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IRS Wants a Cut of Sales On eBay and Craigslist
Ponca City, We love you writes "In 2009, $60 billion worth of items were sold on eBay, meaning 'extra' money for many sellers, whose activities may provide them with taxable income. Now the Washington Post reports that beginning next year, a new law will require 'the gross amount of payment card and third-party network transactions to be reported annually to participating merchants and the IRS.' Also, for 2011 tax returns, 'taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions' will receive a new IRS form, known as 1099-K, for reporting the proceeds. The new tax issues shouldn't be a concern for people who sell just a few small items online for less than they paid for them, because as the IRS points out, income from auctions that resemble a garage or yard sale 'generally' isn't required to be reported. But if an online garage sale turns into a business with recurring sales and purchases of items for resale, it may be considered an online auction business. 'Generally, transactions resulting in a gain are reportable, regardless of whether the taxpayer is conducting a business,' says Gil Charney, principal tax researcher at The Tax Institute at H&R Block. The real reason behind the law is simple: Research shows taxpayers do a much better job of reporting taxable income when they know the IRS is receiving information about their transactions."
How exactly is this news? Governments have wanted to tax everything since well since they were established it's what they do.
You don't sell things on Craigslist; you simply find buyers, meet, and sell it on your front porch (or somewhere in public).
I'm looking at this from a slightly different point of view. If I, as a small business, accept credit card payments, I'd be insane not to expect the IRS to have its hooks into data on my receipts. But if I pay someone $600 for stuff, the IRS is going to expect me to track this for them? That means I'll have to get taxpayer IDs from any vendor I buy stuff from.
Try this some time: Walk into a local shop, buy a load of crap and then whip out your 1099-K form and ask them for their social security (or taxpayer ID) number. Odds are that the clerk will think you are nuts.
Have gnu, will travel.
All businesses no matter how large or how small or informal will have to file a 1099 for every entity to which they pay more than $600 in payments for goods and/or services in a year. This includes everything: the part-time plumber, your landlord, the power company, Office Max, WalMart, etc. You are going to have to get Best Buy's TIN if you purchase a server from them. The average USA small business will need to file about 600 every year.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
And if you actually read the details, you have to sell over $20,000 and have 200 transactions in order for it to be reported. This is not for people who sell their cell phone every 3 months.
$20K is nothing; I can sell my classic car in my garage and exceed that amount. And since the regulations are not yet written (1099K is still in draft), the "and 200 transactions" is still up in the air. Knowing the desire for tax revenues, my opinion is that it'll end up being $20,000 OR 200 transactions.
Additionally, if I sold my classic car for $25,000 (about what it's worth, and about about what I've put into it over the years), and had two garage sales where I sold a lot of my old clothes, computer parts, records, and trinkets (easily beyond 200 items), I could end up having to report. Having 50 transactions at a single garage sale is not that uncommon; having 4 garage sales a year (especially if someone is out of work and looking to raise money by selling assets) puts you into this new "you're a business even though you aren't" category.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I work with some of those tea baggers. Sometimes I can't believe the stupid shit they say & think
Never mind:
* The record national debt run up by Smirky & Snarly
* The national/global economic crash caused by 8 years of complete republican control
* 2 Unwinable wars in muslim nations for the benefit of the American multinational energy and military industrial complex corporations
disclaimer for the trolls: I hate all politicians and believe they all need to be dragged into the street and shot as traitors
"Suppose you were an idiot...and suppose you were a member of Congress...but I repeat myself." Mark Twain
Flat taxes are disproportionately hard on low-income earners, while they give the wealthy a huge break. They're not fair, stop pushing them.
For every problem, there is at least one solution that is simple, neat, and wrong.
It's a method that is bound to gain enormous complexity - as it has - as the definition of "income" is stretched and mutilated by the government.
Actually it seems like the idea of income taxes is incredibly straightforward. Any "income" (easily definable as any wealth you receive) is taxable at a certain rate.
Complexity comes from tax deductions and tax breaks, not the taxes themselves. The sheer number of tax deductions and various rules you can use to reduce your taxable income is crazy. If you drive a blue car on Tuesdays and Fridays but never on Wednesday and you have at least 4 children (but not more than 7) then you're eligible to get a $500 deduction for the Nancy Drew Blue Family Living Credit.
I agree that the system could be simpler, but for many people with simple incomes, it already is pretty dang simple (single 1040, maybe a 1099-INT for bank interest). It's when you have a large income and/or from many sources that it gets complex, and again, almost entirely due to tax breaks and reductions.
"What do you despise? By this are you truly known." --Princess Irulan, Manual of Muad'Dib
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They also do harmful things, and they acquire funding for that through taxes as well. This is one (of many) reasons that government powers and government funding should be severely limited. The main reason we have an out of control government is because they control their own funds, and now also their powers (the constitution no longer governs them.) Not only do they tell you how much you have to pay them, and how often, and why, and for what, and what words like "income" and "profit" mean, they can print money (via the banking scam), incur unlimited debt (stroke of a pen, no approval required), and spend it all any way they want -- and all without you getting a word in edgewise.
Legally speaking, you can't do squat about it. In the case of the US, that's the hallmark of a government that is not in the least responsible to the people who originally put it in place. That connection has been well and truly severed.
I've fallen off your lawn, and I can't get up.
With the IRS, you are guilty until proven innocent. The burden of proof is on you to show the IRS is in error, not the other way around.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
No?
Commerce clause? Ex post facto laws? Most of the bill of rights thrown out the window? Unjust wars? Insane debt levels? Financial system based entirely on an illusion? Judges asserting section five powers that there are no mention of in article three? Intellectual property laws that do more to deter innovation than to encourage it? Educational system that result in large percentages of the population indulging in rampant superstition, and largely unable to read, write or think at a level I'd accept for secretarial work, never mind the tiny (and largely wrong) collection of "facts" they bring with them? Have you noticed that almost our entire manufacturing base is no longer present and accounted for? I could go on - for pages - but it's pretty depressing.
Wait -- I should have asked -- do you live in the USA? Because that's the government I was speaking of. If you live somewhere else, you might, I suppose, have a government that's just fine. I doubt it somehow, but I accept the idea in principle. The US government, however, is an utter clusterfuck. You'd have to be the most servile kind of blinders-wearing sycophant to think otherwise.
I've fallen off your lawn, and I can't get up.
And I suppose you don't care that the Fair Tax is a ridiculously regressive tax? Because it taxes buying power, it disproportionately effects those who do not save or invest but, instead, live paycheck to paycheck. So, if you're poor and you have to spend all your income on rent and food, the fair tax hits you hardest. If you're rich, and you are able to invest half your income, and you spend the rest, you're only taxed on half your income. Thus, the rich pay a lower real tax rate than the poor. (Add to this the fact that the marginal value of $1 is far less to a rich person than to a poor person to begin with and the system starts to look downright dystopian.)
The obvious way to fix this that I've heard some propose, is to allow exemptions for the poor, etc. But now you're getting back where we are now, where individuals have to keep track of their finances and report to uncle sam for their rebates. Except now individuals have to keep track of every single purchase, rather than just their annual income from their employer.
And this gets at the broader point: taxation is a powerful and legitimate tool for achieving public policy goals. But if you use a national sales tax, you either are robbed of those tools for the sake of keeping taxation simple, or you and up with the worst of both worlds: a highly regressive taxation system that is still a nightmare to administer.
caritj.org
Why, by running high inflation and heavy regulation & taxing of businesses.
High inflation ensures that this big miserly border-line treacherous criminal will lose any money he saves in banking account, etc, forcing him to invest that money into businesses, if he wants to maintain the value of his money.
Once you've forced him to put the money into businesses, then you take the money from the businesses with various fees and what-not. (Some tweaking and fixes will be necessary, such as banning of owning gold and silver by members of public, as well as a ceiling on interest rates banks can pay on savings, but the general idea remains the same.)
There are many, many ways to "spread the wealth around" even without a progressive income tax. Progressive income tax just makes it easier.