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Massachusetts' Big Brother Tech to Watch Taxpayers
rocketjam writes "The Boston Globe reports that the Massachusetts state Revenue Department has launched a new technology offensive which strives to piece together all the stray bits of financial information about individual taxpayers that is contained in various public databases in order to catch tax cheats. The databases have been around for years, but technology has only recently enabled the state to assemble and review the information in a time-efficient manner. The so-called 'Discovery' initiative is already bringing in an additional $1 million a week. While denying the state is playing 'Big Brother', the Revenue Department Commissioner, Alan LeBovidge predicted the state may eventually be able to track so much financial information on individuals that the state could complete the citizens' returns for them."
Anybody every notice that most big brother projects or legislation comes from New England first?
This is a test. This is a test of the emergency sig system. This has been only a test.
One thing to note here is that it would be very easy for the state to fill out tax paperwork for the taxpayer in MA. I'm an MA taxpayer, and I did my taxes recently with TurboTax. After completing the federal portion, there were very few questions the state software needed to ask me.
- Did I want to pay the voluntary 5.85% tax rate instead of the standard 5.3% tax rate? (No!)
- Did I have any use tax items to declare? (Nope, and if anybody asks further I plead the 5th.)
- Would I like some of my tax money to go to the state's Clean Elections Fund? (Sure, why not?)
Beyond those little things, TurboTax could complete my pages of state tax forms simply by porting over the values from the IRS forms that had already been completed. So, since the state can already look at my IRS forms anyway, why not have them compute my taxes for me, and automatically send me the already-completed paperwork attached to the bill or refund?
If you're able to track their large purchases? Very well, I think. You can identify who to look at more closely, as the article says. If you're making $500 a month car payments and $1,500 a month mortgage payments and are reporting $20,000 a year in income, something's probably up, and as stupid as state bureaucracies are, I don't think they'll have too much trouble figuring it out once enough information is in front of them.
The plural of 'anecdote' is not 'data'. --Dan Kaminsky
The Revenue Department has spent about $3 million over the last two years on the program, which has generated a total of $43 million in new tax revenue and $6 million in refunds. (Yes, the system identifies overpayers, too.)
Very simple. When you get paid, your employer must keep records of what you received, regardless of the form they paid you in, be it a check, direct deposit, cash, or pounds of seaweed. Then, at the end of the year, your employer sends you a form W-2, which has a total of what you were paid, how much taxes they withheld from your pay to be sent to the government, and what you finally took home with you. This information is also sent to the government (both state and federal). They already have been receiving all of this information, the agencies just haven't been able to do anything useful with it yet.
This isn't really a revolutionary thing happening. The governments have had this information for years but only recently has it been electronic and able to be easily and readilly retrieved and compared to what is declared on a tax return. In the past, if the tax man wanted to check if you were telling the truth, he would have to do it by hand.
..but the shouldn't. Or rather we (you, as I'm not in the US) shouldn't let them.
Not because it is Big Brother, but it would be all to easy to just add new taxes whenever the state needs money.
In that the taxpayer has to relate to his own taxes, instead of just paying another bill every month, there is a substatial amount of government control by the people.
How many you guys check your phonebills if it is $10 or even $20 above average one month? Sure, alot of people do, but even more just pays. You don't want this atitude towards taxes too!
are you saying that companies are leaving Mass? Why would they do that? I'm sure its got nothing to do with the orwellian taxes that "The Rich" are supposed to pay.
how fscking hard is this to understand - rich people that run companies give jobs to average joes... its not a gawddamned hard concept, people. I work for rich people, and i'm cool with that. if they weren't rich, they couldn't pay me.
btw: california staved off $56 BILLION in new taxes last year - only because of the Republican 2 state senators and 6 state house reps that comprise the delta between what's necessary to pass new taxes and to kill off new tax bills...
let me repeat that...
the Cali legislature tried to pass $56 BILLION in new taxes - in one year - and 8 people stopped them. Our state's budget last year was just under $100 BILLION. It would have been $156 BILLION if not for 8 people.
holy shit, batman.
with a proposition (56) to kill off the requirement for a 2/3 majority to raise new taxes, and the teachers' unions putting out ad after ad claiming 56 is "good for California" - we should be dead in the water by 2006, and the only guy making money will be the U-Haul guy that drives the empty trucks back from Nevada, Colorado and Texas.
guns kill people like spoons make Rosie O'Donnell fat.
Here's a timely story for those of you filling out your federal tax return for Uncle Sam this spring.
According to my tax preparer, one of the ways they decide whether to audit a particular return is to correlate the adjusted gross income against ZIP code. Generally, areas segregate into rich and poor neighborhoods.
Persons in poor ZIP codes who have unusually high incomes would be singled out (Mr Coke Dealer that wants to avoid Al Capone's downfall - income tax evasion) on the one hand.
Then, people in wealthy ZIP codes with no visible means of support (again, illicit gains and unreported income).
It all goes to show that intelligent data mining can make much better use of the information already available. No need for John Ashcroft to review my frequent shopper card purchases.
"Provided by the management for your protection."
The only ones who can cheat on their taxes in any significant way are corporations who are basically on the honor system when it comes to paying taxes these days.
No they are not. Publically held corporations are required by law to have an independant accounting firm file their financial statements. Accounting firms have a very real motivation in filing accurate numbers. Look at what happened to Arthur Anderson after the Enron fiasco- overnight we went from having the "Big 5" accounting firms to the "Big 4".
Wow, if that is really true, then the US system for calculating personal income tax is even more retardedly fucked up than I had thought.
Canadian income tax form? 4 pages long. Big type. Double spaced. And if you pony up a few bucks for some software, you are done in under 15 minutes, including submitting the return on line. Within a day, it is processed, and in 2 weeks your refund is direct deposited into your bank account (or if you owe, just pay online with you bank.)
Simple is good. And if you havn't filed a tax return in several years, you get a polite letter asking you to do so as soon as is possible. I hear the IRS rapes your wife, sells your children, and burns your house to the ground for anything more than 10 bucks.
There's 25 different ways to fill out your federal return, but the MA state taxes are based almost completely on the Federal tax laws with different percentage rates assigned. If your answers on the IRS forms and the MA DOR forms don't match, you're already setting yourself up for audits... so all the state would do is just port over the numbers you gave to the IRS and do the math.
Publically held corporations are required by law to have an independant accounting firm file their financial statements.
Hah! You said "independant accounting firm!" What a joke, dude. You don't really believe they're independent do you?
Look at what happened to Arthur Anderson after the Enron fiasco-...
And look how the rules changed after that happened. Oh, wait, they didn't change, did they? Sarbanes-Oxley? Give me a break.
- Hail to our fearless misleader! Fool speed ahead!
Lord forbid anyone go to the bookstore and learn how to do it too. Or even the library.
Work earns you money, and a penny saved is a penny earned.
Get the Rich Dad Poor Dad books, best on the market IMO.
That's an old story. This year's version actually allows you to install the software on multiple PCs in a household in the license terms, most likely as a reaction to last year's scandal.
But considering that the only tax-free bonds a citizen of the Commonwealth of Massachusetts can have are bonds issued by the Commonwealth (and thus able to be tracked by the Commonwealth), that could be an input into the program.
"The Boston Globe reports that the Massachusetts state Revenue Department has launched a new technology offensive which strives to piece together all the stray bits of financial information about individual taxpayers that is contained in various public databases in order to catch tax cheats."
Which means that Massachusetts is leveraging federal law how exactly?
Your last paragraph is a bit misleading. The level of overhead in California's state government is greater than you even imagine. I work for the state government (as a contractor) and I see the colossal waste firsthand. Not only could we save millions of dollars by better implementing open source solutions, we could save even more by doing the same kind of belt-tightening that private businesses have to do in tough economic times.
Unionized state employees are exempt from layoffs, even though most of them are worthless layabouts who probably would be among the first sent packing if they were working in the private sector (assuming any private corporation would even hire them). They simply cannot be fired, no matter how poorly they perform.
It was the California State Employees Association that twisted Gray Davis' arm to give them a 5% pay raise in exchange for their endorsement just before the 2002 election, at a time when he knew damned well the state couldn't afford it. The Prison Guard union asked for even more payback, and he gladly gave it to them. Now that Arnold is in the governors' office, he's asking both unions to re-negotiate their contracts because he knows that when all other California citizens have had to forego raises (even the Teacher's Union, for chrissakes), only these two ended up getting more money out of the taxpayers. And he knows that the money still isn't there to pay them without borrowing it from somwhere else.
On the IT side (the one I work in), we were all informed that the State of California is an all Microsoft shop. We had a major project to migrate all our servers off Novell NetWare and move to Windows NT. We still have most of our infrastructure running on NT4 and only a few servers have been upgraded to Win2K/Win2K3. Imagine our surprise when the Oracle scandal broke and we found out that in exchange for a $25,000 campaign contribution, Gray Davis had purchase more seat licenses for Oracle database software than there were employees in the government! And at the time, most of us were training for Microsoft SQL2000 as our primary database platform.
This is the kind of corruption that sparked the recall in the first place. I don't know if Arnold will be able to fix it, but I'm willing to give him the benefit of the doubt.
'Unemployment' as defined by the US Feds consists of people currently drawing unemployment benefits. Once your benefits run out, job or no, you're no longer unemployed. Now consider the unwillingness of the feds to extend UI benefits - lots of unemployed folks suddenly stop showing up in the numbers.
You're looking for quotes? See my journal.
Ours is going down -- the opposite of skyrocketing.
2000 - 4.0%, 2001 - 4.7%, 2002 - 5.8%, 2003 - 6.0% That doesn't look like it's going down to me sport.
Allow me to direct you to here and here. The first link gives yearly unemployment averages from 1948 to 2002. The second link, to the homepage, says the average unemployment numbers for 2003 are 6.0%. As for the "booming 90s", 1990-1999 yield a simple average of 5.75% Lower than present. Now if we take the numbers from 1994-2001, the years the Clinton administration is mostly responsible for, you get 4.925%.
Much of our country's history has been spent in debt, the key is the percentage of the debt versus the GDP of the nation. Debt is not the problem, its the ability of the nation to manage that debt and make the payments in relation to the country's ability to produce goods and services that people want to obtain.
A budget deficit doesn't paint the whole picture? Brilliant deduction! Let me guess, you went to college for an Economics degree, didn't you? 'The country's ability to produce goods and services that people want to obtain'... that sounds directly related to our trade deficit. Which is also at an all time high. In terms any American can understand, this country has lost it's job and is now living on the credit cards.
I won't even bother to respond to the rest of your flamebait. How this post got modded 4 Interesting is beyond me. I'm beginning to think Slashdot is the target of astroturfing.
And why did he stop taking physical exams 3 years before the end of his service? He was supposed to take one every year to coincide with his birthday. Bush passed an exam May 15, 1971, but in the summer of 1972 he refused to take one, and lost his flying status because of it. In the summer of 1973 Bush was still serving in the Guard, but no records exists to prove he ever took a physical. In fact, there's no evidence that in the 42 months between May 1971 and the time he officially discharged on Nov. 21, 1974, Bush ever took an Air Force physical.
His failure to take the physical in 1972, and his subsequent loss of his flying status, should have triggered a disciplinary review, copies of which would be contained in Bush's military file. But none exists. Where are they?
And why, after the government spent hundreds of thousands of dollars to teach him how to fly, did he apply to be transferred to an Alabama postal unit?
What's that sound? That's the sound of AWOL.
If you're honestly asking, a "sales tax" is a tax based on a percentage of the purchase price of an item. It's very similar to the VAT that many other countries have, with some key differences:
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Hope that clears things up for you.Unlike VAT, sales tax is collected only once on an item through the manufacturing and sales process, whereas with VAT (if my understanding is correct) it's collected at each point in the supply chain, minus what has already been paid. For example, with 15% VAT on an item made of metal, a mining company might mine one dollar's worth of metal and sell it for $1.15, with the $0.15 going to the state. Then the company that bought the raw metal might make parts out of which are worth $3, so they'd charge $3.30 and send $0.30 to the state. (That's $0.45 less the $0.15 which has already been paid.) And so on, and so forth, until the product, worth $10, is sold in the store with a sticker price of $11.50.
On the other hand, in the US, the raw metal would be sold for $1 with the state getting no money, and the part for $3, and so on and so forth, until the product winds up on the shelf listed for $10.
The price of the sales tax is not included in the purchase price of the item. With the above example, you take your item, which is labeled as $11.50, up to the register and that is what you pay. On the other hand, the item is marked $10 on the shelf and the sales tax is added on at the register. This stems mainly from the feeling that having the tax included in the purchase price would be a form of hidden taxation (as some people feel the gasoline taxes are). So depending on the locality, the cashier will ask for between $10.50 and $11.00 once your purchase is rung up.
Which brings up another point. The sales tax is not uniform across the US. Each state can choose to implement a sales tax or not. In states which implement the sales tax, it is not necessarily uniform across the entire state. For example, Indiana has a 5% sales tax, Pennsylvania has a 6% sales tax, and the city of Philadelphia has a 1% sales tax (on top of Pennsylvania's 6%, so you must pay an additional 7% of the purchase price in taxes). For someone living in Phoenix, Arizona, the situation is even more complicated. The state charges 5.6% (from what I could find), the county charges 0.7%, and the city charges 1.8%, for a total of 8.1%. Basically, the amount charged varies by ZIP code (the US term for a postal code), and oftentimes even within the same ZIP code you might have different tax rates. This makes it a nightmare for a small business, for example, to collect and remit the proper taxes to all the different localities.
Following the last point, mail-order (here I am including catalog, telephone, and Internet sales) businesses thus tend to collect sales taxes only for states in which they have some form of physical presence; otherwise, the state has no jurisdiction over the business. To my knowledge, though, all states which have a sales tax have a "use tax", which applies to items purchased elsewhere which have had no (or fewer) taxes paid on them. For example, a Pennsylvania resident (6% sales tax rate) who drives to Delaware (an adjoining state with no sales tax) and purchases a $100 video card is supposed to declare this on his tax returns and pay the $6. If he was on a trip to Indiana and paid $105, he is legally required to pay the extra $1 but is not responsible for the other $5. However, if he purchases the item in Phoenix, paying $108.10, he does not owe the Pennsylvania state government anything at all.
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Runnin' around, robbin' banks all whacked on the Scooby Snacks...