Nothing Is Certain But Death and Taxes. The IRS Can Deliver Both

 

In Orwellian Washington, DC-speak, a “budget reconciliation” bill is winging its way through Congress. Under the post-Watergate 1974 Budget Control and Impoundment Act, “reconciliation” bills have special status, especially in the United States Senate.

More Orwellian than calling it a “reconciliation” bill is its actual title: The Inflation Reduction Act. It does no such thing. But by the time you read this, it will likely have passed the Senate and is on its way to being rubber-stamped by a House narrowly controlled by Democrats and signed by a clueless, hapless, and compliant President. The Senate vote, I predict, will be 51-50, with Kamala Harris breaking the tie. There is always a chance a Senator won’t show up but don’t count on that.

Unlike most legislative items, reconciliation bills cannot be filibustered. A simple majority enacts them. Debate is limited to 30 hours. But it resembles a Faustian bargain. The bill (and any amendments) must strictly focus on permanent spending and tax programs – no “extraneous” provisions. Any attempts to mask policy issues as “revenue raisers” – such as raising the federal minimum wage to $15 per hour – are verboten unless a supermajority of 60 Senators says so.

For those reasons, our current very slim Democratic majority endlessly and aggressively tries to cram as many of its agenda items in reconciliation as possible. The Senate Parliamentarian gives the “reconciliation” bill a “Byrd bath,” so named for the late Senate Majority Leader who, in 1985, became concerned about abuse of the reconciliation process. He was prescient about his own caucus.

But Byrd baths and budget rules can’t fix all horrible big spending and tax provisions that have made their way into this horrific legislation.

Much has already been written about the 15 percent minimum corporate tax allowing Medicare, our nation’s largest government health care program, to “negotiate” (i.e., set) prescription drug prices. There are many other bad ideas, especially billions to fund so-called “green energy” programs, including wildly distortive tax credits for not-as-environmental-friendly-as-you-think electric vehicles. Owners of those heavier-than-gas-operated vehicles also pay practically nothing to maintain roads and bridges, funded largely through state and federal fuel taxes.

But one provision that is escaping much notice as a “revenue raiser” is $80 billion in new spending for the Internal Revenue Service to double it’s workforce, adding 87,000 new agents over the next 5 years. Ostensibly, this “investment” will result in $200 billion in new revenue by catching tax cheaters.

“If Democrats have their way,” the Washington Free Beacon reported, “one of the most detested federal agencies—the Internal Revenue Service—will employ more bureaucrats than the Pentagon, State Department, FBI, and Border Patrol combined.

“That would make the IRS one of the largest federal agencies., the Washington Free Beacon added. “The Pentagon houses roughly 27,000 employees, according to the Defense Department, while a human resources fact sheet says the State Department employs just over 77,243 staff. The FBI employs approximately 35,000 people, according to the agency’s website, and Customs and Border Protection says it employs 19,536 Border Patrol agents.

“The money allocated to the IRS would increase the agency’s budget by more than 600 percent. In 2021, the IRS received $12.6 billion.”

Not to worry, says a statement signed by a “bipartisan” trio of former IRS Commissioners. (Emphasis added)

As former IRS commissioners, we have watched the agency closely over the years, and understand far too well that the status quo is not tenable: The IRS has a workforce that has shrunk to 1970s levels with technological infrastructure that is decades out-of-date and an audit rate that has dropped by 50 percent. The sustained, multi-year funding contained in the reconciliation package is critical to help the agency rebuild. That will mean vastly improved services for taxpayers, who will be able to interact with a modernized IRS in a digital way, whose questions will be answered and issues resolved promptly and fairly, and who will find it simpler to get access to the benefits and credits to which they are entitled. It will also mean the capacity to enforce the tax laws against sophisticated taxpayers who today evade their tax obligations freely, because they know that the IRS lacks the tools it needs to pursue them. To be sure, the vast majority of workers already pay what they owe, which is why the Administration has been clear that audit rates wouldn’t increase for families making under $400,000 annually. In fact, for ordinary Americans who already fulfill their tax obligations, audit scrutiny will decline, because the IRS will be better at selecting returns for examination. This bill is about getting to the heart of the problem and pursuing high-end taxpayers and corporations who today illegally evade their tax obligations.

“The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year,” reported the Wall Street Journal. “Only 4% to 9% would come from those making more than $500,000.”

The IRS’s own data underscores the point. While people reporting income of at least $10 million annually face higher audit rates (about 12 percent in 2015), there are only 14,000 such wealthy Americans Meanwhile, the vast majority of IRS audits – nearly 600,000 – were conducted in 2015 on households reporting less than $50,000 in annual income. I’m sure the IRS finds it easier to audit people who don’t hire expensive lawyers and accountants who are experts in evasive tax strategies.

The problem may be less the enforcement of existing laws than their complexity. Congress is doing it all wrong, as usual.

Oh, and that promise by President Biden, Senator Joe Manchin (D-WV), and others that no couple making $400,000 or less will pay any new taxes? The Joint Committee on Taxation says no. They found that taxes would jump by $16.7 billion on American taxpayers making less than $200,000 in 2023 and raise another $14.1 billion on taxpayers who make between $200,000 and $500,000,” the New York Post reported.

To be sure, the IRS needs modernization. No doubt there are tax cheats out there who need to be caught. Maybe they are among the 14,000 or so filers who make $10 million. But the problem is our overly complex tax code as the result of wealthy interests who hire tax experts and lobbyists to protect or win the approval of favored provisions.

And as we know, the IRS never makes any mistakes, especially when auditing taxpayers and small businesses.

AOL.com:

Joan Smith, 52, a Philadelphia-based artist, was preparing to go in for spinal surgery in 2010 when the IRS put a $10,000 tax lien on her bank account — which was more money than she had in the bank. It turns out she’d never received an audit memo that had been sent to her old address. She spent the next 11 months digging out from the paperwork avalanche that comes with a full audit.

Or this, from cheapism.com:

Bostonian Paul Hatz endured a five-year audit over the liability of his C corporation. To start, he was served with a $110,000 personal tax lien, allegedly because the auditor miscategorized money he’d invested into the corporation as income. He incurred $60,000 in attorney and CPA costs fighting the fine and was forced to shutter his small business, which had employed more than a dozen people. He’s since tried to appeal the results on grounds that the IRS never sent out the proper statutory notices of deficiency, denying him the right to challenge his auditor’s claims.

Tim and Tracey Kerin have a story via thestreet.com:

This couple experienced the ultimate nightmare. According to Tim, the IRS agent outright lied about her findings, because she didn’t have time to go through the estimated 4,000 pages of documents they provided.

The audit was about the pair’s company expenses, and they learned a costly lesson: Their CPA hadn’t correctly evaluated their expense categories and they’d signed off on the forms without reading them thoroughly.

“A lesson moving forward is that every business owner should spend time with their CPA and bring their Quickbooks in and go over every expense account to make sure it complies with the current tax laws,” says Tim. “Also, you should visit your CPA on a regular basis and not just at tax time when the year is already closed out.”

But it was the audit itself that took the biggest toll. During the process, Tim says, he and Tracey learned that “you can have the Taxpayer Advocate Service (TAS) step in to resolve issues.”

They reached out and the TAS called on their behalf, which irritated the IRS agent further.

“She complained to our CPA and notated how upset she was on our forms,” Tim said. “By us doing this we upset the IRS agent so she put the screws to us even harder and ignored the TAS. Our civil rights are now gone.”

Just a couple weeks ago, Tim and Tracey met with the Deputy Chief Council of the House Small Business Committee on Capitol Hill to argue their case.

“The Deputy Chief Council responded that this is unfortunate,” Tim recalls. “Tracey said, ‘Unfortunate is when my cat gets hurt! This is criminal.'” To date, Tim says, the two of them have spent more than 30 months and $95,000 in legal and accounting fees to defend their companies in an expense audit. “We now have to spend an additional $15,000 in appeals to defend ourselves against the lies of the IRS agent.”

There are thousands more stories like this. Maybe you have one. I probably will after the IRS reads this.

What will the IRS do with all that new money? Will they use it all to hire new agents and upgrade their technology, or will they also buy more ammunition? According to the fact-checking website verifythis.com:

Between March 1 and June 1, 2022, the criminal division of the IRS ordered $696,000 in ammunition, the IRS told VERIFY in an email.

The order was for the IRS Criminal Investigation (IRS-CI) division, which is a federal law enforcement agency that conducts criminal investigations including tax violations, money laundering, cyber crimes, and organized crime involving drugs and gangs. There are more than 2,000 sworn special agents in the division. 

“Many of these cases are typically worked in conjunction with other state and federal law enforcement agencies. IRS-CI special agents have been carrying firearms throughout the more than 100-year history of the agency, and have found themselves dealing with some of the most dangerous criminals,” an IRS spokesperson told VERIFY.

In 2018, the U.S. Government Accountability Office (GAO) published a report on what the IRS spent on firearms and ammunition from 2010 through 2017. The data starts on page 75 of the report.

From 2010 through 2017, the IRS has spent an average of $675,000 on ammunition a year, the report shows. During that time, the IRS spent the most in 2011, with $1,100,000 in spending.

I yearn for elected officials who will fight for me, not for interests who hire lobbyists to win special tax provisions in exchange for large campaign contributions.

It appears to be a fait accompli, but make no mistake, this “reconciliation” bill is a disaster, a pure payback, and giveaway by Democrats to favored constituencies and interests at our expense. The non-partisan Tax Foundation outlines their analysis, which I find persuasive:

Last-week’s Democrat-sponsored Inflation Reduction Act (IRA), successor to the House-passed Build Back Better Act of late 2021, has been touted by President Biden to, among other things, help reduce the country’s crippling inflation. Using the Tax Foundation’s General Equilibrium Model, we estimate that the Inflation Reduction Act would reduce long-run economic output by about 0.1 percent and eliminate about 30,000 full-time equivalent jobs in the United States. It would also reduce average after-tax incomes for taxpayers across every income quintile over the long run.

By reducing long-run economic growth, this bill may actually worsen inflation by constraining the productive capacity of the economy.

There’s no way these provisions make any sense, economically or politically. Democrats must have accepted that they will lose control of Congress in November and want to lock in as many benefits for their friends as possible while punishing their enemies (and even a few of their friends in the private sector). They are counting on Republicans being unable to fix or undo their provisions so long as a Democrat sits in the White House and can veto any future “reconciliation” bills.

Those worried about partisan behavior at the IRS have justification for their fears. Richard Nixon infamously used the IRS to target political opponents. And remember the Lois Lerner scandal from the Obama years for which no one was punished? 

“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”  — Mark Twain

In the meantime, get ready for that knock on the door from your friendly IRS agent. They have questions about your tax returns. And they have ammunition. After all, nothing is certain in this life but death and taxes. And the IRS, it seems, can deliver both. Thank your Democratic US Senator for sending them. And their ammo.

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  1. Percival Thatcher
    Percival
    @Percival

    Remember, kids … auditing elections is expensive and unnecessary. Insisting on it means that you are a conspiracy theorist, a white supremacist, and a threat to our democracy.

    Auditing you, however … that’s just fine.

    • #1
  2. 9thDistrictNeighbor Member
    9thDistrictNeighbor
    @9thDistrictNeighbor

    Yet another reason to repeal the 16th and 17th amendments.  1913 was a bad year. 

    • #2
  3. Kelly D Johnston Coolidge
    Kelly D Johnston
    @SoupGuy

    9thDistrictNeighbor (View Comment):

    Yet another reason to repeal the 16th and 17th amendments. 1913 was a bad year.

    Indeed. And that was called the “Progressive era.” 

    Oh, but you forgot the 18th amendment. At least that was repealed by the 21st amendment. We have precedent. 

    • #3
  4. RufusRJones Member
    RufusRJones
    @RufusRJones

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning. 

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity. 

    When are the Republicans going to start talking like this?

    • #4
  5. Stad Coolidge
    Stad
    @Stad

    If we had a flat rate income tax or The Fair Tax, we wouldn’t fear the tax man . . .

    • #5
  6. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    • #6
  7. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that. 

    • #7
  8. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters.  In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    • #8
  9. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters. In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    What has to be reduced when you pay this tax? Make a list of the possibilities. tia 

    • #9
  10. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters. In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    What has to be reduced when you pay this tax? Make a list of the possibilities. tia

    That wasn’t my point.  But increasing prices to cover the tax, is almost part of the point.  If a poor person buys a bucket of paint and pays $1 tax, and a rich person buys a bucket of paint and pays $1 tax, that’s a “flat tax” where poor people pay too, that doesn’t get people screaming about “UNFAIR!” because the rich person pays the same AMOUNT – not just the same RATE – as the poor person.

    And it’s a “consumption tax” which many people seem to think is the best way to go.

    • #10
  11. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters. In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    What has to be reduced when you pay this tax? Make a list of the possibilities. tia

    That wasn’t my point. But increasing prices to cover the tax, is almost part of the point. If a poor person buys a bucket of paint and pays $1 tax, and a rich person buys a bucket of paint and pays $1 tax, that’s a “flat tax” where poor people pay too, that doesn’t get people screaming about “UNFAIR!” because the rich person pays the same AMOUNT – not just the same RATE – as the poor person.

    And it’s a “consumption tax” which many people seem to think is the best way to go.

    It doesn’t have to be built into increased prices. They can reduce other things in the company–productivity, worker benefits, WAGES– or the product quality. Nobody has any idea of what it comes out of. 

    It’s too convoluted to say it’s a good consumption tax. It’s redundant to the income tax, anyway. Just tax personal income once. 

     

    • #11
  12. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters. In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    What has to be reduced when you pay this tax? Make a list of the possibilities. tia

    That wasn’t my point. But increasing prices to cover the tax, is almost part of the point. If a poor person buys a bucket of paint and pays $1 tax, and a rich person buys a bucket of paint and pays $1 tax, that’s a “flat tax” where poor people pay too, that doesn’t get people screaming about “UNFAIR!” because the rich person pays the same AMOUNT – not just the same RATE – as the poor person.

    And it’s a “consumption tax” which many people seem to think is the best way to go.

    It doesn’t have to be built into increased prices. They can reduce other things in the company–productivity, worker benefits, WAGES– or the product quality. Nobody has any idea of what it comes out of.

    It’s too convoluted to say it’s a good consumption tax. It’s redundant to the income tax, anyway. Just tax personal income once.

    That may be becoming increasingly… unworkable.  As more and more people are “on the dole,” etc.  And the people I hear/read who support consumption tax, usually seem to think there should be ONLY a consumption tax.  So, no redundancy.

    • #12
  13. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters. In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    What has to be reduced when you pay this tax? Make a list of the possibilities. tia

    That wasn’t my point. But increasing prices to cover the tax, is almost part of the point. If a poor person buys a bucket of paint and pays $1 tax, and a rich person buys a bucket of paint and pays $1 tax, that’s a “flat tax” where poor people pay too, that doesn’t get people screaming about “UNFAIR!” because the rich person pays the same AMOUNT – not just the same RATE – as the poor person.

    And it’s a “consumption tax” which many people seem to think is the best way to go.

    It doesn’t have to be built into increased prices. They can reduce other things in the company–productivity, worker benefits, WAGES– or the product quality. Nobody has any idea of what it comes out of.

    It’s too convoluted to say it’s a good consumption tax. It’s redundant to the income tax, anyway. Just tax personal income once.

    That may be becoming increasingly… unworkable. As more and more people are “on the dole,” etc. And the people I hear/read who support consumption tax, usually seem to think there should be ONLY a consumption tax. So, no redundancy.

    The corporate and/or business taxes are totally redundant to the income tax. This isn’t debatable. That is the point I’m making. 

     

    • #13
  14. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    What if businesses act as “concentrators” of wealth in that both richer and poorer people buy food, for example, so that “taxing the business” is a way of balancing the load?

    It’s regressive taxation because you can’t force it to come out of shareholder income. People think that’s what happens, but it’s not even close to being like that.

    I’m not sure that matters. In a way it could be a means of having something of a “flat tax” – since the tax on a poor person buying something would be the same as the tax on a rich person buying the same thing – but without it seeming visibly “unfair” that the poor person pays the same amount of tax as the rich person.

    What has to be reduced when you pay this tax? Make a list of the possibilities. tia

    That wasn’t my point. But increasing prices to cover the tax, is almost part of the point. If a poor person buys a bucket of paint and pays $1 tax, and a rich person buys a bucket of paint and pays $1 tax, that’s a “flat tax” where poor people pay too, that doesn’t get people screaming about “UNFAIR!” because the rich person pays the same AMOUNT – not just the same RATE – as the poor person.

    And it’s a “consumption tax” which many people seem to think is the best way to go.

    It doesn’t have to be built into increased prices. They can reduce other things in the company–productivity, worker benefits, WAGES– or the product quality. Nobody has any idea of what it comes out of.

    It’s too convoluted to say it’s a good consumption tax. It’s redundant to the income tax, anyway. Just tax personal income once.

    That may be becoming increasingly… unworkable. As more and more people are “on the dole,” etc. And the people I hear/read who support consumption tax, usually seem to think there should be ONLY a consumption tax. So, no redundancy.

    The corporate and/or business taxes are totally redundant to the income tax. This isn’t debatable. That is the point I’m making.

    Not totally redundant, since they are also a consumption tax.  And they’re a tax that, for example, Hollywood stars can’t avoid by making a movie in South America so the income isn’t American, but what they buy with it in America, is.

    • #14
  15. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):
    Not totally redundant, since they are also a consumption tax.

    You are literally the only person that says this. 

    The reason it’s redundant is, if you wiped it out, it would show up in personal income, dividends, or capital gains completely. Therefore, all tax collection at the business level is a complete waste of time because it’s redundant.

    • #15
  16. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):
    Not totally redundant, since they are also a consumption tax.

    You are literally the only person that says this.

    The reason it’s redundant is, if you wiped it out, it would show up in personal income, dividends, or capital gains completely. Therefore, all tax collection at the business level is a complete waste of time because it’s redundant.

    How about addressing my point of people who get their income from places/in ways that are not taxable in the US?  Or maybe are just taxed at much lower rates.

    Drug cartels being another example.  They pay no income tax, and if they pay no consumption tax either, because you think that’s redundant, then they don’t even help to partly pay for the police and other services that their activities make necessary.

    • #16
  17. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):
    Not totally redundant, since they are also a consumption tax.

    You are literally the only person that says this.

    The reason it’s redundant is, if you wiped it out, it would show up in personal income, dividends, or capital gains completely. Therefore, all tax collection at the business level is a complete waste of time because it’s redundant.

    How about addressing my point of people who get their income from places/in ways that are not taxable in the US? Or maybe are just taxed at much lower rates.

    Drug cartels being another example. They pay no income tax, and if they pay no consumption tax either, because you think that’s redundant, then they don’t even help to partly pay for the police and other services that their activities make necessary.

    I think I’ve heard this argument before, but do you really think it nets out? 

    • #17
  18. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):
    Not totally redundant, since they are also a consumption tax.

    You are literally the only person that says this.

    The reason it’s redundant is, if you wiped it out, it would show up in personal income, dividends, or capital gains completely. Therefore, all tax collection at the business level is a complete waste of time because it’s redundant.

    How about addressing my point of people who get their income from places/in ways that are not taxable in the US? Or maybe are just taxed at much lower rates.

    Drug cartels being another example. They pay no income tax, and if they pay no consumption tax either, because you think that’s redundant, then they don’t even help to partly pay for the police and other services that their activities make necessary.

    I think I’ve heard this argument before, but do you really think it nets out?

    What needs to net out, and why?

    I can see a point to having only consumption taxes, vs only income taxes; and I can see a point to having some of both, including business income taxes (which amount to indirect consumption taxes); but I can’t see the point of having ONLY personal income taxes.  There are too many ways around it.

    • #18
  19. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):
    What needs to net out, and why?

    The IRS tax code is idiotic central planning and I don’t know if you’re keeping up with the news but the organization is getting increasingly notorious in multiple ways for people that can’t afford lawyers.

    kedavis (View Comment):
    I can see a point to having only consumption taxes, vs only income taxes; and I can see a point to having some of both, including business income taxes (which amount to indirect consumption taxes); but I can’t see the point of having ONLY personal income taxes.  There are too many ways around it.

    A flat tax on your revenue. This is not complicated. I have no idea what you’re talking about.

    • #19
  20. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):
    What needs to net out, and why?

    The IRS tax code is idiotic central planning and I don’t know if you’re keeping up with the news but the organization is getting increasingly notorious in multiple ways for people that can’t afford lawyers.

    kedavis (View Comment):
    I can see a point to having only consumption taxes, vs only income taxes; and I can see a point to having some of both, including business income taxes (which amount to indirect consumption taxes); but I can’t see the point of having ONLY personal income taxes. There are too many ways around it.

    A flat tax on your revenue. This is not complicated. I have no idea what you’re talking about.

    That seems to invite shenanigans to avoid having something be considered “revenue.”

    You do realize that the term “revenue” would have to be defined?

    Gross, or net?

    If gross, how does that encourage “capital formation” etc?

    And are loan proceeds etc “gross” revenue?  If yes, why?  If not, when, and why not?

    If net, what deductions are allowed?

    • #20
  21. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    That seems to invite shenanigans to avoid having something be considered “revenue.”

    You do realize that the term “revenue” would have to be defined?

    Gross, or net?

    I am not talking about anything new. You define revenue the same way. I have absolutely no idea how you came up with this.

    I said a flat tax with one deduction. This is not complicated. 

    • #21
  22. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

    kedavis (View Comment):

    That seems to invite shenanigans to avoid having something be considered “revenue.”

    You do realize that the term “revenue” would have to be defined?

    Gross, or net?

    I am not talking about anything new. You define revenue the same way. I have absolutely no idea how you came up with this.

    I said a flat tax with one deduction. This is not complicated.

    That seems pretty unworkable, if you look at it closely.  That is, in terms of saying you’re only going to have personal income taxes, and nothing else.  How much is Warren Buffet’s salary, $1?

    • #22
  23. RufusRJones Member
    RufusRJones
    @RufusRJones

    kedavis (View Comment):

    RufusRJones (View Comment):

    kedavis (View Comment):

    That seems to invite shenanigans to avoid having something be considered “revenue.”

    You do realize that the term “revenue” would have to be defined?

    Gross, or net?

    I am not talking about anything new. You define revenue the same way. I have absolutely no idea how you came up with this.

    I said a flat tax with one deduction. This is not complicated.

    That seems pretty unworkable, if you look at it closely. That is, in terms of saying you’re only going to have personal income taxes, and nothing else. How much is Warren Buffet’s salary, $1?

    Nobody is taxing assets now anyway. I already explained how this flows to the personal income.

    • #23
  24. RufusRJones Member
    RufusRJones
    @RufusRJones

     

     

     

    • #24
  25. kedavis Inactive
    kedavis
    @kedavis

    RufusRJones (View Comment):

     

     

     

     

    Maybe it will help inspire other people to stop voting for Democrats, but I haven’t had taxable income in years.  Many/most retirees don’t.

    • #25
  26. GlennAmurgis Coolidge
    GlennAmurgis
    @GlennAmurgis

    Grammarly: Government Edition (reason.com)

    • #26
  27. Gazpacho Grande' Coolidge
    Gazpacho Grande'
    @ChrisCampion

    RufusRJones (View Comment):

    There is no value added to the tax code beyond one single deduction for procreating another W-2 slave. Everything else is dumber than Soviet central planning.

    Taxing business is completely redundant and regressive to the income tax. Completely unnecessary drag on productivity.

    When are the Republicans going to start talking like this?

    It’s an artificial creation built from politics and an undying bureaucracy.  So naturally, it’s clean, sleek, easy to understand, and makes sense.

    The bulk of the problem is the code.  You want to reduce a need for auditors?  Simplify the tax code.  Your current set of auditors can then more easily process and disposition audits.

    And it’s no surprise that it’ll hit the middle class.  I’ll keep saying it:  That’s where the money is, because that’s where the bulk of the taxpayers reside.  The wealthy don’t earn a W2, it’s on investments.  If the number of people with 100MM or above is 14,000, you could assign 1 auditor per wealthy household and you still wouldn’t generate much additional revenue, and spend your billions in doing so, and making auditors comfortable on a federal salary, for a lifetime.

    It’s funny how Congress complains about tax cheats while they’re the ones who make the tax laws and change or add to them, annually.

    • #27
  28. Gazpacho Grande' Coolidge
    Gazpacho Grande'
    @ChrisCampion

    RufusRJones (View Comment):

    kedavis (View Comment):

    That seems to invite shenanigans to avoid having something be considered “revenue.”

    You do realize that the term “revenue” would have to be defined?

    Gross, or net?

    I am not talking about anything new. You define revenue the same way. I have absolutely no idea how you came up with this.

    I said a flat tax with one deduction. This is not complicated.

    There’s a reason why I blow right past kedavis’s posts.  No hard feelings, but way too much free time and incoherency = manual ignore button.

    • #28
  29. Gazpacho Grande' Coolidge
    Gazpacho Grande'
    @ChrisCampion

    Great post, Kelly, btw – great summarization of the issue and breakdown of the stupid.

     

     

    • #29
  30. RufusRJones Member
    RufusRJones
    @RufusRJones

     

     

     

     

     

    • #30
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