States Link Databases to Find Tax Cheats 726
The IRS and state revenue agencies are increasingly linking every database they can get to their tax records to find clues about your finances.
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States Link Databases to Find Tax Cheats
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"Ninety percent of baseball is half mental." -- Yogi Berra
Privacy Issues (Score:5, Interesting)
I really don't have a lot of sympathy for people who cheat on their taxes. I play fair, which means I have to pay more to make up the difference from the people screwing over their own government. If database cross-referencing means it will be easier to catch tax evasion, with the side benefit of making audits more efficient, you've got my vote. It even sounds like it will assist in keeping some innocents out of the audit process, which is good. I'm sure more than a few people still remember the high-profile black eyes the IRS got from false alarms.
A side note: I know the flames in reply will be numerous, because it's not a popular stance, and most won't bother to RTFA or my entire comment. But I wanted to go on record anyway.
Yet more privacy issues. (Score:4, Interesting)
Re:Privacy Issues (Score:5, Interesting)
Another way to accomplish this... (Score:4, Interesting)
Re:Get a national sales tax already (Score:2, Interesting)
Ideally they won't keep it under the mattress, they'll give it to a bank, who [in exchange for a small amount of interest] will use it to provide venture capital to new companies to keep the economy moving! Now whether this works in practice is another thing all together :)
Re:There is no reasonable expectation of privacy (Score:2, Interesting)
What about bad data? (Score:4, Interesting)
They had this info for years... (Score:3, Interesting)
Re:Get a national sales tax already (Score:2, Interesting)
No shit. (Score:2, Interesting)
Happy happy joy joy.
Just when you think you might be getting ahead.
It's always something.
Mass wants to catch NH shoppers (Score:5, Interesting)
On the MA income tax forms there's a space for "use tax" that you can fill out to tell the state what you bought out of state and how much owe them. How nice. My tax preparer said that she didn't have a single client all year that volunteered that information to the state.
How long before they can audit out-of-state store records to see if their citizenry have been shopping in NH and not volunteering to pay the tax?
They don't call this state "Taxachusetts" for nothing. It's no wonder people and jobs are leaving...
-S
Re:Get a national sales tax already (Score:1, Interesting)
Simple clothing is not taxed. This means underwear, tennis shoes less than $30, socks, and plain clothes less than $30 in value.
Bus and subway tickets are not taxed. Services are not taxed, so feel free to spend as much as you want on a day-care, lawnmower boy, or prostitute.
Everything else is taxed.
And just to prove that even this tax system can be monkeyed with for political purposes (bonus points for finding the examples already given): Guns are taxed at double the rate, and anything with a peace symbol printed on it is tax-free.
Use tax: The most cheated on tax ever. (Score:5, Interesting)
The problem with collecting use tax from an individual is that Massachusetts tax authorites can't make a New Hampshire store turn over names of people who shop there because they're outside of their jurisdiction, nor can they make the buyers confess to shopping in New Hampshire thanks to protection from self-incrimination. It's a tax that's on the books, but in most cases uncollectable.
"Tax free" shopping is a myth... if you avoid the sales tax you owe the use tax. Again, however, the state's going to have a hard time chasing you.
However, if you pay a customs duty while bringing an item into the USA and you live in MA... it's a pretty good case of "gotcha" that you owe the use tax on that item and haven't paid it. So, this is simply taking federal government records and using them to collect a state tax too. So, the unlucky few getting these notices just got caught ducking a tax nearly everyone doesn't pay...
Re:Privacy Issues (Score:3, Interesting)
The trouble is that you are relying on individuals with a vested interest in getting as much money out of you as possible (for a wide variety of reasons) to put checks and balances that work into a system designed to get money from the populace.
Whether we like it or not, we have gone from a majority government (democracy) to a republic (which ONLY works IF the elected representatives are truly ACCOUNTABLE to the people they are supposed to represent). In our day and age, with the methods of communication and data/idea transfer that are available, republics are now an outdated form of government.
The trouble is that most politicians are aware of this on some level, and it scares them to death! Which is right and proper, since it means that if the entire nation EVER wakes up to this fact at the same time, the politicians are in danger of losing their jobs.
The neat thing is that they make the rules, and if they can they will do everything they can to make the idea of changing how our government works a very unpopular/highly illegal idea. This is NOT a good thing.
This country was, fortunately, founded on the idea that from time to time the government might need to be reorganized. Unfortunately, I think that most of us have lost sight of that fact. (Don't get me wrong here, though. I am in favor of change, but not while we have unfinished business overseas. I don't want to be accused of anti-Americanism--I believe this country is very strong and is a good place to live (and if you don't agree, fine, but you then have two options: leave or change it--grousing is just annoying). We need to change though.)
As for taxes, I am NOT in favor of the current tax system, but I do believe that it is better to work within the system to change it, but if that is NOT possible, then it may require more drastic actions.
Taxes are a leech system, and very much unecessary. If we had a true democracy, we would cut out some of the MOST expensive government employees (the pro politicians), and save a ton of money each year. Also the people would have to decide what programs they wanted to spend their moeny on, and I guarantee that if they saw that oooh, hey, spending more money on this means my paycheck gets smaller (what you take home), then most people would cut government spending in many areas.
At the same time, I would increase gov't spending on the areas that are important--education, police, fire, and military. Welfare should be, and needs to be, a private affair, as does social security, retirement, etc. These are things that the community can provide IF there is an incentive to do so. That incentive can be provided in many ways. Personally I buy into the libertarian philosophy that IF you give people their money (instead of taxing them), then they will, on average, give more to charities and similar things than those charities ever get from taxes.
If you want a good rundown of this read this book by larry elder: http://www.amazon.com/exec/obidos/tg/detail/-/031
It's a great read for anyone who is curious about the libertarian philosophy, but isn't too preachy.
Personally, it's men like him that make the MOST progress against racism, not the people that are generally seen as civil rights leaders. Those people (such as Bell Hooks), are so often inflamatory instead of conciliatory.
However, I've said too much, I'm going to get flamed just as much as you now...Doh!
Oh, the Irony (Score:2, Interesting)
Your .sig says:
And yet, you advocate overbearing government control and invasion of privacy in support of taxation.
Tell me: When my speeches from the soap box are being ignored; my vote at the ballot box is drowned out by votes from idiots who open wide and swallow what's spoon-fed to them on TV; a voire dire process gone mad stacks the jury box with drooling morons who are easily manipulated by the prosecution, who have never heard of jury nullification, and who will never stand up for someone who just wants to keep a little more of his hard-earned money than Uncle Sam decrees -- and the government is still stealing an ungodly amount of my salary so corrupt politicians can feed their pork-barrel friends -- when is it time to apply the "ammo box" to the tax man like we did a few hundred years ago?
If you can give me a satisfactory answer to that, then maybe I'll be less inclined to "cheat" on my taxes (i.e., keep what belongs to me in the first place).
Re:Get a national sales tax already (Score:4, Interesting)
Also, other than getting moldy, what does that money under the mattress do for the person who earned it? If you're not actually spending it and increasing your standard of living why should you be penalized reguardless?
And when did it become the consumers fault that businesses aren't making things worth buying? Sounds like RIAA-thought to me...
I would be satisfied... (Score:5, Interesting)
My father found out the hard way what happens between IRS 'zones' (we moved around a lot - military). There was a discrepancy (totally honest) that didn't show for almost 20 years and then they tried to slam us for back payments with interest. This is something that they KNEW about at the time, but never informed us through any other zone.
It took the work of a local representative to clear things up. At that time you couldn't even bring a lawyer or tape recorder in with you when you went to see them.
This is the kind of headline that scares me (and should scare YOU) green!
pentagon (Score:3, Interesting)
Add it up, the government is the biggest thief in the US. Pack of hypocritical liars. Research the sordid history of the creation of the "federal" reserve and the IRS. Nerd, educate thyself!
That gang of crooks, entrenched year after year, both major "parties" running the government as their private cash cow, millions of workers, almost no accountability--it's beyond disgust.. The sheer scale of government financial malfesance is awesome, and their "crying foul" and data mining to find alleged "cheats" is the pitiful squeaking of insatiable bloated ticks.
Think about it, government's position is all of your labor is their's by default, then they come up with some magic formula over how much you are allowed to keep-this year. And said magic formula is so arcane and convulted that no two "agents" of the infernal revenue service can look at a complicated tax "return" and arrive at the same figures. Every year someplace you will see a similar test, an ex agent perhaps, a CPA, someone from one of the popular tax preparation companies, all given the same hypothetical taxpayer info, and they never come up with the same figures.
It's nuts. Scrap the system, cut government back down to manageable size by attrition, with a freeze on new hires being a good starting point. Scrap entire un needed and unwanted agencies. Get rid of the large standing army. Retire the whole government pension system, make it ten years maximum government "service" then you are out, no pension, top to bottom, especially politicians. Make campaign contributions from any cartel, org, corporation, etc be illegal, because they are bribes, call it what it really is. Reduce personal contributions to a maximum of one hundred dollars.. Use excise taxes as a replacement for "income" taxes, like it was before the 16th. DUMP the fed and send greenspawn and his fellow reserve governor-demons packing (to prison for fraud and racketeering), end the welfare state for billionaires. Take away legal personhood for corporations. End the revolving door of electing lawyers to congress so they can pass more laws that only benefit their leeching guild.
There are several good solutions to "the tax problem" out there, just the people who actually COULD implement them have zero incentive TO implement them, because it would put them out of their parasitical jobs.
Re:Get a national sales tax already (Score:4, Interesting)
I'd like to think this, but actually I have a hard time believing that much of the money the rich spend ever trickles down to the poor. One of the reasons for this is the inherent downward flow of money in a company. When you buy a product from company X, the people who run/own company X get a piece of the profits, and then pass as little as they can get away with down to their subordinates.
The second problem is that consumerism causes inflation. You don't spend money in a vacuum; when you buy something, it drives up the price of that product for others, thanks to the law of supply, price and demand.
This is why the lower classes aren't all that excited about Bush's "across-the-board" tax cuts: living costs are increasing at a rate that far outstrips the extra few hundred dollars that they're saving on taxes each year. And on top of that, the rich are getting huge amounts back from the tax cuts, which means they will spend more, further driving up costs of goods and services.
The problem is especially manifest in the housing and gasoline markets, because housing and gasoline are both commodities that everyone needs.
My solution to this would be to have our tax tables change each year depending on the cost of living. If the cost of living increased from the previous year, then the taxes will become more progressive (harsher on the upper class), and if the cost of living decreased, vice-versa.
Only way we'll deal with this our own data mining (Score:4, Interesting)
1. Because we all know that we do embarassing things.
2. People who cannot check the actions of their elected officials, are subject to as horrible a system as there ever was, We can do our own datamining and do our tests/queries to check them, If we are not allowed to, the government should not have the right to do such things.
3 There are some downsides to having no privacy, so we should only trade our privacy as there are other ways to protect our interestes...
in the case of voting, we could be blackmailed or coersed to vote a certain way. If we had a big enough group who are willing to fight to the death about an issue, the other group will probably see the opportunity cost as being too high, and will not force people to vote a certain way.
4. We can also deal with limited term privacy, we can have our elected officials encyrpt data in a fassion that it can be decrypted in a certain amount of time... this has problems as one groups attack method could reveal the information almost immediately... so that wouldn't work.. but the goverment could encrypt the data in two fassions, and release the hash of the data in one format, and the date that the data will key will be decryptable, then when the private key is released, we could decrypt the info, and perform the multiple has functions to verify that the data was what was acted upon.
We have no privacy.. that isn't neccissarily a bad thing
Going On For A While Now (Score:4, Interesting)
When did this happen? 1994.
Re:No one "makes up the difference" (Score:5, Interesting)
Thats ridiculous. The reason we are running massive budget deficits and our taxes are so high is thanks to massive corruption and waste in our government.
Halliburton has something like 18 billion dollars in no bid contracts in Iraq. They are cost plus contracts so its impossible for them to not make money on them. On top of that they've been cooking their books to rake in even higher profits, for example wildly inflating the number of meals they are serving to the Army. Bechtel is presumably doing about as well. Its pretty simple really, they are so connected with the Bush administration there was no chance these contracts would be competitively bid, and they are raking in huge profits at tax payer expense.
Most of the contractors working in Iraq are making six figure, tax exempt, salaries. Iraq is one giant pork barrel for friends of the Bush administration. This is, no doubt, one reason they wanted to invade Iraq.
The annual ombudsmen bill is an annual ritual where Congressmen, from both parties, dole out pork to the friends and contributors. Its $820 billion total, $328 billions is discretionary spending (which means not essential) and about $11 billion is unabashed pork. John McKane does an annual speech exposing all the blatant payola and humiliating his fellow Congressman for doing it. The congressional delegation from Alaska is especially adept at it. Alaska gets more federal hand outs than any state in the Union, per capita.
http://timesargus.com/Story/77768.html
Last years so called Medicare reform bill was a gigantic subsidy to the pharmaceutical and insurance industries which will cost us at least $55 billion a year very little of which is benefiting seniors. It was passed using deceptively low cost estimates, bribery, deception and pushed through by corrupt insiders. Billy Tauzin who pushed it through congress, and the Medicare administrator who hid the true cost, instantaneously took multimillion dollar jobs with the drug industry they'd just blessed with tax payer subsidized wealth. Its a basicly a transfer of our tax dollars in to their pockets because they are friends and contributors of the Republicans. I'm pretty sure these two industries are probably the least in need of a bailout from the Federal government of any in this country.
The Bush/Cheney Energy bill is likewise going to be a huge transfer of wealth in to the pockets of big energy companies if it passes.
http://www.cnn.com/2003/ALLPOLITICS/11/30/mccain
The Pentagon is equally bad. There is a revolving door from the civilians and officers in the DOD to big defense contractors. They are throwing billions in contracts to these companies while they are in the government and then taking lucrative jobs with the contractors as the payoff when they leave the government. The latest most vivid case was a $20 billion dollar deal for 767 tankers that was thrown to Boeing by Darlene Druyun, a key civilian procurement official for the Air Force. As soon as the deal was signed she took a lucrative job at Boeing. The only reason this stinking mess unraveled was because John McCain once again refused to stand for it and exposed it.
Basically you need to understand how the U.S. system works. Big corporations and wealthy individuals donate relatively small amounts to a candidates war chest. If that candidate wins they get a 1,000 or 10,000 fold return on their investment at tax payer expense. The company wins, the politician wins (its not their money they are giving back to their donors), and the tax payer gets screwed.
There is also a revolving door where people are jumping between big corporations and government service. They don't make anything while they are on the Federal payroll but they get RICH as soon as they return to private industry and they get paid off for their gener
NEVADA and FLORIDA don't share (Score:4, Interesting)
Other states don't have state income taxes, and so don't keep track of as much
Also, I believe Nevada and Wyoming are the only states that allow bearer shares - which means you can hold ownership of a company without your name being on public record, a competent lawyer can have their name on the public record instead - which is supposed to protect against tax hounds and personal liabilities.
Re:Privacy Issues (Score:3, Interesting)
The problem with Libertarians is that they assume that things will get done "just because." If a bridge ought to exist over a river, then someone will build the bridge and charge others to cross it; Libertarians reason that if the bridge can't pay for itself, then it shouldn't exist, and nobody will build it, and that's fine, QED.
In reality, I suspect that very little along these lines would get done at all. People are far too selfish and too short-sighted to build selflessly for the future. The interstate highway system would never exist. For that matter, neither would the US highway system that preceded it. Or the state highway system. And, it takes a lot of years to pay back an interstate highway construction project, even if you do collect tolls. Who has the capital to do that? Nobody.
Oh, sure, people will get together, pool their resources, blah blah blah. If we only enforced property rights, polluters could never get away with polluting blah blah blah. I love Libertarians. Everything has an easy answer. Let's give guns to children, then Columbine would never have happened (I heard this argument at a dinner party, from a former Libertarian candidate for president).
Like government or hate it, there is a need for government, so there's a need for taxes to support it. Someone/something had to stop Standard Oil, Andrew Carnegie, J.P. Morgan, and the Union Pacific Railroad, before they screwed us all. I can hear the Libertarians yelling in the background: "Government CAUSES monopolies! Monopolies buy government influence!" Sure, maybe. But no capitalist would refute the essential truth that the ultimate outcome of unrestricted capitalism is monopoly. SOMEONE WILL WIN IN EVERY MARKET. Then what? Then you need government to smash the monopoly so we can start over. Isn't working too well at the moment with Microsoft, but wait a few years. Didn't happen overnight with Standard Oil, either.
What is *this*? (Score:2, Interesting)
I'm sorry - why won't you name them? One, you work for ME. Two, the majority of the time a government agency won't specify something it is because they shouldn't be doing what they are.
THAT statement worries me more than the rest of the article in its entirety. The government should be completely transparent at all times to the citizen, at least in civil matters. (Military, et al, would be excepted in certain circumstances.)
Grah. That's okay. The TIA database that's running will pick this post up and flag me as a dissident. When the time comes I'll disappear like the rest...
Fair Tax Act (Score:2, Interesting)
Re:Tax $ Tug of War (Score:5, Interesting)
Of that list you put out, the only things that really require income tax to fund are the NSA, CIA, and the military. Transit and highways fall under transportation (which can be funded by gas and transit taxes, and by local and state bond issues which will be paid with local and state taxes), social security and medicare are welfare taxes that are levied separately from the federal income tax.
Apart from the issues with all of these items (ie, Social Security, where you pay money in for the people currently drawing out, in exchange for the thin possibility some wage earner in the future will do the same for you), the government needs money only to do the things that we, as a people, have deemed that it is necessary for the government to do.
For example, with regards to the common defense, most people don't want to devote part of their time to serving in the armed forces, so we pay people to serve full-time and part-time (also, a volunteer force is more effective, but the idea is we'd rather commit money than time.) Same thing with law enforcement, the court system, roads, etc. - it is a delegation of authority and responsibility, that requires funding in order to work.
Because shit costs money, and people like you are too greedy to fork it over for the general good by choice, so we have to legislate it out of you.
"We", meaning the majority of American citizens, or "we", as in the minority of special interests think they know what's best for the rest of us? Most of us are fine with being taxed for services we use - its the services we DON'T use, and the misuses of those funds that we object to. Consider that fact that the federal income tax is a "pay as you go" tax - if you run a business, you must remit quarterly tax receipts if you expect to make a profit that year. As an individual, you must pay taxes throughout the year, and come tax day, you either get to pay more money, or you get a refund (with no interest.)
Where does that money go? To print lots of paper for stupid laws proposed by special interests, to pay for staff and telephones, and fax machines for the politicians who then spend time debating these stupid laws, who then pass the stupid laws, which are then challenged in court, resulting in more money to print more paper, pay judges, court reporters, etc. to try the case in court, and finally, if upheld, to pay for enforcement of those laws.
In the case of tax laws, they're taxing you in order to pay for enforcers to make sure you're paying your taxes. What a racket!
Personally, I think the government is way too easy on tax evasion. In my opinion, if you don't care enough about the country to pay a small portion of it, then you don't care enough to stay here either. They should all be stripped of their citizenship and deported. Fines / Jailtime is too easy.
Funny thing you propose that. Too bad the IRS will not let anyone give up their US Citizenship if they think that they're doing it to evade taxes.
Personally, I think anyone who shirks from jury duty should be stripped of citizenship. If I'm going to have to give up a month's pay because two sets of assholes have nothing better to do than waste the time of a judge and jury on a civil case (they ended up settling while we were on the second day of deliberations), then by god, you should too!
Want to solve the root problem? (Score:5, Interesting)
National Sales Tax.
Instead of taxing people for achievement (income), tax them for consumption (spending). A national sales tax of 20% on all retail transactions would generate the same revenue collected now, but with a tiny fraction of the overhead.
To counteract the regressive nature of the sales tax, everybody would receive a fixed dollar amount refund. That refund would be equal to the tax rate times the federal definition of poverty level income. The basis for this is that a person whose income is at poverty level must spend all their income to survive. If that person and everybody else receives the same size refund, it would amount to a 100% refund for the poor and a smaller percentage refund for higher income people. People would automatically pay an infinitely graduated tax because people with higher incomes buy more.
All the privacy issues generated by federal income tax would go away.
The overhead involved would be practically zero. The IRS would need only a fraction of its current 100,000+ employees, to deal with state revenue agencies to collect the fed's share. If they still insisted on doing audits, rather than letting the existing state agencies handle it, they would be looking at 12 million businesses collecting sales tax instead of 170 million people currently paying income tax.
All business taxes and corporate income taxes would go away. The national sales tax would be on end user purchases only. All the hidden taxes paid by companies and built into the prices of everything would be gone.
All the costs of calculating personal and business taxes and trying to avoid them would go away, along with all of the associated record keeping. An army of clerks, accountants, lawyers and consultants whose jobs are based entirely on taxation would have to find something productive to do.
Congress would lose its ability to use tax breaks to repay campaign contributions.
About 7 years ago there was a proposal to do the above. It died in committee.
Re:No one "makes up the difference" (Score:2, Interesting)
ENRON - WORLDCOM (Score:2, Interesting)
Re:Want to solve the root problem? (Score:3, Interesting)
For example, IIRC, there's a section on the tax forms that legally blind people don't have to pay any taxes. Would you mandate, then, that legally blind people carry ID cards making them exempt from the sales tax? Would this get abused by their friends having them buy the expensive items to save the tax money?
Also, there's different tax rates for varying children. A family w/ no kids pays more tax than a family w/ 2 kids.
Also, there's alot of random programs for tax breaks. For example, my girlfriend and I just bought a house, and it's designated 'historical'. So in some cases, home improvements we do can be discounted (through taxes). This would be difficult for the plumbers and roofers to have to maintain in your system.
Another program is for students (I'm a graduate student now so I know about this). If a student spends up to $5000 on tuition, they are entitled to tax relief on that. How would this get effectively reduced for some students but not others, etc? (ie, if parents vs students paid)
Your plan would, though, easily allow charity donations to be tax-free, as no effective sales tax would be charged on the donation. That would cut down alot of overhead and also cheating.
Re:No one "makes up the difference" (Score:1, Interesting)
Greenspan's statement, to my understanding, was independent of Congress currently using any surplus of funds collected by these two being siphoned off to the general fund.
The numbers on Social Security and Medicare are not pretty.
Universal healthcare costs less (Score:1, Interesting)
Actually, US voters are too dumb to consider the pricetag of NOT having universal healthcare. The "efficiencies" generated by competitive private coverage are eaten up many times over by the costs of form filling for multiple providers and insurers, among other things.
The United States spends a larger share of GDP on health than any other major industrialized country. In 2000 the United States devoted 13.3 percent of the GDP to health compared with 10.6-10.7 percent each in Germany and Switzerland and 9.1-9.5 percent in Canada and France, countries with the next highest shares.
In 2001 national health care expenditures in the United States totaled $1.4 trillion, increasing 8.7 percent from the previous year compared with a 7.4 percent increase in 2000. In the mid-1990s annual growth had slowed somewhat, following an average annual growth rate of 11 percent during the 1980s. According to the figures released by the White House this January, health spending now accounts for nearly 15 percent of the USA's economy, the largest share on record.
Yet around 40-43 million people in the US presently have no health insurance according to snapshot figures, and the longer term total of uninsured months per person is probably a lot higher.
The USA continues to be the only country in the G8 without some kind of universal healthcare, and the only winners are the private health corporations and the lawyers.