run by leprechaun economics; that decision was taken by blatantly corrupt political parties Irish one though surely? What makes them win elections?
    - 8y ago
flyinglizard 8y ago
1. This is a fantastic piece of reporting. 2. Reading through all of this, I hold no sympathy to the IRS given this situation. The government policies described, from the requests of disclosure to the taxation levied in this specific case appear downright abusive.
- influx 8y ago
  I read it and came to the same conclusion. The whole crux of the case is that there was unreported income from a loan that was forgiven. The banks did make it complicated, but they did so to avoid driving the company (and themselves) into bankruptcy, and look to still get paid back. Collecting a billion dollars on a loan that really hasn’t been forgiven and driving the company into bankruptcy seems insane. The IRS would have more of a case if they looked at the situation at the term of the loan and found it hadn’t been repaid.
  - ben7799 8y ago
    I agree with your take on it. If they got their billions of taxes they'd have bankrupted this guy and put Continental Tire and a bunch of other companies out of business. There would be a ton of lost jobs and a lot of value in society destroyed. All because they couldn't back out of a deal because of the law in the first place. Definitely a weird international thing going on here too with the IRS potentially bankrupting a German company and the Germans being stuck with the fallout.
ptero 8y ago
I suspect most of those strategies are perfectly legal under the current (insanely complex) US tax laws. Instead of trying to further complicate those laws to outlaw a few arcane tax strategies (likely in vain; more complexity likely leads to more arcane loopholes) we should be simplifying our laws. It should be dead simple to determine legality and IRS should be left with simple enforcing function. I would be much in favor of flat rates with negative tax rates on first $X to help bridge the gap from minimum wage to living wage. And a better safety net for those who cannot work. My 2c.
- village-idiot 8y ago
  The problem isn’t the progressive tax system, the problem is the heaping pile of exceptions and special rules that take forever to wade through. All a flat tax would do is make it even easier for the ultra-wealthy to pay less.
  - usaar333 8y ago
    Eh, is also what we tax. We tax cancelled debt as income. Simple enough at first glance. But when is debt cancelled vs restructured?
  - jngreenlee 8y ago
    Could be a wealth tax instead of income tax. But, let's stop worrying about "the wealthy"...just make a systems that's easy for everyone and funds the government. Soaking the rich shouldn't be the goal...a balanced government budget providing the basic services we together agree on should be the goal.
    - bmcooley 8y ago
      How does a wealth tax work when the majority of your assets are illiquid? Stake in a company, real estate, etc. are difficult to tax and still have predictable recurring tax revenue, right?
      - 8y ago
tomohawk 8y ago
Classic hit piece from propublica, trotting out the classic villains. If only the poor IRS was allowed to go after those neer do wells! I've known wealthy people, but not plutocrats, who the IRS has gone after. Auditing (harassing) them year after year. Referring them to be investigated by DEA, BATF, etc. It's totally insane how unaccountable the IRS is. Of course someone in the gun sites of the IRS is going to avail themselves of the best legal and accounting talent they can get. If you have lots of money, you are in their sites.
- copper_think 8y ago
  Maybe one day you'll be rich too, and can work tirelessly to avoid paying your fair share to the government. But I kind of doubt it, because you don't know the difference between "sites" and "sights."
  - jngreenlee 8y ago
    Ad hominem much?
  - tomohawk 8y ago
    Uncle. You got me on the sights thing. Fair share as determined by who? The IRS? Some politician who wants more money to spend?
    - dontbenebby 8y ago
      >Fair share as determined by who? The IRS? Some politician who wants more money to spend? Determined by the laws of the United States, which you have disproportionate influence on by being affluent. You live in a republic. You benefit from roads, from our military, and your local police. If you don't like your tax burden, you could move to a state with a lower one (Nevada, Washington etc). Or you could choose to emigrate. At the end of a day, you live in a republic, and need to obey it's laws. ("Render unto Caesar")
      - tomohawk 8y ago
module0000 8y ago
History is filled with tales of governments trying to demand money that they did not facilitate the production of. The "income tax" in the US was a response to World War II debt, and was intended to be temporary. However, once you begin handing people free money, they don't want you to ever stop. Read all about it at http://time.com/4289687/1942-tax-day-history/ http://time.com/4289687/1942-tax-day-history/ It is what it is, and nothing short of a hero in a book depository window is likely to change it. Nothing to do but move on with our lives and keep being robbed.
- SantalBlush 8y ago
  This sentiment always reveals a misunderstanding of economics. The US Government can obliterate your income/wealth without ever touching your bank account; moreover, it can generate revenue without touching your account as well. Why tax individuals then? Because it is considered more economically stable than some of the alternatives, like printing money; this means taxation is safer for the value of your dollars than other forms of revenue generation, all else being equal.
  - dredmorbius 8y ago
    And history: Income tax in the US dates to 1894. The 16th Amendment was ratified in 1913. A very premature response to WWII. Income is not the only taxable quantity; tariffs, excise, property, wealth, and estate taxes are among the options.
    - nybble41 8y ago
      Not to mention simply spending a lot less on things the federal government doesn't need to be involved in to begin with.
      - dredmorbius 8y ago
        Sorry? Such as?
dollar 8y ago
The poor, poor Internal Revenue Service. With virtually unlimited resources (if it alleges a crime) and a 99.8% conviction rate, its a wonder they collect any taxes at all! How dare these filthy billionaires try to keep their own money.
linsomniac 8y ago
The graphic on that article reminds me of something a multi-millionaire once told me about his stock market high-frequency trading: It's like picking up pennies in front of a steam roller.
adolph 8y ago
See also Propublica on what regions are subjected to the most audits. Hint is in the URL. https://projects.propublica.org/graphics/eitc-audit https://projects.propublica.org/graphics/eitc-audit
jasonshen 8y ago
One of the challenges we have with our current tax code is the fact that it's based on income (salary, capital gains, etc). One idea is to use a value-added tax (VAT) that allows all consumption to be taxed. This is a big part of Andrew Yang's campaign to fund UBI. https://www.yang2020.com/policies/value-added-tax/ https://www.yang2020.com/policies/value-added-tax/ He also wants to increase the IRS's funding which would help go after those super rich people and their lawyers.
- dredmorbius 8y ago
  Or wealth / property taxes. Or exim taxes on international money transfers. Or taxes on bank balances, particularly offshore. https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/Chapter_2 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/...
treespace8 8y ago
It used to be simple. Government taxed their citizens. But now at a certain level of wealth you can turn yourself into an international corporation. Who isn’t really a citizen of any one country. No one is going to ban international business. So the ultra rich will probably continue to get away with this. And the upper class (100k - 500k a year) will bear the tax burden.
HillaryBriss 8y ago
I love the quotation "From the minute it went live, it was dead on arrival." I mean, that's pretty dead.
wav-part 8y ago
Ultrawealthy Ought to Help https://www.youtube.com/watch?v=PGMQZEIXBMs https://www.youtube.com/watch?v=PGMQZEIXBMs
z5h 8y ago
Dear interested lawyers, keep half the money you recover. Problem solved.
- xtracto 8y ago
  That would be brutal, but really good.
specialist 8y ago
I wonder if there's enough public information to do third party (citizen) audits? Crowd fund some under employed accountants and geeks and sleuths to dig into some of the big boys. -- Is there some kind of bounty program exposing tax cheats? Like that small law group that's made millions whistleblowing big pharma.
lordnacho 8y ago
If you've never had a tax scheme offered to you, this is how it goes. My experience is in the UK but there's similar stuff everywhere, I'm sure. Someone from an "aggressive accountant" will somehow find you. They will tell you what kind of people they represent, and why you are one of them. Then they will draw an immensely complicated block diagram, like the UML diagram of a large enterprise application, except none of the blocks means anything to you. There's always some special rule they are using. One time it hinged on me, a guy who can't play or sing a note, spending an hour or two each week critiquing the lyrics of a well known rap artist. Another time it hinged on me writing and publishing poetry. Yet another one was related to films. I've got zero skill in anything artistic, so obviously this was not going to be legit. It is what the guy presents it as, a tax dodge. The guy also says your winning are dependent on running a legal gauntlet; Some schemes work, others don't and you end up paying the tax bill, the accountants, and a penalty. Luckily I wasn't tempted to participate in any of these schemes. You know why you are participating in these schemes, and it's not a sincere desire to improve rap music. And I did hear about a friend of a friend recently who tried and lost, and is now in deep trouble. That's just the tip of the iceberg as well. All sorts of other tax games are played by people way wealthier than me, as well as corporate entities.
mrnobody_67 8y ago
If any other revenue generating entity was bringing in $4500/hr of labour, it'd be rapidly scaled up and funded to capture the maximum possible upside... crazy how that doesn't happen here.
joelx 8y ago
All tax returns should be public. This would vastly reduce cheating on taxes. Our society has run into a fundamental problem - there are always a certain number of people who will cheat on their taxes. According to research, these people are disproportionately the ultrawealthy. The real problem comes up when the government does not do proper audits and doesn't enforce penalties because then good and honest people see the cheaters get away with it. This leads to a quick erosion of morals and integrity in the whole system. Making all tax returns public makes it very easy for anyone to spot the cheaters. Even pathological liars and cheaters will have a strong disincentive against cheating and will be quickly punished if they do.
- nojvek 8y ago
  Making tax returns public also attracts a shit ton of spammers and conmen. But I whole heartedly agree, if you want to solve any form of corruption or “some are more equal than others”, public accountability and immutable/verifiable record keeping is the best counter.
Proven 8y ago
No one complains when government campaigns to cut public spending fail. When will somebody complain about that? Public sector is less competitive so it is reasonable to expect that such campaigns will fail. The government may have more success if they hit on their own spending, but nobody wants to do that because the higher the spending the easier it is to get re-elected.

260 points by iron0013 8y ago

I recently called the IRS and by the end of the call I felt really bad for them. The agent that picks up immediately tells you there ID# even before their name or any formal greetings. I know it's tax season and they are harried. But speaking with him he just felt worn down, and it was only 10AM! And having to use your ID# for every call dehumanizes you. It's the same way we treat prisoners, only referring to them by their DoC number.

duxup 8y ago
> And having to use your ID# for every call dehumanizes you. I used to work in a call center. Scripts and giving an ID is brutal. It generally has a negative connotation for the folks taking the calls as well. They know the process is there for someone to come down on them if someone complains. Any positive reinforcement is at best a virtual high five as people are FAR more likely to complain than complement, even if you do a great job. I worked at a call center once where I got a negative report when a report came back from someone doing follow up customer satisfaction surveys. The quote from the person they called: "Please stop calling this number, I am not Joe and i don't own a X computer." Nobody could do anything about it, the report stood... it was not possible to remove such an obviously bogus report because management was worried someone might abuse that system. Call centers are metrics hell.
- SideburnsOfDoom 8y ago
  > Nobody could do anything about it, the report stood... management was worried someone might abuse that system. In Europe, you can do something about it. The magic words are something like "In terms of General Data Protection Regulation (GDPR) I invoke my right to be forgotten. Please erase this data, and you will be in violation if you keep calling me". Then it's the other way around - management would be right to be worried if they're not complying with that.
  - duxup 8y ago
    I think there might be a misunderstanding here. I'm not sure GDPR applies to employer's holding information about employees.
    - johannes1234321 8y ago
      Yes, GDPR applies, but GDPR allows storing "required" data to full fill the (employment) contract. What data that might be is debatable.
      - duxup 8y ago
        Presumably peformance data is required. Otherwise I would expect you'd have the absurdity of: "Delete all my data!" "See I didn't do anything wrong, you've got nothing on me!"
        SideburnsOfDoom 8y ago
        The more usual example is: if I buy a fridge from you, I can't then insist on right to be forgotten and then ask for repairs under warranty later. The seller has a right to keep a record of purchase for that legitimate interest. https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/lawful-basis-for-processing/legitimate-interests/ https://ico.org.uk/for-organisations/guide-to-data-protectio... That would apply to employee, yes.
    - SideburnsOfDoom 8y ago
      > I'm not sure GDPR applies to employer's holding information about employee Above: > "Please stop calling this number, I am not Joe and i don't own a X computer." Right, I don't understand how that describes an employee. To me that seems to describe a person who could assert their rights under the GDPR to not be called any more.
      - duxup 8y ago
- bitwize 8y ago
  There's some company somewhere that thinks I own a Honda. I keep getting calls about Honda recalls. The exact model changes from year to year. Nice to know that despite the rep's assurances that I would be removed from the system, in 2049 I'll still be getting calls because the new Honda Accord has a faulty quantum tunnelling distributor, irrespective of whether I own a Honda or any car.
  - swozey 8y ago
    I get these calls/letters almost weekly on my 2018 vehicle with an added unlimited warranty. "Your 2018 Wranglers warranty has expired!" I'm guessing they'd happily sell you a fake or worthless warranty for a non-existent Accord.
    - ericlewis 8y ago
      I get these too, and I’ve never owned a car in my entire life.
deleted 8y ago
[deleted]
chrisseaton 8y ago
How else should they let you note who you spoke to? Using their actual name? They're not unique. You need some kind of reference number on each call. I'd love it if each call I had to make to a company started with a call ID number and then I got emailed a transcript and recording afterward. I think some call centres give staff pseudonyms so they're unique.
- ajdlinux 8y ago
  Most call centres I deal with will happily give you a call reference number on request, rather than saying it first thing upon picking up the phone. That seems... more natural and human, even if it's a bit less efficient.
- ben_w 8y ago
  Name is good. You don’t need a customer-facing GUID, you can automatically keep track of which customers were connected to which call centre person. You could easily combine that with the automated transcription you’re suggesting, which I also like. Heck, make it an MP3!
  - chrisseaton 8y ago
    > You don’t need a customer-facing GUID They don't need it, but I do. > you can automatically keep track of which customers were connected to which call centre person But I want to keep track. I don't care how they keep track. I want to be able to say 'on call XYZ we agreed this' rather than saying 'I spoke to someone called John Smith on Tuesday please look it up in your log'.
    - ben_w 8y ago
      “Hi, I’m calling about the same thing as last week” “<Caller ID says your perferred name, and you were talking with Mr ExampleName about your contract> Hello Mr Seaton, how can I help you today with your contract?”
      - 8y ago
MuffinFlavored 8y ago
their ID

Nasrudith 8y ago

I see the tax issue as a cybersecurity analogous issue - the complexity gives room for exploitation. A refactor could help alleviate many of the issues but that would be a very difficult task even without regulatory capture and perverse incentives.

jacobush 8y ago
To riff on that, the complexity is a feature. For some.
- Bombthecat 8y ago
  Well, in IT it definitely is :)

jacobush 8y ago

Oh, this adds another twist to why taxes are so complicated in the US. If the IRS was not bogged down in the tax reports of commoners, they might have more time for mischief, like pursuing Schaeffler and friends.

mistrial9 8y ago
hm - please consider that a founding principle of the United States was to remove a class system of families; therefore 'commoner', heraldry and family crest, titled names and the knighting system, are all explicitly removed.
- asark 8y ago
  If you reveal your class by your outrage at the very topic, you reveal it also by the way you define the thing that's outraging you. At the bottom, people tend to believe that class is defined by the amount of money you have. In the middle, people grant that money has something to do with it, but think education and the kind of work you do almost equally important. Nearer the top, people perceive that taste, values, ideas, style, and behavior are indispensable criteria of class, regardless of money or occupation or education. One woman interviewed by Studs Terkel for Division Street: America (1967) clearly revealed her class as middle both by her uneasiness about the subject's being introduced and by her instinctive recourse to occupation as the essential class criterion. "We have right on this street almost every class," she said. "But I shouldn't say class," she went on, "because we don't live in a nation of classes." Then, the occupational criterion: "But we have janitors living on the street, we have doctors, we have businessmen, CPAs" [...] Being told that there are no social classes in the place where the interviewee lives is an old experience for sociologists. "'We don't have classes in our town' almost invariably is the first remark recorded by the investigator," reports Leonard Reissman, author of Class in American Life (1959). "Once that has been uttered and is out of the way, the class divisions in the town can be recorded with what seems to be an amazing degree of agreement among the good citizens of the community." [...] The special hazards attending the class situation in America, where movement appears so fluid and where the prizes seem available to anyone who's lucky, are disappointment, and, following close on that, envy. Because the myth conveys the impression that you can readily earn your way upward, disillusion and bitterness are particularly strong when you find yourself trapped in a class system you've been half persuaded isn't important. When in middle life some people discover that certain limits have been placed on their capacity to ascend socially by such apparent irrelevancies as heredity, early environment, and the social class of their immediate forebears, they go into something like despair, which, if generally secret, is no less destructive. -- from Paul Fussell's Class: A Guide Through the American Status System, Chapter 1, "A Touchy Subject" (typed in from the book, any errors probably mine)

xiphias2 8y ago

The tactics used for lowering taxes looks like a great target for WikiLeaks. The more people use the same tactics, the less efficient it is for billionaires.

wl 8y ago
These kinds of tactics usually require a lot of time from tax attorneys and only work in uncommon financial situations. If you've just got W2 income, there's probably not much you can do.
AlexTWithBeard 8y ago
How to lower your taxes using the same tactics as billionaires: step 1. Hire a team of accountants and legal advisors
- ryandrake 8y ago
  Is that really all it is, though? Hire wizards and they cast spells to make your taxes lower? I think being able to lower taxes has more to do with your billionaire status (there are more loopholes and deductions for wealthy people) and less to do with hiring professional help. Nearly 100% of my income is W2 labor, and I always do my own taxes. A long time ago I thought I'd hire a CPA to do my taxes, to double check that I was doing mine optimally. Total waste of money. He cost about $400 (I understand that's a pretty good bargain these days), and found no additional deductions, and was kind of a pain to deal with. For working class and middle class people, there really aren't that many ways to get creative with your income to reduce your tax bill.
  - AlexTWithBeard 8y ago
    It's not about some special status, it's purely about money: casting the magic tax-lowering spell requires a lot of mana. I'm sure your accountant could have set up a charity, put most of your assets there, the charity would hire yourself as an independent contractor... But it will cost more than it's worth.
- 8y ago

jerkstate 8y ago

This is what people who argue for the expansion of the welfare state don't understand. The ultrawealthy will always find ways to protect themselves from taxation (as they did back in the days when "tax rates" were "80 to 90 percent" as they love to tell you) and the brunt will be borne by people like me, who are relatively comfortable in providing for my family but still worry a lot about saving adequately for retirement and college payments down the road (which if I am restricted further from doing properly, will simply increase the burden on the welfare state).

matchbok 8y ago
We do not have a welfare state. There are simple ways to get people to pay their taxes, there simple isn't political will.
- deleted 8y ago
  [deleted]
maxxxxx 8y ago
What do you propose? Shut down the welfare state and stop taxing rich people since they will evade taxes anyway?
- jerkstate 8y ago
  No, I think civilized countries absolutely need a strong social safety net, and rich people should pay their fair share, but increasing spending before proving that you can get the rich to pay is putting the cart before the horse (and moves the burden to people who have don't have access to the tax avoidance techniques that the rich do)
  - maxxxxx 8y ago
    I don't think you can make a social safety net dependent on your ability to make the rich pay their taxes. Both problems should be attacked in parallel.

mbostleman 8y ago

I wish a switch to a consumption tax would get more (or any) traction. It seems like it would solve so many problems, be more efficient, and considerably more liberal. Unfortunately the institution that is the IRS, the government's addiction to its citizens' private information, and the financial services / tax prep lobby are likely impassable obstacles.

atonse 8y ago
This idea is appealing to me as well but unless it's based on your income (hence yet another progressive tax), such a tax hurts the poor disproportionately.
- mbostleman 8y ago
  Yes, if income is used as the base in the calculation, consumption taxes are always regressive. How workable it would be, I'm not sure, but the FairTax proposal included a refund to all households equal to the tax on purchases up to the poverty level. So, effectively, income up the poverty level is tax free, thus making it progressive.
- jbattle 8y ago
  This could get complex fast, but if the consumption tax was graduated according to a subjective measure of how critical the need was ... Food purchases get taxed at 1% Car purchases get taxed at 2% First home purchases get taxed at 3% Second home purchases get taxed at 6% Private airplane purchases get taxed at 99% that sort of thing
  - nemo44x 8y ago
    I don’t like it. Who gets to decide what tax rate each thing gets? There are just so many things. Make it flat at 20% for any time money is traded for something. This would be for toilet paper to a house to a political donation and include capital gains profits. Everything is taxed at 20%. Then eliminate income and corporate taxes. States can define other taxes like local income tax, property tax etc. Then every adult gets a check for 20% of the agreed upon poverty level in January. Now taxes are not tied to income, to only those that work or capitalize, etc.

tmp09211 8y ago

The pain of Trump's tax law in California can't be understated ...the cap on SALT deductions means that you cannot deduct more than $10k in income + property taxes anymore, which barely covers an average base salary for many people. Double taxed on income we'll never see.

atonse 8y ago

When I read this, yet again I think of all the wasted incredible brains and talent that end up in ad-tech companies like facebook and google. All this brain power could be used to help with this sort of injustice, in what seems to be essentially a battle of brains (IRS lawyers vs rich people's top lawyers). But then the gov needs to find a way to competitively pay for this stuff.

deleted 8y ago
[deleted]
rorykoehler 8y ago
The best idea i’ve heard is to abolish taxes and print money instead. Inflation becomes the tax and you just print enough to provide the services that are critical (health, police, fire, Ubi etc). That way you wouldn’t have to waste the brain power on pointless legal squabbles (antechamber on the other hand...).
- elcomet 8y ago
  It's a regressive tax, as it affects everyone at the same rate. Modern tax systems are progressive, ie people get different tax rates depending on their income.
  - ijpoijpoihpiuoh 8y ago
    "As it affects everyone at the same rate." That's a flat tax. A regressive tax is one that affects the poor more. However, you are right that it is probably regressive, since the rich normally place more of their wealth percentage-wise in non-cash assets than poor people do.
    - wavefunction 8y ago
      A flat tax is regressive in nature since the wealthy demand a greater share of the services provided by civil society.

mywittyname 8y ago

I feel like neutering the IRS is going to have long-term negative impacts on the country. I hate taxes as much as anyone, but I do think the IRS has been a force for good in our country. Not just by ensuring that wealthy people make investment in our society without the expectation of direct financial return, but also by virtue of being a powerful enough to tackle corruption. The anti-tax rich are totally fine with continuing to shovel government money into their pockets, via contracts, grants, etc. Which suggests that a greater share of the cost burden of enriching these people will fall to regular Americans.

jimmy1 8y ago
> but also by virtue of being a powerful enough to tackle corruption. After all, it was tax evasion of all things that brought down Al Capone.
mrfredward 8y ago
Yes, weak tax enforcement shifts the tax burden from dishonest people to honest people. Unfortunately, giving funding to those scary tax collectors doesn't make for much of a political slogan.

zdragnar 8y ago

Wealth and income are two different things. Think of income taxes as regulatory capture by those who already have money. The higher the taxes, the greater wealth inequality becomes. Once you have a lot of wealth, you can afford to stop and start new efforts at getting income, while everyone else is stuck taking a salary (and if they're lucky, stock / 401ks). That flexibility lets them stay ahead of the tax laws that keep everyone else down.

clarkevans 8y ago

The Land Value Tax (https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax) should be considered: It's progressive. It's hard to conceal/evade. It muffles speculation bubbles.

chongli 8y ago
The problem with this is that a huge amount of wealth today is not in the form of land, it's in the form of capital (physical, cash, and equities) and a lot of that is located off-shore. Yes, the Apple UFO campus is extremely valuable land but it's a very tiny fraction of Apple's overall wealth.
- arethuza 8y ago
  Why not a War on Off-Shore? [NB I seem to remember that David Brin's novel Earth has something like this where WW3 is everyone-vs-Switzerland - or something like that].
- gwern 8y ago
  > The problem with this is that a huge amount of wealth today is not in the form of land, it's in the form of capital (physical, cash, and equities) That's a feature, not a bug, of the LVT. The entire point is to tax something which is inelastic and won't cause deadweight losses by people not creating it (capital like physical or equity, or human capital, or labor for that matter). We want there to be lots of that kind of capital.
- dredmorbius 8y ago
  Citation requested. (I've looked for wealth distribution by asset class. It's remarkably hard to find.)
  - myroon5 8y ago
    as of 2016: https://www.claconnect.com/-/media/cla-image-repository/general/illustrations_and_objects/the-investable-universe.jpg https://www.claconnect.com/-/media/cla-image-repository/gene...

dalbasal 8y ago

Re: the term "abuse" rather than a more concrete term like "violation." About 10 years back, Bono (of U2) was being interviewed on irish tv. They asked about U2's business interests (real estate and hotels), taxes, and overseas holding companies... with a "why don't you pay taxes in ireland" implication. Bono started with a generic "U2 is a Businezss" answer but he ended with a (IMO) an honest point that people avoid making.. because it's kind of an admission of guilt: "Look... We (ireland) manipulate our tax rules for all sorts of gain^. How can it be ok for the country but not U2?" We're an extreme example, but not that extreme. American politicians have also been big believers in complex tax reforms/policies as a way of tweaking all sorts of economic results. We can't have it both ways. Either we have a "the rules are the rules" approach or we have a principled approach. You can't appeal to the "spirit" of a soulless ruleset. ^We have a highly "engineered" tax system, designed to encourage foreign revenue to be silmultaneously booked and not booked in ireland. >30% of ireland's gdp is Leprechaun money, according to Paul Krugman & some oecd economists. It's here, but not real. Try to touch it, and it will vanish. A lot of these rules relate to IP which is why the biggest companies utlizing irish tax shenanigans are apple, google and other techcos. Music is also IP.

viivaux 8y ago
> "Look... We (ireland) manipulate our tax rules for all sorts of gain^. How can it be ok for the country but not U2?" I'll answer that Bono - because no one in Ireland asked for us to be run by leprechaun economics; that decision was taken by blatantly corrupt political parties that form a golden circle fueled by brown envelopes, protected by even more blatantly by corrupt police and state / billionaire owned media. Normal people in Ireland :pay their fucking taxes: and he should too.
- lostlogin 8y ago
  > no one in Ireland asked for us to be run by leprechaun economics; that decision was taken by blatantly corrupt political parties Irish one though surely? What makes them win elections?
  - 8y ago

flyinglizard 8y ago

1. This is a fantastic piece of reporting. 2. Reading through all of this, I hold no sympathy to the IRS given this situation. The government policies described, from the requests of disclosure to the taxation levied in this specific case appear downright abusive.

influx 8y ago
I read it and came to the same conclusion. The whole crux of the case is that there was unreported income from a loan that was forgiven. The banks did make it complicated, but they did so to avoid driving the company (and themselves) into bankruptcy, and look to still get paid back. Collecting a billion dollars on a loan that really hasn’t been forgiven and driving the company into bankruptcy seems insane. The IRS would have more of a case if they looked at the situation at the term of the loan and found it hadn’t been repaid.
- ben7799 8y ago
  I agree with your take on it. If they got their billions of taxes they'd have bankrupted this guy and put Continental Tire and a bunch of other companies out of business. There would be a ton of lost jobs and a lot of value in society destroyed. All because they couldn't back out of a deal because of the law in the first place. Definitely a weird international thing going on here too with the IRS potentially bankrupting a German company and the Germans being stuck with the fallout.

ptero 8y ago

I suspect most of those strategies are perfectly legal under the current (insanely complex) US tax laws. Instead of trying to further complicate those laws to outlaw a few arcane tax strategies (likely in vain; more complexity likely leads to more arcane loopholes) we should be simplifying our laws. It should be dead simple to determine legality and IRS should be left with simple enforcing function. I would be much in favor of flat rates with negative tax rates on first $X to help bridge the gap from minimum wage to living wage. And a better safety net for those who cannot work. My 2c.

village-idiot 8y ago
The problem isn’t the progressive tax system, the problem is the heaping pile of exceptions and special rules that take forever to wade through. All a flat tax would do is make it even easier for the ultra-wealthy to pay less.
- usaar333 8y ago
  Eh, is also what we tax. We tax cancelled debt as income. Simple enough at first glance. But when is debt cancelled vs restructured?
- jngreenlee 8y ago
  Could be a wealth tax instead of income tax. But, let's stop worrying about "the wealthy"...just make a systems that's easy for everyone and funds the government. Soaking the rich shouldn't be the goal...a balanced government budget providing the basic services we together agree on should be the goal.
  - bmcooley 8y ago
    How does a wealth tax work when the majority of your assets are illiquid? Stake in a company, real estate, etc. are difficult to tax and still have predictable recurring tax revenue, right?
    - 8y ago

tomohawk 8y ago

Classic hit piece from propublica, trotting out the classic villains. If only the poor IRS was allowed to go after those neer do wells! I've known wealthy people, but not plutocrats, who the IRS has gone after. Auditing (harassing) them year after year. Referring them to be investigated by DEA, BATF, etc. It's totally insane how unaccountable the IRS is. Of course someone in the gun sites of the IRS is going to avail themselves of the best legal and accounting talent they can get. If you have lots of money, you are in their sites.

copper_think 8y ago
Maybe one day you'll be rich too, and can work tirelessly to avoid paying your fair share to the government. But I kind of doubt it, because you don't know the difference between "sites" and "sights."
- jngreenlee 8y ago
  Ad hominem much?
- tomohawk 8y ago
  Uncle. You got me on the sights thing. Fair share as determined by who? The IRS? Some politician who wants more money to spend?
  - dontbenebby 8y ago
    >Fair share as determined by who? The IRS? Some politician who wants more money to spend? Determined by the laws of the United States, which you have disproportionate influence on by being affluent. You live in a republic. You benefit from roads, from our military, and your local police. If you don't like your tax burden, you could move to a state with a lower one (Nevada, Washington etc). Or you could choose to emigrate. At the end of a day, you live in a republic, and need to obey it's laws. ("Render unto Caesar")
    - tomohawk 8y ago

module0000 8y ago

History is filled with tales of governments trying to demand money that they did not facilitate the production of. The "income tax" in the US was a response to World War II debt, and was intended to be temporary. However, once you begin handing people free money, they don't want you to ever stop. Read all about it at http://time.com/4289687/1942-tax-day-history/ http://time.com/4289687/1942-tax-day-history/ It is what it is, and nothing short of a hero in a book depository window is likely to change it. Nothing to do but move on with our lives and keep being robbed.

SantalBlush 8y ago
This sentiment always reveals a misunderstanding of economics. The US Government can obliterate your income/wealth without ever touching your bank account; moreover, it can generate revenue without touching your account as well. Why tax individuals then? Because it is considered more economically stable than some of the alternatives, like printing money; this means taxation is safer for the value of your dollars than other forms of revenue generation, all else being equal.
- dredmorbius 8y ago
  And history: Income tax in the US dates to 1894. The 16th Amendment was ratified in 1913. A very premature response to WWII. Income is not the only taxable quantity; tariffs, excise, property, wealth, and estate taxes are among the options.
  - nybble41 8y ago
    Not to mention simply spending a lot less on things the federal government doesn't need to be involved in to begin with.
    - dredmorbius 8y ago
      Sorry? Such as?

dollar 8y ago

The poor, poor Internal Revenue Service. With virtually unlimited resources (if it alleges a crime) and a 99.8% conviction rate, its a wonder they collect any taxes at all! How dare these filthy billionaires try to keep their own money.

linsomniac 8y ago

The graphic on that article reminds me of something a multi-millionaire once told me about his stock market high-frequency trading: It's like picking up pennies in front of a steam roller.

adolph 8y ago

See also Propublica on what regions are subjected to the most audits. Hint is in the URL. https://projects.propublica.org/graphics/eitc-audit https://projects.propublica.org/graphics/eitc-audit

jasonshen 8y ago

One of the challenges we have with our current tax code is the fact that it's based on income (salary, capital gains, etc). One idea is to use a value-added tax (VAT) that allows all consumption to be taxed. This is a big part of Andrew Yang's campaign to fund UBI. https://www.yang2020.com/policies/value-added-tax/ https://www.yang2020.com/policies/value-added-tax/ He also wants to increase the IRS's funding which would help go after those super rich people and their lawyers.

dredmorbius 8y ago
Or wealth / property taxes. Or exim taxes on international money transfers. Or taxes on bank balances, particularly offshore. https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/Chapter_2 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/...

treespace8 8y ago

It used to be simple. Government taxed their citizens. But now at a certain level of wealth you can turn yourself into an international corporation. Who isn’t really a citizen of any one country. No one is going to ban international business. So the ultra rich will probably continue to get away with this. And the upper class (100k - 500k a year) will bear the tax burden.

HillaryBriss 8y ago

I love the quotation "From the minute it went live, it was dead on arrival." I mean, that's pretty dead.

wav-part 8y ago

Ultrawealthy Ought to Help https://www.youtube.com/watch?v=PGMQZEIXBMs https://www.youtube.com/watch?v=PGMQZEIXBMs

z5h 8y ago

Dear interested lawyers, keep half the money you recover. Problem solved.

xtracto 8y ago
That would be brutal, but really good.

specialist 8y ago

I wonder if there's enough public information to do third party (citizen) audits? Crowd fund some under employed accountants and geeks and sleuths to dig into some of the big boys. -- Is there some kind of bounty program exposing tax cheats? Like that small law group that's made millions whistleblowing big pharma.

lordnacho 8y ago

If you've never had a tax scheme offered to you, this is how it goes. My experience is in the UK but there's similar stuff everywhere, I'm sure. Someone from an "aggressive accountant" will somehow find you. They will tell you what kind of people they represent, and why you are one of them. Then they will draw an immensely complicated block diagram, like the UML diagram of a large enterprise application, except none of the blocks means anything to you. There's always some special rule they are using. One time it hinged on me, a guy who can't play or sing a note, spending an hour or two each week critiquing the lyrics of a well known rap artist. Another time it hinged on me writing and publishing poetry. Yet another one was related to films. I've got zero skill in anything artistic, so obviously this was not going to be legit. It is what the guy presents it as, a tax dodge. The guy also says your winning are dependent on running a legal gauntlet; Some schemes work, others don't and you end up paying the tax bill, the accountants, and a penalty. Luckily I wasn't tempted to participate in any of these schemes. You know why you are participating in these schemes, and it's not a sincere desire to improve rap music. And I did hear about a friend of a friend recently who tried and lost, and is now in deep trouble. That's just the tip of the iceberg as well. All sorts of other tax games are played by people way wealthier than me, as well as corporate entities.

mrnobody_67 8y ago

If any other revenue generating entity was bringing in $4500/hr of labour, it'd be rapidly scaled up and funded to capture the maximum possible upside... crazy how that doesn't happen here.

joelx 8y ago

All tax returns should be public. This would vastly reduce cheating on taxes. Our society has run into a fundamental problem - there are always a certain number of people who will cheat on their taxes. According to research, these people are disproportionately the ultrawealthy. The real problem comes up when the government does not do proper audits and doesn't enforce penalties because then good and honest people see the cheaters get away with it. This leads to a quick erosion of morals and integrity in the whole system. Making all tax returns public makes it very easy for anyone to spot the cheaters. Even pathological liars and cheaters will have a strong disincentive against cheating and will be quickly punished if they do.

nojvek 8y ago
Making tax returns public also attracts a shit ton of spammers and conmen. But I whole heartedly agree, if you want to solve any form of corruption or “some are more equal than others”, public accountability and immutable/verifiable record keeping is the best counter.

Proven 8y ago

No one complains when government campaigns to cut public spending fail. When will somebody complain about that? Public sector is less competitive so it is reasonable to expect that such campaigns will fail. The government may have more success if they hit on their own spending, but nobody wants to do that because the higher the spending the easier it is to get re-elected.