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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."
They have always invaded privacy to collect money. Why is this news?
How would they figure the tax from the merchant's credit card revenue? They could have very high revenue, but low profits, or vice versa. You wouldn't be able to tell only from their CC processor history.
Seriously do we really need the extra tax dollars spent, man hours, and all that goes with it so the government can get more money?
I'll tell you if it doesn't pass, you will see it sooner or later under the guise of "searching for terrorist finances".
I am Bennett Haselton! I am Bennett Haselton!
The privacy issue is not a concern either. Even if it is a small business using the owner's SSN the IRS already has that info on tax forms, W2s, and other data they get from banks. This personal information will not be shared with anyone outside the IRS anymore than one's 1040 is.
It's been quite obvious in the last few years especially, that transactions on a credit card don't reflect "real" monetary transactions. How many people spend way more than they can afford, and pay back little for long periods of time. Also, it seems bad policy for a gov't to know how and where you spend money. There is no reason they should have record of that. Imagine the legal power of having records of the spending of a Senator for example. Imagine the blackmail power that would give the IRS.
I already report and pay sales tax from my income from credit card transactions.
And what the hell does the IRS care about my local city, county or state sales tax? Oh they want to make sure that I, as a small business owner, am reporting my income correctly? Fuck Off, I already do, audit me if you want you lazy fuckers, but stay the fuck out of my records unless you are doing an audit.
They can't possibly figure out my take-home income from credit card transactions anyway. They don't know if my expenses are 10% or 90% of those transactions, nor do they know how much of my business is cash or check.
Small businesses that want to hide income already know how to do this, they are cash only businesses. Allowing credit card transactions and avoiding paying taxes on that income is just asking for trouble. Well avoiding paying taxes in anyway is asking for trouble.
Let me and my accountant do our work and don't change a thing.
I can only see this leading to problems.
The Bush Administration is pushing for bigger government, great ... just great. He's a Republican too? I'm so confused.
I'm not american, but don't understand the outrage. surely this is an attempt to 'catch' those people who are making a fortune selling stuff on ebay etc, without ever declaring the income through their business or paying any corp tax.
As a small businessman who pays every penny of tax as I should, I'm behind any method that helps catch those swine who can undercut me by not paying any tax.
Since when is it cool to stick up for tax cheats?
What am I missing?
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So when are they going to ban paper money and coinage?
---- Booth was a patriot ----
Because when Social Security was first introduced, a citizens anonymity was thought to be a god-given right. It was warned by "tinfoil hat wearing nut jobs" that Social Security was evil because it required an identity card. "Your paperss pleass".
My SS card, issued in 1968, says "For social security and tax purposes only - not for identification". The newer SS cards don't say that.
Now they're trying to do away with Social Security and keep the cards. The "tinfoil hat wearing nut jobs" were right.
Before long it will be a felony to not carry identification.
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
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
Most of Europe has a fine tradition of beheading rulers who try to abuse their power. We haven't done it for a while though, and it looks like the deterrent effect is starting to wear off.
I am TheRaven on Soylent News
I just don't see a flat tax, IRS abolishment, etc ever happening. I would not want to imagine the lobbying effort to quash all talk about it. Think of all the accountants, bookkeepers, H+R Blocks, IRS agents, Tax lawyers of the country that will fight tooth and nail to destroy any common sense approach.
Paul and Hucklebee both discussed the ideas during the Republican primaries. Sadly those stories didn't get much traction to really get covered. It was a perfect opportunity to have a serious discussion about it but of course the media typically ignores any real issues .