Slashdot Mirror
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.'"
I remember when this law was passed. At the time, many large companies were switching to having huge numbers of contractors instead of regular employees. Uniformly, these companies denied any benefits, like health insurance. Job security was also lower. I personally did a lot of contract work at the time. After the law passed, the big companies were forced to hire most of those contractors, with benefits. I think this improved things generally all around. For some reason, full employment creates a bond of loyalty from the employee, and sometimes from the company, which is never there as a contractor. More programmers got health care. It was a good thing.
As a contractor, I was not personally effected, because I was an actual contractor, with multiple clients, self-employment taxes, and all. All you need to not be effected by the law is to be an actual contractor.
Celebrate failure, and then learn from it - Nolan Bushnell
Do you mean 'criminal and non-citizen slave'?
Or '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 gist of it is that the 1986 law withdrew a special exemption for high tech workers, along with a whole bunch of other tax shelters (the law is most hostile to individuals that work full time using resources provided by a company and with supervision from an employee of the company, while claiming that they are a corporation doing contract work for the company).
Nerd rage is the funniest rage.
From TFA: In an earlier interview, Tom Burger, the director of employment taxes for the I.R.S., said one of the agency's difficulties ''is that, and I need to pick my words carefully, Congress passes laws, often without asking us about them, and then tells us to enforce them.''
Translation: Politicians make laws without knowing jack about the consequences and not even bothering to ask those that could tell them what kind of can of worms they are about to open. And then they're too pussy to admit they blundered.
Sounds familiar? A law gets passed that should cure some problem with the economy and the only thing it accomplishes is to cause troubles where there were none before while the problem continues to exist.
If I get that right, the law aimed at eliminating the "fake freelancing", where companies pretty much forced programmers into freelancing instead of hiring them, resulting in cheaper labour for them and shifting the risk and insurance burden on their not-quite-really-employee. Now, that still exists, with programmers now being passed about like slaves by temp agencies where they enjoy little less risk or much more insurance while at the same time losing their freedom entirely, while those companies still get the cheap programming labour they wanted, and at the same time the whole deal also keeps those programmers that are good and sought after enough to actually be (really) self employed and successful at it from actually being this.
Sounds very familiar...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
That's not how I read the article. The law creates tax issues for individual programmers who incorporate: if your business has only one employee and is less than one year old, the IRS comes looking for you. And as a matter of policy, the IRS is harassing _the employers_ of such contracting companies. The result is to discourage individual programmers from incorporating on their own.
Partly due to the economic issues lately, I've had _a lot_ of recruiting companies trying to recruit me to leave my work and come help them earn their recruiting fees. It's taken me a lot to stop laughing, sadly, when they say how lucrative it is: salary equal to my current salary, but without benefits or vacation, unemployment, and on a "temp to perm" basis for a company that is already falling apart due to letting their qualified engineers go at the start of the crisis is not a good place to go. I've reviewed the potential for consulting, and while it makes sense for some, it's not the wonderful and economically sound decision that many recruiters would have you believe.
this is how it happens :
- you let individuals or groups to amass unlimited wealth
- eventually some reach the wealth level with which they can influence democratic processes or representatives
- the first individuals or groups to reach the above level start protecting their interests in lieu of everyone else
- laws do not work against this, because if you can influence democracy and its representatives, you can MAKE laws, as in the current example we are discussing (contract law)
- 'the people' get the shaft
Read radical news here
I'm not a tax attorney, but I do know a little about the situation. Here's a brief summary:
There's a lot of concern over how to classify workers as either "employees" or "independent contractors." Each has its own pros and cons, but in general, it's better for a company to consider its workers as contractors from a tax perspective. Because taxes are radically different based on how an employee is classified, a misclassification that is turned up by the IRS can be very expensive for a company. As such, there is a "safe harbor" which protects companies who have a reasonable basis in considering an employee to be an independent contractor.
There was a sense this was being abused in the technology industry in the 1980s, and as such, Congress amended the law. The amendment didn't change the classification system of employees versus independent contractors, but did remove the safe harbor. As such, companies became much more reticent to hire a worker as an independent contractor, because the penalty for getting it wrong was much more likely to be assessed.
I'm a lawyer, but not yours. I wouldn't represent someone who thinks taking legal advice from Slashdot is a good idea.
The more interesting part of the tax provision was that it was introduced by Patrick Moynihan as a favor to IBM. A $60m tax cut type of favor. I'm not saying Joe was right in what he did, but it is rather apparent that to be noticed by government, you must either be insanely rich or insanely violent.
What changed under Obama? Nothing Good
Substitue "Mohammed al-Mohammed" for "Joe Stack" and "Section 1706 of the 1986 tax act" with "United Nations General Assembly Resolution 46/86" and you'll see what you folks are all doing - you're making up excuses for a terrorist because he happens to share your political views. This guy was a fundamentalist libertarian terrorist.
If it was part of this nutjob's manifesto, now if Congress repeals the law it will look like the government can be swayed by terrorism. Since the government never ever wants to appear to be that way, this law will now have to remain on the books forever.
Way to go.
Weaselmancer
rediculous.
I remember when this law was passed. At the time, many large companies were switching to having huge numbers of contractors instead of regular employees. Uniformly, these companies denied any benefits, like health insurance. Job security was also lower. I personally did a lot of contract work at the time. After the law passed, the big companies were forced to hire most of those contractors, with benefits.
I remember that too. That was during The Bubble.
And then after the bubble? Why most of those people were laid off. Only instead of being able to get by with smaller amounts of work the way mot people do, they spent years unemployed because they couldn't contract anymore and they couldn't find permanent work either.
I don't know why on earth you would say "job security was lower" because contractors at least always had a defined term of work and only in the most extreme circumstances would you be able to get rid of them even if you as an employee thought they sucked. Meanwhile at any moment Hammer Of Rightsizing could come down on you as an employee.
As for healthcare, there are a lot of people with spouses also working that can cover the health angle or you can opt to go with the catastrophic coverage (still pretty cheap) along with the tactic of setting aside something more than the $2-$3k deductible in a medical savings plan. Then you are covered for the big things but also can do the small stuff too if you want.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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?
Basically, it's a duck law. If it looks like a duck, quacks like a duck, and walks like a duck it is a duck.
If you work for one company long term, doing what is essentially a full time position, then you are an employee whether you want to be or not and are entitled to things like health care and you employer is required to pay payroll taxes. It doesn't matter if you call yourself a consultant or work out of some sort of shonky staffing agency, and more importantly it doesn't matter if your employer calls you a consultant and hires you through some shonky staffing agency.
In theory it's to protect the rights of workers so they get all the benefits of full time employees if that's what they are, however in reality it's to close a tax loophole. Ya see the thing is generally speaking capital gains tax is less than income and payroll tax. Consultants running their own companies generally pay capital gains on most of their income whereas employees pay income tax and their employers pay payroll tax, which generates more revenue for the government. The extra benefits for employees are nice too, but that isn't really the goal.
Now the thing about this law is that if you actually are a consultant(you know, changing clients regularly, working for multiple clients, or doing work that isn't standard 9-5 work) none of this affects you, you're still a consultant and you still get the pluses and minuses of that arrangement. If you're not really a consultant(more than a year at the same place, no additional clients, doing what would normally be a salaried position) then your employer has to treat you as an employee. This means paying payroll tax, health benefits, 401k if applicable, which is of course expensive. Generally speaking if this happens a company decides to either get a real consultant or get a real employee. If they make you a real employee it generally means a pay cut(since they're paying all those benefits) and essentially the end of the little consulting business you had going.
Now none of this is in and of itself a problem, people who were being exploited got their proper benefits, the tax man got his money, and real consultants weren't affected. The problem is that some people are either stupid or lying to themselves. They want all the stability and routine of a salaried position with the higher salary, lower taxes, and theoretical freedom of a consultant. Essentially they want to be consultants without incurring any risk. This, of course, doesn't work because the loser in this relationship is the government who gets fewer tax dollars, and everyone who does the right thing since they're paying extra tax to make up for you dodging yours.
There were a few problems because of people who really couldn't face doing either real consulting or real employment(which this guy seems to be one of with the whole slave thing) or who invested a lot of money and time into their business shell even though they weren't actually using it. All in all it's a fair law though, real consultants stay consultants, real employees stay employees, people who are in the wrong category get moved to the right one. Everyone pays the taxes they owe.
The moral of the story is that consultants get higher pay and lower taxes because they incur higher risk(a consultant/contractor may or may not have work at any given time and has pretty much zero protections) and you can't get rid of the risk and still retain the other benefits.
How are contractors realizing capital gains? Are they 'creating' software and then transferring ownership of it?
Nerd rage is the funniest rage.
I'm pretty left wing, but I lived through that insanity:
1. The IBM PC had just become a viable business computer
2. Firms had an incredible need for decent programmers
3. Decent programmers commanded pay 2-3 times what was then considered reasonable salary for a recent college grad (i.e. way outside corporate pay scales)
4. Firms had a hard time telling good vs bad programmers apart
so...
5. Firms hire programmers as consultants, pay them market wage, but have the ability to easily fire them by not renewing contracts
6. Programmers self incorporate because that is the only way firms are equipped to pay them
7. Programmers quickly realize that they can write off giant amounts of income as business expenses (travel, meals, home computers, video games, home office space, etc.)
then...
8. Law is passed to prevent this if basically:
a. You claim to be a sole proprietor, and
b. All your billing is coming from a single corporation (i.e. you are really an employee, not a consultant.)
IIRC, I avoided the law by forming a two person corporation with multiple billing streams.
The issue with this would impact someone who forms his own contracting firm and starts to deduct business expenses like getting from home to the job site, home office costs, etc... If he is later declared to be an employee, all those deductions get disallowed and he owes the back taxes. I suspect that, if he incorporated and paid himself mostly by distributions, he also paid his taxes at capital gains rates instead of the wage rates. That's a privilege restricted to lawyers, doctors, financial consultants, investment fund managers, and corporate officers.
Now, originally, the law's effect would have been balanced by the way that it kept companies like Microsoft and IBM from just making everyone a contractor to remove benefits, but the corporation quickly figured out that they could use temp agencies as a middle-man. It wasn't until a major lawsuit in the late 1990s that companies became sensitive to the idea that if it walks like a duck (employee) and quacks like a duck (employee), then it is a duck (employee) that can sue you for benefits. After that suit, many companies started brining contractors back on the payroll to avoid later class action claims.
The law was in the main part, a $60m tax break favor to IBM. The effect on ind. contractors was the manner in which IBM's tax cut was funded. Nobody was thinking about consequences. Moynihan was simply doing a $60m favor for IBM.
What changed under Obama? Nothing Good
Yeah this poor guy could only afford a nice house and a plane. Just imagine, without that terrible law, he could have been able to afford a two engine plane and a slightly nicer house!
All Section 530 does (which the 1706 amendment exempted programmers, drafter and other similar technical people) is to make it easier for employers who hire independent contractors to protect themselves of the "contractor" fails to pay his taxes. Someone who works for another can easily file a form with the IRS claiming that in fact they were an employee, not a contractor--and that could cause an employer to be subject to an audit and owe employment taxes.
By exempting programers and drafters and other technical people from section 530's 3 point test [irs.gov] to determine if you are a contractor, it simply means programmers must satisfy an older pre-section 530 20 point test [tmc.edu] to determine if a programmer is in fact a contractor.
It's not hard under the current legal regime to become an independent contractor. Hell, I was an independent contractor all through the 1990's. All it requires is that you basically provide your own tools (such as a computer, the compilers, and the like), you set your own hours, and you have a contract with your current employer specifying the work to be provided. You don't even need to satisfy all 20 points--you simply need to show that certain things (such as being paid hourly) is common in the software development industry. (And in my case I also did a few fixed-priced contracts as well, which established a history that I was an actual contractor.)
The other half of the equation is the $60m tax cut that was pushed by Senator Moynihan as a favor to IBM. You were clever and figured out a way to navigate the hurdle caused when congress had to find $60m to offset its favor to IBM (nice work BTW). The problem is, when there are a very few who can simply buy the laws they want via the legalized corruption of campaign donations, cleverness will not always be sufficient to overcome those hurdles.
What changed under Obama? Nothing Good
I was traveling through airports when I happened to see this story on the news, so I haven't caught up on all the details, but one thing disturbed me: the lying heads went on and on about how mentally disturbed this man must have been, and how could we identify such mentally disturbed people in the future, but never once did they ponder whether this was a rational response to an untenable situation. Never once did they question the role of a convoluted, maddening, and probably illegal tax code.
It is difficult living in a country where there is little rule of law because the multitude and complexity of laws makes virtually everyone eligible for a felony conviction at the arbitrary whim of unaccountable government officials. If Mr Stack had run into such persecution his response may well have been the only rational one. What other avenues were open to him to escape from the situation? Good riot police know that they should never cut off an angry crowd's escape routes, as they will have no choice but to fight, and most of us have heard of the dangers of a cornered animal, but what opportunities did Mr Stack have to avoid what he (probably accurately) described as a kind of slavery?
In short, if Mr Stack had no viable alternatives, or if he was feeling especially patriotic, this response may not have been irrational. If all his friends and colleagues never suspected that he was insane, it may be because he wasn't. The fact that his suicide note was angry and used profanity does not necessarily mean that Mr Stack was mentally unbalanced - it may simply mean that he had good cause to be angry. If someone tried to enslave you, would you be angry? Would you say some naughty words? If so, does that mean that you are wrong or mentally ill to object to being enslaved, or does it mean that the bastard who is trying to enslave you is wrong?
The fact is, all Americans have become or are becoming the slaves of the United States government, which in turn has become the instrument by which those who take more than they give (at present 60% of Americans) have harnessed the productive classes for their own benefit. This is the tyranny of the majority, and it looks like it will only increase in the future. Talking to people overseas, I have met many who envy American wealth but none who envy American "freedom".
The fact that the lying heads on the News never addressed this question concerns me. The American media is no longer interested in discovering the truth, they merely do the bidding of their employers - and with the U.S. government being the largest advertiser, guess who their employers are? It may well be that Mr Stack really WAS crazy, but we will never learn the truth from the media.
Gross receipts tax. It's like a VAT, but on everything you receive. No deductions, no exemptions, no exclusions. Applies to everyone with a tax ID (i.e. persons and corporations). Double taxation for small businesses? Yup - you get the protection of the government via corporate veil, you pay the extra. (disclaimer - I own an S corp - I would be double taxed)
Then it doesn't matter what is deductable. It doesn't matter how you make it or where it comes from - gifts, cap gains, interest, wages, inheritance. It favors local production (fewer middlemen). It's easy to administer. Everybody pays something.
It does not, however, allow for social tinkering via the tax code, so it will never be adopted.
Is it just my observation, or are there way too many stupid people in the world?
Awesome, we can basically make sure rich people pay practically no taxes at all.
Are you super rich or dumb?
IIRC, I avoided the law by forming a two person corporation with multiple billing streams.
After reading the idiot pilot's letter several times as well as the links provided, the solution to this tax situation is exactly what you did: create a partnership/hire another person, and have multiple concurrent projects.
For all the tax-avoiding mental gymnastics many of the antitax crowd employ, and with how smart they think they are, you'd think a simple, straightforward solution such as what you did would be obvious. Some people just don't want to pay taxes.
As the son of the IRS employee who was killed in this incident said, "if he [Stack] has a house and a plane he can pay his taxes." (Austin American-Statesman, 2/21/2010).
Because the organization that makes sure _every_ _single_ _retail_ _item_ has had its tax paid, necessitating intrusive monitoring ... won't have the name "IRS"?
Information theory is life. The rest is just the KL divergence.
If you bill as an individual, 100% of the revenue (after expenses) gets hit with 15.2% ss/medicare tax. So you incorporate and instead of paying yourself a salary, the company issues a monthly dividend which is exempt from the 15.2% ss/medicare tax.
Sounds good, but there are 3 things to keep in mind:
Do you even lift?
These aren't the 'roids you're looking for.
I don't see any reason to pay taxes - they already TAKE TAX out of my check before I ever get it. Fuck paying them anything extra.
You are aware exactly how all that works, right? The amount taken from your paycheck has absolutely no effect on the total you have to pay for the year.
He blamed 'politicians, the Catholic Church, the "unthinkable atrocities" committed by big business and the government bailouts' for his own failures to reach his goals. This is classic schizophrenic behavior, it is delusions of grandeur. With delusions of grandeur, you are convinced you are the most amazing person in the world and you should be able to succeed at anything. When you don't succeed, you start finding reasons as to why. And since you're convinced you are the best, you start at the top, because clearly it takes powerful forces to keep a great man like you down.
So you blame any powerful group. The government, big religion and big business.
My uncle had the same symptoms. He had all his genius ideas written down and the government was trying to steal them (physically!). He wrote to Kofi Annan (the head of the UN) to tell him that George Tenet (the head of the CIA) was in the building across the street spying on him. This is how these delusions work. Not only is the government out to get you, but the important people in the government are involved!
So what makes these guys? Well, primarily their own mental illness. The media has a role (previously lore did) in helping them choose the bad guys who they are going to list as out to get them. But the media doesn't create them, they'd just select other enemies if the media changed their tune.
http://lkml.org/lkml/2005/8/20/95
For all the tax-avoiding mental gymnastics many of the antitax crowd employ, and with how smart they think they are, you'd think a simple, straightforward solution such as what you did would be obvious. Some people just don't want to pay taxes.
You've made a mistake here. The anti-tax crowd aren't against paying their taxes. They don't want to have to go through any kind of "straightforward" gymnastics to avoid taxes. They just want the taxes to not be in the way to avoid.
Because of the complexity of the tax laws, we now have a new activity which somehow is frowned upon by everyone (and committed by nearly as many.). An activity which is not only perfectly legal, but also presumably encouraged. You've even advocated that activity right here, but for some reason there are people decrying "Tax Avoision."
Why not just not have that complexity. Have a tax code that's short enough for a single person to read completely through in less than 2000 hours of reading (leaving two weeks for actual work). Every section you can't read is a section you can't be sure doesn't apply to you. If you're on the hook for criminal liability for failing to adhere to "must" sections, then you must be able to read them. And that's not even counting the money you lose by not having time to find "may" sections.
Can you be Even More Awesome?!
Here is the deal - companies pay out money in a few different ways.
They can pay money to vendors for services rendered. Generally there is no tax on this, but it can't go to an individual directly, and it might be taxable by states/etc.
They can pay money to an employee - W-2 and all that. That is how 99% of the US population gets paid. The recipient pays income tax on that.
They can pay money to their shareholders in the form of dividends. The shareholders pay capital gains taxes on that money, which is a nice low percentage so that rich people don't have to pay taxes. There is also the issue of double-taxation, but most big corporations have so many tax shelters that they don't pay those anyway (just watch the Frontline episode on companies buying sewer systems in Europe and leasing them back to communities, and so on).
When you have a company of 1 you can elect to pay yourself in salary, or in dividends. The latter is FAR more beneficial tax-wise, although you first need to realize the money as corporate profits and pay corporate taxes on it. If you pay yourself as salary then chances are you won't have many corporate profits to speak of and so corporate taxes will be low (a salary counts as an expense on the balance sheet - a dividend does not).
The reason dividends are attractive is that before you pay them to yourself you can offset them with all kinds of expenses. Driving to your client pays for your car, any computer used mostly for work purposes is a deduction, lunch with the client is a deduction, and so on. Ordinary employees are expected to pay for their own commutes and pay taxes on that money at a much higher rate on top of that.
Hope that explains some of the nuances here. Disclaimer: I'm not a tax accountant, and I'm not an expert on this stuff in any way so a detail here or there might be off.
But they don't. See the thing is once you have so much money you basically can't spend it all. Add to that they will be paying less tax as a percentage of income and it gets really unfair. Heck, they also tend to spend lots of money on things that are not property so more money they spend without paying taxes on.
The only real fair tax would be, no tax on first X dollars made and Y% on every dollar made after. With no difference between money made via honest labor or capital gains, or dividends.
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.
---
*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 would point you to Three Felonies a Day by Harvey Silverglate.
Silverglate should have a great deal of appeal here. He was deeply involved in the ACLU, was a founding member of FIRE, and was the first litigation counsel for the EFF.
LedgerSMB: Open source Accounting/ERP
Comment removed based on user account deletion
No. In the 1770's, the government taxed imports for its operating funds. It did not tax income. It was not authorized to tax income, and if you had suggested that they should do so at the time, likely you would have been shot, hung, or worse. Here's how it actually went:
The federal income tax was first enacted in 1862 to pay for civil war expenses on the part of the Union. They subsequently eliminated it in 1872; turned around again and revived it in 1894; and then finally it was declared unconstitutional by the Supreme Court in 1895. Then in 1913, the 16th Amendment put income tax into the "authorized powers" category, and that's where we are today.
I've fallen off your lawn, and I can't get up.
The point isn't about economic security. (Although there's really very little more as an employee than as a contractor.)
The point is that the IRS has singled out - for persecution, one might argue - small (both one-man and slightly larger) technology companies to investigate this issue.
The preferred solution is to not have a problem.
As the son of the IRS employee who was killed in this incident said, "if he [Stack] has a house and a plane he can pay his taxes." (Austin American-Statesman, 2/21/2010).
Corporations with multiple headquarters and Lear jets don't end up paying the taxes Joe was required to pay.
The only people who don't are those who want to avoid paying their proper share.
And people who understand the time value of money, which you obviously don't.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
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.
If you're living below poverty then you don't have the perspective of those of us living well above it. They aren't taking what they want. They're taking what you told them to take.
My only income isn't my job. It's the lion's share, but I have investments, too.
My withholding is set - by me - so that the monies that come out of my paycheck cover my expected investment income too.
Just how do you expect to the IRS to manage that trick?
By the way, why wouldn't you file taxes for every tax year you can if they owe you? A 1040-EZ is, well, easy. Back when I owned a business I helped a number of my employees do them rather than pay the H&R Block bastards. If you can do basic math it takes about 20 minutes.
If you're living on that little money, I'd think an extra few hundred or thousand would be most welcome.
The preferred solution is to not have a problem.
This amounts to you giving the government an interest free loan. Keep the money and make interest on it yourself. (of course you get taxed on that interest too. grr)
In theory it's to protect the rights of workers so they get all the benefits of full time employees if that's what they are, however in reality it's to close a tax loophole. Ya see the thing is generally speaking capital gains tax is less than income and payroll tax. Consultants running their own companies generally pay capital gains on most of their income whereas employees pay income tax and their employers pay payroll tax, which generates more revenue for the government.
I like your post, not being argumentative.
The solution to the above, I propose, is to actually close the tax loophole. Eliminate the distinction between capital gains and labor income. It would put labor on an equal footing with capital provision. As a side benefit, it would help to stem the explosion of the American aristocracy.
To those who cry double taxation I would then add; eliminate the tax on corporate profit. If you tax only people, then you don't get these complexity problems. For those who play RPGs, you can compare these to class and race balance issues.
Not enough tax revenue? Simple -- check out the PPC adjusted 1954 tax code. Getting paid more always means taking home more, so there is motivation to excel. The more our system benefits your wealth concentration, the more you pay to support the system from which you benefit.
And if we still decide we want some benefit for long-term investment, I could acquiesce -- if we make it truly long term. Hold a stock for more than 5 years, we give you 10% off the taxes. Hold it for more than 10 years, 20% off. Or something like that. This would have a limiting effect on the quarterly-report oriented book-cooking and gutting of product quality and customer service.
Uneasy with taxing people based on inflation? Fine, adjust the taxable stock value according to the CPI. This would also motivate us to start being honest about the CPI, instead of using "CPI(*)" (* = not counting things that increase in price).
In truth, it is not the solutions that are hard. Being a well balanced capitalist economy is entirely possible. It is only the lack of honor and fortitude in D.C., and the lack of engaged citizenship by the public, that allows our system to continue to degrade.
Stop-Prism.org: Opt Out of Surveillance
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!
"if he [Stack] has a house and a plane he can pay his taxes."
I find this as compelling as, "Rich people can afford to pay more taxes." Which is to say; I do not find it compelling. The question is not what a person can afford to pay, it is what is the most economically efficient amount for them to pay. What amount maximizes the long term GDP of the nation? (and lest you think me a right-wing-nut or tax protester, I think that solution involves a significant shift back toward the PPC-adjusted tax policy of our rise to superpower(*))
Solving for efficient taxation is not tremendously complicated, but it is a bit more complex than the facile sound bite above.
* See 1954 tax code here: http://en.wikipedia.org/wiki/Internal_Revenue_Code_of_1986
Stop-Prism.org: Opt Out of Surveillance
There is no such thing as financial security short of having a trust fund in your name. The main difference between self employment and general employment is how many tax forms you fill out.
Otherwise freedom is an illusion. In a job your boss tells you when to wake up and what to work on. If you're self-employed, your customers do.
1/2 of self employment taxes are used as an adjustment between the reported gross income and the reported AGI (Adjusted Gross Income), if you are filing a normal 1040 with Schedule C reporting the income.
The effect is generally much less than getting a straight 50% off:
Let's assume a $ 50,000 base income, all from self employed sources, and the filer, for one reason or another, falls in the 15% bracket. Self employment tax of 15.2% means the tax is $ 7,600. The adjustment means $ 3,800 is credited back to the taxpayer, and subtracted from the raw income, so the AGI becomes only 46,200. That still puts the filer in the same bracket (for my example, not invariably), so the tax benefit is actually 15% of that $ 3,800, or $ 570.
That works out a little differently than the way a standard or itemized deduction is used, and a lot differently than the way a refundable credit would apply.
Who is John Cabal?
And if you're not spending it, what are you doing? Investing it -- either directly or putting it in a bank, and they're investing it for you. ...and what are your investments doing? Buying goods and services (on which sales taxes are paid) while funding ventures intended to make a return.
Also, think of it this way: What's better social policy, encouraging people to spend, or encouraging people to save? Taxing only money that's spent (the former approach) encourages saving, something which has long since been forgotten.
Also, the official FairTax proposal (which the grandparent was not promoting, as their post implied that some items would be "tax free") provides for absolutely no tax-free goods, but includes a refund based on poverty-line cost-of-living for one's family size in one's area; thus, if you're living below the poverty line, you're getting more money back from taxes than you put in -- and people spending far more than the basic cost of necessities on food don't freeload with cheap fillet mignon purchased with tax breaks intended to protect the poor.
I'm saying that the "permanent employment" cookie is dangled like it's a treat, a prize, something worth selling myself out for. But that is precisely how and why this opportunity has arisen. Someone else had "permanent employment," but then management decided--through some undisclosed analysis--that that person/those people had to go. Then they found out that they needed this work function, therefore I'm getting a phone call from someone who clearly doesn't understand the job requirements, let alone the fact that they, too, are the victims of a "contract-to-hire" scam.
I realize that I could pay for the travel, the lodging, the food, etc., up front, and then claim the expenses against my income tax, but ...
Like everybody else, I've got no capital to invest -- at zero interest with the IRS -- and the banks still aren't loaning money for this sort of venture. Even then, even with crazy low interest rates, I lose money because I pay interest on the loan, but recoup only the capital from the IRS. Further, I've also made myself an attractive target for audit, or the outright levy of penalties, to be proven later--or never.
It took someone who's been around long enough to see the semi-cyclical nature of this situation. Everyone seems to be referencing the current crisis, but this happens whenever the economic outlook is bleak. IT is [ still !! ] considered to be overhead and is the first area for cutbacks.
Apparently the Congress is [ still !! ] listening to the Old World. Gee, when has the government been so profoundly disconnected to the people?
Oh, yeah ... like 240, 250 years ago. Bloody revolution. Pirates pressed into service as contractors, except that when the US didn't need their services, they kept ... blowing $#!+ up.
Huh.
Oh look, my favourite TV show is on. Let's see, comfortably numb, or rage against the machine?
Each seems equally effective from this vista.
"Press to test."
(click)
"Release to detonate."
I know you think you are a god whose word should be blindly taken by the bowing and scraping masses, but I it's not true.
Some evidence is required to back up your otherwise-specious claim.
Infuriate left and right
and why are consultants not even easier to outsource overseas?
Actually a fair number of my customers are overseas, so it cuts both ways.
LedgerSMB: Open source Accounting/ERP
Most of us pay our 1040s and that's that. Many of us can't understand why paying taxes is complicated, because we file a 1040 take the standard deduction and move on with life. Obviously if you're a contractor, self-employed or a small business owner, you know better.
With that said I don't agree completely that avoiding taxes should be encouraged and is perfectly acceptable. The courts have decreed that avoiding taxes is not illegal, not that its should become a national past-time. Firstly, on principle, anything that is not illegal is not necessarily OK. Many things are legal that are not OK, including flipping off passengers in traffic and jumping in front of the line at the grocery store. Second, by finding loopholes in the tax law, you are finding was to avoid carrying your burden. It should not be on individuals to be deciding for themselves how much they should pay in taxes. A lot of confusing debate goes on about who is carrying the tax burden, and no one really knows since we're all not really paying taxes the same way. The government still needs the money, so the result will be increased taxes on everyone else. Finally, by putting it on individuals (particularly those with large accounting staffs that still represent less than 1% of their corporate revenue) to find loopholes you encourage the complicated tax code we have today.
So I agree that our tax code is bizarre and complicated, and I can understand that taxes are not straightforward for very many, that for small businesses it is a crippling overhead, I can't justify avoiding taxes as an upstanding activity. The tax code should be short and sweet, with a minimum of exceptions. But I think it will continue on as-is, because those benefitting from finding loopholes would not appreciate what happened to them if they had to pay the full burden the general public has agreed to (although I suspect we could then get away with lowering the tax rate if we did so).
If your oldest AR is 60 days count yourself very lucky. While my dad's small business has normal net 30 and at most net 60 terms with his customers he often has outstanding bills for 120-180 days. When a single order can be $40k+ in materials that means he sometimes has to take out a loan to float these delinquent accounts.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
One way i solved this issue with late payments was by adding a 3% per month late charge. They had 30 days from the invoice to pay.
Its part of the terms before any work is started
Rich people spend a way, way smaller percentage of their income on retail goods than the poor.
So? They still spend more, meaning they will be taxed more. Can you show me where in The Constitution where it says that those who have more, must pay a higher percentage in taxes?
They also have the means at their disposal to easily avoid such a tax, assuming the government doesn't try to tax goods purchased overseas and never brought in to the 'States.
Huh? If you buy a house, you pay taxes. Rich people buy houses. If you buy furniture for that house, it is taxed. Rich people buy furniture. If you buy a boat, car, ceiling fan, computer, whatever... it is taxed. Rich people buy such things. Those items will be taxed. If a rich person bought a surfboard in Haiti... why do you care? When they bring it stateside, it will be taxed.
Now, think about how much money "rich" people make. If I gave you $20,000,000, you would pay pretty hefty taxes on it this year because it's all counted as income. Now, how much money would you make NEXT year? I assume you invest the money somehow, but let's say your investments don't do so well. Let's say you broke even. How much money would you pay in taxes? That's right! $0.00, no matter how well you lived or how much money you spent, you would owe $0.00 to the government because you made $0.00 for the year. Hell, you might even get money back!
Let me tell you "rich" people spend money. I have a cousin that owns his own custom home building business. His company built a house for demo purposes. My cousin lives there. It's a very nice home that they may show to potential customers about once or twice a year. My cousin, of course didn't have to pay taxes on the house. He didn't have to pay any income taxes on the money that bought the house. The business called it an investment and used it as a deduction, meaning that it LOWERED THE TAXES THE COMPANY OWED, and does so every year as the house "depreciates". Of course, the company also has to furnish the house and provide work vehicles for my cousin and his wife. Yard upkeep, home maintenance, vehicle maintenance and all living expenses that are not food or clothing, are paid by the company because the company owns all the stuff.
In years that the business does well, my cousin does well salary wise and pays good taxes on it. In years that the business does not do well, my cousin doesn't do as well and may not pay any taxes at all, even though he is still living like a king.
Now, if you look at various CEO's around the country, they are living well beyond their income levels because many of the things they'd normally have to purchase are provided by the company and counted as expenses when tax time comes. Private planes, nice cars, limo service, even homes are all company owned so that the person using them usually doesn't have to claim them on their taxes. Of course, the company writes it off and doesn't pay taxes on it either.
This is what a sales tax will prevent.
Further, this has the effect of dampening consumer spending, which, despite what the trickle-down dumbasses say, drives the economy. This recession has given proof enough of that, for anyone who couldn't figure it out on their own.
This recession didn't start until Democrats took over Congress. If you read the Constitution, you will find out that CONGRESS CONTROLS THE ECONOMY because CONGRESS WRITES THE BUDGET! It has nothing to do with "trickle-down" economics. But since you brought it up, who do you work for? Is he a wealthy or poor. If he were poor, would he be able to hire you?
You don't have to look too hard to find stories about business owners complaining that loans and tax cuts won't help them much, since they can't hire more people unless they've got the orders to justify it.
Maybe if people like me were not paying so much in taxes, I'd be able to buy more stuff meaning
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
The fact is, your real tax rate specifically determines what goods and services you get for your dollar. That means taxes applied to your purchases - no matter what they are called - reduce the ability of your dollar to function on your behalf.
You are implying that if that tax rate was lessened, I would somehow have had "more money" to spend on plumbing. But that is not necessarily true because prices are set by the market not by the tax rate. Even if the plumber had to pay $0 in taxes, he would still charge me the same $100 if the market would bear it. The taxes that businesses pay are simply a cost of doing business, which is only one input into price.
My hope for you is that someday you actually understand what is being done to you.
This seems really melodramatic. You said that maybe Stack could not have afforded his house if he had paid his taxes, but I pay my taxes every year and presumably so do most of the businesses where I spend my money. And yet, I have little problem affording my house and many businesses turn profits. Taxes are simply a cost to be managed. It's a very good idea to minimize them--yes--but IMO it's ridiculous the degree to which some people get emotionally involved in the concept of taxation.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
"International Terrorism: Image and Reality" by Noam Chomsky, notable linguist and self-declared Libertarian Socialist ... The answers are not difficult to find. We must simply abandon the literal approach and recognize that terrorist acts fall within the canon only when conducted by official enemies. When the US and its clients are the agents, they are acts of retaliation and self-defense in the service of democracy and human rights. Then all becomes clear. ...
http://www.chomsky.info/articles/199112--02.htm
"""
There are two ways to approach the study of terrorism. One may adopt a literal approach, taking the topic seriously, or a propagandistic approach, construing the concept of terrorism as a weapon to be exploited in the service of some system of power. In each case it is clear how to proceed. Pursuing the literal approach, we begin by determining what constitutes terrorism. We then seek instances of the phenomenon -- concentrating on the major examples, if we are serious -- and try to determine causes and remedies. The propagandistic approach dictates a different course. We begin with the thesis that terrorism is the responsibility of some officially designated enemy. We then designate terrorist acts as "terrorist" just in the cases where they can be attributed (whether plausibly or not) to the required source; otherwise they are to be ignored, suppressed, or termed "retaliation" or "self-defence."
"""
There are many related comments by Chomsky on this:
http://www.google.com/search?hl=en&source=hp&q=chomsky+terrorism
Even a book:
"excerpts from the book: The Culture of Terrorism by Noam Chomsky"
http://www.thirdworldtraveler.com/Chomsky/Culture%20of%20Terrorism.html
http://www.amazon.com/Culture-Terrorism-Noam-Chomsky/dp/0896083349
More here:
http://en.wikipedia.org/wiki/Noam_Chomsky's_political_views
And, not by him, but here is an essay by Prof. G. William Domhoff on why non-violence is the only moral and rational approach to social change in the USA:
http://sociology.ucsc.edu/whorulesamerica/change/science_nonviolence.html
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Chapter 8 of How To Save Jobs contains a nice discussion of the U.S. health care system. Since David Gewirtz has kindly made this book free to download, I've taken the liberty of quoting more than I might otherwise, concerning bankruptcy and rescission (emphasis mine):
Three-quarters had health insurance. Put those two numbers together. 60% of all bankruptcies in America were driven by people who couldn't pay their medical bills, most of whom actually had health insurance.
...
Most insurers claim the rate of rescission is fairly small. In testimony before the U.S. House of Representatives Committee on Energy and Commerce, Don Hamm, CEO of Assurant Health stated "Rescission is rare. It affects less than one-half of one percent of people we cover."
And yet, according to a story by Karl Vick in the September 8, 2009 issue of the Washington Post:
In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.
Amazing statistical coincidence that the rescission rate mirrors the relatively low rate in modern society of personal health catastrophe.
Gewirtz is an odd duck, with significant background in both politics and technology. If your response to Gewirtz is to pigeon-hole him for easy target practice at one end or the other of the ideological spectrum, good luck with that. If he's as clever as I think he is, his misguiding jingoism on "buy American" could be cured by a close listen to Rustici on Smoot-Hawley and the Great Depression, another flawed discussion which nevertheless can not be resolved by means of a circular pigeon dance. In the end, I rejected about a quarter of what Rustici puts forward, but felt edified by the other three quarters.
I'm about halfway through The Baroque Cycle which has an an organizing theme tumult in the understanding of financial markets and the stability of credit and currency. If Neil's super-great (mostly paternal) granddaughter Nellie Stephenson were to write the Barack Cycle several hundred years from now, it would focus on the present tumult and disorder in our health insurance industry, with lobbyists in Washington taking center stage as the imposing yet perhaps doomed palace of Versailles.
America fails to reform it's health care system because it is now in the late phase of the French disease, terminal narcissism. Debate rarely turns on what needs to be done until coinage runs short. From what I've read, mission accomplished. Will the American empire make it to the next gas station running on fumes? America is not to be underestimated, but far enough back, hard to believe, neither was France.
These kinds of laws are a lot like Smoot-Hawley. The elite has a shallow hand-waving understanding of how this implicates tax revenue (shared by few of the wonks), while totally failing (with scant concern) to wrap their minds around the larger consequences.
Fortunately, there are economies gaining steam in other corners of the world less set in their sumptitude, that sucking glissando you hear as you circle around the velvet drain pipe.
In a vigorous nation, it might be prudent to fix this while time remains, starting with a cold hard look at some of these small fish nourishing larger ponds.
Fine, we'll do that as soon as people stop trying to game the system by inventing ever-more complex ways to avoid paying their taxes.
Precisely. The latter one follows the former. Also, as the tax code is currently used for behavior modification as well as actual revenue generation, we should not condemn those who alter their behavior to present a smaller taxable profile. That was the intended effect. If we don't like it, then we shouldn't put all kinds of behavior-modifying loopholes in the law!
Until law making authority is granted to another body (read: our constitution is re-written), then we'll never have a simple, straight-forward, tax code.
Fie on you. I think you're right. Part of the problem is that lawyers in legislatures have a slight conflict of interest: they have no interest in creating good laws, or striking bad (or even good) laws, but they have a direct financial interest to creating more laws.
I'm not saying the code shouldn't be amended. I think it could be simplified quite a bit while remaining quite effective. But I don't hold any illusions that it *will* be simplified without a military coup.
Eventually, we'll get to the point where it's almost ready to happen. At that point the politicians on watch will either wise up very quickly and re-form just enough to keep their heads...or they won't. We seem to have a pretty high tolerance for intolerable tyrannies, though. Does that make us stoically noble in some way? I'm going to claim it.
Can you be Even More Awesome?!
Have a tax code that's short enough for a single person to read completely through in less than 2000 hours of reading (leaving two weeks for actual work)
Become a New Zealand citizen... seriously.
Our tax code is 3408 (PDF) pages long: http://www.legislation.govt.nz/act/public/2007/0097/latest/viewpdf.aspx . Most of that is irrelevant and can be skimmed (contents: http://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1512301.html). You would need to revoke your US citizenship: "If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad." as per http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html
Other reasons:
Fundamentally, it seems like the New Zealand IRD is really interested in not wasting your time. I cringe at the stories about the IRS, and the dealing personal friends have had with it.
PS: Our state and private health care systems work too (from experience. Also our health stats mostly rank better than the US). If you want to pay for private health care (i.e. health care beyond what your taxes pay for) it is cheap, available and it also works.An expensive all-options private plan for an unhealthy 40 year old is about USD30 per week. http://wellbeingcalculator.southerncross.co.nz/OnlineQuote.aspx (I hope accessable from a non-NZ IP address). Get a quote by selecting a plan and answering 4 questions: (Q1) Are you a non-smoker? ie. have not smoked at all over the past 12 months, (Q2) Do you eat five servings or more of fruit and vegetables per day? (Q3) Do you exercise three or more times a week? (Q4) Do you drink: Female - two or less glasses of alcohol a day (14 per week)? Male - three or less glasses of alcohol a day (21 per week)?
Happy moony
Both of the articles linked in the summary (which you obviously did not read) stated that computer programmers are the least likely group to be dodging taxes as consultants, compared to other occupations. In other words, your flawed analogy is completely backwards.