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Our Low-Tech Tax Code
theodp writes "After establishing that nothing can excuse Joe Stack's murderous intentional plane crash into an IRS office, a NY Times Op-Ed explains the reference in Stack's suicide note to an obscure federal tax law — Section 1706 of the 1986 tax act — which the software engineer claimed declared him a 'criminal and non-citizen slave' and ruined his career. Interestingly, a decade-old NY Times article on Section 1706 pretty much agreed: 'The immediate effect of these [Section 1706] audits is to force individual programmers ... to abandon their dreams of getting rich off their high-technology skills.' Section 1706, the NYT Op-Ed concludes, 'is an example of how Congress enacted a discriminatory law that hurt thousands of technology consultants, their staffing firms and customers. And despite strong bipartisan efforts and unbiased studies supporting that law's repeal, it remains on the books.'"
The question I have is whether this guy is the tip of the iceberg or whether he's just another wing nut who can't admit when he's lost whatever argument he got in.
He does make some complaints in his screed about the kinds of issues that even rational people are worried about -- big government, big corporations and a "system" that feels stacked against individuals; some of these issues have been kicking around among conspiracy theorists and paranoids forever, yet a Treasury run by ex-bankers that loans out a trillion dollars to bankers and others who make sure the banks get paid is only too real.
Is unemployment and the rest of it going to create more of these guys?
A few items:
I tried to get private healthcare once, I can't. You should try it yourself.
Look: If you want economic security as your top priority, don't be self-employed. Starting a business or going out on your own universally means that one must be willing to accept a lack of security. And for all that you have to work harder than anyone else.
Furthermore, every new business fails. It isn't a question of if you will run out of money. It is a question of when. More money doesn't solve that problem. What separates out a successful from an unsuccessful business is that the successful one manages to keep going through the failure and eventually arrives at success. If you don't have the fortitude to do it, don't.
There are a lot of benefits to starting such a business, though. They include freedom and the possibility in time to earn more than you would working for someone else. I prefer this route, but I would certainly not recommend it to everyone.
LedgerSMB: Open source Accounting/ERP
More accurately, it is likely he had a house and a plane because he did not pay his taxes.
After paying for his legally required share of the two utterly ridiculous wars we are prosecuting, US bases all over the world, the cost of keeping an unprecedented number our citizens in jail, subsidies for businesses that otherwise would naturally fail... he might very well have been unable to purchase a house, much less an aircraft. 20% to 40% of one's income in your hands over the years (more, if you actually do the math*) makes for quite a difference in how you can approach purchasing big ticket items like homes and boats and so forth; and if in doing so, whether you ride the wheel of debt that has been arranged for us, or if you are able to actually make such purchases without incurring additional costs in interest.
It is well to keep in mind that like any enterprise that involves the legal system, trying to stand up for a position that the government finds itself in disagreement with - legitimately or otherwise - is also a hugely expensive undertaking, easily capable of bankrupting any person of average income. The presumption that you can fight city hall is false for most people. It's just another way to shipwreck your life.
Perhaps taxes are too high, and government too large, after all. I seem to recall that there are Americans who are looked upon as heroes because they fought against unreasonable tax policies. Is it fair to assume that each and every one of those we hold in such high regard perfectly managed their lives? This guy clearly could have made different decisions (no doubt most of them to his detriment), but would they have been "right", or merely compliant?
I could point out many historical examples of "law abiding citizens" that most certainly were not doing "right." To call this fellow an "idiot", as you do, is to attempt to wrap the whole event in a nutshell of disrespect that does not serve the interests of the dead IRS employees, the family Stack left behind, or, frankly, the rest of the nation.
It does, however, serve the needs of the government. An entity that is more in need of careful pruning than encouragement, in my opinion. I can't support Stack's action, because in the end, these people were neither his enemy nor the source of his problems. However, from where we stand today, it is history, and all I can do is hope that more people think about the problem, instead of assuming it is inevitable that we pay such huge amounts for "services" that primarily benefit other than the general population. Perhaps while they're at it, they'll think about how the government has stepped outside the boundaries defined for it by its formal authorizing mechanism.
After all, a government that is doing what it was actually authorized by its citizens to do is a lot less likely to incur the wrath of its citizens, thinking rationally and "acting rightly", or not.
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*note: The amount of your money that goes to taxes is the amount you actually pay directly, plus the amount paid by any first-party you do business with. For instance, if you pay a plumber $100 to fix your pipes, and the plumber is paying a 25% tax rate, then $25 of the $100 you gave the plumber goes directly to the same tax well that your direct taxes do. Here's the math. Let's say you and the plumber are both paying 25%. Then, you initially earned $133; the government taxed you 25%, which is $33.33, and now you have $100 left. Now you give that $100 to the plumber, who in turn has to give $25 of that income (25%) to the government. $75 of your $133 has arrived in the plumber's hands, actually paying for the plumbing work. Your actual tax rate here is 75/133 which is about 56% - not the 25% that it initially appears to be.
And the income of the plumber, w
I've fallen off your lawn, and I can't get up.
One thing everyone is forgetting about health insurance. They cheat. Insurance doesn't pay what they should, and they'll always have some excuse. They can outright deny your claims. More common is burying you in technicalities that somehow amount to them paying a good bit less than they ought while trying to convince you and the doctors that they've paid their share. Watch Sicko sometime, and try not to let any bias you may harbor about the director interfere with the message.
First thing you know is the hospital is hitting you with one of their fantasy bills for something you thought was covered. You think you're only on the hook for 10% of the 30% of the completely scandalous list price the insurance negotiated when they entered into an agreement with the doctors. But then they won't pay it. They give you and the hospital a load of crap about how some of the drugs and procedures aren't approved, the visit is classified in a certain way, the particular deductible hasn't been met yet. They've got a mile long list of excuses. Denied by insurance, the hospital has the gall to turn around and demand from you not just the 30% the insurance was supposed to pay, no, but the full 100%, because of course you don't have any such agreement with the hospital. Pretty big jump when your share of the bill changes from 3% to 100%. I've had the hospital harassing me with weekly calls and finally siccing a credit collection agency on me for a bill that the insurance bastards should have and finally did pay after much determined calling and calling and calling and waiting on hold and waiting while they "investigate" and waiting for supervisors and listening to them blame the hospital for entering incorrect codes (to which I replied that it was the insurance's fault if they'd made the system too complicated for the doctors to get right), and angrily refusing when they try to tell me I should just pay up and stop making trouble. Cost me a lot of time to straighten out just one-- so much time that maybe I could have earned as much or more money than what the insurance tried to cheat me out of. I have several others that look like they're never going to be paid. And they didn't surface until more than a year after the medical work was all done-- that's how long the hospital tried to get fully paid through the insurance. To be fair, the hospital shares a good bit of the blame for their outrageous billing practices, in particular, the miserable fee for service system with the completely insane rates that somehow can't be figured out in a timely fashion because they've got to pack it with every service they can. Decided I was through arguing about it all and am just letting the rest rot. Statute of limitations FTW!
You may even have to find a lawyer to threaten to sue the damned insurance company.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
I'm sorry, but I work for a company in the top 10 of the fortune 500 and with the economy the way it is I'll be _lucky_ to not be outsourced by the end of this year.
Job security in IT is _not_ joining a large company that is going to ship your job overseas the second they realize they will save 50%+ letting you and your staff go.
Going out on your own may not yield the best results up front, but once you get a somewhat stable client base you are basically secure.
In the world of outsourcing IT, keeping yourself visible and available is the way to go. Not locking yourself behind some corporate facade that will drop you first chance they get.
I'm pretty certain the Stack tragedy represents the outcome of some form of mental illness, not terrorism or a political statement. The jury is still out, but the rant seems kind of pointless.
OTOH, section 1706 has been a bone in my craw and the deep seat of a sincere grudge I hold very firmly. It was obviously a sop to IBM and when it emerged from reconciliation, also Cap Gemini and other large contracting organizations (at the time, AKA "body shops"). It was very obviously intended as an anti-competitive measure against people just like me. I have personally observed the negative influence of section 1706 on my business and career on more than a dozen occasions.
For the people who say "just work around it" - that's the point - it's another increment in the cost of doing business. Also it increases the risk to your customers - they have to verify you're not going to face them with an unforeseen tax liability. And so the whole market was modified to favor the large firms at the expense of entrepreneurship. And then there's the obvious begging hand of Congressional shakedown held out whenever someone tries to get the law changed to remove this double-dealing injustice.
Fucking Parasite Bastards. I'm sure I'm not the only one who feels this way. All these holier-than-thou pro-IRS bigots who holler "we're just following the law" or "We did our job fairly" need to consider the consequence of laying down to bed with tyranny. It isn't something which may be excused with happy talk and a smiley face!
Whoaaa! $800/month ($10k/annum)
In Australia:-
Everyone is covered with free emergency care in the public system. (Which is very good despite what fringe whiners say)
The public system has waiting lists for non life threatening stuff (Which can be days to years)
You have the option of buying private health insurance which for a family is around $2k/annum.
Private insurance gives you the choice of your own doctor in a private hospital.
Pre existing ailments usually have a one year exclusion.
Employers do not provide any form of health insurance.(because it is not required)
GP visits are covered under the Medicare system where you are refunded 50-100% of the consult.
If you spend more than about $1500/annum on medicines, the Govt covers the rest.
Some medicine is covered under a Pharmacetical Benefits Scheme which makes their cost around $15/treatment no matter what the price of the drug.
In the USA, it sounds like when the Military Idustrial Complex ran out of wars, they got into medicine.
46137
If car insurance worked like health insurance, we'd never see the real costs of things like oil changes because we'd only pay the co-pays. And the costs would rise since every shop would need an extra person to handle the paperwork and claims.
This is the quasi-logical rhetorical form that gives the economics profession a bad name, for it conceals everything about the issue worth thinking about.
The underlying structure is the timeless vapour-lock of the insipid: "if there is enough food in the food, how come people are starving?"
Indeed, good question, and it happens to have an answer: distribution is often a harder problem to solve than production. This surprises anyone why? The former is largely a political problem (venality and custom), the later is largely an industrial/engineering/scientific problem. Our accomplishments on the later front include the green revolution, fiber optics, and sending a man to moon, on the former front our wreath of achievement is CNN.
In the case of our hyper-technological medical system, it's a miracle of paper-work that anyone gets the right sequence of treatments on a prompt and cost effective basis. The paper-pushers are hardly a burden on the system, they are practically the whole of the system, unless you regard the human brain as a leech on the human organism.
E. O. Wilson: Trailhead is a nice read. Now imagine what it requires to individually and fairly compensate every ant in this society for their individual contribution as measured by the outcome to the hive of the trails they blaze or toil upon? You'd need a whole other ant hill just to keep track.
A founding principle of America is that all this score keeping is a pro bono service of the invisible hand. That's what "invisible" primarily means by those who invoke it: that you never see the bill for services rendered. A health system based on less individual score keeping for the corporate participants (such as the Canadian system) strikes most Americans as inimical to the American way, yet at the same time the cost of all this score keeping is brushed off the table as inefficiency and overhead endemic to the regulatory structure as opposed to being endemic to the problem itself, delivering health care products and services so complex and litigious and expensive it boggles the mind.
Yes, it's possible to stiff the invisible hand, if you don't mind watching 20% of American society line up for the soup kitchen while the nation fences with Asian tigers for increasingly sparse petroleum resources.
I've been trying to decode the lure of "the invisible hand" for over a decade. Visibility in America is anything or anyone that collects its debts; invisibility is everything else. Amazing what can hide in a word and for how long. The old gag in America is that as soon as the invisible hand becomes visible (by collecting its debt for services rendered) it's immediately dismissed as a burden of regulation, with the same fatuous logic that in a world with enough food for everyone, no one starves.
In the glib theory of the invisible hand, a twenty year old American male lacking health insurance who comes down with testicular cancer can borrow $100,000 against future earnings (without posting hard equity of which he has none), to cure himself of the cancer and remain a valuable member of the American work force, since this is the most sensible economic outcome. Equity-lite loans worked great with housing.
If your family posts equity, that's sugar-daddy insurance, a whole different ball game. In the American myth, everyone has a loving sugar-daddy to fall back upon when the heartless banks demand equity against their loans, and thus a productive future worker never falls through the cracks of too little treatment too late.