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Old 10th August 2022, 07:33 PM   #1
IsThisTheLife
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The Inflation Reduction Act

I always get the feeling that a lot of the locals on this forum are state employees, or beholden to the state in other ways. There is good news for them; the Biden admin has just presented a bill, the almost spitefully named Inflation Reduction Act, which will very likely sail through Congress, that will (among a raft of other things) authorise a massive increase the budget allocation for the IRS, $80 billion over ten years, potentially doubling the numbers of IRS commissars agents over that period.

It means (can ONLY mean) one or both of two things for 'ordinary', private, working citizens;

- being screwed out of more money by the state
- being criminalised by the state.

Isn't it great!?
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Old 11th August 2022, 01:09 AM   #2
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I guess it depends.

If you're in the majority, the people who have paid their taxes, then this is good news because studies have shown that $1 spent on enforcement yields many times that in recovered tax payments.

If you're in the minority, the people and corporations which break the law in order to evade the taxes they should be paying then it's bad news.

Strangely enough, the people and corporations who evade the most taxes are among those who are liable for the most taxes, the very richest.
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Old 11th August 2022, 01:33 AM   #3
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Originally Posted by IsThisTheLife View Post
I always get the feeling that a lot of the locals on this forum are state employees, or beholden to the state in other ways. There is good news for them; the Biden admin has just presented a bill, the almost spitefully named Inflation Reduction Act, which will very likely sail through Congress, that will (among a raft of other things) authorise a massive increase the budget allocation for the IRS, $80 billion over ten years, potentially doubling the numbers of IRS commissars agents over that period.

It means (can ONLY mean) one or both of two things for 'ordinary', private, working citizens;

- being screwed out of more money by the state
- being criminalised by the state.

Isn't it great!?
do you believe that Government Spending should pay for itself?
If so, there is no Agency that gives you more ROI than the IRS.
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Old 11th August 2022, 02:22 AM   #4
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It must be hell in the US with the state enforcing taxation laws.
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Old 11th August 2022, 04:50 AM   #5
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Originally Posted by The Don View Post
I guess it depends.

If you're in the majority, the people who have paid their taxes, then this is good news because studies have shown that $1 spent on enforcement yields many times that in recovered tax payments.

If you're in the minority, the people and corporations which break the law in order to evade the taxes they should be paying then it's bad news.

Strangely enough, the people and corporations who evade the most taxes are among those who are liable for the most taxes, the very richest.
There is a difference between tax-avoidance and tax-evasion. Just as small business owners and other self-employed can employ 'creative book-keeping', so can the state - if it has the resources.

Let's be clear, this kind of budget will create what amounts to a dragnet to fleece USians.

But on this particular forum I'm unsurprised to find immediate and unthinking approval for an unprecedented expansion of an arm of the state - statists will be statists.
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Old 11th August 2022, 04:57 AM   #6
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Originally Posted by The Don View Post
I guess it depends.

If you're in the majority, the people who have paid their taxes, then this is good news because studies have shown that $1 spent on enforcement yields many times that in recovered tax payments.

If you're in the minority, the people and corporations which break the law in order to evade the taxes they should be paying then it's bad news.

Strangely enough, the people and corporations who evade the most taxes are among those who are liable for the most taxes, the very richest.
That'll be the pablum people are expected to swallow - as if the employing of tens of thousands of new enforcers is intended to pursue "corporations" and "the very richest". Is that really your take-away from this?
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Old 11th August 2022, 06:05 AM   #7
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Originally Posted by IsThisTheLife View Post
I always get the feeling that a lot of the locals on this forum are state employees, or beholden to the state in other ways. There is good news for them; the Biden admin has just presented a bill, the almost spitefully named Inflation Reduction Act, which will very likely sail through Congress, that will (among a raft of other things) authorise a massive increase the budget allocation for the IRS, $80 billion over ten years, potentially doubling the numbers of IRS commissars agents over that period.

It means (can ONLY mean) one or both of two things for 'ordinary', private, working citizens;

- being screwed out of more money by the state
- being criminalised by the state.

Isn't it great!?
I see the Chicago Boys really did a number on you. To be fair, they had a lot of help.
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Old 11th August 2022, 06:07 AM   #8
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Originally Posted by shuttlt View Post
An agency that seized the assets of random citizens would probably pay for itself as well.
Though they try the police don't manage to fund themselves through that technique, though it is one of the top forms of asset theft.
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Old 11th August 2022, 06:13 AM   #9
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Originally Posted by IsThisTheLife View Post
There is a difference between tax-avoidance and tax-evasion. Just as small business owners and other self-employed can employ 'creative book-keeping', so can the state - if it has the resources.

Let's be clear, this kind of budget will create what amounts to a dragnet to fleece USians.

But on this particular forum I'm unsurprised to find immediate and unthinking approval for an unprecedented expansion of an arm of the state - statists will be statists.
I don't understand this, just pay the taxes you are suppose to pay..
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Old 11th August 2022, 06:19 AM   #10
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Originally Posted by Lennart Hyland View Post
I don't understand this, just pay the taxes you are suppose to pay..
No, because taxes are evil.

The correct, god-given way is for rich people to keep all of their money, there to be no social services or provision for the general welfare of the people and certainly no standing armies.


No, the only right way is for rich people to stay rich, poor people to stay poor and for tax to be abolished. It's what god would have wanted.
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Old 11th August 2022, 06:19 AM   #11
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Originally Posted by IsThisTheLife View Post
a massive increase the budget allocation for the IRS, $80 billion over ten years, potentially doubling the numbers of IRS commissars agents over that period.
For context, this comes after years and years of budget cuts for the IRS.

How the IRS Was Gutted

The Need to Rebuild the Depleted IRS

I think the IRS really does need rebuilding.
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Old 11th August 2022, 08:33 AM   #12
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Originally Posted by IsThisTheLife View Post
That'll be the pablum people are expected to swallow - as if the employing of tens of thousands of new enforcers is intended to pursue "corporations" and "the very richest". Is that really your take-away from this?
I get your point. Without a change in tax laws, the big corporate evaders are not going to pay more taxes even if we employ more tax officers.

However, small fry also try to evade taxes and a beefed up tax office could see more people paying what they are legally obliged to pay. Whether this represents value for money for the government is not so easy to determine.
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Old 11th August 2022, 08:46 AM   #13
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Originally Posted by The Don View Post
I guess it depends.

If you're in the majority, the people who have paid their taxes, then this is good news because studies have shown that $1 spent on enforcement yields many times that in recovered tax payments.

If you're in the minority, the people and corporations which break the law in order to evade the taxes they should be paying then it's bad news.

Strangely enough, the people and corporations who evade the most taxes are among those who are liable for the most taxes, the very richest.
Except that for the most part, that's not who they go after.
https://www.cbsnews.com/news/irs-aud...o-get-audited/
The people who avoid taxes the most are the rich and corporations, they're also the people that can afford to fight an audit and higher good accounts who make sure all that avoidance is legal.
Originally Posted by Lennart Hyland View Post
I don't understand this, just pay the taxes you are suppose to pay..
Its about incentives. The US tax code is so convoluted and Byzantine that it pays to avoid paying if you can. If it cost 10k to avoid 20k in taxes, lots of folks are going to do it.
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Old 31st August 2022, 10:36 AM   #14
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Originally Posted by IsThisTheLife View Post
...There is a difference between tax-avoidance and tax-evasion. Just as small business owners and other self-employed can employ 'creative book-keeping', so can the state - if it has the resources...
Tax Avoidance should be minimized and closely scrutinized and any hint of "gaming" to circumvent tax laws should be treated as deliberative evasion. Tax Evasion is, and should be, a serious crime and should result in stiff, substantive penalties, to include extensive fines at a minimum and incarceration and/or loss of the ability to work in senior corporate/financial roles in perpetuity for repeat/chronic criminal behavior in regard to federal taxation. Needless to say, this is my personal perspective. Make the laws strict and clear, and the penalties for deliberate violation just as clear and unavoidable.
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Old 31st August 2022, 12:52 PM   #15
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Originally Posted by IsThisTheLife View Post
There is a difference between tax-avoidance and tax-evasion.
And since the IRS can only get additional money out of the latter, any sane person will realize that's where collection efforts will be targeted.
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Old 31st August 2022, 12:57 PM   #16
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Originally Posted by ahhell View Post
Except that for the most part, that's not who they go after.
https://www.cbsnews.com/news/irs-aud...o-get-audited/
The people who avoid taxes the most are the rich and corporations, they're also the people that can afford to fight an audit and higher good accounts who make sure all that avoidance is legal.
That's mainly because they have the political clout to get legal loopholes built into the system. Auditing them isn't going to do much if the loopholes they are using to avoid taxes are perfectly legal.
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Old 31st August 2022, 11:04 PM   #17
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Originally Posted by lomiller View Post
That's mainly because they have the political clout to get legal loopholes built into the system. Auditing them isn't going to do much if the loopholes they are using to avoid taxes are perfectly legal.
And we can all thank Kyrsten Sinema for making sure that the carried interest loophole wasn't killed. Or to be more specific, Wall Street can thank her.

https://www.npr.org/2022/08/07/11161...es-whats-in-it

Quote:
Tax reform
The legislation creates a 15% minimum tax for corporations making $1 billion or more in income, bringing in more than $300 billion in revenue.

A portion that got cut, though, is one that narrowed the carried interest tax loophole. Arizona Kyrsten Sinema agreed to sign onto the bill if this measure, which would have changed the way private equity income is taxed, was cut. Democrats said it would have brought in $14 billion in revenue.

Instead, a 1% excise tax on stock buybacks was introduced, and it could bring in roughly five times as much revenue as the carried interest measure. However, it wouldn't take effect until next year, raising predictions of a rush of buybacks by some companies before 2023 rolls around.
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Old 1st September 2022, 07:04 AM   #18
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Instead of spending money on enforcement, how about they craft some tax law that means I'm probably not accidently cheating on my taxes rather than hiring more people to figure out how I'm accidently cheating on my taxes?

Seriously though, simplification of the tax code would actually be better than enforcement of the current code. It not just give aways to the super rich, its also give aways to the middle class like the mortgage deduction and a big give away to tax accountants and lawyers. All at the expense of every american that has to pay to have someone or some software do their taxes.
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Old 1st September 2022, 05:26 PM   #19
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Originally Posted by ahhell View Post
Instead of spending money on enforcement, how about they craft some tax law that means I'm probably not accidently cheating on my taxes rather than hiring more people to figure out how I'm accidently cheating on my taxes?

Seriously though, simplification of the tax code would actually be better than enforcement of the current code. It not just give aways to the super rich, its also give aways to the middle class like the mortgage deduction and a big give away to tax accountants and lawyers. All at the expense of every american that has to pay to have someone or some software do their taxes.
what do you propose should be "simplified"?
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Old 1st September 2022, 08:14 PM   #20
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Simplification is something everyone always talks about but which never happens.

What simplification actually means is eliminating all the tax breaks. As soon as anyone proposes that, the people who stand to lose those tax breaks raise a stink about it, and they quietly reinstate them in committee.

The simplest tax scheme would be you don't get to write anything off. Not your dependents, not your mortgage interest, not medical expenses, nothing. You could keep the "standard deduction", which is simple enough.
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Old 1st September 2022, 08:26 PM   #21
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Originally Posted by Puppycow View Post
Simplification is something everyone always talks about but which never happens.

What simplification actually means is eliminating all the tax breaks. As soon as anyone proposes that, the people who stand to lose those tax breaks raise a stink about it, and they quietly reinstate them in committee.

The simplest tax scheme would be you don't get to write anything off. Not your dependents, not your mortgage interest, not medical expenses, nothing. You could keep the "standard deduction", which is simple enough.
There is a difference between a tax break and a tax deduction IMO. Many tax deductions make a lot of sense. For example it makes sense for business expenses to be deductible because they are never really part of your personal earning. Not respecting the difference between business and personal expenses is one area where people get themselves into trouble. It doesn't need to be simplified IMO because people that violate this always know it's a personal expenses not a business expenses.
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Old 2nd September 2022, 12:39 AM   #22
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Originally Posted by lomiller View Post
There is a difference between a tax break and a tax deduction IMO. Many tax deductions make a lot of sense. For example it makes sense for business expenses to be deductible because they are never really part of your personal earning. Not respecting the difference between business and personal expenses is one area where people get themselves into trouble. It doesn't need to be simplified IMO because people that violate this always know it's a personal expenses not a business expenses.
Yes, people deliberately game the system.

My late uncle used to own a business in Las Vegas and had a holiday property in Arizona. He rented a PO Box in the adjacent Arizona town and claimed all trips to his holiday property as business expenses - checking the PO Box (or at least that's how it was explained to me as a child).

AFAIK he was never caught by the IRS so whether this was perfectly legal or lucky, I don't know.
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Old 2nd September 2022, 07:24 AM   #23
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Originally Posted by lomiller View Post
what do you propose should be "simplified"?
Originally Posted by lomiller View Post
There is a difference between a tax break and a tax deduction IMO. Many tax deductions make a lot of sense. For example it makes sense for business expenses to be deductible because they are never really part of your personal earning. Not respecting the difference between business and personal expenses is one area where people get themselves into trouble. It doesn't need to be simplified IMO because people that violate this always know it's a personal expenses not a business expenses.
Anything everything. How do foreigners do it? Mostly they get a statement from the government that says, you paid this much are you ok with that. And they check a box.

And I seriously doubt most deductions make sense, at least not for personal income taxes.

Why is there even a standard deduction? How does that make sense.

An easy way to start would just have a law to the effect of any provision in the tax code that impacts less than some arbitary number or percentage of tax payers is deleted and treat all income the same regardless of source.

Last edited by ahhell; 2nd September 2022 at 07:26 AM.
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Old 2nd September 2022, 09:50 AM   #24
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Originally Posted by ahhell View Post
Anything everything. How do foreigners do it? Mostly they get a statement from the government that says, you paid this much are you ok with that. And they check a box.
Not here, and I can't imagine anywhere that operates like that for business taxes.

Originally Posted by ahhell View Post
And I seriously doubt most deductions make sense, at least not for personal income taxes.
This seems like more of a personal issue on your part. Most deductions flow out of mundane accounting practices that anyone running a business should be able to understand. And, as I said above, there is no way they don't understand when something is a personal expense rather than a business expense which is the main thing the IRS gets small business on.

Originally Posted by ahhell View Post

Why is there even a standard deduction? How does that make sense.
The standard deduction is the part of your income that is tax free, do you have something against having a portion of your earnings be tax free.

It exists so that people with very low incomes don't need to give the government what little they do make. Higher income earners get it as well to avoid situations where earning more money per-tax cuts your after tax earnings.

Furthermore this is a relatively simple calculation that has no relation to "complexity of the tax code" issues in the US.
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