5 ms·

> under what definition of software engineer? Probably a broad enough definition to net the US Government the greatest tax revenue possible for the effort to e

by teeray 1y ago

> under what definition of software engineer? Probably a broad enough definition to net the US Government the greatest tax revenue possible for the effort to enact this.

abeppu 1y ago
IDK if that's right. Oddly, the current administration has gutted the IRS and seems pretty ambivalent about collecting taxes that are on the books. I wonder if there will be an inconsistent definition of who is a software engineer, based on how friendly the company is with the administration, whether the company still has someone with a DEI title, etc.
- teeray 1y ago
  > the current administration… seems pretty ambivalent about collecting taxes that are on the books. I wonder if there will be an inconsistent definition of who is a software engineer, based on how friendly the company is with the administration, whether the company still has someone with a DEI title So basically the same situation that we have with bullshit speed limits everywhere.
  - ethbr1 1y ago
    If we had specifically defunded highway patrol that was net-revenue-positive, yes. Republican defunding of the IRS is literally insane: reform by cutting enforcement. - It rewards people who cheat on their taxes. - It costs the government more money that it saves, because IRS investment is net revenue positive. But then, the modern Republican party seems more concerned with being the party of 'law(s I agree with) and order (for people who aren't me).'
    - jandrewrogers 1y ago
      People greatly overestimate the amount of material cheating that happens, especially among large companies and the wealthy. I used to work for a Federal audit organization and almost all of the recoveries had a root cause in sloppy compliance and record-keeping practices rather than intentional malfeasance. It is broadly recognized as optimal that the recovered money should be several-fold the direct costs spent to recover it because this activity incurs a lot of non-obvious indirect costs. It is a variation on the principle that the optimum amount of fraud is non-zero. Most of the blatant tax fraud is much lower down the economic ladder because below a certain threshold recovery doesn’t justify the cost and people know this. The amount you can get away with is far below the threshold where it would be worth the risk for wealthy parties. The best ROI for auditors in many of these cases is to make regular object lessons at random to discourage it rather than systematically prosecute it. AFAIK, the increased spending at the IRS did not lead to concomitant offsetting recoveries. This is a predictable outcome, the amount of enforcement activity has been pretty finely tuned for decades to optimize ROI. Most of the recoveries come from changing focuses on compliance to areas that haven’t seen much enforcement activity in many years. Fighting entropy basically. If you assume that most large recoveries are from sloppiness rather than systematic tax fraud, it changes what is going to be an effective strategy.
      - guntars 1y ago
        I’d think it’s normal and expected that the “mistakes” made will err on the side of benefiting the taxpayer, i.e., reducing their tax bill.
      - madars 1y ago
        This comment (currently downvoted to hard-to-read grey-on-grey) is an excellent example why you should always enable "showdead" in your profile, use user CSS to make downvoted comments readable again (e.g., https://news.ycombinator.com/item?id=41514726 https://news.ycombinator.com/item?id=41514726), and browse https://news.ycombinator.com/active https://news.ycombinator.com/active instead of the homepage once in a while.
      - LamaOfRuin 1y ago
        >AFAIK, the increased spending at the IRS did not lead to concomitant offsetting recoveries. This is a predictable outcome, the amount of enforcement activity has been pretty finely tuned for decades to optimize ROI. Most of the recoveries come from changing focuses on compliance to areas that haven’t seen much enforcement activity in many years. Fighting entropy basically. AFAIK, all the data shows exactly the opposite. https://news.harvard.edu/gazette/story/2023/07/turns-out-irs-audits-of-wealthy-offer-terrific-return-on-investment-for-taxpayers/ https://news.harvard.edu/gazette/story/2023/07/turns-out-irs... https://www.irs.gov/pub/irs-pdf/p5901.pdf https://www.irs.gov/pub/irs-pdf/p5901.pdf (There are many more studies from various outside organizations, as well as other non-partisan government bodies outside the IRS concluding similarly)
        AnthonyMouse 1y ago
        These are studies designed to show positive results, and are susceptible to the criticism the parent identified. IRS enforcement has diminishing returns because the IRS starts with the small minority of people who are very obviously cheating on their taxes. Those people get audited and the IRS very easily recovers money from them. If you want to audit more people than that, you have to audit people who are less likely to be cheating. The more people you want to audit, the lower the collections rate gets. But if you're averaging in the recovery rate from the people who are so obviously cheating, you can get quite far down the road past a marginal benefit before the average becomes a negative number. Meanwhile, even that isn't considering the indirect costs. The IRS spends $1 and recovers $2, but audits are much cheaper than the IRS than they are for taxpayers. So the IRS spends $1 and the taxpayers (many of whom did nothing wrong, because we're talking about averages here) have to pay $5, in order for the IRS to recover $2. That's quite bad -- $6 is being spent in order to recover $2, but it's being reported as a $1 net gain. And it's worse than that, because those $6 aren't just money, it's actual spending -- human labor hours that couldn't be allocated to something else -- so what you're losing isn't the cost of that labor, it's the value of that labor. Someone was being paid $1 to create $2 in value but now instead of doing that they have to spend that time on an audit, so the $6 in cost is actually $12 in lost value. Not accounting for things like this makes it seem like we should be spending a lot more resources on something with diminishing returns and large hidden costs.
- drdec 1y ago
  What's really going on here is that this provision was part of the tax acts from the first Trump administration. Due to procedural rules in Congress, they had to make those cuts appear revenue neutral over a 10 year time period. This tax increase is part of that. Very likely nobody involved really had a reason or cared that SEs get categorized this way, it just let them pass the changes they really wanted at the time.
- sh34r 1y ago
  Judging by the Big Law shakedown, enforcement will be based on how much of your corporate cash is held in Taco’s shitcoin.
sailfast 1y ago
They want the change to _seem_ like it will bring in revenue so the CBO number adding to the deficit is lower. The folks advocating for this could care less about the deficit, but they need to act like they care.
sh34r 1y ago
A sufficiently idiotic tax scheme such as Section 174 can destroy far more income tax revenue than it collects, by destroying jobs and small businesses, and knocking high earners down a tax bracket or three. Section 174 isn’t doing much to tax FANG companies. Apple has all their profits in their Double Irish Dutch Sandwich racket. Amazon cooks the books to appear unprofitable on paper, in a manner that would make Hollywood accountants blush. This really only hurts the competition, who is completely unprofitable in every sense of the word. And all for what? Left-shifting the collection of a 21% income tax by a couple years? I think many of us would’ve done terrible things in 2021 to only have an effective tax rate of 21%. The government mugged Peter the payroll tax man to pay Paul the corpo tax man, but they disemboweled Peter in the process, and most of the money had to be disposed of as a biohazard. I don’t believe Section 174 was an honest attempt to manage the deficit. I think Zuck, the PayPal Mafia, and the blood-boy cabal bribed some Congresscritters to kill off what remained of their competition.
- robocat 1y ago
  > I think Zuck, the PayPal Mafia, and the blood-boy cabal bribed some Congresscritters to kill off what remained of their competition. What's with the craze for finding conspirational incentives? There's a repeatable pattern where commenters hallucinate an unreasonable incentive for everything. Motivations are difficult to discern (see courtrooms), and it is a modern vice to try and analyse incentives, but too often the cause-and-effect imaginations are not even reasonable guesses, but are just pure fiction. My best guess (based off word choices made) is that we all love to create new stories/narratives, that fit into our personal tribal stories.
  - sh34r 1y ago
    My best guess is that legalizing corruption has made everyone a bit more deranged. Some more than others. I don’t think it’s such a huge leap that a policy with such unanimous opposition was put in place by the select few special interests who benefit from it. It helps (or doesn’t help?) when they all got together for that photo op at the inauguration.
  - pigeonhole123 1y ago

by teeray 1y ago

> under what definition of software engineer? Probably a broad enough definition to net the US Government the greatest tax revenue possible for the effort to enact this.

abeppu 1y ago

IDK if that's right. Oddly, the current administration has gutted the IRS and seems pretty ambivalent about collecting taxes that are on the books. I wonder if there will be an inconsistent definition of who is a software engineer, based on how friendly the company is with the administration, whether the company still has someone with a DEI title, etc.

teeray 1y ago
> the current administration… seems pretty ambivalent about collecting taxes that are on the books. I wonder if there will be an inconsistent definition of who is a software engineer, based on how friendly the company is with the administration, whether the company still has someone with a DEI title So basically the same situation that we have with bullshit speed limits everywhere.
- ethbr1 1y ago
  If we had specifically defunded highway patrol that was net-revenue-positive, yes. Republican defunding of the IRS is literally insane: reform by cutting enforcement. - It rewards people who cheat on their taxes. - It costs the government more money that it saves, because IRS investment is net revenue positive. But then, the modern Republican party seems more concerned with being the party of 'law(s I agree with) and order (for people who aren't me).'
  - jandrewrogers 1y ago
    People greatly overestimate the amount of material cheating that happens, especially among large companies and the wealthy. I used to work for a Federal audit organization and almost all of the recoveries had a root cause in sloppy compliance and record-keeping practices rather than intentional malfeasance. It is broadly recognized as optimal that the recovered money should be several-fold the direct costs spent to recover it because this activity incurs a lot of non-obvious indirect costs. It is a variation on the principle that the optimum amount of fraud is non-zero. Most of the blatant tax fraud is much lower down the economic ladder because below a certain threshold recovery doesn’t justify the cost and people know this. The amount you can get away with is far below the threshold where it would be worth the risk for wealthy parties. The best ROI for auditors in many of these cases is to make regular object lessons at random to discourage it rather than systematically prosecute it. AFAIK, the increased spending at the IRS did not lead to concomitant offsetting recoveries. This is a predictable outcome, the amount of enforcement activity has been pretty finely tuned for decades to optimize ROI. Most of the recoveries come from changing focuses on compliance to areas that haven’t seen much enforcement activity in many years. Fighting entropy basically. If you assume that most large recoveries are from sloppiness rather than systematic tax fraud, it changes what is going to be an effective strategy.
    - guntars 1y ago
      I’d think it’s normal and expected that the “mistakes” made will err on the side of benefiting the taxpayer, i.e., reducing their tax bill.
    - madars 1y ago
      This comment (currently downvoted to hard-to-read grey-on-grey) is an excellent example why you should always enable "showdead" in your profile, use user CSS to make downvoted comments readable again (e.g., https://news.ycombinator.com/item?id=41514726 https://news.ycombinator.com/item?id=41514726), and browse https://news.ycombinator.com/active https://news.ycombinator.com/active instead of the homepage once in a while.
    - LamaOfRuin 1y ago
      >AFAIK, the increased spending at the IRS did not lead to concomitant offsetting recoveries. This is a predictable outcome, the amount of enforcement activity has been pretty finely tuned for decades to optimize ROI. Most of the recoveries come from changing focuses on compliance to areas that haven’t seen much enforcement activity in many years. Fighting entropy basically. AFAIK, all the data shows exactly the opposite. https://news.harvard.edu/gazette/story/2023/07/turns-out-irs-audits-of-wealthy-offer-terrific-return-on-investment-for-taxpayers/ https://news.harvard.edu/gazette/story/2023/07/turns-out-irs... https://www.irs.gov/pub/irs-pdf/p5901.pdf https://www.irs.gov/pub/irs-pdf/p5901.pdf (There are many more studies from various outside organizations, as well as other non-partisan government bodies outside the IRS concluding similarly)
      - AnthonyMouse 1y ago
        These are studies designed to show positive results, and are susceptible to the criticism the parent identified. IRS enforcement has diminishing returns because the IRS starts with the small minority of people who are very obviously cheating on their taxes. Those people get audited and the IRS very easily recovers money from them. If you want to audit more people than that, you have to audit people who are less likely to be cheating. The more people you want to audit, the lower the collections rate gets. But if you're averaging in the recovery rate from the people who are so obviously cheating, you can get quite far down the road past a marginal benefit before the average becomes a negative number. Meanwhile, even that isn't considering the indirect costs. The IRS spends $1 and recovers $2, but audits are much cheaper than the IRS than they are for taxpayers. So the IRS spends $1 and the taxpayers (many of whom did nothing wrong, because we're talking about averages here) have to pay $5, in order for the IRS to recover $2. That's quite bad -- $6 is being spent in order to recover $2, but it's being reported as a $1 net gain. And it's worse than that, because those $6 aren't just money, it's actual spending -- human labor hours that couldn't be allocated to something else -- so what you're losing isn't the cost of that labor, it's the value of that labor. Someone was being paid $1 to create $2 in value but now instead of doing that they have to spend that time on an audit, so the $6 in cost is actually $12 in lost value. Not accounting for things like this makes it seem like we should be spending a lot more resources on something with diminishing returns and large hidden costs.
drdec 1y ago
What's really going on here is that this provision was part of the tax acts from the first Trump administration. Due to procedural rules in Congress, they had to make those cuts appear revenue neutral over a 10 year time period. This tax increase is part of that. Very likely nobody involved really had a reason or cared that SEs get categorized this way, it just let them pass the changes they really wanted at the time.
sh34r 1y ago
Judging by the Big Law shakedown, enforcement will be based on how much of your corporate cash is held in Taco’s shitcoin.

sailfast 1y ago

They want the change to _seem_ like it will bring in revenue so the CBO number adding to the deficit is lower. The folks advocating for this could care less about the deficit, but they need to act like they care.

sh34r 1y ago

A sufficiently idiotic tax scheme such as Section 174 can destroy far more income tax revenue than it collects, by destroying jobs and small businesses, and knocking high earners down a tax bracket or three. Section 174 isn’t doing much to tax FANG companies. Apple has all their profits in their Double Irish Dutch Sandwich racket. Amazon cooks the books to appear unprofitable on paper, in a manner that would make Hollywood accountants blush. This really only hurts the competition, who is completely unprofitable in every sense of the word. And all for what? Left-shifting the collection of a 21% income tax by a couple years? I think many of us would’ve done terrible things in 2021 to only have an effective tax rate of 21%. The government mugged Peter the payroll tax man to pay Paul the corpo tax man, but they disemboweled Peter in the process, and most of the money had to be disposed of as a biohazard. I don’t believe Section 174 was an honest attempt to manage the deficit. I think Zuck, the PayPal Mafia, and the blood-boy cabal bribed some Congresscritters to kill off what remained of their competition.

robocat 1y ago
> I think Zuck, the PayPal Mafia, and the blood-boy cabal bribed some Congresscritters to kill off what remained of their competition. What's with the craze for finding conspirational incentives? There's a repeatable pattern where commenters hallucinate an unreasonable incentive for everything. Motivations are difficult to discern (see courtrooms), and it is a modern vice to try and analyse incentives, but too often the cause-and-effect imaginations are not even reasonable guesses, but are just pure fiction. My best guess (based off word choices made) is that we all love to create new stories/narratives, that fit into our personal tribal stories.
- sh34r 1y ago
  My best guess is that legalizing corruption has made everyone a bit more deranged. Some more than others. I don’t think it’s such a huge leap that a policy with such unanimous opposition was put in place by the select few special interests who benefit from it. It helps (or doesn’t help?) when they all got together for that photo op at the inauguration.
- pigeonhole123 1y ago