7 ms·

Five Former Treasury Secretaries: Fund the IRS

52 points by resalisbury 5y ago

yownie 5y ago
I don't think anyone trusts the IRS enough to give them money.
chrispeel 5y ago
link w/o paywall: https://archive.ph/vDBOh https://archive.ph/vDBOh
rjzzleep 5y ago
I find it extremely annoying that the USA treasury wants to punish a lot of other countries for being easy to do business in just because the USA themselves doesn’t dare touching their billionaires.
- bbarnett 5y ago
  Taxing billionaire can generate additional revenue, bit it is nothing compared to corporate taxes.
  - rjzzleep 5y ago
    Those two usually go hand in hand. Most of those billionaires built their fortunes on corporate tax avoidance, so when I say go after their billionaires, I don't talk only about individuals. I'm also talking about the Starbucks, the Amazons, etc. Even the Trump empire was built on smart tax credits, avoidance and political lobbying, and most of it happened before it became a global institution. A global minimum tax rate won't actually fix those institutions tax avoidance, it just makes life harder for everyone else. There are so many more topics to address than just raising an arbitrary tax number. But having that global tax rate, makes it look like they at least tried. Either they don't know what they're doing, or they're intentionally deflecting from the problem. Either way it's not good.
kingsuper20 5y ago
>The proposal also calls for increasing the information the I.R.S. has at its disposal. and that is the nature of government going forward. Good luck everyone.
- d33lio 5y ago
  No thank you... I still can't get over how people fail to realize that arbitrary thresholds for financial reporting (initially set in 1970 at $10k[0]) haven't been adjusted for inflation. To the point where in a not so distant future, settling up funds with friends at a large dinner could in certain cases be considered "structuring"[1]. You have access to all of my credit card records, basically everything I do online, figure it out. The fed boys have more than enough info, but of course we should trust them with it to tax the rich... Full disclosure, we should definitely tax a-holes with billions in their Roth IRA. 0 - https://www.fdic.gov/regulations/safety/manual/section8-1.pdf https://www.fdic.gov/regulations/safety/manual/section8-1.pd... 1 - https://www.investopedia.com/terms/m/moneylaundering.asp https://www.investopedia.com/terms/m/moneylaundering.asp
  - tablespoon 5y ago
    > To the point where in a not so distant future, settling up funds with friends at a large dinner could in certain cases be considered "structuring"[1]. That's a bonkers thing to fear, bordering on conspiracy theory. The feds aren't chomping at the bit so they can bust you and your friends for everyday behavior. Now, that's not to say they might exploit it in a three-felonies-a-day sense to get someone they have their eye on for other reasons (a-la Al Capone and tax evasion), but if the law too often leads to unjust results, it will be changed. Especially if the unjust result is experienced by people with power and influence (and not just the poor and marginalized).
    - quercusa 5y ago
      > if the law too often leads to unjust results, it will be changed. But since it will only be used against 'bad' people, no problem.
AlgorithmicTime 5y ago
Giving more power to the IRS is not the answer. The Fair Tax is a far better solution.
- d33lio 5y ago
  Deductions are the real "lever" that the ultra rich use, since you can lobby the feds to implement whatever you want. This is why when tax rates post WWII were "over 90%" in top brackets nobody actually paid those taxes. Ironically, in that period most people who would be subject to that tax just took sabbaticals (of sorts) and reduced their income. Contrary to popular belief, most rich people have a far higher IQ than Hollywood actors.
  - opo 5y ago
    >...most rich people have a far higher IQ than Hollywood actors. Not surprisingly, back when marginal rates were so high, rich Hollywood actors also hired CPAs to avoid giving 90+ percent of their income to those in power. The previous discussion on this was here: https://news.ycombinator.com/item?id=19031135 https://news.ycombinator.com/item?id=19031135
  - majormajor 5y ago
    > Deductions are the real "lever" that the ultra rich use, since you can lobby the feds to implement whatever you want. This is why when tax rates post WWII were "over 90%" in top brackets nobody actually paid those taxes. Ironically, in that period most people who would be subject to that tax just took sabbaticals (of sorts) and reduced their income. Did they not pay because they had magic deductions or did they not pay because of sabbaticals and reduced income? Because the former means it was no better than today (and income differential stats around CEO vs line-level employer suggest this is not true), but the latter is by its very nature better than today. It's literally creating more opportunity for more people to earn money? If person A isn't doing the work and making the income, person B is. So inequality will be less! That high tax rate disincentives a small set of super-high-earners from running ever-more parts of the world? Good!
    - 5y ago
MR4D 5y ago
TLDR: modernizing outdated technological systems is the key to fixing this problem.
- MR4D 5y ago
  Wow. I quote directly from the article and get downvoted.
  - meragrin_ 5y ago
    Perhaps because the summary is inaccurate? They also include more auditors, more support personnel, more reporting requirements for financial institutions, and more regulations on tax preparers.
    - MR4D 5y ago
      More people with outdated technology won’t fix it. Key statements below. Note that any change in reporting. Requires updated technology as well. So if they want to make a real improvement, it cannot happen without a big update to their technology. More humans cannot fix the problem, and they cannot handle more information sources without improved technology. How that is inaccurate is beyond me. Paragraph 4: “ In particular, the agency’s siloed and antiquated I.T. ” Paragraph 6: “ This is because they include, for example, modernizing outdated technological systems”
      - meragrin_ 5y ago
        It is inaccurate because it is incomplete. Sure it will help, but it won't give them additional information needed to get the unreported or do much to help to give support to confused people.
        MR4D 5y ago
        TLDR by definition is incomplete. I think your expectations are a bit off.
wonder_er 5y ago
> Six hundred billion dollars per year, and growing in "unpaid taxes". I foolishly tried to file my own taxes in 2018. Used the IRS's free online calculator. According to the letter I got recently, when I put $11k into some tax-advantaged retirement account, it resulted in me not counting that $11k as income, but I actually put it in the wrong account, so that $11k should have counted as income on which I owed taxes. To put it lightly, I am _extremely unsympathetic_ to the IRS complaining about "unpaid taxes" when... i mean, literally everything about the system is broken. There are 1000 things I'd rather spend the $80k/yr my wife and I have taken from me, under threats of violence, by the many agencies who think they have a right to our income. I'm struggling to understand the arrogance that's just dripping through this entire piece. People in America are struggling right now, it's been a difficult two years. The heads of the "revenue collection agencies", complaining about how their job is difficult? Cry me a river.
- pitaj 5y ago
  I agree completely. If the IRS want an easier time, we should simplify the tax code, not give them more resources for enforcement.
  - AnIdiotOnTheNet 5y ago
    You say that like the IRS has any power at all to simplify the tax code. That's all congress, who are paid by H&R block and rich people in general to keep it complicated.
    - pitaj 5y ago
      No I was not implying that at all. Congress also must be involved in giving the IRS more resources, either through budget or more information access.
- LanceH 5y ago
  Sure the government has gotten it wrong in the past. But this time we need more government because the right guys are in charge and it will work better this time. Promise.
CityOfThrowaway 5y ago
In a surprising turn of events, bureaucrats believe that bolstering their own bureaucracy is the panacea they’ve been looking for! More seriously, based on the level of digitization that has happened in the financial sector over the last 20 years, I think it would be truly shocking if we didn’t have a tremendous reduction in manpower associated with auditing records. Firstly, most American file their taxes using software that all but makes it impossible for them to be wrong in any significant way. Secondly, that is aided by the fact that all major financial institutions pipe their customers data straight into the government and into each other. There is very little space for lying or hiding assets. The whole system is computerized. And to be frank, I doubt that the pursuit of major tax evaders is really a function of lack of resources. I’d strongly wager that it’s a lack of political will. If the authors are being truthful about the existence of a small number of large, known entities simply not filing returns, then we can assume that somebody in the chain of authority has made the explicit decision to not pursue. Adding more bodies without changing that fundamental decision won’t help.
- Retric 5y ago
  It’s become more expensive to audit records not less. The IRS computerized collecting payroll information decades ago, so any recent reductions have simply been politically motivated.
  - rjzzleep 5y ago
    True, but if Tax systems are anything like government healthcare systems, then the reason why it's more expensive to audit records isn't because what data is available, but rather because of how that data is available and how its processed. In Germany, while you do submit everything digitally it's all scanned and filed on paper, and to some extent the digitally some digitally submitted information is printed at tax office before processing. Obviously when you have nonlinear data, i.e. paper receipts and invoices and a lot of other paper data, more data means more physical labour.
    - Retric 5y ago
deleted 5y ago
[deleted]
motohagiography 5y ago
> But misreporting exceeds 50 percent for certain types of business income, like rental and proprietorship income. The current tax system thus benefits certain high earners who accrue most of their income from sources where misreporting is common. This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. However, I seem to remember something about this very issue in history before, and for some reason this period is a theme this morning - something to do with wealthy peasants being an ongoing problematic resitance to policies that promise justice to everyone if they just give up everything. https://en.wikipedia.org/wiki/Dekulakization https://en.wikipedia.org/wiki/Dekulakization The window has not shifted and the crimes of the 20th century are still very much in the minds of people. These guys and the rest of the out of touch Davos crowd basically want to engineer a version of China for the rest of the world. You're never going to guess who won't be giving up their stuff. It is important to express contempt at these people. They show up in every generation, and the results are always the same.
- deleted 5y ago
  [deleted]
- vajrabum 5y ago
  How does a simple, flat tax fix not reporting income?
- Thrymr 5y ago
  > This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. How do simple flat taxes solve the underreporting problem? Surely there is still an incentive not to report rental & proprietorship income if it is not well tracked? Perhaps there is a lower incentive if these mostly affect wealthier people and the marginal rate was lower, but the incentive is still there.
- sroussey 5y ago
  We have flat taxes now. $1m/yr or $10m/yr makes no difference—same rate.
pwned1 5y ago
Just abolish the income tax. All it does, and will do, is justify the further growth of the surveillance state.
- jl2718 5y ago
  More importantly, it's already irrelevant ($1.6T) compared to bond sales ($8T). I'll eat my socks if the economy doesn't grow by 20% after eliminating taxes.
Drunk_Engineer 5y ago
It is hilarious that Timoty Geithner, of all people, would write this editorial -- given his own problems with failing to report income to the IRS. https://abcnews.go.com/Business/story?id=6704526&page=1 https://abcnews.go.com/Business/story?id=6704526&page=1
jl2718 5y ago
> could total $7 trillion over the next decade The treasury created $8T in bond sales just last year, and accelerating. Bond sales fund every level of the government. Tax revenue will never pay the debt. Buyers know this. It doesn't matter. It's irrelevant.
adolph 5y ago
The linked IRS inspector general report the article’s premise is based on is pretty interesting. Basically the IG is saying that the IRS is leaving a lot of money on the table because of gaps between different functions/departments (examination and collection). The report does acknowledge that workforce scale is a problem but it looks like that is stated without considering worker productivity. https://www.treasury.gov/tigta/auditreports/2020reports/202030015fr.pdf#page7 https://www.treasury.gov/tigta/auditreports/2020reports/2020...

52 points by resalisbury 5y ago

yownie 5y ago

I don't think anyone trusts the IRS enough to give them money.

chrispeel 5y ago

link w/o paywall: https://archive.ph/vDBOh https://archive.ph/vDBOh

rjzzleep 5y ago

I find it extremely annoying that the USA treasury wants to punish a lot of other countries for being easy to do business in just because the USA themselves doesn’t dare touching their billionaires.

bbarnett 5y ago
Taxing billionaire can generate additional revenue, bit it is nothing compared to corporate taxes.
- rjzzleep 5y ago
  Those two usually go hand in hand. Most of those billionaires built their fortunes on corporate tax avoidance, so when I say go after their billionaires, I don't talk only about individuals. I'm also talking about the Starbucks, the Amazons, etc. Even the Trump empire was built on smart tax credits, avoidance and political lobbying, and most of it happened before it became a global institution. A global minimum tax rate won't actually fix those institutions tax avoidance, it just makes life harder for everyone else. There are so many more topics to address than just raising an arbitrary tax number. But having that global tax rate, makes it look like they at least tried. Either they don't know what they're doing, or they're intentionally deflecting from the problem. Either way it's not good.

kingsuper20 5y ago

>The proposal also calls for increasing the information the I.R.S. has at its disposal. and that is the nature of government going forward. Good luck everyone.

d33lio 5y ago
No thank you... I still can't get over how people fail to realize that arbitrary thresholds for financial reporting (initially set in 1970 at $10k[0]) haven't been adjusted for inflation. To the point where in a not so distant future, settling up funds with friends at a large dinner could in certain cases be considered "structuring"[1]. You have access to all of my credit card records, basically everything I do online, figure it out. The fed boys have more than enough info, but of course we should trust them with it to tax the rich... Full disclosure, we should definitely tax a-holes with billions in their Roth IRA. 0 - https://www.fdic.gov/regulations/safety/manual/section8-1.pdf https://www.fdic.gov/regulations/safety/manual/section8-1.pd... 1 - https://www.investopedia.com/terms/m/moneylaundering.asp https://www.investopedia.com/terms/m/moneylaundering.asp
- tablespoon 5y ago
  > To the point where in a not so distant future, settling up funds with friends at a large dinner could in certain cases be considered "structuring"[1]. That's a bonkers thing to fear, bordering on conspiracy theory. The feds aren't chomping at the bit so they can bust you and your friends for everyday behavior. Now, that's not to say they might exploit it in a three-felonies-a-day sense to get someone they have their eye on for other reasons (a-la Al Capone and tax evasion), but if the law too often leads to unjust results, it will be changed. Especially if the unjust result is experienced by people with power and influence (and not just the poor and marginalized).
  - quercusa 5y ago
    > if the law too often leads to unjust results, it will be changed. But since it will only be used against 'bad' people, no problem.

AlgorithmicTime 5y ago

Giving more power to the IRS is not the answer. The Fair Tax is a far better solution.

d33lio 5y ago
Deductions are the real "lever" that the ultra rich use, since you can lobby the feds to implement whatever you want. This is why when tax rates post WWII were "over 90%" in top brackets nobody actually paid those taxes. Ironically, in that period most people who would be subject to that tax just took sabbaticals (of sorts) and reduced their income. Contrary to popular belief, most rich people have a far higher IQ than Hollywood actors.
- opo 5y ago
  >...most rich people have a far higher IQ than Hollywood actors. Not surprisingly, back when marginal rates were so high, rich Hollywood actors also hired CPAs to avoid giving 90+ percent of their income to those in power. The previous discussion on this was here: https://news.ycombinator.com/item?id=19031135 https://news.ycombinator.com/item?id=19031135
- majormajor 5y ago
  > Deductions are the real "lever" that the ultra rich use, since you can lobby the feds to implement whatever you want. This is why when tax rates post WWII were "over 90%" in top brackets nobody actually paid those taxes. Ironically, in that period most people who would be subject to that tax just took sabbaticals (of sorts) and reduced their income. Did they not pay because they had magic deductions or did they not pay because of sabbaticals and reduced income? Because the former means it was no better than today (and income differential stats around CEO vs line-level employer suggest this is not true), but the latter is by its very nature better than today. It's literally creating more opportunity for more people to earn money? If person A isn't doing the work and making the income, person B is. So inequality will be less! That high tax rate disincentives a small set of super-high-earners from running ever-more parts of the world? Good!
  - 5y ago

MR4D 5y ago

TLDR: modernizing outdated technological systems is the key to fixing this problem.

MR4D 5y ago
Wow. I quote directly from the article and get downvoted.
- meragrin_ 5y ago
  Perhaps because the summary is inaccurate? They also include more auditors, more support personnel, more reporting requirements for financial institutions, and more regulations on tax preparers.
  - MR4D 5y ago
    More people with outdated technology won’t fix it. Key statements below. Note that any change in reporting. Requires updated technology as well. So if they want to make a real improvement, it cannot happen without a big update to their technology. More humans cannot fix the problem, and they cannot handle more information sources without improved technology. How that is inaccurate is beyond me. Paragraph 4: “ In particular, the agency’s siloed and antiquated I.T. ” Paragraph 6: “ This is because they include, for example, modernizing outdated technological systems”
    - meragrin_ 5y ago
      It is inaccurate because it is incomplete. Sure it will help, but it won't give them additional information needed to get the unreported or do much to help to give support to confused people.
      - MR4D 5y ago
        TLDR by definition is incomplete. I think your expectations are a bit off.

wonder_er 5y ago

> Six hundred billion dollars per year, and growing in "unpaid taxes". I foolishly tried to file my own taxes in 2018. Used the IRS's free online calculator. According to the letter I got recently, when I put $11k into some tax-advantaged retirement account, it resulted in me not counting that $11k as income, but I actually put it in the wrong account, so that $11k should have counted as income on which I owed taxes. To put it lightly, I am _extremely unsympathetic_ to the IRS complaining about "unpaid taxes" when... i mean, literally everything about the system is broken. There are 1000 things I'd rather spend the $80k/yr my wife and I have taken from me, under threats of violence, by the many agencies who think they have a right to our income. I'm struggling to understand the arrogance that's just dripping through this entire piece. People in America are struggling right now, it's been a difficult two years. The heads of the "revenue collection agencies", complaining about how their job is difficult? Cry me a river.

pitaj 5y ago
I agree completely. If the IRS want an easier time, we should simplify the tax code, not give them more resources for enforcement.
- AnIdiotOnTheNet 5y ago
  You say that like the IRS has any power at all to simplify the tax code. That's all congress, who are paid by H&R block and rich people in general to keep it complicated.
  - pitaj 5y ago
    No I was not implying that at all. Congress also must be involved in giving the IRS more resources, either through budget or more information access.
LanceH 5y ago
Sure the government has gotten it wrong in the past. But this time we need more government because the right guys are in charge and it will work better this time. Promise.

CityOfThrowaway 5y ago

In a surprising turn of events, bureaucrats believe that bolstering their own bureaucracy is the panacea they’ve been looking for! More seriously, based on the level of digitization that has happened in the financial sector over the last 20 years, I think it would be truly shocking if we didn’t have a tremendous reduction in manpower associated with auditing records. Firstly, most American file their taxes using software that all but makes it impossible for them to be wrong in any significant way. Secondly, that is aided by the fact that all major financial institutions pipe their customers data straight into the government and into each other. There is very little space for lying or hiding assets. The whole system is computerized. And to be frank, I doubt that the pursuit of major tax evaders is really a function of lack of resources. I’d strongly wager that it’s a lack of political will. If the authors are being truthful about the existence of a small number of large, known entities simply not filing returns, then we can assume that somebody in the chain of authority has made the explicit decision to not pursue. Adding more bodies without changing that fundamental decision won’t help.

Retric 5y ago
It’s become more expensive to audit records not less. The IRS computerized collecting payroll information decades ago, so any recent reductions have simply been politically motivated.
- rjzzleep 5y ago
  True, but if Tax systems are anything like government healthcare systems, then the reason why it's more expensive to audit records isn't because what data is available, but rather because of how that data is available and how its processed. In Germany, while you do submit everything digitally it's all scanned and filed on paper, and to some extent the digitally some digitally submitted information is printed at tax office before processing. Obviously when you have nonlinear data, i.e. paper receipts and invoices and a lot of other paper data, more data means more physical labour.
  - Retric 5y ago

deleted 5y ago

[deleted]

motohagiography 5y ago

> But misreporting exceeds 50 percent for certain types of business income, like rental and proprietorship income. The current tax system thus benefits certain high earners who accrue most of their income from sources where misreporting is common. This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. However, I seem to remember something about this very issue in history before, and for some reason this period is a theme this morning - something to do with wealthy peasants being an ongoing problematic resitance to policies that promise justice to everyone if they just give up everything. https://en.wikipedia.org/wiki/Dekulakization https://en.wikipedia.org/wiki/Dekulakization The window has not shifted and the crimes of the 20th century are still very much in the minds of people. These guys and the rest of the out of touch Davos crowd basically want to engineer a version of China for the rest of the world. You're never going to guess who won't be giving up their stuff. It is important to express contempt at these people. They show up in every generation, and the results are always the same.

deleted 5y ago
[deleted]
vajrabum 5y ago
How does a simple, flat tax fix not reporting income?
Thrymr 5y ago
> This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. How do simple flat taxes solve the underreporting problem? Surely there is still an incentive not to report rental & proprietorship income if it is not well tracked? Perhaps there is a lower incentive if these mostly affect wealthier people and the marginal rate was lower, but the incentive is still there.
sroussey 5y ago
We have flat taxes now. $1m/yr or $10m/yr makes no difference—same rate.

pwned1 5y ago

Just abolish the income tax. All it does, and will do, is justify the further growth of the surveillance state.

jl2718 5y ago
More importantly, it's already irrelevant ($1.6T) compared to bond sales ($8T). I'll eat my socks if the economy doesn't grow by 20% after eliminating taxes.

Drunk_Engineer 5y ago

It is hilarious that Timoty Geithner, of all people, would write this editorial -- given his own problems with failing to report income to the IRS. https://abcnews.go.com/Business/story?id=6704526&page=1 https://abcnews.go.com/Business/story?id=6704526&page=1

jl2718 5y ago

> could total $7 trillion over the next decade The treasury created $8T in bond sales just last year, and accelerating. Bond sales fund every level of the government. Tax revenue will never pay the debt. Buyers know this. It doesn't matter. It's irrelevant.

adolph 5y ago

The linked IRS inspector general report the article’s premise is based on is pretty interesting. Basically the IG is saying that the IRS is leaving a lot of money on the table because of gaps between different functions/departments (examination and collection). The report does acknowledge that workforce scale is a problem but it looks like that is stated without considering worker productivity. https://www.treasury.gov/tigta/auditreports/2020reports/202030015fr.pdf#page7 https://www.treasury.gov/tigta/auditreports/2020reports/2020...