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IRS Pushes for New Reporting at Expense of Privacy
angelheaded writes "Brian Krebs from the Washington Post is reporting that the Bush administration is proposing a new tax collection program that would force credit card companies to report merchants' income to the Internal Revenue Service. The plan has come under fire from privacy groups, who say it will create another private sector database tied to Social Security numbers at a time when ID theft experts are urging companies to wean themselves from the use and collection of such information."
Huh.. I remember R's always being tax hunger, unless you're talking about Big Business. R's were never the friends of ALL business, only big business.
Who said it's a surprise? It's "New Reporting", which is why it's "news". New things that are important are news (you can tell by the spelling).
What is this bizarre dismissal of important stories just because they are new developments that meet low expectations? Do you have something against people being informed that our worst expectations are being realized? Or are you Bushlike in equating your purely imaginary prior beliefs with their actual materialization?
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make install -not war
The IRS and its inevitable escalation of privacy invasions is one good reason why we should discard the income tax entirely, in favor of a sales tax. At about 25% (instead of income tax that's 20-35%), our $15 TRILLION economy would produce something over $3T, which (if we stopped pouring money into the Iraq War) would completely pay for even modern bloated budgets, without deficits (and probably with substantial debt paydowns).
Everything sold retail, with exceptions for a few "necessities", would be charged the 25% sales tax. The necessities would be raw cloth (not finished clothing, unless used and bought from a nonprofit collecting it from donations), raw food (groceries, not restaurants), health insurance, education, telecom (phone, basic cable, basic broadband), local average mass transit expenses, and home expenses on those primary homes costing (rent, mortgage, etc) in the bottom 20% of their Congressional District. Those homes would also have their median power/heat/light utilities exempted. The vendors would be the ones audited by the government, and responsible for ongoing tax collection, not the consumers, so the cost of the tax system would be part of the existing business accounting infrastructure. And violations would cause liens and seizures on the much more easily grabbed businesses.
Wholesale taxes for registered wholesalers would be a fraction of that 25%, probably closer to 1-5%. Equity sales not resulting in majority ownership transfer would be taxed at a rate of something like 0.01-0.001%, to encourage liquidity.
Congress could grant extra exemptions for subsidizing commerce it says the US is investing in, like home sales during housing busts or prescription drugs for seniors whose hardship is monitored by the government. But those arbitrary economics engineering projects would be easily pointed out for balancing against new debt when the government proposed deficit spending, rather than charge exempt people their fair share.
This system would put US taxation on a fair and supportable basis for the first time. Those benefiting most from the system that protects their ability to spend money on what they want would pay the most to keep that system working. Everyone would be encouraged to save, as income and savings aren't taxed. The poorest would have their prices on necessities lowered, but so would everyone else, without the government deciding how to redistribute that money among different people. And the simplicity, fairness and much smaller population (vendors) from whom taxes are actually collected would increase compliance and reduce tax evasion: the vendor won't sell you the goods if you don't pay, and they'll lose their business if their records don't add up.
But their records will be aggregated, not individual. The government tax authorities won't know a goddamn thing about individuals' private transactions, because they won't need to, and they won't have the raw data.
The IRS and the income tax will just keep getting worse. Even as it increasingly fails to either manage the economy by "exemption engineering", as we can see from its sketchy results (which usually just covers up subsidies to huge multinational corps), or to even pay the bills, as the ever-booming (especially lately) National Debt proves with more data than any other human endeavor ever measured. Sales tax will do what we want, without doing what we don't want. Let's have it already.
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make install -not war
You know, I don't see how this is any different then requiring an employer to submit a 1099 for contract workers and other similar paid people. I mean the changes are so it reports the total amount of sales (income) a merchant or business owner has made through a credit card account. It would almost be the same as the card companies issuing a 1099 to the merchants.
The real SSN problem is their use for completly unrelated purposes. Including as proof of identity.
Using them as an authenticator rather than an identifier is where the problem is. It's an interesting question what, if anything, can be used as an authenticator between two parties. But having one (and typically only one) of the parties produce a list of identifiers can't do this.