4 ms·

Just standby for the next travesty. What's the specific travesty here? The IRS already looks at and analyzes your private financial data both as reported by yo

by glurgh 13y ago

Just standby for the next travesty. What's the specific travesty here? The IRS already looks at and analyzes your private financial data both as reported by you and others and this is generally considered acceptable and a necessary part of them doing their job. So say now they noticed you reported $20k in gross annual income but are buying Ferraris on eBay. It seems pretty reasonable to assume, from that piece of public data that you might be mis-stating your taxable income.

ams6110 13y ago
If congress would simplify the tax code, it would be both harder to cheat and vastly easier for the honest to pay their taxes. And the IRS wouldn't need to snoop into everyone's life.
- glurgh 13y ago
  These seem like orthogonal issues, though. Even with the most simplistic tax code conceivable (say, a flat tax) a tax authority would have to examine your self-reported financial data and financial data relating to you reported by third parties. And if you're suspected of misrepresentation, they'd still have good reason to go rummaging through your publicly or legally accessible info to make their case. These steps appear independent of the details of the tax code.
- tptacek 13y ago
  No simplified tax code proposal I've read would eliminate the problem of people doing cash transactions under the table, or "loaning" themselves a house and treating that as a business asset.
  - theflyingkiwi42 13y ago
    The Fair Tax would take care of most of that. Any transaction with a business would have sales tax. There are no write offs, so the business asset would not fly, neither would be buying Ferraris. http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWo...
    - thaumaturgy 13y ago
      Every time I've looked at the Fair Tax proposal, I've been underwhelmed and thought the name was the same sort of anti-nomer as the Patriot Act. But maybe you can change my mind. It's a tax on buying. Think about that for a moment. Fair Tax proponents claim that the current tax system causes disincentives for things like exports and U.S. manufacturing. Why would the Fair Tax proposal then not cause a disincentive on the demand side of the economy? ("How will the plan affect economic growth" in the FAQ clearly espouses a particular economic ideology that has yet to be supported by any of the facts of history.) It also places the entire tax burden on the consumer. Annual pre-tax corporate profits are somewhere between $800 billion and $2 trillion, depending on which data you decide to believe. Why is all that money being left on the table in favor of drawing the entire national budget from consumers?
      - ars 13y ago
        Tax already has an effect on demand - it reduces income, which reduces available money. This just makes it more obvious. Corporations are owned by people (consumers as you call them), tax the person, not the intermediary. And in any case the corporation would also have to pay the tax on everything they buy.
        eightyone 13y ago
        You should check out the link I posted above. Under the FairTax the highest and lowest brackets will see their share of taxes go down. Everyone who makes between $15,000 and $200,000 will see their share of taxes go up.
    - ajross 13y ago
      The Fair Tax would "take care of" neither of the examples tptacek gave... Like all other sales tax proposals, it relies on voluntary reporting of sales. Want to cheat the IRS? Just don't tell them about it.
      - ars 13y ago
        > Want to cheat the IRS? Just don't tell them about it. This might help your customers, but it doesn't help you (unless you charge the sales tax and don't forward it). So the cheating incentives are much lower.
knowaveragejoe 13y ago
If you're implying they can go to eBay and figure out what you've been purchasing, that's quite scary. On the other hand, if they go through the accepted channels and gather that information from the credit card companies, that seems more acceptable.
kalininalex 13y ago
Or you may have just cashed out your 1-year CD that paid you .86%. You had $2.3M there and received income of ... $20k. Disappointed by the depressed interest rates you went on a shopping spree, which included a Ferrary.

by glurgh 13y ago

ams6110 13y ago

If congress would simplify the tax code, it would be both harder to cheat and vastly easier for the honest to pay their taxes. And the IRS wouldn't need to snoop into everyone's life.

glurgh 13y ago
These seem like orthogonal issues, though. Even with the most simplistic tax code conceivable (say, a flat tax) a tax authority would have to examine your self-reported financial data and financial data relating to you reported by third parties. And if you're suspected of misrepresentation, they'd still have good reason to go rummaging through your publicly or legally accessible info to make their case. These steps appear independent of the details of the tax code.
tptacek 13y ago
No simplified tax code proposal I've read would eliminate the problem of people doing cash transactions under the table, or "loaning" themselves a house and treating that as a business asset.
- theflyingkiwi42 13y ago
  The Fair Tax would take care of most of that. Any transaction with a business would have sales tax. There are no write offs, so the business asset would not fly, neither would be buying Ferraris. http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWo...
  - thaumaturgy 13y ago
    Every time I've looked at the Fair Tax proposal, I've been underwhelmed and thought the name was the same sort of anti-nomer as the Patriot Act. But maybe you can change my mind. It's a tax on buying. Think about that for a moment. Fair Tax proponents claim that the current tax system causes disincentives for things like exports and U.S. manufacturing. Why would the Fair Tax proposal then not cause a disincentive on the demand side of the economy? ("How will the plan affect economic growth" in the FAQ clearly espouses a particular economic ideology that has yet to be supported by any of the facts of history.) It also places the entire tax burden on the consumer. Annual pre-tax corporate profits are somewhere between $800 billion and $2 trillion, depending on which data you decide to believe. Why is all that money being left on the table in favor of drawing the entire national budget from consumers?
    - ars 13y ago
      Tax already has an effect on demand - it reduces income, which reduces available money. This just makes it more obvious. Corporations are owned by people (consumers as you call them), tax the person, not the intermediary. And in any case the corporation would also have to pay the tax on everything they buy.
      - eightyone 13y ago
        You should check out the link I posted above. Under the FairTax the highest and lowest brackets will see their share of taxes go down. Everyone who makes between $15,000 and $200,000 will see their share of taxes go up.
  - ajross 13y ago
    The Fair Tax would "take care of" neither of the examples tptacek gave... Like all other sales tax proposals, it relies on voluntary reporting of sales. Want to cheat the IRS? Just don't tell them about it.
    - ars 13y ago
      > Want to cheat the IRS? Just don't tell them about it. This might help your customers, but it doesn't help you (unless you charge the sales tax and don't forward it). So the cheating incentives are much lower.

knowaveragejoe 13y ago

If you're implying they can go to eBay and figure out what you've been purchasing, that's quite scary. On the other hand, if they go through the accepted channels and gather that information from the credit card companies, that seems more acceptable.

kalininalex 13y ago

Or you may have just cashed out your 1-year CD that paid you .86%. You had $2.3M there and received income of ... $20k. Disappointed by the depressed interest rates you went on a shopping spree, which included a Ferrary.