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That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that th

• hos234 7y ago
  Yup. That's the strategy the Military uses - https://www.rollingstone.com/politics/politics-features/pentagon-budget-mystery-807276/ https://www.rollingstone.com/politics/politics-features/pent... "At a cost of $400 million, some 1,200 auditors charged into the jungle of military finance, but returned in defeat. They were unable to pass the Pentagon or flunk it. They could only offer no opinion, explaining the military’s empire of hundreds of acronymic accounting silos was too illogical to penetrate"
  • cpr 7y ago
    Remember when Rumsfeld announced that 2.3T USD were missing from the military? https://www.city-journal.org/html/americas-missing-money-15725.html https://www.city-journal.org/html/americas-missing-money-157... Yeah, nor do most people. The date he announced that? September 10, 2001. The section of the Pentagon hit? The accounting wing with all the records.
    • journalctl 7y ago
      As though the US government would have to orchestrate several terrorist attacks just to obscure some bad finances which are basically meaningless anyway.
      • bena 7y ago
        Yeah, that's the funny thing, we're supposed to trust that the Rumsfield thing is 100% legit but then they'd turn around and run a plane into the records to "hide" it. They could have just like not said shit. It's amazing how often conspiracy theories rely on the Illuminati DMV
        • journalctl 7y ago
          Conspiracy theories are always so impractical. It would’ve been way easier to just ship all of the documents to an incinerator and yeah, just not say anything.
      • jsight 7y ago
        Alternatively, the terrorist attack didn't actual hit the records in question (or at least not as many as are implied) and is unrelated, but was used as a convenient cover for bad finances that are basically meaningless anyway.
    • dekhn 7y ago
      ummm, are you making an oblique "9/11 truther" claim?
      • std_throwaway 7y ago
        What is wrong with those facts? Did they keep copies of those files in other locations? Did they explain the unaccounted money later on? EDIT: According to other comments who explained what's wrong, the "facts" are wrong and belong into the realm of "911truther" propaganda.
        • ComputerGuru 7y ago
          Money continued to disappear and in fact keeps disappearing and the Pentagon just says “oops, e we don’t know where it went, we’ll just permanently offset the books to balance them,” with no further accountability than that (across three administrations). They are basically untouchable even with records physically around; they do not need to resort to destruction of physical evidence so long as the military industrial complex is alive and well.
        • dekhn 7y ago
          as mentioned elsewhere, the part of the pentagon that was destroyed was not "the accounting wing" which is also not even a concept that makes sense. Pretty much every 9/11 truther cites "facts" but then has trouble when the facts turn out to be not true or are willful, limited misinterpretations of reality.
    • ComputerGuru 7y ago
      It’s a lot easier on your sanity to just accept that (insanely) crazy coincidences happen. If it helps, that number jumped to 6.5T a few years later and now stands at 21T and the military and Pentagon have simply stalled all attempts at enforcing audits. They have the gall to simply refuse to account for the discrepancies and believe they cannot be taken to task for misappropriated funds; they don’t need to blow up records when no one does anything if they simply refuse to make them available.
      • ptero 7y ago
        I do not doubt that the waste and accountability are a huge problem in the DoD, but $21T sounds extreme. The FY19 total military budget, according to Wikipedia, is a bit under $700B and you need to misappropriate 30 years of that to embezzle $21T. And that assumes everything is misappropriated (no salaries, no fuel to fly planes, etc.) and does not account for growth (30 years ago the budget was a lot smaller than it is today). My 2c.
        • ComputerGuru 7y ago
          It’s not really $21T in cash but rather $21T worth of book-cooking “adjustments” to make the numbers align. This article gives a good overview: https://www.nytimes.com/2018/12/03/us/politics/fact-check-pentagon-medicare-alexandria-ocasio-cortez.html https://www.nytimes.com/2018/12/03/us/politics/fact-check-pe... The NYT article claims that’s the absolute value of cooked assets and liabilities rather than the net amount but in truth it’s misappropriation so many levels deep (and recursive in parts) that you can’t even tell whether dollars are being made or lost. Purposely, I can only presume.
      • mistermann 7y ago
        > It’s a lot easier on your sanity to just accept that (insanely) crazy coincidences happen. Perhaps if your goal is peace of mind rather than correctness. All crazy things are not necessarily coincidences.
        • ComputerGuru 7y ago
    • skrebbel 7y ago
      I'm trying to deduct what you're implying, and as an armchair conspiracy theory fan¹, I love all of the options! This stuff is so nuts, it's lovely. ¹ I mean that I don't believe in the average conspiracy, but I love reading about them for the entertainment value
    • LyndsySimon 7y ago
      I do recall that, and recall discussion of it after 9/11. As for what I infer is an implication of the 9/11 attack being motivated by a desire to cover this up, I can't find any reference to the outer ring of the west wing of the Pentagon being "the accounting wing". Even if it were, I can't imagine that we're doing our federal accounting in the 21st Century on paper that's stored only in one central location. That said, the military is in fact missing a ton of money and is not in compliance with laws that require annual audits of all federal departments. That's a huge problem that should be addressed, but I see no evidence whatsoever that it's in any way related to 9/11.
      • nobleach 7y ago
        > I can't imagine that we're doing our federal accounting in the 21st Century on paper that's stored only in one central location. I'm not a conspiracy theorist, nor do I even remotely believe the idea that there's some sort of cover-up. But I will say one should _never_ assume the federal government doesn't do almost everything in the most backward, ancient way possible. Certainly they have tons of meetings, task-forces and plans to update things. Yet mostly they just flounder and keep on using ancient technology... like paper.
      • cpr 7y ago
        https://www.washingtonpost.com/archive/local/2002/09/11/hard-hit-pentagon-office-carries-on-in-aftermath-of-terror-attack/763063ed-9db0-4119-abc7-5516bf8c3f5b/ https://www.washingtonpost.com/archive/local/2002/09/11/hard...
    • notatoad 7y ago
      If they were going to fly a plane into the pentagon to cover up 2.3T in missing funds, why would they bother to announce the shortfall beforehand? You don't orchestrate an elaborate cover-up, and also publicly announce the thing you're trying to cover up.
      • mattmaroon 7y ago
        Because that's, like, what they want you to think man. :)
        • Amygaz 7y ago
          Rofl! I needed that today. Thanks!
      • Consultant32452 7y ago
        I don't buy into this particular conspiracy theory, but the answer to your question is really simple. Try to imagine the US government as a mob. "Helpful" services it runs are like fronts. So when the government builds a library, it's like the mob running a garbage collection company. The helpful services are fronts for complex murderous organizations with many factions. Once you see it that way, it's easy to see why one faction might tattle or fight against another faction within the mob, even though they are still all kind of in on the game together.
    • thebigshane 7y ago
      Yes, Rumsfeld did make this speech on the day before the attacks. It's actually a great speech too! He talks about the cumulative bureaucratic waste of the previous few years of the Department of Defense, and poor auditing. https://www.c-span.org/video/?c4623026/donald-rumsfeld-speech https://www.c-span.org/video/?c4623026/donald-rumsfeld-speec... https://www.cbsnews.com/news/the-war-on-waste/ https://www.cbsnews.com/news/the-war-on-waste/ https://www.quora.com/What-does-the-missing-3-trillion-dollars-just-before-the-9-11-attacks-suggest-to-you https://www.quora.com/What-does-the-missing-3-trillion-dolla... But the section of the Pentagon that was hit was not the "accounting wing". There is (and was) no "accounting wing". The specific areas that were hit were mostly "Naval Command Center" and "Defense Intelligence Agency", but even then, the area was relatively unoccupied due to renovations that started in 1998. https://en.wikipedia.org/wiki/File:FirstFloor_Pentagon_Bodies.png https://en.wikipedia.org/wiki/File:FirstFloor_Pentagon_Bodie... https://media.washingtonpost.com/wp-srv/national/images/pentagon_strike_0911.gif https://media.washingtonpost.com/wp-srv/national/images/pent... https://en.wikipedia.org/wiki/American_Airlines_Flight_77#Crash https://en.wikipedia.org/wiki/American_Airlines_Flight_77#Cr... https://en.wikipedia.org/wiki/The_Pentagon#September_11,_2001_attacks https://en.wikipedia.org/wiki/The_Pentagon#September_11,_200...
      • thebigshane 7y ago
        Forgot to note that, the money wasn't "missing" in the sense that it disappeared. It was definitely spent, over many projects, over many years. The problem he was trying to point out was that the auditing and tracking is poor and it is difficult to retroactively see where it was spent. I'm not trying to downplay it too much, because it obviously was (and IS) a huge problem. But there wasn't any implication of nefariousness or intentional fraud. (Caveat: There may have been smaller cases of fraud to make up that number, but the $2.3trillion itself wasn't implied to be all fraud). It wasn't "wait, wtf happened to all this money? >:( ". It was more "ah crap, we didn't do a good job tracking all this money... :*(" The nuance is subtle and easily hand-waved away by truthers, but such is politics.
  • solotronics 7y ago
    This is just a single example but it was eye opening when my friend told me about one of his clients. He is the chief mechanic at an exotic car dealership and one of their biggest customers is an active duty general in the Marines, this guy has millions of USD worth of cars.
    • isoskeles 7y ago
      Forgive me if I am misinterpreting, but wouldn't the taxes of an individual general in the Marines be completely different from the Department of Defense itself?
      • xapata 7y ago
        The implication was that they should be distinct but are not.
        • isoskeles 7y ago
          I didn't get that at all. Can you explain?
          • xapata 7y ago
            Generals do not earn millions in salary. To afford millions worth of automobiles, the general must have misappropriated funds.
            • dragonwriter 7y ago
              > To afford millions worth of automobiles, the general must have misappropriated funds. Or have, or at least have once had, a lucrative side business (military personnel can do this, legally.) Or have inherited money. Or have a spouse with a greater income or inheritance. Or restore cars, such that the market value of their vehicles vastly exceeds the purchase price. Or purchase cars that have significantly appreciated in value for other reasons (lots of high-end luxury cars that are limited run not only are pricey but limit sales to selected buyers, and the market value of the cars is almost immediately much higher than the purchase price and appreciates rapidly.) Or a combination of the above.
  • deleted 7y ago
    [deleted]
• ASTP001 7y ago
  Would it help to start a fund specific to this purpose? I'd imagine there would be significant ROI on it, in the big picture sense. Relevant Article: https://www.citylab.com/life/2017/09/the-rise-of-public-sector-crowdfunding/539244/ https://www.citylab.com/life/2017/09/the-rise-of-public-sect...
  • devicetray0 7y ago
    A fund? To what, pay the IRS to target specific individuals? After the IRS targeting controversy [0], I would highly doubt the IRS would accept that money. [0] https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy
  • pcurve 7y ago
    I love the idea but the rich would lobby so hard against it like it's the end of the world.
  • nickpsecurity 7y ago
    I've pushed for this before. Your idea: haven't read linked article yet. Mine was an organization that obfuscated working- to middle-class finances as much as rich. It would operate at cost with most legal stuff done as templates and accounting comouterized. It could be a public-benefit company, foundation, or co-op. They'd just charge annual fee to be in, consulting for anything complex, and everything external at cost plus minimal labor. What yall think?
• makomk 7y ago
  Careful. The two articles rely on vastly different cherry-picked definitions of who counts as rich, and neither claim is even remotely true anymore if you use the other definition. The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. This NYT article on the other hand picks out the top 400, who apparently pay lower taxes but are much more aggressively audited by the IRS than less wealthy people even with the funding cuts limiting their ability to do so. (According to the linked letter from the IRS, they heavily audit roughly the top 20,000 most well-off Americans.)
  • deleted 7y ago
    [deleted]
  • newen 7y ago
    Lower tax rates, not necessarily lower taxes.
    • tanderson92 7y ago
      From TFA: > They have constructed a historical database that tracks the tax payments of households at different points along the income spectrum going back to 1913, when the federal income tax began. It may be reading the book for the full detail on methods and results. I plan to.
      • newen 7y ago
        I was saying that the reason the IRS would audit richer people more is because they would pay more taxes even though they might have lower tax rates.
    • rc_kas 7y ago
      Lower tax rate is indeed my definition of lower taxes. A lower tax payment is a different thing.
      • koheripbal 7y ago
• PhasmaFelis 7y ago
  This seems like the "looking for your keys under the lamp post" joke. https://www.3quarksdaily.com/3quarksdaily/2016/03/the-streetlight-effect-a-metaphor-for-knowledge-and-ignorance.html https://www.3quarksdaily.com/3quarksdaily/2016/03/the-street...
• fredgrott 7y ago
  we have a sitting US Prez who has a whole bunch of pass through llcs as it makes tax auditing such a complex personal return nearly impossible due to cost constraints.
• swebs 7y ago
  Maybe its time we start considering the Fair Tax plan again. https://en.wikipedia.org/wiki/FairTax https://en.wikipedia.org/wiki/FairTax
  • lonelappde 7y ago
    LPT: an organization with an opinion in its name is not a trustworthy organization.
    • Supermancho 7y ago
      > an organization with an opinion in its name is not a trustworthy organization TO ME You have a strange life for that to be considered a "tip". I'm usually ok with the Federal Reserve or Green Peace or Humane Society or whatever.
  • astrodust 7y ago
    Ah, yes, the "tax the living hell out of the working poor" tax plan.
    • swebs 7y ago
      You must be thinking of something else. The effective tax rate is negative for the poor due to the basic income provided. https://en.wikipedia.org/wiki/Distribution_of_the_FairTax_burden#Tax_burden_impact https://en.wikipedia.org/wiki/Distribution_of_the_FairTax_bu...
      • harimau777 7y ago
        I'm not seeing that in the page you linked. Is there a specific statistic that you are referring to?
  • panopticon 7y ago
    Consumption is a smaller percentage of wealthy household incomes, and that plan doesn't do anything to address equity or other forms of lucrative wealth generation. I don't agree with that definition of "fair", and I think it would further exacerbate wealth inequality.
• Shivetya 7y ago
  Fortunately four states lost a lawsuit[0] attempting to overturn the 2017 Tax changes, specifically they went after the cap on deductions allowed that could be deducted off Federal taxes with regards to taxes paid to states and cities. In effect what they wanted was for their citizens to be able to write off a much higher level of state and local taxes against the Federal tax debt owed. This is how high tax states in turn claw back money their citizens would other pay to the Feds, by being able to write it off Federal taxes State taxes can be increased and the burden passed along. Not much different than some subsidies that favor wealthy households over all others in the form of "saving the environment". Watch how holier than thou a hand out is defended with to understand how money is given back to those least needing it. I am guilt of accepting the $7500 handout TWICE for EVs. I have always though that it should have been restricted to much less expensive cars to encourage their development but instead the Federal credit has no limit, car price or income level. IF you pay that much Federal Tax you got it back. So don't just focus on how much the "rich" pay or don't pay, also focus on all the handouts to people with good to great incomes just masked behind feel good names. (education - in particular master and higher degrees is a subsidy to the same) [0] https://reason.com/2019/10/07/federal-court-rules-against-blue-state-lawsuit-challenging-constitutionality-of-cap-on-federal-tax-deduction-for-state-and-local-tax-payments/ https://reason.com/2019/10/07/federal-court-rules-against-bl...
  • ScottBurson 7y ago
    Speaking as someone in a higher-tax state whose taxes went up as a result of the state tax deduction restriction in the 2017 tax bill, I wouldn't mind that if the difference were visibly going to help educate children in poorer states. Instead, it seems that a lot of it is being pocketed by people who already have a lot more money than I do. So although I can see the argument for restricting or eliminating SALT deductions, on the whole I still think the bill was terrible. I don't think you should feel bad about accepting the EV tax credit. The purpose of that is to help jump-start the industry; restricting it by income level would have diminished the desired effect. I haven't bought an EV (yet), but I'm glad you have.
• throwawaysea 7y ago
  The Pro Publica link you provided does not show they "audit the poor instead". It shows that the IRS audits poor and rich at the same rates. Unfortunately it seems Pro Publica is succumbing to the same forces as other journalistic outlets and has started to engage in sensationalist headlines. Here is their title verbatim: > IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor Here is the article's first sentence, verbatim: > The IRS audits the working poor at about the same rate as the wealthiest 1%. They go on to say this: > ProPublica reported the disproportionate audit focus on lower-income families in April. Per their own sentence, the poor and rich are audited at the same rate yet they go on to label this "disproportionate". That makes no sense. Furthermore, they have defined rich and poor in arbitrary ways - the top 1% of taxpayers by income versus EITC recipients. The latter group is 25 million people - 7.6% of the US. So per capita, the "rich" are getting audited more frequently.
  • ceejayoz 7y ago
    > Per their own sentence, the poor and rich are audited at the same rate yet they go on to label this "disproportionate". That makes no sense. They point out that while the rates may be similar, the impact is disproportionate. The rich have the means to hire a tax attorney, probably have a CPA who kept detailed records, etc. EITC recipients don't even know where to start in responding, and as the article indicates, many don't as a result.
  • lonelappde 7y ago
    Considering the rich have far higher tax liabilities and custom complex accounting (vs the poor whose income is usually reported by employers as an automatic check against self reports), "proportionate" auditing should be closer to per-dollar than per-person.
    • refurb 7y ago
      No, I wouldn’t expect that at all. Audits are often driven by the type of deduction. Some are hard to get fraudulently (401k deduction) while others are easier (rental income). A guy pulling in $500k in salary probably shouldn’t be audited, but someone pulling in $20k in adjusted rental income might need to be.
• seanmcdirmid 7y ago
  The IRS can audit everyones tax returns via automated algorithms, it is just that those kind of audits are very effective on simple tax returns and very not effective on complicated ones.
• deleted 7y ago
  [deleted]
• anoplus 7y ago
  I thought maybe we need to penalize "complexity". I feel like there is too much incentive to complexify things in society.
• tempsy 7y ago
  I think even most people mocking Bernie for saying "there should be no billionaires" are more open to much higher estate tax rates. At least when a wealthy person dies it's easier to count their wealth because there are strong incentives on the parts of the people who stand to inherit their wealth to make sure it's all counted correctly.
• captainbland 7y ago
  Seems like the correct thing to do is just to send the very rich person the bill for the costs of investigating their tax arrangements if it is substantially obscure. This would both make investigating these arrangements financially viable and disincentivise people from setting up arrangements like that in the first place.
  • conanbatt 7y ago
    Is the tax man an employee of the tax payer or is it the other way around?
    • captainbland 7y ago
      I suppose the question is "which tax payer?" Which is unclear because really it's the "employee" (in the sense that an organisation could be considered an employee at any rate) of a democratically elected government which in principle predominantly represents people who pay tax in general but also some who can't or don't. And one of their roles is in ensuring the interests of those lower down the income scale (which in this case even includes senior salaried professionals and only moderately successful business owners) such that they do not have an undue burden simply because somebody with far, far greater means has decided to arrange themselves some kind of labyrinthe with the express purpose of ensuring they outwit the rest of society. In this case it of course makes sense to make them feel the burden of their own creation rather than burdening the rest of society with it.
      • conanbatt 7y ago
        > And one of their roles is in ensuring the interests of those lower down the income scale ... This is not a responsibility of government as described in the constitution the united states.
        • captainbland 7y ago
          I'm not American but which amendment is that out of interest?