She posits that greed and corruption have overtaken the American government's purpose, especially in the last 25 years. Money, through lobbying and other forms of influence, now dictates who the government works for. It works for large corporations, pharmaceuticals and the oil industry (for example) rather than America's citizens and workers--specifically with access to healthcare, a living wage and a clean planet.
Either way the plan can be adjusted, as my sibling says, to include the revenue from subsidiaries so let's not be defeatist :)
In other words, if you try to do multiple $9999.00 transfers in an attempt to "fly under the radar" - you will be caught out.
Concrete example, since you mention the oil industry: Exxon makes about 22.5 cents when you buy a gallon of gas at $3.00. Meanwhile, an analysis has found that gas should be taxed an extra $4.36-7.62 per gallon to fully reflect the environmental and other harms of driving: https://www.citylab.com/transportation/2015/01/the-real-reas.... So when the government doesn't impose that tax, who benefits? Exxon benefits a little because it sells more gas and collects the $0.22 of profit on each gallon. But the consumer saves $4.36-7.62 by avoiding those taxes. Exxon's profits, about $20 billion last year, are a rounding error compared to the trillion+ dollars that consumers would pay in extra taxes to address the negative externalities of driving.
Transportation, heating, agriculture, consumer products--these are the industries responsible for the fast majority of GHGs. And these are also highly competitive, commoditized industries where most cost savings get passed onto consumers. (Facebook makes more profit than Exxon, even though Exxon's revenues are more than five times as much.) That means the savings of making pollution cheap also accrues mostly to consumers. The industries where lack of competition allows corporations to command huge margins--banking, tech, advertising, etc.--are not the ones that are primarily responsible for GHGs.
"Access to healthcare" is similar. Why do people in Sweden have universal healthcare while people in America do not? Is it corporations? No, Sweden's corporate tax rate is quite a bit lower than ours. (It's similar to the current federal rate, but in the U.S. most corporations also pay a state rate. In Delaware, for example, it's an additional 8.7%.) So who benefits by Americans not having universal healthcare? It's middle-class Americans who don't pay the high middle-class taxes that middle-class Europeans pay.
Warren's focus on corporations is a total red herring, intended to make people falsely believe that you can have universal healthcare and a cleaner planet without decreasing your material quality of life. As Jimmy Carter told us, that's not in the cards. How do we know that? Because we can look at other countries who do better on these measures, and see what they do! France has much lower GHG emissions than the U.S. and universal healthcare. How do they do it? They live in houses that are half the size; they drive tiny fuel efficient cars, and have fewer of them per household; they deal with the challenges of nuclear power; their payroll taxes on the middle class are double ours; they take public transmit more often and therefore have significantly longer commutes. But their corporate taxes are even lower than ours!
Just as I don’t want a bored cop on every street corner, I also don’t want the IRS to be staffed to maximize revenue.
It’s a balance.
Most corporations pay the amount of tax they owe under the law, but the law is written to allow tax evasion. The IRS can’t do anything about this.
The fix is to close several well known loopholes.
Is it that you don't want IRS employees sitting around doing nothing?
Because if this resulted in losing $34B in revenue, it doesn't like they were sitting around doing nothing.
We're not there, though.
It's different with police officers because the number of crimes is un-countable [1] and if you point the police at anyone they'll find crimes. The same isn't really true of a W-2 employee with a 401(k). The taxes due are by definition countable and the compliance process is largely automated. You are just responsible for truing it up at the end of the year.
[1] https://www.wsj.com/articles/SB10001424052702304319804576389...
We did it in Denmark during our new public management period. It cost us billions in tax evasion and fraud, and at one point someone did the math. Turned out our tax-agents cost 500.000 danish kroner a year, but they gave the state a net positive of 1.5-10 million Danish kroner. Needles to say, there is now support for our tax agency from every political party, even the ones that want to cut taxes. If your tax-agents aren’t needed, then downsize them, but I’m not sure that’s anywhere.
The police on the other hand are an expense you pay to avoid paying a bigger expense.
Granted, both parties are terrible when it comes to corporate interest so... they both suck - but one really has a strong tendency to advocate for balancing the books.
I didn’t read the statement as a universally applicable principle, but rather a description of the current situation.
The issue there isn't the IRS though, it's the tax code. The IRS is absolutely a department that needs to be staffed to maximize their revenue.
If you have an easy to navigate tax-code that doesn't require a doctoral understanding of economics, then there's not a problem for the everyday person (TBH you can also say the same thing about the law in general).
>>“Anyone opposing more police officers and equipment is breaking the law” is similar to your argument.
Here's a better statement: I believe the people who are most actively working and spending money to depower the IRS are those who seek the most to gain by hiding their financial doings. They seek to deregulate industry as a whole in the name of corporate gains while simultaneously infiltrating various branches of the government to further this agenda. These people are doing so in an (successful) effort to push more wealth from the majority into the hands of a minority. I believe this is bad for society as a whole.
I want the IRS to have whatever resources are necessary to collect every tax dollar owed (but not a dollar more) according to tax statue.
You are welcome to over-report them for your own satisfaction.
I do not expect a properly staffed tax agency to.
https://en.m.wikipedia.org/wiki/IRS_targeting_controversy
(Read the fourth paragraph of this page)
The IRS does this all the time.
And unlike criminal law, the burden of proof is on the accused, not the state.
IRS agents are no exception.
The intended outcome is that the statistical distribution of claims all bunch up at the edge of "being as close as possible to being illegal while still being legal." Which seems to actually be a better Nash equilibrium, economically, than one where people/corporations are so afraid of the IRS that they don't claim as much as they could.
Wow, that's a very bold accusation. Have you a single shred of evidence for this libel? Being as how this started quite a while ago, I guess all politicians and both political parties are tax frauds or employed by them:
Also unmentioned is the very real negative externalities that IRS audits cause. Audits disproportionately affect poor people [2], who are also the least able to spend time dealing with them. The United States already has extremely low tax evasion rates [3]. Rather than spending money to catch more of the very few cheaters by audits, other country's tax authorities have found "nudge" letters were found to be similarly effective and vastly cheaper.
[1] https://www.aaajournals.org/doi/abs/10.2308/accr-52520?utm_s...
[2] https://projects.propublica.org/graphics/eitc-audit
[3] https://www.researchgate.net/figure/Size-and-development-of-...
Wow, they used to audit 1/3rd of all filers in $10 mil/year bracket? I guess at that level, there aren't too many people with W2 form.
> For those making less than $25,000, the audit rate fell 0.02% (to .69%) from 2017 to 2018.
Frankly, for it to be significantly above 0 seems grossly inefficient. I would assume that average rate of return for public money spent on auditing a millionaire is... a fair bit higher than that spent auditing someone earning 25k.
If we stopped auditing those with AGIs less than $25,000, then all I’d have to do is take enough deductions (retirement contributions, unreimbursed business expenses, medical expenses, loss from property sales, tuition, etc) to get my AGI below $25,000 and I’d never have to worry about being audited.
Ever.
One way to significantly reduce your taxes is to lower your AGI. So if anything, the lower AGIs would be a good place to start looking for tax cheats.
Since you can claim self-employment income without documentation, regular audits are necessary to prove actual income. It's also common for people to claim children who don't truly qualify; again, this would only be provable through actual audits.
In contrast, the average middle-class taxpayer tends to have both less built-in incentive to game the system and less flexibility (as most of their income will be documented to the IRS).
To defend the IRS a bit more: this program is in some ways an administrative model. Taxpayers don't need to prove any need to claim the credit. There aren't multiple rounds of paperwork, and, if you aren't audited, the only interfacing you have to do with the bureaucracy is in submitting your tax return, and you'll have money deposited in your bank account in a week. It may be the most effective welfare program, even accounting for audits (many of which are triggered by obvious red flags) in its ratio of benefits to "hoops needed to jump through."
Millionaires have access to lawyers and tax accountants and are more difficult to pin down.
A poor person can easily be bullied to handing everything over to the IRS -- probably with just a few mean letters.
Whereas rich people have complicated forms, requiring more man-hours and actual human eyeballs to get involved.
That's why it happens. Not sure why you disagree, these are facts.
Pretty much only form letters should be used for low income people.
The poor can’t afford to do anything but not pay tax, the rich can pay for all kinds of tricks to hide their money from the government while paying some paltry, but still seemingly legit, portion of tax.
That's not a strong argument against audits. I'd just take that to mean the IRS should mainly audit people or businesses based by how large the underreporting was.
I hope their internal models take into account the cost of an audit which finds nothing, both to the IRS themselves, but also to the audited and their family.
In fact, to make incentives align, maybe they should even pay those who are audited and end up owing nothing.
A similar thing plays out when politicians want to cut popular social programs. They manufacture a budget crisis (typically through instituting a popular tax cut) and then solve the crisis by cutting the funding to the thing they already decided they didn’t like.
Elaine: What do you think of the catalog?
George: I think it stinks.
Elaine: There, we just talked business.
* Imagine the IRS debating grey area scenarios like this against financial teams trained to argue deductions. The ROI quickly becomes a sewer drain.
That said, the absurd complexity of the tax code is also a problem here, since you don't want the government doling out bankruptcy-inducing penalties on businesses that might just be making an honest mistake. The whole system clearly needs an overhaul. It should be simple enough that when a business severely underpays, it will be very likely that they did so on purpose, and therefore a large, deterrent-worthy penalty can be justified.
Given clear and straightforward code/laws, it becomes hard to cheat.
The consequence is that for anything moderately or more complex there is actually no correct answer on what your tax liability is. What is the value of an intangible asset? How do you define novelty for the R&D tax credit? There are thousands of intersecting rules that change your liability and many of those are up to interpretation.
You ascribe too much to malice, when it is typically just plain old politics. Representative will only vote to tax X if his/her constituent Y is excluded somehow. Add these types of items over many bills/years and you get what we have today.
It breeds sociopathy among the executive class that doesn't need any help in that department while encouraging nonproductive "investment".
On one hand I do want businesses to pay their fair share. On the other hand I don't want to encourage massive tax agencies which must justify their numbers by auditing and harassing as many people as possible. Often small businesses that don't have to resources to defend themselves like large corporations. Very similar to police departments who justify their existence by writing tickets and have quotas set up to encourage cops to harass people. Does not seem much more than a shakedown.
And there's eventually a marginal tipping point where more money spent in audits won't net more recovered revenue. Generally the smaller the fry, the less you can recover from them.
Though, since I wasn't aware of our financials, for all I know my parents could have just been poorly keeping track of the numbers which led to these issues.
'The controversy began in 2013 when an IRS official admitted the agency had been aggressively scrutinizing groups with names such as "Tea Party" and "Patriots."'
https://www.npr.org/2017/10/27/560308997/irs-apologizes-for-...
So the IRS was profiling pro-profiling groups based on their extensive association with anti-tax and anti-government political currents, expecting that people who don't think they should pay taxes may well be trying to avoid paying taxes less than honestly?
According to KOS at the time, literally the only group which got their 501(c)(4) application reviewed and rejected during that "scandal" was a progressive one. Meanwhile a bunch of "tea party" associates got their 501(c)(4) (or worse 501(c)(4)) despite historical and ongoing partisan political work.
Sounds like "conservatives v twitter", where conservatives cry foul every time they get on a blocklist, and twitter replies that they can't autoban white supremacists the way they did ISIS because it'd throw out half the republican conference and a significant fraction of their followers.
All in all, just more and more examples of Wilhoit's hypothesis
> Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.
[0] https://www.dailykos.com/stories/2013/5/19/1210132/-The-Only...
There are lots of anecdotal reports to the contrary of what you just stated. Do you have anything more than anecdotal evidence to support your statement?
> Two Australian Taxation Office whistleblowers have told a joint Four Corners and Fairfax investigation about a toxic internal culture where vulnerable small businesses and individuals are deliberately targeted to help meet revenue goals.
Perverse incentives.
https://www.abc.net.au/news/2018-04-09/whistleblower-exposes...
"In 2017, Amazon paid close to $1 billion in income tax. In 2018, the amount jumped to $1.18 billion, accounting for local, state, and international taxes."
https://www.forbes.com/sites/stephaniedenning/2019/02/22/why...
Your quote glaringly leaves out federal....
Amazon reinvests revenue into the business which is discussed tons on this site. It also has the effect of eliminating certain types of taxes... and massively increasing taxes in other areas (like sales, use, B&O, payroll, etc...). Somehow I don't see discussion of how payroll tax at Amazon is exploding, though.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/stock-...
Such people really need to get a sense of proportion.
The destitute, despised, downtrodden guy who slaves away to support their family by mowing your lawn, picking apples for you, driving you somewhere, or serving you your burger is not your enemy.
I noticed from her Facebook page that she owned a ranching operation, so I searched her name in the EWG Farm Subsidy Database and saw that she and her husband had received $18k in subsidies in 2018, and nearly $250k since 1995.
If so, I don't agree.
I'm just trying to figure out if it's hypocrisy or selfishness.
This is not something you can fix quickly either, as with State the loss of institutional memory and all the things which should have been tracked but weren't and got lost are going to be a huge supplementary shock.
Edit: A lot of downvotes, but no examples. Such cuts are always talked about as if though they have factually happened. To my knowledge, I’ve never actually seen such a cut in the United States at the federal, state, or local level. Sometimes, there have been attempts to limit the rate of spending growth, but those seem to always fail too.
Oklahoma and a number of other states moved to a 4 day school week to cut costs. Do you include cutting teacher pensions as an education cut? I can provide significant examples of education cuts.
I've noticed this is a frequent occurance--one faction will try to score political points by appearing to take an action, only to capitulate at the end when fewer people are looking.
Simplifying tax code will go much further than trying to staff up IRS. My 2c.
Everyone wants to lower their own taxes by raising everyone else's taxes.
100 people in a room will have 100 different way to change the tax system, and every proposal will have 99 votes against it.
A good friend was a specialist in a few tax evasion schemes used by real estate developers and a few other more obscure areas with similar methods. Basically, there were about 50 people nationally doing this in the early 90s, but the program was defunded over time and when he retired, there were 4. He spent about 60% of his time flying all over the country to testifying in court. Today there is nobody, the last guy retired last year.
By my friend's reckoning, his direct work accounted for $100M in recovered revenue per year. Some big cases were multiples of that. They have models that show the deterrent effect that enforcement has -- that $100M in recovery may deter $1B in undetected fraud. That is money being stolen from the treasury.
Superficially it sounds reasonable. But it isn't. The US military spends $700B+ every year, often times very pointedly protecting the interests of US businesses. The state department has untold people spending billions more opening markets and making trade favorable for US businesses. By and large, the benefits to individuals is an afterthought -- what is good for US business is good for US citizens is the thinking. Large swaths of the government function is spent optimizing conditions for business activity.
So, to get to the point: why should I pay higher tax to protect the business interests of Grumman, and GE, and farmers, and Apple, etc? Apple derives far more benefit and far more directly than I do. Why aren't they paying their portion of the taxes to support it? If part of the cost of doing business is running overseas bases so we can exert influence, that cost should be built into the business expenses as taxes, instead of being externalized to John Q. Public.
The answer is, of course, the super wealthy have captured government and a large part of the media which promotes their interests.
You'll end up paying those taxes regardless. When companies are taxed directly then those taxes are baked into the prices of everything they sell, just like every other business expense. This functions like an inefficient and regressive sales tax except that, unlike normal sales taxes, buyers don't see it as a separate line-item on the bill.
That isn't true. If the assertion is that if Apple has to pay $10B/year more in taxes, than they will raise the price of their products $10B/year and keep a fixed profit, that assumes there is complete price elasticity.
In reality, they might raise the price of their products some, but that is fine -- the people who use the products and benefit from the government's expenditures to promote Apple's business interests are exactly who should be paying for them.
I don't buy Apple products, so I shouldn't be subsidizing their products via taxes.
As for calling it a regressive tax, the costs of production of the product should be built into the product price. If it is abnormally low because Apple isn't paying their share of taxes, that is a market distortion. It is regressive if you only stop at first order thinking. Apple's prices would go up, which hurts some consumers, but they would also be paying significantly more in taxes, which helps consumers.
Let's pick another example. Would it be OK with you if the government decided to donate $5B/year of crude oil to Exxon? Hey, it would make Exxon's bottom line look great. I don't think anyone (except Exxon) thinks that would be right, yet that is exactly what is being done in kind: Exxon not paying much/anything in taxes, and $B spent every year globally to keep the supply of oil flowing. (As for $5B, I just picked a number out the air).
No, I'm not assuming that. The quantity sold will decrease, of course, if the price increases. That is a hidden cost paid by prospective buyers who must now do without the good, complementing the more visible cost paid by those who continue to purchase the good at the higher price. A company's profitability (ROI), on the other hand, is relatively fixed—in the end all investments tend toward zero economic profit, or equivalently a level of accounting profit equal to the opportunity cost of the investment, assuming even a moderately competitive market. Higher-than-average profitability invites competition, while on the opposite side if profitability is low then investors put their money elsewhere and the business closes. There is some variation due to factors like brand recognition, other natural or artificial monopolies, and risk, but generally speaking a corporate tax won't be paid from the company's bottom line as most people imagine. There just isn't much flexibility in that area to begin with.
> Exxon not paying much/anything in taxes, and $B spent every year globally to keep the supply of oil flowing.
This is not a subsidy to Exxon, it's a subsidy to the people consuming oil-based products. If you want to stop subsidizing oil, fine; but that is a completely separate policy decision from where to levy the tax. Anyway it's not like you're proposing to tax Exxon specifically for the cost of keeping the oil flowing, which would defeat the point of the subsidy. A corporate income tax would spread that cost across all products, even ones that have nothing to do with oil, and be paid primarily by people who spend most of their earnings on corporate-produced goods (i.e. not the rich, who tend to spend a larger share on investments).
This may be an ideal solution in theory, but it would likely be devastating in practice.
Bezos bought a 65 million dollar jet... at 20% federal sales tax that would have been 13 million dollars in revenue. He would pay more in taxes in one purchase than I'll earn in gross income in 10-13 lifetimes.
I paid a bit over $8000 in w2 employment taxes last year (21.8% of my gross income, with a 20% sales tax I'd have MORE money and yes, I would buy less crap I don't need and use once), in one purchase Bezos would have paid 1974x what I paid last year.
Never mind that under most federal sales tax proposals, a flat-rate rebate is issued monthly, quarterly or annually to everyone which greatly softens the blow for the lowest earners.
https://www.npr.org/2017/10/27/560308997/irs-apologizes-for-...
"In January 2014, James Comey, who at the time was the FBI director, told Fox News that its investigation had found no evidence so far warranting the filing of federal criminal charges in connection with the controversy, as it had not found any evidence of "enemy hunting", and that the investigation continued. On October 23, 2015, the Justice Department declared that no criminal charges would be filed. On September 8, 2017, the Trump Justice Department declined to reopen the criminal investigation into Lois Lerner, a central figure in the controversy.[1]
In late September 2017, an exhaustive report by the Treasury Department's inspector general found that from 2004 to 2013, the IRS used both conservative and liberal keywords to choose targets for further scrutiny."
This is non-knowledge.
The article mentions the Tax Cuts and Jobs Act of 2017 (Trump's tax cuts). But the IRS budget cuts discussed in the article are actually from 2015, stemming from the kerfuffle over the IRS allegedly targeting conservative groups for increased scrutiny.
Separately, the article fails to address the nature of the additional revenue that could hypothetically have been collected. Pages 26-27 of the article address the study's finding that "the IRS collects a larger portion of proposed deficiencies when it has fewer resources." In the authors' view, that could be because "the IRS focuses on weaker taxpayer positions when its resources are limited." In other words, a larger enforcement budget leads the IRS to go after cases where the IRS is less certain it will win because the facts are more debatable. The authors do not assess the merits of those cases or whether it would be socially desirable to pursue them.
It's not clear to me what is actually being said here because engaging in transactions that reduce tax liability is legal.
We currently punish those people badly, which is wrong IMO
1. We have a system where the fed. government holds states hostage for money when it wants to bully things around. (emergencies, etc..).
2. The current system is actively encouraging people to domicile in TX, FL, WA, SD, etc... (income tax free states) and not actually live there, hoping to play the tax lottery (or move around so much they can't be convicted).
3. The "sales tax" system in the US is ridiculous. It's egregiously illegal according to our tax-once rule. If we can get a tax break on all sales tax we paid, that would be one thing, but we can't.
4. Ind. contractors are taxed in extremely unfair ways, often have no recourse to get discounts or tax breaks on health insurance.
My solution -
I say it's time to start having states collect that 25% and the feds are hands-off of taxing individuals. Beyond that it would make sense for people to declare a state of residence (one that they most want roads repaired at, police hired, etc..). Get rid of sales tax completely - it's a massive waste of time if states are getting a fair amount. Move MOST fed employees to the state level and remove major govt. contractors that are bilking the public (in the long run companies like Northrup Gruman etc.. are paying the heads billions each - there's no oversight.). Remove the national army and start creating state-armies. Re-write the constitution that changes how states operate within the federal level, and completely change the role of the federal government to be allowed to make laws that are scoped towards fairness across states. Make the fed. government in charge of analytics and cross-state environmental regulation. States would then have the right to make laws that apply to the people.
Some might say this is ridiculous but in a time where we getting to the "end of capitalism" a MASSIVE re-write to how money is moved around is damn fucking necessary.
