Can Computers Be Used To Optimize the US Tax Code? 730
FatLittleMonkey writes "Science fiction author David Brin wonders whether the US tax code, described by President Obama as a '10,000-page monstrosity,' could be dramatically simplified. His idea is about using computers to shuffle the existing system: 'I know a simple way the sheer bulk of the tax code could be trimmed by perhaps 70% or more, without much political pain or obstructionism! ... it should be easy to create a program that will take the tax code and experiment with zeroing-out dozens, hundreds of provisions while sliding others upward and then showing how these simplifications would affect, say, one-hundred representative types of taxpayers... Let the program find the simplest version of a refined tax code that leaves all 100 taxpayer clades unhurt. If one group loses a favorite tax dodge, the system would seek a rebalancing of others to compensate. No mere human being could accomplish this, but I have been assured that a computer could do this in a snap.' With all the talk about Open Government, perhaps the computer code currently used in tax modelling could be released to the wider community, leading eventually to a Folding@Home type project."
Short Answer (Score:2)
Re:Short Answer (Score:5, Insightful)
Maybe
Would politicians accept the solution without re-bloating it first? No
Re:Short Answer (Score:5, Funny)
rm tax code | /dev/null
Computers CAN fix the tax code.
Re:Short Answer (Score:5, Funny)
I take it you know more about economics than you do about the command line, right?
Re:Short Answer (Score:5, Insightful)
Fairtax effecitvely cuts taxes massively for the wealthy. it has a lot of good press (aka the best propaganda money can buy) combined with a healthy dose of magical thinking.
A real fair tax needs to address the fact that state taxes typically tax in reverse with the lower income paying 10%+ of their income in taxes while the wealthy pay under 1% of their income in taxes.
The best form of a fair tax would be
A fixed 20% tax on everyone with no deductions except ignoring all income at and below the poverty line.
The poor and middle class listen to this nonsense and slit their own throats while the wealthy are turning into an oligarchy and new nobility class.
Re:Short Answer (Score:4, Interesting)
Fairtax effecitvely cuts taxes massively for the wealthy.
Nope, not true. It eliminates loopholes for the wealthy
it has a lot of good press (aka the best propaganda money can buy) combined with a healthy dose of magical thinking.
Not sure where that's coming from - all I ever see in the press is people like you vilifying the FairTax with falsehoods and misrepresentation (like your post)
A real fair tax needs to address the fact that state taxes typically tax in reverse with the lower income paying 10%+ of their income in taxes while the wealthy pay under 1% of their income in taxes.
That's for the states to do, not the Federal government - state taxation is up to the states.
The best form of a fair tax would be A fixed 20% tax on everyone with no deductions except ignoring all income at and below the poverty line.
That sounds a whole lot like the FairTax (except that it's 26% instead of 20%)
The poor and middle class listen to this nonsense and slit their own throats while the wealthy are turning into an oligarchy and new nobility class.
Better that they just listen to you describing the FairTax as something different than it is, and never give it a chance?
Re: (Score:3)
The presumption that wealthy people spend 100% of their income is invalid.
That may be your presumption (not sure why you would make it). This provides incentive for saving, which is a good thing. The only other objection that this would cover is if you are just concerned about punishing people for their income.
The presumption that wealthy people would not buy clothing, booze, and other valuables in other lower tax jurisdictions is invalid.
Out of the COUNTRY!?!? They don't do that now, why would they do it under this scheme? Not invalid at all.
I've validated since this was posted that raw food would not be excluded. That is a HUGE tax increase for the poor.
You're missing a lot. NOTHING is excluded - that's part of the fairness. The FairTax actually eliminates and reimburses all federal taxes for those below the pover
Re: (Score:3, Insightful)
No you didn't. You just shifted the entire burden of taxation onto the poor and middle class with your shitty, extremely regressive tax system that nobody but a few fringe libertarian types wants.
Why not do your own research into the facts [fairtax.org] instead of just repeating what your socialist comrades claim. They don't like the fair tax because it shifts power and control away from the centralized government, not because it's regressive (it's not).
Re:Short Answer (Score:5, Interesting)
Slightly longer answer:
Maybe
Would politicians accept the solution without re-bloating it first? No
Actually, the original idea will never get off the ground, because most of those 10,000 pages deal with things like "companies employing less than 100 people and which are located in a depressed neighborhood and which have names ending in a vowel get to deduct the cost of the president's jet." Things like that are added to give one particular company a break, but they never mention the company's name, just a set of circumstances that describe only that company. The company knows who they are, but we are unlikely to figure it out since each of the intersecting sets is rather large. Unless that company is part of one of the clades, that particular clause will have zip effect and it will be proposed for deletion, leading to that company and all the others in the same situation to object to the entire process.
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You're right, but only half right. Rich individuals, not just companies, can get these same kinds of special treatment. It's all about how much you've donated to the right Congresscritters.
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because most of those 10,000 pages deal with things like "companies employing less than 100 people and which are located in a depressed neighborhood and which have names ending in a vowel get to deduct the cost of the president's jet."
Please cite examples.
Redistricting (Score:4, Insightful)
I tried to interest people in redistricting on the same idea. Have the politicians state what their trade-space is? state the value of having districts simply shaped versus ones that include more diverse/less divers people or follow natural contours like housing development or rivers. Then have a computer bark out lors of possible district maps.
No interest.
The problem is that politicians are interested in their own power not fairness. THey want certain companies in their districts. They want mayors that owe them favors in their districts. they want gerry mandered advantages.
If you want this you have to impose it by referendum or other force. they will not agree on their own accords.
In the case of the tax code. How is a politician supposed to promise intel a tax break if they give him a boatload of money? he can't unless the tax code is adjustable.
Re:Short Answer (Score:4, Insightful)
It won't work for the very simple reason that the rich are much more able to optimize their tax paying to take advantage of what is in the tax code.
For example, in the UK the rich pay 50% tax on income (42.5% tax on dividends) but only 28% tax on capital gains (might even be 18% if they can get their taxable income low enough - I'm not absolutely sure what happens at this extreme)
So it currently makes sense for the rich to buy shares that tend to generate capital gains in favour of shares that tend to generate income - especially if there intention would have been to reinvest the dividends anyway.
Change that around and the rich will shift their investment strategies around to get the best deal they can. The poor (and in this case I mean almost everybody) will typically only have a single source of income (their job) and no opportunity to optimize their tax rates because they'll be "trapped" in a single taxation regime.
So if you try and optimize it so that nobody ends up better or worse off, what will actually happen is that the rich will then optimize their tax rates and end up paying less. The only way to recover the missing tax will be to put up rates so that, for at least some people, they will end up worse off.
Tim.
Re:Short Answer (Score:5, Insightful)
So it currently makes sense for the rich to buy shares that tend to generate capital gains in favour of shares that tend to generate income - especially if there intention would have been to reinvest the dividends anyway.
This is not a bug, this is intended. And if it isn't, it really should be. It makes sense that that taxation regimes should be designed to encourage the re-investment of surplus wealth into economic activities. After all, you might lose the 22-32% on income tax, but this is expected to be beaten by the increase in tax take from the recipients of the investment in the form of corporation tax, VAT where applicable and the income tax on employees of the organisation that was invested in. Having anyone simply sitting on huge piles of cash benefits no-one.
Re:Short Answer (Score:5, Insightful)
Except that the tax code doesn't encourage that, in fact I'd go so far as to say that it discourages it by offering tax breaks for all sorts of antisocial behavior. For instance corporations like GE can book their losses in the US from foreign operations and offset their gains in the US without having to book profit from international operation, which makes it trivial for them to pay no taxes in the US.
Most of those bits of the tax code ought to be eliminated in favor of something less unwieldy so that people can actually understand what it is that they're doing without need for a professional.
And while we're at it, why doesn't the IRS just fill out our tax forms for us? Given that they already have most of our information in large databases, I see no reason why they can't fill them out like they do in other countries.
Re:Short Answer (Score:4, Interesting)
I think corporate tax is silly anyway. Just tax all income as income... capital gains, dividends, salary, benefits... and you won't need a corporate tax.
This would have the additional advantage of encouraging corporations to move to the US.
Corporate taxes only generate revenue in the $400 billion range. You could easily get this back with higher capital gains rates and deduction/loophole killing.
Re: (Score:3)
You might complain about that, but do you - or any other industrialized nation around the world - have to fill out the sort of bullshit paperwork that we Americans have to? AFAIK, you don't have to worry about getting audited or whether you qualify for certain deductions. There's a small but growing movement here to get a flat tax similar to the VAT added just to simplify the whole thing as well as cut 90% of the IRS down. Saves money, cuts down on bureaucracy, it's impossible to evade, and no more goddamne
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Spending also improves the economy. Yet I doubt you'd support reducing taxes on the bottom three quintiles in order to increase spending.
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The income tax was introduced in 1913 at levels of like about 2% , for only the super rich.
90% of people didnt have to pay so didnt complain.
Govts got greedy, kept increasing the taxes, and lowering the thresholds.
Welcome to 2011, 110% of you taxes and more goes directly to banks, and none of it gets spent on 'society'
I'm not a fan of our current tax system, but that's the stupidest thing I've ever read.
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I'm not a fan of our current tax system, but that's the stupidest thing I've ever read.
Not true. I'm sure you've read things that are much more stupid than that. Although I will concede that it's likely in the high end of the stupid spectrum.
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I'm not a fan of our current tax system, but that's the stupidest thing I've ever read.
Not true. I'm sure you've read things that are much more stupid than that. Although I will concede that it's likely in the high end of the stupid spectrum.
In his defense, when you get much dumber, literary ability starts to decline. I'm sure he's not counting dumb pictographs, gestures, or of course "dictated but not read" (also known as the "Trump Du Jure").
Re:why pay tax? thats your real question (Score:5, Interesting)
You understand it is true, though?
Income Tax in the United States originally applied only to profits from dividends and the like. Wages and salaries were explicitly excluded. It affected only the wealthy who could afford to invest, and were successful at it.
That is really the only way it passed, by exempting 90% of the population. For an example, see Tennessee State's income tax today.
Re: (Score:3)
Uh, no. Try looking into the actual history of income tax, please. What you claimed is trivially disprovable. See here [wikipedia.org]
The 16th amendment was needed to for the Federal government to tax dividends, interest, and rents. Aka, 'money earned without doing any work'. Not income from employment, which was always taxable.
And, strangely, the supreme court decision that seemed to disallow that was probably in error. Taxes on property, aka, a 'direct tax', were not allowed, and that court decision had a very convolu
Re:why pay tax? thats your real question (Score:4, Interesting)
Welcome to 2011, 110% of you taxes and more goes directly to banks, and none of it gets spent on 'society'
You must have clicked submit too soon because you were about to explain how you have no publicly funded roads, bridges, air traffic control, police, army / navy / airforce, prisons, firefighters, justice system, schools, health care, welfare, parks & recreation facilities, sanitation or water supply where you live.
Re: (Score:3)
America rose to its economic supremacy, not because of any kind of American specialism rooted in rugged individualism, but because of the following factors:
Vast natural resources
Vast amounts of land to absorb population growth without causing political instability
An ongoing supply of cheap immigrant labor
Not having fought any world wars on its own soil
There are other reasons for sure, but keep in mind that the US experienced economic supremacy only after introducing soc
Re: (Score:3)
Paying off those who own homes isn't really a simplification, it's what the housing deduction does.
Actually no, it does nothing useful for them. The group it pays off is the homebuilders, developers, etc.
Look what happens when the govt provides $5000 untaxed child care benefit... I do not end up $5000 richer, or even my roughly 20% average tax rate richer. What happens by supply and demand is the prices rise to match the new supply of money. Inflation, basically. The daycare knows darn well I can afford to pay more, and I will have to. So as an industry the price rises to compensate.
Same thing with
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Where your tax dollars go (last chart at the bottom):
http://www.offthechartsblog.org/top-ten-tax-charts/ [offthechartsblog.org]
Sure. (Score:5, Insightful)
That procedure would lead to the same results. Maybe some redundancy would be removed, but obviously he doe not understand why the Tax system is complicated. Its the politics, stupid. Many of these 10000 pages are just small little promises somebody has given to *his* voters at some point. And nobody wants to cut such things, because one time this starts, it could be soon the promises to *your* voters. So no matter how absurd something is, it will stay there forever.
Re: (Score:2)
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"Our Senator" and "our representative" is not exactly bound to a nametag.
Re:Sure. (Score:4, Interesting)
Quite possibly true.
If such a revision could be worked out, its advantages would be tremendous, in several different ways. At the least, it would move USA politics away from back room horsetrading for tax breaks for special interest groups toward actually addressing revenue and expense issues.
However this is a major change, with greater impact than anything that has been done in the USA since 1775. It would take a real Tea Party movement-- not the play actors who have recently wrapped that name around their petty aspirations-- to make the thing work. That is to say, Trump, Palin, and the Pauls just do not come close to the stature of Jefferson, Franklin, or Thomas Paine. I do not think a massive revolution like shifting the tax structure from a political playing field to something with a rational basis can happen without real leaders doing actual leadership, and without a populace that is willing put aside the pleasures of bitching about the price of gas and take on some of the real risks involved in real world changes.
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Flat tax can only work if the money is evenly held by all classes. When ti's weighted towards a few people, flat tax fails. Unless you want a mud dwelling slave class and a rich class. In which case it works well.
Would work at face value (Score:5, Insightful)
Would work at face value. Genetic algorithms can easily be used to solve something like that.
However I think taxes have more of an effect than just bringing in money, if the system decides to highly tax something, it might cause an economic downturn on that item, which could have ramnifications. In fact, the more popular the item is, the more cash you'd get if you raise the taxes on it.
Re: (Score:2)
Approximate. Not solve. Sorry.
Re:Would work at face value (Score:5, Funny)
Tomorrow's Headline: Computer Suggests Tax on Sex
Re:Would work at face value (Score:5, Funny)
In fact, the more popular the item is, the more cash you'd get if you raise the taxes on it.
Tomorrow's Headline: Computer Suggests Tax on Sex
Slashdot crowd mostly unaffected.
Re:Would work at face value (Score:5, Insightful)
Would work at face value. Genetic algorithms can easily be used to solve something like that.
I'm not convinced it would work.
Such an algorithm might detect 15 different tax breaks for education, then notice that a huge percentage of college students own iPods, and thus conclude that the best simplification is a $5k tax credit for anybody who buys an iPod, or something equally dumb. Now, if such a break didn't change public behavior, then it might even work out the same in the end. However, any change in tax rules will definitely change public behavior, which means that the algorithm would have to be run iteratively.
The problem is that a set of a few hundred million people will itself implement what amounts to something like a genetic algorithm to game the tax code. So, which do you have more confidence in:
1. The ability of a computer program to come up with an un-gameable simple tax code?
or
2. The ability of a few hundred million people to collectively figure out how to game the new tax code faster than the computer can fix it?
People still game the tax code, of course, but the current code at least targets the breaks where they are intended to go, which makes this a little harder.
End result: (Score:3, Insightful)
The system will still not be understandable, but this time computers will be blamed.
Re: (Score:3)
The system will still not be understandable, but this time computers will be blamed.
You are correct. You will end up with a big transform matrix while you currently have a binary tree. In other words you'll replace a series of questions such as 'Are you married?', 'Do you have children?', 'Do you have a job?', etc that can be negosciated in sequence by a matrix where thousands of parameters need to be input in one big formula at once.
It's the same reason why we don't replace the income brackets [20k-30k$/year], [30k-50k$/year], etc by an exponential formula. It would be more correct math
Re:End result: (Score:5, Informative)
Going from 29999$ to $30001 means you would only be taxed the higher rate on $1 of income, not the whole amount. If it wasn't your intent to imply otherwise I apologize, but I see people making that mistake all the time for some reason.
Re: (Score:2)
Thank you for pointing this out before I had to. The bracket tables are only there to make the math easier, because we don't trust people to correctly calculate 15% of the first 20K+ 20% of everything between 20-30K +25% of eveything above (numbers completely made up). The tables simplify that for people and reduce mistakes.
Re:End result: (Score:4, Informative)
Just to respond to one small point that most people miss, but it is never a penalty to move up a U.S. tax bracket (well... excluding some deductions). Assuming the same deductions if you start out with more money, then you always end up with more money. Yes, always, every time. You might pay a slightly larger overall percent, but you never wind up with less money.
The way this works is that you start at the bottom tax bracket and pay taxes on the money you made in that bracket at that percentage. Then you set asside that money and move up to the next tax bracket and pay in that. It is probably clearer in a made-up example:
With the following hypothetical tax bracket system:
0 - 10,000: 2%
10,001 - 30,000: 5%
30,001 - 85,000: 10%
85,000+: 15%
If you have an (adjusted) income of $30,001 then you pay: .02 = $200 .05 = $1,000 .1 = $0.1
10,000 *
20,000 *
1 *
So if we compare a $30,000 vs. a $30,001 income, the tax difference is 10 cents, leaving you with 90 cents more than you would have had. While my hypothetical numbers are way off... the principal holds. Oh... and for the math pendants, all brackets are inclusive and rounded.
dpkg (Score:2)
Sounds like a job for dpkg [slashdot.org]
Save yourself the trouble.... (Score:2)
Well then, who does create jobs? (Score:3, Insightful)
It certainly has to be someone who has the resources to do so. No offense, but your statement leaves only the poor and I doubt they create jobs. Usually those who create jobs do so because they have exhausted their personal abilities and need an extension of themselves, hence employees. Corporations are merely that process grown over a longer period of time.
Your flat tax rate is a bit low to sustain the government we have now.
The real problem with the tax system is not in its complexity, its just how high o
Re:Well then, who does create jobs? (Score:5, Informative)
We're the lowest taxed generation since WWII. The highest rate now is 35%, and few pay it. The highest tax bracket in the 90s was 39.6. The highest tax bracket under most of Regan was 50%. Under Nixon was 70%. Kenedy was 91%. Eisenhower was also 91%. The rate coming out of WWII was 94%.
Try doing actual research before spitting out far right talking points.
Re:Well then, who does create jobs? (Score:4, Insightful)
Horse shit. Add payroll tax to that - both halves - state income tax, state sales tax, local income tax, local sales tax, property tax, and taxes masquerading as fees such as water, sewer, automobile registration, automobile insurance surcharges funneled straight into state coffers, and so on ad nauseum. I'm not much concerned with how high the top federal income tax bracket is. I'm more concerned with the total tax burden on the middle class.
Finally there's the unfairest tax of all - inflation. That's the one you get when the federal gangsters print money to cover their unrealistic runaway budget.
Re:Well then, who does create jobs? (Score:4, Insightful)
This. I always laugh when people talk about how high European tax rates are compared to the US. If we count all of our taxes, and not just the federal rate, and we cat get competitive on high rates quickly.
Re: (Score:3)
Re:Well then, who does create jobs? (Score:5, Insightful)
Wow, it's great that you exposed him for the liberal he is. That is obviously not classical liberalism because it seems that he wants to justify higher levels of taxation, but perhaps it is social liberalism and he craves greater government revenues to support gay marriage or whatever it is that liberals like these days. Oh well, he's bound to be a liberal because you don't agree with liberals and he said something you don't agree with.
When did it become fashionable to display such a stunted view of politics by saying that "liberals/conservatives say X". As a self-confessed social and economic conservative I have to say that my own views are certainly not the same as most other "conservatives" and would much rather be in the company of a socialist or libertarian that can justify their position than someone who agrees with my own views for the wrong reasons.
Re:Well then, who does create jobs? (Score:5, Insightful)
However, I survive on the amount I have left after I pay my taxes. I may not be in the category of richest people but I feel that health care, infrastructure, police, ambulance and so on, are services worth paying for. Why should I pay more (in %) then someone who makes less, well, because the money is needed, and where will it come from otherwise? There certainly are things I want, like a better car and a bigger house, but really, what I have now is not bad.
I believe in two basic things, freedom and helping those that cannot provide for themselves.
I do not believe that everyone has the same opportunities in life, even if my country provides free education (including uni) to all it's citizens.
I pay taxes because I think that free education should be the foundation of any country, I pay them because I think health care should be free for everyone. You shouldn't have to die of a disease because you cannot afford the healthcare, and I believe in helping those who come from countries that require help (I seem to be a minority in Europe having this opinion these days).
I fear that compassion is become rare, it seems to be gone from politics, and especially when talking about taxes. The debate now is often focused on cost, how much immigration costs, how much does free health care cost... rarely do I read debates asking how many lives were saved because we have free health care or because we let people from countries that are at war stay in ours.
Re:Well then, who does create jobs? (Score:5, Insightful)
I look at taxes from an entirely selfish perspective. I benefit immeasurably from living in a stable society with relatively low levels of poverty and a high standard of living and free or cheap education. I can walk into the doctor's surgery and be given - either for free or for a token amount - cures for diseases that would have killed the richest man in the world a hundred years ago. I was paid by the state for the last stages of my formal education (my PhD).
Unfortunately, this costs money, and I have to pay for some of it. If it could be funded entirely by pixie dust, that would be great, but since that's not the case, this society is an expense that I consider worthwhile. I'd rather avoid paying taxes, in much the same way that I'd rather avoid paying for a new laptop, but I consider the price I pay to be very reasonable for the benefits that I receive in both cases.
Oddly enough, your line of reasoning from an altruistic perspective seems to reach the same conclusions as mine from a selfish perspective.
Re: (Score:3)
Re:Well then, who does create jobs? (Score:4, Insightful)
Sure, the US was doing fine before the income tax. Let's go back to the way things were then. Let's see, the income tax was instituted in 1861. Hmm, the Emancipation Proclamation was in 1863. So how do you want to divy up the slaves?
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The US has a modern, civilized, industrial society despite a government that seems dead-set on returning us to the feudal system. Not because of it
Indeed. It's almost like the policies of the US government are deliberately intended to further accelerate the concentration of wealth in the hands of the already wealthy.
Oh wait. You mean asking rich people to pay taxes to maintain the country they find it so lucrative to do business in is a return to feudalism? That would be hilarious if it weren't so pathet
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Simply put, the Federal Government has grown too large from over promising everyone something.
This is a general problem with democracy - people will vote for all cake, all of the time without considering costs, and the costs start to balloon. The candidate that says "I'm going to cut spending and raise taxes to reduce the deficit" doesn't get elected, certainly not without promising something like "social welfare will not be cut, medicaid will be increased" or "defense will not be cut" which immediately starts to water down the first commitments.
The flat rate tax might be fair, but it doesn't wash.
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Customers create jobs. Keep pushing regressive tax "reform", and before long all your customers will be too poor to buy anything. Then no one has a job.
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The reality of the world is that it doesn't matter how the government collects its taxes - every dollar the government spends is productivity removed from the economy one way or another.
While emotionally it might not seem like it, you are aware that generally speaking, tax revenue is not just loaded in piles and burned, yes?
From an economic point of view - money taken from individuals and then spent by a group is not significantly different from that same money being spent by the individuals themselves. Yes, the way it is spent/invested/wasted might be different (more roadways, less plasma TVs), but it is not "removed from the economy".
It is interesting to look at differences in tax rates
Better solution (Score:5, Insightful)
Scrap the whole thing and start over. All the cruft is from decades of putting in and taking out different provisions for thousands of groups of people. Start with whatever rates you want. Then stop. What's the point of taxing someone 30%, then giving them a mortgage deduction, education deduction, horse rodeo operator deduction, etc.? Same with corporations; if you're going to give them all tax breaks on their water coolers, just drop the rates. The IRS will be pissed, thousands (millions?) of accountants will be pissed, and everyone else get 4 hours of their lives back from stupid paperwork each year.
Re:Better solution (Score:4, Informative)
Re:Better solution (Score:5, Funny)
Oh come on, don't you like spending a springtime evening every year telling a computer that you aren't collecting a railroad pension, and that you weren't paid to not grow corn?
less short answer: no because (Score:3)
If you change it too often (like in France), you will penalise business (business likes fixed rules).
Computer models can help in modifying the system, but you can not improve it without a very deep understanding of the current system. You can not just say it is crap, even if it is true.
assured by who? (Score:2)
because there's PLENTY of human factors in there.
the computer wouldn't know how to value how a tax affects favoring of different types of crops, for example. the "computer" wouldn't know if they should favor diesel, logs or coal. the computer wouldn't know what are "normal" amounts to spend on medical bills(which is necessary and which is just excess).
of course, you should have read your asimov. you need a full grown caring AI to run a tax system - and then you're better off not telling people that it's a c
My version (Score:3)
Sales Tax:
5% to the local community
3% to the local State
2% to the FedGov.
= 10% tax on everything sold. Easy to calculate and pretty fair (spend more, pay more).
Get rid of everything else...
Re:My version (Score:5, Interesting)
Most EU countries have VAT which amounts to a (different in every country but currently in the UK:) 20% tax on all sales except essentials (baby milks, children's clothing, most foods - but not "luxury" foods with chocolate in them, etc. - and, strangely, printed books).
Yet we still have high tax rates too, and it's not because we're being "stung" any more than other countries.
Hell, some EU countries just charge you 50% of whatever you earn which actually works out quite a good deal when you take into account all the tiny taxes and administrative costs of them over a lifetime. It makes taxes SO much simpler and you can actually spend time chasing those who cheat the system rather than having to need a degree in law and mathematics to understand taxation enough to tell whether something is right or not.
The UK has a tax mess too - and we really should go the blanket 50% way (although if we were to do it properly, it would be nearer the 60-something % that we're currently paying) - we have fuel tax, road tax, "tv licensing", income tax, VAT, land tax, house-buying tax, cigarette tax, alcohol tax, corporation tax, national insurance contributions, gambling tax, air passenger tax, insurance premium tax, inheritance tax, council tax, and a million others, all on sliding scales and requiring all sorts of legal basis and challenges (McVities were sued by HM Customs and Excise for classing a Jaffa Cake as a cake - untaxable - and not a luxury biscuit - taxable. The lawsuit cost millions.)
Whereas if you just said "any money or goods you earn or are given as a gift/inheritance, we want 50%", it's very easy to work out. Hell, most of the time it's almost impossible to work out what you need to pay. Self-employed people fill out a tax return and if they *don't* want to calculate their own tax, they have to send it in 6 months before those who do with the relevant data so someone else can work it out for you. And that's AFTER you've made sure to legally declare everything and put it in the right boxes and ask for the right forms.
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Most EU countries have VAT which amounts to a (different in every country but currently in the UK:) 20% tax on all sales except essentials (baby milks, children's clothing, most foods - but not "luxury" foods with chocolate in them, etc. - and, strangely, printed books).
This is where the strangeness begins. Is sushi an essential? Well, it's not cooked, so there's no VAT on it. (A friend of mine owns a sushi place). All these little rules and loopholes are insane. For instance, someone wrote a rule exempting certain creative businesses (film, books, music). So what happens next? Someone goes around proposing a tax structure in which the beneficiaries "publish" their own poetry, and through various vehicles get their tax break. The other major issue with having a load of lit
Re: (Score:3)
The average pensioner receives more than they've put in (Google it yourself).
Not sure what you mean, yes pensioners are a net expense. There's an "expense curve" of sorts constructed of the average person's net contribution. It's negative in childhood (child support, public schools) and up to mid 20s (many students at public education, high unemployment, low wages to tax), then a net contribution up to retirement age, afterwards public pensions and hospitals cost more.
There is a degree of collectivism to it, some will die before the retirement age so in total there's somewhat more t
Re:My version (Score:5, Insightful)
We do have "slightly" more government services to compensate though, or at least we do in Sweden. Our "marginal" tax rate is about 55%, though of course no one actually pays that much, the tax bracket up to about 380,000 SEK is about 30%, then 50% up to about 540,000 SEK, after which it's about 55%. When I take into account the things Americans have to pay huge sums of money for out of pocket (health care, education, daycare, parental leave, sick leave, etc) I'd say we got the better end of the stick.
Re:My version (Score:4, Informative)
You mean it's a higher proportion of their disposable income. Case study:
Family A makes 30k per year, and spends 20k per year on the essentials, leaving 10k free. Any more than a 33 1/3% tax rate cuts into their ability to live.
Family B makes 100k per year, and spends 40k living a nicer life than family A, leaving 60k. They could afford a 60% tax rate without cutting into their standard of living.
Of course, KermodeBear probably thinks that Family A is pretty much worthless and deserves to live in the gutter, while Family B are the only productive members of society.
Re:My version (Score:4, Insightful)
50%?!? I don't understand how anyone can justify giving up half of your income to the government.
If you think of "the government" as some outside thing, that does seem pretty unreasonable. If you think of it more as "society" or the "community" then it doesn't necessarily seem so unreasonable. What percentage does the publisher charge the author? The community provides the entire ecosystem within which each member operates. No individual can succeed to any great extent without the entire community around them working well enough to provide all the bits and pieces necessary for that success to happen.
How to reasonably account for all this sort of stuff is not particularly clear unfortunately. The current way we create and use money, and then tax it to fund the "community" is far from perfect.
One interesting system that Heinlein mentioned in one of his early novels (published posthumously - it wasn't really very good from a writing point of view) was "Social Credit". As I understood the society in the novel, rather than tax anyone, at the end of the year they would calculate the increased value of the society based on some sort of GDP measurement, and then "print" enough new currency so as to keep the value of the "dollar" at the same level - so if the economy increased by 20% you would print 20% more money. The government then drew its revenue from this pot and distributed the rest on a per-capita bases. Of course in this future society there was massive automation and little need for most forms of manual labour, so most people just lived off of their yearly societal income (thus the "social credit" name) spending their large amounts of leisure time in uplifting artistic pursuits and other utopian activities.
I don't really know if the wikipedia article reflects any of this understanding:
https://secure.wikimedia.org/wikipedia/en/wiki/Social_Credit [wikimedia.org]
It does seem as thought it ought to be possible to design a society where increases in productivity and efficiency and technological advancements could have wider societal benefits. Since the 1920s our industrial systems have advanced tremendously and as a society we are way way way richer and more well off - but individually we have not advanced much. It seems like with all of these advances we should have been able to come up with a way to provide full employment while at the same time reducing the working hours of us all. By now we should all have an 8-hour work week and three months of vacation. Maybe such a system would come at the cost of speed of advancement, but I am more than willing to trade the decreased personal labour requirements today for a 1980s middle-class lifestyle which might be our level of advancement if we had somehow done this since the 1940s.
Of course I have no idea how to structure something like this in light of real human behaviour, greed, and the rewards of cheating any system we try to put into place.
Re: (Score:2)
Does my employer buy my services and pay 10% sales tax on my wages?
If I buy Treasuries do I pay 10%?
What about equities? Or buying and selling gold?
Or I sell my house and buy another one somewhere else in the country. Do I lose 10%?
Tim.
Re: (Score:3)
And where are the service cuts to make that work? We've got a 10% sales tax here in WA. (Well, 9.5% in my corner anyways, the general state sales tax is 6.5%) And it's not enough to cover the expenses we have in running our state, and that's with other forms of taxation such as property taxes, gas taxes, liquor taxes etc. So, I'm curious as to how under your plan we're going to be able to keep our state running and the federal government for less money than we're presently paying to run our government.
The p
tax enjoyment (Score:2)
Rather than taxing productivity, how about we tax enjoyment?
(1) Scrap all taxes;
(2) Scrap the notion of limited companies, so a businessman becomes responsible for his own affairs and doesn't get to personify a non-person with all of the rights and none of the responsibilities;
(3) Introduce a personal consumption tax, which slides like income tax so the first $x is tax-free, up to say 90% consumption tax for people who spend more than $y/year on their own enjoyment. So someone who is just getting by on mode
Constrained numerical optimization (Score:2)
It has been done for years. I have seen lots of talks at conferences where they discuss formulating and solving numerical optimization problems to maximize profits subject to constraints.
The first problem is getting all the tax rules formulated as constraints. Crazy tax rules can be difficult to formulate.
The next problem are the 0-1 binary variables for yes/no questions, so you can end up with mixed-integer nonlinear programming problems, which can be difficult to solve deterministically at large scale.
It is impossible (Score:2)
If the numbers didn't have a $ in front of them it would be simple.
However that $ makes the amounts have an affinity for the right side of the equation (but only when that behavior is beneficial to the one doing the calculation).
This property if $ has thus far defied all rational endeavour to normalize monetary calculations.
Too Easy (Score:2)
Did you make less than $24,000? If yes then you owe no tax. Otherwise,
Pay to the IRS 10% of the amount you made over $24,000.
In a snap (Score:2)
"No mere human being could accomplish this, but I have been assured that a computer could do this in a snap."
Sounds like my manager who seems to have in common with this science fiction writer that they don't understand the first thing about programming.
Creating a program to run through a set of rules described by a '10,000-page monstrosity' is no small feat. Running the program afterwards, yes, that's the easy part.
Wat? (Score:2)
If one group loses a favorite tax dodge, the system would seek a rebalancing of others to compensate.
There's should be "tax dodges" to start with. Either a tax is justified or not. The point of the system isn't that people should have little tricks to avoid paying their fair share.
Re: (Score:2)
:facepalm:
"There SHOULDN'T be tax dodges...."
Sure, why not? (Apart from the obvious...) (Score:2)
The spirit of laws lends themselves rather well to an if-then programming interpretation. Therefore, the current legislation could be rewritten into a programmatic form as a series of if-thens of case switches, where each evaluates a certain aspect of the applicant, changes a variable, and uses these variables to calculate the final tax value by multiplication and subtraction (for tax breaks and tax-deductible donations). The final code could then be stored in a subversion repository to enable easy versioni
How about simplifying it? (Score:2)
Why work to simplify a problem system when there is a better, simpler, more fair way to do so?
Just abolish the IRS, let us all have our full paychecks, and implement the FairTax!
http://www.fairtax.org/site/PageServer?pagename=about_faq [fairtax.org]
http://www.fairtax.org/ [fairtax.org]
There's a much simpler way (Score:2)
Repeal the Sixteenth Amendment.
Re: (Score:2)
Which is why you'd use something like a Genetic Algorithm to get a close enough approximation.
Re: (Score:2)
the article misses the point.
The tax code isn't about the result, it is about the story.
Politicians don't care that group 87 pays 32.4%
Politicians do care that they have been _seen_ to support 'single mothers with jobs' or 'offshore oil workers' or special interest group Z.
you can create a set of rules with the same output, but if the effect is to just set income tax at X and remove the special provision inserted umpteen years ago by senator Ping and supported by campaign donators P, then it will never fly.
Simple solution (Score:4, Interesting)
The IRS and it's system certainly has ulterior motives. As do the congress critters who actually pass laws regarding taxes.
I can simplify the tax code without a computer. Just strike all the existing income tax laws, and in their place, pass a law that your gross income times .1 belongs to the government. No deduction, no shelters, no credits, nothing. The same tax rate applies for married, single, youth, elderly, businesses large and small, no matter who you are.
However, the tax system isn't about revenue for the government, so much as it's about politics, so my system would never be adopted. Politicians use the tax system to make a zillion little groups of people feel "special", and to redistribute wealth according to whichever special group has the most political clout.
Re: (Score:2, Insightful)
And such a system is grossly unfair to the low wage earners, would make poverty line people struggle to feed themselves while being a windfall for the wealthy, and would shatter the economy as 75% of homewoners, who depend on the mortgage deduction, would go bankrupt.
A lot of deductions can definitely go away, and probably should. But the idea of "moving to a flat tax solves all problems" is so naive that to even suggest it you have to be a fucking idiot or have major external motivations.
Re: (Score:3)
Fair is everyone paying the same rate.
I agree. Everyone should pay the same tax rate.
Like, for example, the superrich, who have managed to wrangle a 15% tax rate for their income, which is in the form of stock gains, which results in them paying a lower tax rate than anyone but people making under $16,000.
Although I suspect, somehow, it's the people making under $16,000 that people like you are talking about.
Re: (Score:3)
So you're going to have to explain why businesses get to deduce expenses, but not people.
Oh, right, because you're an idiot.
Re: (Score:2)
Even if it is NP-Complete, it does not imply that achieving meaningful improvements is impossible. There is a lot of NP-problems which can be approximated or where perfect solution can be found with a certail probability. An NP-complete problem is not uncomputable.
Re: (Score:2)
Re: (Score:2)
Cool, then they can go do something that creates cultural value or wealth, rather than fiddling around with its transfer.
Too late. Go where? No country accepts now refugees on economic basis (as for the skilled migration... spare me, will ye?)
</tongue_in_cheek>
Re: (Score:2)
Re:Why? (Score:5, Insightful)
Yes, you're the only person who has done research on this topic. Out of the hundreds of millions of people affected by the tax code, nobody has ever thought to sue the federal government over income taxes or to use this as an affirmative defense against charges of tax evasion. You could be the hero who leads us all into a tax-free future by finding that honest judge of which you speak.
Get to work on that. Good luck, and let us know how it turns out.
Re:Why? (Score:5, Informative)
In what way? The power to tax is in the constitution itself and "general Welfare of the United States" is pretty much "whatever you think is good".
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
Also they added this amendment which is very, very broad:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
So do tell... what is unconstitutional?
Re: (Score:2)
Re:Why? (Score:4, Insightful)
it requires all appropriations to be made for the benefit of the people as a whole, not favoring any region or group at the expense of another.
Naive questions: if you look to benefit the people as a whole, isn't it to be expected that sometimes some regions or groups will be benefited more than others? Does this inequality in benefits mean that sometimes a group will benefit at the expense of another?
Re: (Score:3)
No. "General Welfare" is a term from contract law, and in the constitution it's a limit on the taxing power: it requires all appropriations to be made for the benefit of the people as a whole, not favoring any region or group at the expense of another.
And how would anything ever be exactly equal? We all use public roads, but we'll never get perfectly equal benefit from them. Some use them more, some use them less, some only use them indirectly as passengers or public transport and even more indirectly buy goods that got there over public roads. And there's always arguments about what route to take because it'll benefit different people or where to build roads at all. And if we should spend more or less money on roads in general. That is just one tiny fra
Re: (Score:3)
No. "General Welfare" is a term from contract law
In 1789?
This isn't how Hamilton understood its meaning:
The terms "general Welfare" were doubtless intended to signify more than was expressed or imported in those which Preceded; otherwise numerous exigencies incident to the affairs of a Nation would have been left without a provision. The phrase is as comprehensive as any that could have been used; because it was not fit that the constitutional authority of the Union, to appropriate its revenues shou'd have been restricted within narrower limits than the "General Welfare" and because this necessarily embraces a vast variety of particulars, which are susceptible neither of specification nor of definition.
It is therefore of necessity left to the discretion of the National Legislature, to pronounce, upon the objects, which concern the general Welfare, and for which under that description, an appropriation of money is requisite and proper. And there seems to be no room for a doubt that whatever concerns the general Interests of learning of Agriculture of Manufactures and of Commerce are within the sphere of the national Councils as far as regards an application of Money.
The only qualification of the generallity of the Phrase in question, which seems to be admissible, is this--That the object to which an appropriation of money is to be made be General and not local; its operation extending in fact, or by possibility,* throughout the Union, and not being confined to a particular spot.
Alexander Hamilton, Report on Manufactures [uchicago.edu]
*- emphasis added.
Think of infrastructure and economic development projects like the state-funded Erie Canal in the 1820s or the federally funded TVA in the 1930s. Once you demonstrate what can be done, you can do more.
Re: (Score:3)
Bill Gates and Warren Buffet
Nobody owes them money without a government establishing and enforcing contract law upon which their businesses are built.
A government provides education to develop their employees. Police to protect them and their employees from a lawless societies. Their position of power at the apex of the economy means they receive small indirect benefits from benefits conferred upon all related parties.
Imagine trying to run Microsoft and Berkshire from a government-free place like Somalia. C
Re: (Score:3)
No, that's a stupid-people problem, not something that distinguishes left from right. For every left-wing weirdness that fits what you're talking about, I can list a right-wing one. You cite "tax the rich" and I'll cite "teach creationism." Pretty much everyone is demanding their government make choices that are destructive pragmatism and efficie