A nation of tax evaders

[Iwillnevergiveup]

A Nation of Tax-Evaders
by Lawrence S. Wittner posted on Tuesday, 3 March 2009

The furor over the non-payment of taxes by Tom Daschle and a few other recent nominees for public office should not obscure the deeper truth that the United States has become a nation of tax-evaders.

On the simplest level, this tax evasion is exemplified by the fact that vast numbers of people, including some who are quite wealthy, under-report their incomes to avoid paying their lawful share of the nation’s taxes. And still others, especially millionaires and billionaires, avoid taxes quite legally through a range of obscure loopholes and other tax dodges, including deposits in offshore tax havens. Numerous giant U.S. corporations pay no taxes at all.

Even more striking, cutting taxes is wildly popular among Americans and, as a consequence, in recent decades tax-cutting is all the rage among politicians—whether in good times or in bad, in war or in peace. Taxes, it is assumed, are evil, and like evil should be driven out of American life.

http://www.laprogressive.com/2009/03/03/a-nation-of-tax-evaders/

[notesdev]

1. 60000 pages of tax code

makes you a tax evader no matter how honestly you try to comply. Is there any person out there who is confident that they are straight with the entire code? I doubt it - I doubt there's even anyone out there who knows the whole thing, forget about actually complying with it.

[Igel]

10. Again, intent matters.

We can be reductionist and say that because I'm not familiar with every traffic rule that I'm a scofflaw, just as I would be were I to speed along at 80 mph in violation of posted rules and make continual left-hand turns from the rightmost lane. (Ah, but then I'd just be driving like a native Houstonian.)

In other words, knowledge and intent don't matter in the least. Everything's absolutely black and white, with no gray, no room for negligence or error.

I've probably not always paid all my taxes, although the IRS has never said anything. My mother-in-law certainly didn't pay all her taxes last year, and the IRS did say something. This is different from intentionally not reporting income or taking deductions which, on the face of it, aren't permitted.

Accidental omissions don't justify people who intentionally omit stuff. Even the IRS is more enlightened than that, for the most part.

[Tex-Slim]

15. Anything this complicated and convoluted

invites people to find ways to get around it. Whole industries exist for just that purpose, I'm sure you know.

As much as I realize some have apparently decided I'm a closet RW'er on this issue, when you think it through, the best way to tax people for, say, living too lavishly? A consumption tax! The best way to encourage people NOT to eat junk food or smoke or drink too much so that they become a burden on an already failing health care system? Tax the heck out of those very products which will cause us all to pay more to care for those who choose them later.

Doesn't that make sense? As for the argument that this tax hurts the poor - I guess you missed the part where the basics needed for survival aren't taxed. Plus all that tax money taken away now isn't any more after this is phased in - so actually the poor get a massive tax CUT and the rich no longer get tax cuts as their taxes are directly proportional to the extravagance of their chosen lifestyle.

How can someone not admit to the beauty of such a plan?

[ixion]

2. generalization is generally not a good thing

Most people pay their taxes.

[Butch350]

3. Followed by a general statement..

[SteelPenguin]

4. Genereally, general statements are true.

>.>

<.<

[ixion]

5. that would, of course, depend on the generality of the statement

:rofl:

Really though, generalizations often lack nuance, and tend to lump people into categories they don't really deserve to be in.

[Tex-Slim]

12. I generally find it best to generally avoid generality

Unless the general orders me... oh, I give up!

[Iwillnevergiveup]

6. Every tax season

I get to "eat" all the money I put out for teaching supplies above and beyond the maximum ceiling of a $250 allowable deduction. I'm sure all the teachers here will attest to the fact that out-of-pocket expenditures are not necessarily for frills or treats. Unless paper, pencils and pens are considered extras. The middle class has been getting creamed for decades.

[Tex-Slim]

7. All the more reason...

we need to scrap the tax code and go to a straight consumption based tax model - where the more you consume, the more tax you pay. The beauty and simplicity of such a tax change is astounding. Sure, there will still be those who try to game the system, but they will be easier to catch if you think about it - if you don't know what I mean, or you feel otherwise, let's talk about it.

This model will also silence the critics on both sides - for the rich can be frugal and thus perhaps avoid some tax, or live ostentatiously and thus pay extra automatically. Just think, for instance, about the best part - all the lawyers who make a living off of finding ways for cheating on taxes will be out of work! Tax forms - who needs them! Taxes collected at point of sale, just like current sales taxes!

I think you oversimplify it. Taxes are indeed evil, but to a certain extent they are a necessary evil and, when taken in moderation, actually can do some good. It's a conundrum, one of the great mysteries of life.

[Dr.Phool]

8. Flat tax is a flat-out stupid idea.

I spend, or consume 100% of my income just to survive. Therefore, I'd be taxed (at a higher rate) on 100% of my disposable income.

Someone who earns millions, but only spends a million, has a huge chunk of their income untaxed.

The best way is a fair, PROGRESSIVE income tax.

And tax capital gains just like normal income. Why should I pay tax on 100% of what I labored for in 12 hour days, and some over-moneyed twit with a trust fund, can buy stocks and bonds, live off of it, and be taxed at half the rate?

[Outlier]

11. Rich don't pay taxes

Any "small business owner" with a schedule C gets to deduct lots and lots of living expenses that regular w2 workers don't get to. My boss runs his families cell phone bill throught he business eventhough he never gets a business call on it, the $500 dollar cell phone bill came straight off the bottom line and if he was in the 25% bracket only cost him $375. Many have the business lease vehicles for the entire family plus pay insurance on the vehicles. There are many other legal loopholes available. Spliting the operation up into many different entities in order to pay a lower tax rate than if they were aggregated is very common. As long as the tax system is based on a tax code that is tens of thousands of pages long people will game the system. The simpler the system the more fair it will be, but unfortunately our political system reinforces this complexity as the tax code is the best way to pay off your contributors.

A simple solution. Make the Corporate tax rate higher than the highest margnial tax rate for individuals to encourage people to report as individuals, and then a low marginal progressive tax structure. No tax on interest or capital gains to encourage savings and investment. And ZERO deductions and credits for individuals. See, I told you it was simple.

[Name removed]

16. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Tex-Slim]

13. What percent of your income is paid in taxes?

Obviously you don't get the idea, you just dismiss it out of hand.

Basics, the fundamental things necessary for survival, are not taxed.

First tier luxuries, things that are nice to have to make life easier, are taxed some, but not at a high rate.

As you move up the luxury ladder the taxation progressively gets higher, plus the more, say, cars or boats or whatever you own you're going to pay more taxes, obviously.

Most of us express, without knowing it, a desire for just such a scheme, which replaces other taxes, thus freeing up our income that is now taxed in a way we cannot control - a consumption tax such as that I suggest is something we can control - we ultimately decide how much tax we pay. Your current taxes would come back to you and the basics you need would not be taxed - I suspect, as I've outlined things, you would actually see a significant jump in your standard of living.

What's flat stupid is to flatly dismiss any idea before even thinking it through.

And it's also not that smart to live paycheck to paycheck, IMHO. Sounds like someone needs to learn to budget, plan and maybe to see eventually about getting additional skills, a better job, more pay!

Good luck & best wishes.

[sinkingfeeling]

9. Worse than anything is a 'flat-tax' on consumption. You can't cut enough taxes for the rich to equal

the regressiveness of your flat-tax.

[Tex-Slim]

14. Wait a minute... cut taxes on the rich?

Who's side are you on, anyway? The whole point of it is it is PROgressive such that the more the rich want to live a lavish lifestyle, the more taxes they pay as a result. NO MORE TAX CUTS FOR THE RICH - don't you get it?

Your logic is backwards. You say that it won't allow tax cuts for the rich? OF COURSE, ISN'T THAT THE GOAL?

Thank you so much for making my point for me!

Perhaps, though, I was not clear enough in my explanation - see my other post, my post just before this one, in this very thread - but on another sub-thread.

[sinkingfeeling]

17. You should look up what progressive taxation means. If you make $20K a year and are taxed at

a 20% (never will it be that low and keep revenue neutrality), you would probably be taxed on close to 100% of your income because you will spend most of your income on 'consumption'. Then you would pay something like $4K out in taxes or 20% of all your income. If you make $20 million, you will probably only spend a million or 2 on 'consumption' or 10% of your income. That taxes out to $400,000 on the $2 million and your effective rate on the $20 million income is a staggering 2%.

My previous post says that you couldn't possibly cut taxes on the rich to a low of 2% without causing a rebellion. Any flat consumption tax is a regressive tax by definition.

"A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases"

By the way, "A progressive tax is a tax by which the tax rate increases as the taxable amount increases." How could any flat-tax be progressive if the rate doesn't increase?

http://en.wikipedia.org/wiki/Regressive_tax