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Can Computers Be Used To Optimize the US Tax Code?
FatLittleMonkey writes "Science fiction author David Brin wonders whether the US tax code, described by President Obama as a '10,000-page monstrosity,' could be dramatically simplified. His idea is about using computers to shuffle the existing system: 'I know a simple way the sheer bulk of the tax code could be trimmed by perhaps 70% or more, without much political pain or obstructionism! ... it should be easy to create a program that will take the tax code and experiment with zeroing-out dozens, hundreds of provisions while sliding others upward and then showing how these simplifications would affect, say, one-hundred representative types of taxpayers... Let the program find the simplest version of a refined tax code that leaves all 100 taxpayer clades unhurt. If one group loses a favorite tax dodge, the system would seek a rebalancing of others to compensate. No mere human being could accomplish this, but I have been assured that a computer could do this in a snap.' With all the talk about Open Government, perhaps the computer code currently used in tax modelling could be released to the wider community, leading eventually to a Folding@Home type project."
No
nuff said.
That procedure would lead to the same results. Maybe some redundancy would be removed, but obviously he doe not understand why the Tax system is complicated. Its the politics, stupid. Many of these 10000 pages are just small little promises somebody has given to *his* voters at some point. And nobody wants to cut such things, because one time this starts, it could be soon the promises to *your* voters. So no matter how absurd something is, it will stay there forever.
Would work at face value. Genetic algorithms can easily be used to solve something like that.
However I think taxes have more of an effect than just bringing in money, if the system decides to highly tax something, it might cause an economic downturn on that item, which could have ramnifications. In fact, the more popular the item is, the more cash you'd get if you raise the taxes on it.
Why, isn't the tax code unconstitutional in the first place? Hello. Am I the only one that has done research on the tax code(s). Any honest judge would agree.
Pitch Forks: check Torches: check Angry People: check - A. LaChasse V for Victory
The system will still not be understandable, but this time computers will be blamed.
As long as the Criminals-in-Congress (TM) are running the show it'll never fly.
Sounds like a job for dpkg
and just go with a flat 10% across the board. Then those that make the most will finally pull their own weight. And spare me the non-sense of the rich or corporations creating jobs because its bull shit.
My karma is not a Chameleon.
It would make all the people working in Tax departments unemployed. So it won't happen. Simplifications of bureaucracy always cost jobs.
Scrap the whole thing and start over. All the cruft is from decades of putting in and taking out different provisions for thousands of groups of people. Start with whatever rates you want. Then stop. What's the point of taxing someone 30%, then giving them a mortgage deduction, education deduction, horse rodeo operator deduction, etc.? Same with corporations; if you're going to give them all tax breaks on their water coolers, just drop the rates. The IRS will be pissed, thousands (millions?) of accountants will be pissed, and everyone else get 4 hours of their lives back from stupid paperwork each year.
Vote monkeys into Congress. They are cheaper and more trustworthy.
Why don't you trust me to rewrite the entire tax code? My program will tell you everything's just as it was. I promise it'll be entirely coincidental that company's sister company is 100x richer within 5 years.
a tax system is like an ecosystem. If you change it brutally, people will find holes and adapt their behaviour in order to pay less taxes while remaining in total legality.
If you change it too often (like in France), you will penalise business (business likes fixed rules).
Computer models can help in modifying the system, but you can not improve it without a very deep understanding of the current system. You can not just say it is crap, even if it is true.
if (PersonIsRich) then
TaxToPay = 0;
else
TaxToPay = 101 * income / 100;
because there's PLENTY of human factors in there.
the computer wouldn't know how to value how a tax affects favoring of different types of crops, for example. the "computer" wouldn't know if they should favor diesel, logs or coal. the computer wouldn't know what are "normal" amounts to spend on medical bills(which is necessary and which is just excess).
of course, you should have read your asimov. you need a full grown caring AI to run a tax system - and then you're better off not telling people that it's a computer choosing which state gets farm benefits. but a beefed up excel, sure, yeah, it would help, but there's already that in use. a large part of modern information processing technology was invented for precisely that.
now what the computer possibly could do would be to help people understand how the tax code is currently set up, so they could plan their businesses better, and so that changing the taxing wouldn't be so impossibly slow(because of redundancies and complexities). and to rewrite it in more understandable wording, that's what a computer could do, help in simplifying, but if you start letting it do politics you're doing the politics of the guy who set up the magic computer which assuredly could do this.
world was created 5 seconds before this post as it is.
We have such a program in France. Its based on anonymous Tax data from the French IRS and allows one to play with the different tax types. It's neat and you can design a much simpler and "better" system but the problem is that it's the easy first step. Passing changes to the tax code is a nightmare because there's no way to make pareto improvements. Some lobby will always bitch that your minuscule change will destroy XXX jobs somewhere and throw hardworking citizens out of their homes or something. For politicians, the status quo is the best option because otherwise you're pissing some voters off.
Basic literacy: It helps you not look dumb in front of others!
Sales Tax:
5% to the local community
3% to the local State
2% to the FedGov.
= 10% tax on everything sold. Easy to calculate and pretty fair (spend more, pay more).
Get rid of everything else...
It certainly has to be someone who has the resources to do so. No offense, but your statement leaves only the poor and I doubt they create jobs. Usually those who create jobs do so because they have exhausted their personal abilities and need an extension of themselves, hence employees. Corporations are merely that process grown over a longer period of time.
Your flat tax rate is a bit low to sustain the government we have now.
The real problem with the tax system is not in its complexity, its just how high our taxes truly are. Adding the embedded taxes; this is the taxes rolled into every product and service you buy; to your income taxes, medicare, medicaid, social security, sales taxes, fuel taxes, and associated fees and such, and you would probably have open rebellion if people knew just how much it really takes from them.
Simply put, the Federal Government has grown too large from over promising everyone something. There is not enough taxable income in the United States to sustain the promises made on the local, state, and federal levels of government.
The reason Obama and Washington love to talk about reforming the tax system is not to reduce our tax burden but to increase government revenues. If they were truly serious about fixing the system they would be talking primarily about how to fix entitlement programs. Then top that off with a system where either we have a flat tax rate for all combined taxes at the Federal level with no corporate tax to hide even more or go to a consumption tax.
A flat tax will work but it must be honest. To be honest it means we cannot tax corporations. Every dollar a corporation pays in taxes comes from its customers, that means we pay those dollars. Whether or not you buy a particular company's product or service someone you do buy from may. This is the problem Washington faces, showing Americans their true tax load scares them. They don't want to admit the size of the beast. Also, everyone must have some skin in the game as the old saying goes. This means there must be a rate, I would not go below 10%, applied to all incomes. This must not be offset with give backs and entitlement programs. Everyone needs to know they are paying for it all.
An alternative to a flat tax would be a consumption tax. Even the rich would have no method other than not spending money to avoid this one. Using ideas brought forward with the Fair Tax we would rebate the cost of living to every family using the IRS. It is a simple process that far too many claim is impossible. After all, if they can track the current system they surely can trace a prebate system. The shock here again is that people will see their real tax costs. This is why Washington routinely has their sycophants in the media and academia falsely portray this plan. When they shoot this down it is fun to watch them march over to the flat tax and start over there too.
Ask yourself, why does he want to fix the tax system. If he uses the word "fair" in the conversation you can be assured of one thing, he does not intend to reduce the burden on the American people he merely wishes to increase the revenues to the Federal Government hiding behind common class warfare tactics
* Winners compare their achievements to their goals, losers compare theirs to that of others.
What will we do with all the computers we used to run the algorithms that intentionally complicated the tax code. Someone's not going to like this!
Rather than taxing productivity, how about we tax enjoyment?
(1) Scrap all taxes;
(2) Scrap the notion of limited companies, so a businessman becomes responsible for his own affairs and doesn't get to personify a non-person with all of the rights and none of the responsibilities;
(3) Introduce a personal consumption tax, which slides like income tax so the first $x is tax-free, up to say 90% consumption tax for people who spend more than $y/year on their own enjoyment. So someone who is just getting by on modest food and housing pays no consumption tax, while someone with a large house and a yacht for himself pays out a huge amount;
(4) Introduce a hoarding tax, again sliding, being a proportion taken from assets which are not being put to work.
(5) Finally, ensure that all work in foreign countries is taxed as if the work was done in this country. IOW, if you pay a Chinese company X to build Y, you are charged an amount equal to the tax X would pay if it were in your own country, plus any fines for not complying with worker regulations which would exist in your own country.
The goals are:
(i) to ensure that people gain fully from only productivity;
(ii) to prevent tax avoidance.
This is a complex multi-objective optimization problem, which can be solved a nonlinear optimizer. Maybe genetic algorithms or genetic programming is applicable. These methods need a good model to simulate the effects of the changes in the parameters. But.. without any knowledge of the US tax system, I doubt there is such a thing as an accurate mathematical model for it. Maybe there are some models available in the big consultancies but these would apply only to the taxing of their clients, and not to the 99% of the other taxpayers.
And maybe there is another way to solve problem. Since the tax code needs to be reflected in the databases of the authorities (IRS, correct?) it should be possible to attribute amounts of money to the paragraphs of the code . This would be something like a mathematical model, however it would be difficult to use it for simulation. And it would real data. Paragraph 2342 => 100.000 USD from peacock breeders => remove. Paragraph 4223 => 100 Mio USD from the car industry => keep.
It has been done for years. I have seen lots of talks at conferences where they discuss formulating and solving numerical optimization problems to maximize profits subject to constraints.
The first problem is getting all the tax rules formulated as constraints. Crazy tax rules can be difficult to formulate.
The next problem are the 0-1 binary variables for yes/no questions, so you can end up with mixed-integer nonlinear programming problems, which can be difficult to solve deterministically at large scale. But a lot of times, you don't need the global solution, just a good solution so methods like genetic algorithms or simulated annealing work adequately well.
If the numbers didn't have a $ in front of them it would be simple.
However that $ makes the amounts have an affinity for the right side of the equation (but only when that behavior is beneficial to the one doing the calculation).
This property if $ has thus far defied all rational endeavour to normalize monetary calculations.
I am very small, utmostly microscopic.
I have a better idea.
Did you make less than $24,000? If yes then you owe no tax. Otherwise,
Pay to the IRS 10% of the amount you made over $24,000.
If I didn't have absolutely NOTHING to do, I wouldn't be here.
Uhm... My reading of the GP was that any benefit to the winners would likely cause resentment.
You can't benefit the rich without causing resentment. You can't benefit the poor without benefiting the rich.
"No mere human being could accomplish this, but I have been assured that a computer could do this in a snap."
Sounds like my manager who seems to have in common with this science fiction writer that they don't understand the first thing about programming.
Creating a program to run through a set of rules described by a '10,000-page monstrosity' is no small feat. Running the program afterwards, yes, that's the easy part.
---
"The chances of a demonic possession spreading are remote -- relax."
If one group loses a favorite tax dodge, the system would seek a rebalancing of others to compensate.
There's should be "tax dodges" to start with. Either a tax is justified or not. The point of the system isn't that people should have little tricks to avoid paying their fair share.
Everyone is different and has different circumstances and needs. The UK has seen 2 attempts to implement a simple catchall tax and both have resulted in violent protests and government U-turns. Taxation ends up being complicated because it has to be seen to be fair. Every new tax has to have exceptions and get-outs and that makes it complicated.
There are 300 million separate cases in the US to take into account, not 100.
The spirit of laws lends themselves rather well to an if-then programming interpretation. Therefore, the current legislation could be rewritten into a programmatic form as a series of if-thens of case switches, where each evaluates a certain aspect of the applicant, changes a variable, and uses these variables to calculate the final tax value by multiplication and subtraction (for tax breaks and tax-deductible donations). The final code could then be stored in a subversion repository to enable easy versioning.
Hyperbole: I use it liberally!
Why work to simplify a problem system when there is a better, simpler, more fair way to do so?
Just abolish the IRS, let us all have our full paychecks, and implement the FairTax!
http://www.fairtax.org/site/PageServer?pagename=about_faq
http://www.fairtax.org/
The IRS and it's system certainly has ulterior motives. As do the congress critters who actually pass laws regarding taxes.
I can simplify the tax code without a computer. Just strike all the existing income tax laws, and in their place, pass a law that your gross income times .1 belongs to the government. No deduction, no shelters, no credits, nothing. The same tax rate applies for married, single, youth, elderly, businesses large and small, no matter who you are.
However, the tax system isn't about revenue for the government, so much as it's about politics, so my system would never be adopted. Politicians use the tax system to make a zillion little groups of people feel "special", and to redistribute wealth according to whichever special group has the most political clout.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Repeal the Sixteenth Amendment.
What David Brinn misunderstood is that it has been attempted ... with miserable results.
Here is a C/Net Article from 2007 documenting just how horrible trying replace the current IRS computer system has historically been. I remembered when it totally failed in the 1990's, and I was reminded of the axiom, "if it cannot be done on paper, it cannot be done on a computer", a reference to computer efficiency rather than the uninformed perception that computers can work miracles.
Because a miracle is exactly what it would take to model the IRS code in a computer. As soon as one would get into the process, Congress would add another 1000 pages, and modify 500 others! This would be an annual issue, and as such, the model would never be finished.
Taxing should be simple and fair and the easiest way to do that is to tax income on people and tax sales on businesses, at a flat rate. That would cut the 10,000 pages down to one or two and STOP CONGRESS from messing with it every year.
Well, maybe it would slow them down.
Lou
...stereo type smashed to bits, in this case "Science Fiction authors must be incredibly smart."
Throw the lawyers out and let the engineers have at refactoring the laws...the same would be true of tax code.
Drop all tax breaks and subsidies. Then focus on simplifying the taxes.
I prefer the "u" in honour as it seems to be missing these days.
People change their behavior in response to changes in tax law; how can that be predicted and taken into account?
When I worked for H&R Block on the early Rapid Refund project during the start of the IRS Electronic Tax Filing project, I was made aware of the Millions of Dollars spent Lobbying to make the Tax Forms MORE complicated, and tax law more unreadable.
So there is little hope of ever making it a simple thing to do. In fact the top 1% have no intention of educating the (99%) rest of us to the tax breaks (loopholes) that they receive.
While we are fantasizing, why not simplify all laws?
There are countless numbers of useless and stupid laws in the books that should be removed. But you know it will never happen.
The jerks who caused the problem like it this way, keeps them in business. Imagine what it would be like if software companies could make their products unnecessarily complicated and add even add useless code and functionality and bugs that would require constant updates. They would be printing money...crud, I think this might have happened already?!
Comment removed based on user account deletion
The income tax was introduced in 1913 at levels of like about 2% , for only the super rich.
90% of people didnt have to pay so didnt complain.
Govts got greedy, kept increasing the taxes, and lowering the thresholds.
Welcome to 2011, 110% of you taxes and more goes directly to banks, and none of it gets spent on 'society'
Liberty freedom are no1, not dicks in suits.
"If one group loses a favorite tax dodge, the system would seek a rebalancing of others to compensate."
How about we make EVERYONE pay taxes and stop allowing tax-dodging in the first place?
Maybe THEN we could balance the budget and get back to fiscal sanity.
He who knows best knows how little he knows. - Thomas Jefferson
All income, assets and debts are reported to the Norwegian Tax Administration by your employer, your bank and so on and so forth. The Tax Agency compiles it, automatically fills in your forms, makes sure that all the usual and reported deductions are taken care of and send it out for you to verify and/or change as needed*. If you have no changes, you just nod, smile and put the document away. If you have changes you fill them in (on paper or on the internet) and send back to them. If you owe taxes they will inform you when sending out the documents - if they owe you money back, you'll get it after a month or two. Works pretty well - and off course it will never fly in the US.
But it does show that you can combine a complicated tax code with a system that is easy to use for the majority of people. Off course things gets a little more complicated if you're running a business, but not horrible much so.
*) If for instance you have unreported income, assets, debt or deductions.
Everything in the world is controlled by a small, evil group to which, unfortunately, no one you know belongs.
Everybody dies. But the rich hoard money so that their children have power without ability to use it. Then they hoard more and pass on to their children. Who then hoard more...
So have a VAT on retail purchases and 100% inheritance tax. Why hoard it if it's only going to go to the government? If it's not being hoarded, it's being used to create jobs.
I typed that originally, of course, purely in jest... but now I actually wonder if something like that would actually be beneficial.
rm -r irs
Politics is Treachery, Religion is Brainwashing
The author doesn't get the fact that the IRS itself actually doesn't understand the system. You can't model a system that is so complex that the people in charge of enforcing it literally don't fully understand it.
What does it say about the US tax code when a highly complex mathematical simulation is required in order to straighten it out?
As others have said, scrap the system and start over. Give a blanket rate and limit the number and types of exemptions. As an EU citizen and US ex-pat, the tax code here is MUCH more simple, as others have pointed out. Once you get over the sticker shock of seeing your taxes upfront (holy crap... 23% VAT? WTF?), it actually works out better in the long run and costs you less. We also don't bury hidden taxes in everyday goods and services, it's all there up-front.
rant_mode /rant_mode
This is another peeve of mine, the US sales tax system. Why for the love of god, can't you add the sales tax to the advertised price? Everyone KNOWS they have to pay sales tax. Why the fuck do you add it at checkout, but not on the shelf or online shop? In the EU, any advertised price has to INCLUDE ALL THE TAXES you must pay when you purchase something. This includes things like airline tickets... ever considered how many taxes the airlines tack on on top of the advertised price? It's ridiculous, but at least here you see the ACTUAL AMOUNT YOU WILL PAY in the advertised price. No burying hidden costs in taxes, tacked on at the last minute.
To think that because the tax system is so complicated, a more simpler solution must exist without any by-effects seems to be inspired by a religious belief in technology as a solution to anything we can't figure out by ourselves. This belief is the product of not really understanding then nature of technology: to be able to solve a problem, one needs to understand it first.
Let's apply the same principle to exchange rates (let's use a computer to determine the exchange rates between currencies, those computers are so smart), democracy itself (no more need for arguments or elections), the distribution of rewards, making consumptive choices... I haven't read anything by David Brin, but I would expect him to specialize in fantasies about dystopian societies where a skynet-like system controls the fate of humanity.
A flat tax on income set at 10% (personal) and 15% (corporate or non-personal) with no exceptions and never to increase would bring in a steady stream of revenue to the government. A one-page income tax form would suffice and this could be automated to encourage on-line electronic tax filing. Since all taxable income, with few exceptions, is already recorded against a taxpayer's SSN the system could pre-populate many of the fields on the form to make it a simple process of verification for the taxpayer. Yeah, this idea is too simple and easy that the politicians and special interest groups would never accept it. American Revolution 2.0 anyone? Bueller? Bueller?
You mean well, but you're falling right into economic math traps from the 1970's.
"Fair" is never so simple as "one rate for all, hooray!" Once you convert it to % of disposable income it spikes to levels that would horrify you. Why? Because if a poor earner is only making $20,000 a year, ruthless first-order expenses might easily churn 19,000 of it. First order expenses are things like gas,milk-cereal-bread-butter-cheese-meat (discount!), heat, and rent (already split in halves!).
That's "calculator estimating", which is never real anyway. Add two new pairs of pants, two bottles of shampoo, $300 of car repairs, a cell phone, and four dinners at a pizza restaurant watching a game and you're hosed. $0 raw income left before facing that governmental $2000 in "fair tax".
So once you concede that, that's what the next chuck of tax code does. It says "Oh right, I can't tax you on your rent money." Now, getting back to your question, the mortgage deduction ALONE doesn't quite knock you below a 10% rate, but it *activates Schedule A*, like a giant video game. Then you 1-up your way to that 10% effective rate. (Really, gamers ought to love the tax code! It's Super Mario Goes To Washington!)
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
... I don't think that lots and lots of tax dodges are a good idea.
If you have to pay tax, why should some pay more than others? What if you'd just put a flat rate 10% on everyone's income? Eventually it'll level out without subsidies and whatnots. And it'd save a lot of fscking around, and thus a lot of wrangling and tax advising and tax clerk buyouts and tax clerks and... oh noes! it'd cost jobs! Yep, too practical. Let's go with the hideously complex computer program that nobody is going to check the output of so that will attract even more meddlers and lobbyists than electronic vote machines. And that is obviously The American Way[tm]. Carry on then.
You're more likely to get a complete rewrite of the US Constitution than you are the tax code. Not so many people are directly financially affected by a rewrite of the Constitution.
Nearly 100 years of pandering, back-scratching, paybacks, etc - I agree that a national discussion of what is a fair, simple tax rate would be great, scrapping the mess in favor of a simple, graduated tax scale with no deductions.
But let's remember that the deficits are not the result of people taking too many unexpected tax breaks. It's NOT a matter that the code is 'too complicated' to predict revenue or silliness like that.
The basic fairness of the tax code, and our national debt, are two separate issues.
Our national debts are the result of DELIBERATE overspending by the people given the responsibility of spending the tax money collected.
Think about it: when you walk into a restaurant and buy a meal, do you deliberately buy more than you can afford? Repeatedly? For decades? And then go to your boss and say "I demand a raise because I spent too much"?
Do you think we should rewrite something so essential and basic, when such a bunch of retards are in congress? Especially when whatever set of new rules they create is enforceable at the barrel of a gun?
-Styopa
There. optimized.
Now make everyone pay 25% sales tax as the only tax there is. Ever. Excluding food.
You can have all the fucking money you want... but if you ever spend any of it. we get our cut.
And if the item costs more than $100,000. 55% tax rate! You want your insane richboy rolex? We get our cut!
There. tax code fixed. people happy. rich people ticked off.
Everyone wins.
I'm a strict constitutionalist, for many reasons.
I believe that most people have forgotten the vertical separation of powers that was originally understood when the USA was set up, because the federal government has now assumed so much of the local and state levels.
Originally, the census was used to figure out representation, and also tax liability.
The federal government figured out that it's budget would be X dollars, and it would go to each state and ask for X*Y dollars, where Y was the number of people in that state, as a percentage of total population of all the states. If New York had 5 % of the population, then it (the state) would have to write a check to the federal government which was 5% of the total federal budget.
It was up to the state to decide how to collect the money.
In today's terms, Alaska could pay it from their money from oil, and any single citizen of Alaska might not have to personally pay a dime to the federal government. Nevada might use gambling taxes to do it. Texas might charge fees for exotic game hunters to pay it. New York might have a 100,000 page state tax code to collect it. But, it leaves it up to the state to handle it.
It also gets the federal government out of my pocketbook, and out of my hair. I might interface with a state tax division, but not a federal agency, that is less accountable to me than a state agency.
I truly think we have lost our way in a lot of this, and that the men that set up the USA were far more visionary, and fair, than anyone we know today.
Don't steal. The government hates competition.
Tax all profits proportionally to their size, up to a certain percent (75%, for example).
When I say 'all profits', I mean all profits, no exceptions.
Your reading comprehension is also not so good. It doesn't matter if things are rebalanced.
Suppose we run this process and reach a global optimum. A global optimum doesn't mean a local optimum everywhere. Somewhere, there will be one person who could be considered rich... with a lower tax bill! In other words, to SWPL'ers at least, "society loses".
This is the person they will point out in their smug NYT/Huffington Post articles. Evidence of a government conspiracy to benefit the rich! Obama = Bush, etc.
As a secondary point, there is no optimisation that benefits the poor without also benefiting the rich. If you find an optimisation that helps 99% of low-income people, then it's still a "TAX BREAK FOR THE RICH" if it also helps any "rich" person anywhere. Which it probably will, because rich people have the luxury of being able to employ tax experts to minimise their bills.
Few people understand that the primary reason the income tax code is so complicated is the difficulty of defining income, and the need to close loopholes left (or created) when defining what income is and when it is realized.
Does the nice painting hanging in my house give me income as it increases in value each year, even if I don't sell it? Does my house give me income before I sell it? How about the mutual fund I never touch? How about a mutual fund focussed on generating income (that I reinvest without touching)? How about a growth oriented mutual fund (that generates no 'income' because it owns stock in companies like Apple that don't pay dividends but reinvest the money to grow the value of the business and thus my mutual fund)?
If I am a CEO and get paid $1MM in regular wages in a lump sum at the end of a year of work, should that be treated as income and taxed differently than getting $1MM worth of stock options on day 1 of the year, that I hold until the end of the year and then sell? When do I get the income and how should I be taxed? Does the fact that there was some risk in holding the stock mean anything?
Does a business that takes in $1MM in cash but spends $1MM on new equipment that year earn any income? How about a graduate student who earns $25,000 as a waiter but invests $50,000 in his education that year? Why does the business get to expense its investment in the future but not the graduate student? Who gets income and when in those scenarios?
Yes, politicians further complicate this by favoring some forms of income (the business investment) over others (the student investment) but this does not change the fact that determining what is income and when it should be taxed is inherently complicated.
Many dumbasses argue a flat tax would easily 'fix the overcomplicated tax system'. It does nothing of the sort. Instead, most versions of the flat tax (like the one long promoted by Dick Armey that you 'could do on a postcard') fully tax all W-2 regular wages (like those earned by a waiter, forklift driver etc). as income and don't tax ANY investment income at all -- thereby killing the working class and enriching investors.
You still need to define what is income under such a flat tax plan, so you save little complexity. For example, you can be sure every CEO would shift anything left they still take as wages into stock options (anything left that is after they responded to the Bush cut to the max marginal tax rate on investments over 1 year to 15% while wages remained taxed up to 33%). If I were a forklift driver, I'd be pushing hard to take as much income as I could in the form of stock options!
So please, quit whining about the tax code being complicated. Determining what is income is complicated and most any 'simplification' will simply encourage people to shift to other versions of 'income' that get better tax treatment, causing the need to close those new loopholes, thereby opening other loopholes that need to be closed -- and before long you are at 10,000 pages of rules.
AHAHAHAHAHAHAHAHAHAHAHAH!
Oh wait... You were serious?
AHAHAHAHAHAHAHAHAHAHAHAH!
AHAHAHAHAHAHAHAHAHAHAHAH!
AHAHAHAHAHAHAHAHAHAHAHAH!
Sorry, but anyone who believes this is hopelessly naive and probably should never, EVER be exposed to the disgusting quagmire of depravity that is US politics.
They'd probably spontaneously combust if that happened.
*SNERK*
US Politics is FOUNDED on the principles of political pain and obstructionism!
Chas - The one, the only.
THANK GOD!!!
Tax reform would have to be based on this model: once set in motion, all decisions are final. A nice addendum would be that all the inevitable future tack-ons and carve-outs (read: pork barrel) would auto-expire in six years with no mechanism for renewal. And such exemptions to the tax code have to be voted on their own, not as an amedment to any other bill, period.
I've always thought that the tax code (and IRS) could be simplified into a simple shell script. Of course that means 100k IRS employees would probably be trimmed down to a couple thousand and all the money they waste every year "modernizing" could be saved so of course it won't happen.
Simplest answer is a flat tax, or fairtax. And don't start in on how the flat tax isn't "flat", or the fair tax isn't "fair". It's a hell of a lot better than the crap we have now. And the only reason it'll never fly is greed.
Leave it to the Government to propose something with the complexity of Folding@home to try and figure out the tax law. Two years and a few billion wasted taxpayer dollars later, the tax code will be decided by those who have greased the most palms. That's the way it's always been, and that's the way it'll continue to be.
The tax code complexity also "creates" (or sustains) jobs. This is yet another reason things will remain status quo, as the Government PR campaign right now is touting the creation of jobs, not the destruction of them.
The tax code is confusing BY DESIGN. Do you have any idea what you pay in taxes? Your neighbors? Your relatives? I'd hazard a guess that the government isn't even sure exactly how much you pay. You pay income tax, property tax, sales tax, and dozens of others. By the time you're done you've usually paid taxes on something you buy 3 or more times over. This is all part of a system designed to keep you oblivious to just how much you are taxed... any simplification would lead to the people getting an understanding of just how terribly they are getting screwed over and therefor will never happen.
The only way to improve the tax code is to eliminate the IRS and the FED to prevent the continued raping of the American people. This country never had a problem with deficits while it was on a precious metals standard. What happened to the IMF head should happen to ALL the international banksters.
10,000 pages down to about 50. And you can send your tax form in on a postcard.
Make congres discuss and ratify avery provision separately and with obligatory assistance every year and I bet those 10,000 pages would shrink considerably.
Anyone who thinks that there are only 100 representative classes of taxpayers when there are 10,000 pages of tax code (or so it's said), and about 300,000,000 Americans doesn't understand sampling theory very well.
Put my fist through my alarm clock with its ding-dong death inside my ear. - The Blackjacks.
"A strange game. The only winning move is not to play."
But they get paid quite a few times more than they produce. Therefore it all works out.
http://en.wikipedia.org/wiki/Tax_preparation
USA is spending ~£300billion a year on tax collection. That is just incredibly wasteful
I've lived in UK and NZ, both of which have sizable 15-20% consumption taxes (VAT and GST respectively) that are great because they are so cheap to administer and hit everyone. We also pay income tax (typically 20-40%, increasing with income) and high fuel tax (ie ~$9 per gallon in UK)
The key thing that politicians love about this system is that most voters never even have to do a tax return and as such are never made aware of how much tax they pay - it is deducted before they ever see it. I think the US system is better in this regard helping to keep people engaged and mindful of government spending.
One big cock up that NZ has made is not having a capital gains tax - so that increases in housing prices have been pure profit to the owner. This is a huge ongoing disincentive to buisiness investment cf property investment and has fuelled huge property price increases (and offshore borrowing to finance same), creating a culture where people believe property investment is the most sensible and reliable route to riches. This has been to the massive detriment of business and NZ's international performance.
but I have been assured that a computer could do this in a snap
Yes, a computer can do this, just let me write the code and show you the results...
Do you know how many people are employed in authoring, navigating, collecting, and enforcing our complex tax system?
Well, the IRS alone employs over 100,000 people IRS Employees and there are somewhere around 800,000 tax preparers Tax Preparers. So lets say 1,000,000 people are employed "doing taxes". This number is probably really low, considering all of the tax attorneys, consultants, etc. If you factor in tax educators, accountants, investment advisers, etc., you might get 2 or 3 million people employed by "doing taxes". There are around 150,000,000 people working in this country. Workforce So if we instituted a really simple flat tax, we would "unemploy" between 1 and 3% of our workforce. That would send us into an instant recession. So a simple flat tax won't work if instituted immediately. Even if the computer just simplified the code somewhat, it would still reduce employment. That would reduce the income generated by taxes and, as a result, nullify the work of the computer. So, I propose that the tax code be made so complex that it employs 100% of the US workforce. People work all day every day calculating taxes. This is a sure fire way to reduce unemployment!
Great warrior...hrmph! Wars not make one great.
This sounds like an P=NP problem to me. And considering the complexity, it's probably no more "solvable" than weather prediction is "solvable". It could make major improvements, though.
I8-D
This sounds like a great idea as long as it also makes the system more fair by optimizing out the tax cuts for the rich.
how is babby formed?
I believe this falls into a class of the traveling salesman problem witch is np complete.
It's very easy, I wrote this program long time ago, it's effective and now I am going to provide it for the good of economy, and thus by extension for the good of society for free.
Here it is, it calculates and outputs the income or corporate or payroll or SS or Medicare taxes (for you, US taxpayers):
echo 0
You can't handle the truth.
It wipes out all parts of the tax code and then set's ALL taxes from personal making $15,000+ a year to corperations making $99,876,432,112,435,231,144,32 a year to paying 15% of all income.
ALL INCOME. no not after X,Y or Z.. if you took in a dollar you give creepy uncle sam $0.15 and say thank you nay I have another.
Makes it really easy and the tax form from single college student to the largest corperation on the planet has a simple 1 page form.
Field 1 - How much money did you take in?
Field 2 - what is Field 1 multiplied by 0.15?
Field 3 - send up a check for the amount found in Field 2.
The government will have enough cash to fight 4 wars, have free public transportation including country wide high speed trains, and healthcare free for everyone.
But it will not fly... filthy rich assholes will whine hard about it. and filthy rich assholes run the country. (Note Rich people that do not whine about it are not assholes, only the whiners are the assholes... so yes there will be poor assholes as well as middle class assholes.)
Cities and states? they will NOT be allowed income tax. they can only claim property tax and sales tax. so all state and local income taxes will be ABOLISHED. the feds will give them a stipend just like they do now.
really simple, yet the mensa members that are our US congress cant figure this one out.
Do not look at laser with remaining good eye.
"that leaves all 100 taxpayer clades unhurt" In economics this is called Pareto efficiency. A change that makes at least one person better off and no one worse off. With complex systems it is notoriously hard to do. Undoubtedly the model proposed could create a better tax system, but nothing short of a miracle would be able to make the system better without making at least a few people worse off. Some of the cruft that would be cut out would hurt someone, and re-balancing another part of the tax system to compensate would affect more people than were originally affected by the cruft. Then you'd have to try and re-balance somewhere else, and that would affect people who weren't affected by either of the first two changes. The interconnectedness of complex systems makes Pareto efficiency fiendishly hard. To truly make the system better some people are going to feel pain. Trying to fix it without hurting anyone at all is like trying to live in the land of rainbows and unicorns. A very pretty dream.
So exclude the first $x0,000 of income, as most flat tax proposals do. Or have several brackets of increasing tax rates; 0-15k 0%, 16k-30k 5%, 30k-100k 10%, 100k+ 15% for example but no deductions.
Eliminate the elaborate tax system and you not only make it easier to comply with, but enforcement becomes simple and direct, meaning we don't have to waste millions on the IRS.
Schedule A shouldn't exist.
sudo apt-get purge Taxes
[sudo] password for Governemt:
Reading package lists... Done
Building dependency tree
Reading state information... Done
The following packages will be REMOVED
roads, bridges, air traffic control, police, army / navy / airforce, prisons, firefighters, justice system, schools, health care, welfare, parks, recreation facilities, sanitation, water supply
0 upgraded, 0 newly installed, 17 to remove and 0 not upgraded.
After this operation, $61.4kT in debt will be added.
Do you want to continue [Y/n]?
The JCT is nonpartisan
http://www.jct.gov/about-us/overview.html
has access to all IRS records and returns, and models how different tax proposals will affect general revenue and can do a distributional analysis of taxpayers.
If by automatically, he means reading the 10,000 pages, making sense of them and compacting them into a new intelligable document - then not yet surely. Maybe in another 10-15 years or so.
If he means human programmers understanding the 10,000 pages in all their nuances, and encoding it in machine readable form (without error) and then 'compacting it' and making sense of the machine generated result and turning that into a new set of legal documents that make sense to humans (again without error) - er good luck!
Surprise Surprise -- Billion dollar tax credits for software engineers who write tax-code optimization software for the government.
We can't rely on the mathematical model because people will change their behaviors in response to the new code. E.g., if we find that $2000 x (# bathrooms + # dogs) yields exactly the same results as the current tax code, implement that, people will suddenly find an affinity one bedroom houses (or trees) and cats.
-Dave
Or, replace the code with a two or three tier incremental tax on gross income, no deductions. Less than $16,000 (full time minimum wage), no tax. $16,001 to 100000, 15%. The portion over $100,000 28%. This would apply to individuals and corporations (since they now seem to have "rights" they can also pay taxes to protect those rights).
Fair, balanced and simple. It's an income tax -- no special brakes by the government to encourage behaviors or spending. If they want to do that, they can pass a special appropriation and issue a check to those who qualify, like the Bush Administration did.
Pros:
1) Everybody but the poor pay something
2) All income, regardless of source, is taxed.
3) No special interest groups
4) Simple (means lower enforcement costs, too)
5) Predictable
Cons:
1) No more shelters and loopholes
2) CPAs and Tax attorneys loose prestige (and income)
3) Wealthiest taxpayers/corporations will now have to pay taxes on all their income.
I think people are losing sight of the big picture here, taxes are violent and coercive by their very nature. Optimisation, efficiency, and simplicity at doing that are not necissairly a good thing. Maybe the Germans were efficient at cremating Jewish bodies too, perhaps it saved them a lot of money freeing up more capital for the German government. Whopie ! Yeah I know, gresham's law, ... sue me.
Use a paper shredder: it is faster than a computer for this kind of job.
I always thought that the problem was that people want "tax fairness" when it removes taxes they have to pay, and "tax simplification" when it shifts the tax burden to other people. For example, when I was in grade school, I always heard about how unfair it was that, if you were on the cusp of a higher tax bracket, then a small pay raise could result in less net income, because your taxes increase. Then, we got reform. Instead of saying "you are in the 20% tax bracket. Subtract your deductions and pay 20% of what remains", we complicated the tax code. We divided up the tax brackets so that high-income people calculate as if a fraction of their income exists in each tax bracket. We gave out an incredible number of new credits and breaks for parents, first-time homeowners, etc.
We aren't really worried about the complexity of the tax code. We're worried about cleaning out the parts that don't help us. Now, I can't blame someone for saying "hey, simplifying this tax will cost me $300, let me do a little extra math on this one", but I think the reason we don't already have a simpler tax code is because that isn't really a priority.
The implications of wholly mapping the tax legislation into tunable computer algorithms would be staggering.
We could tune and balance the flow into an agreeable form, open for anyone to view; graphs would represent the information in real time.
As the veil of information obfuscation is lifted, the initial shock of imbalance will cause significant amounts of whine and grief, but balance would ensue in time.
Please, get this done, it is the basis of any long-living realm.
-Anonymous Game Designer.
Next week jewelry ad:
Rolex now on sale for $99,999
I know this one!
Let's exclude the first x income per person, then we'll exclude the first x interest on a home mortgage, then we'll exclude child care, then we'll do several brackets of increasing tax rates! Oh wait...
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
How about adding an expire date to all existing tax laws. And new ones.
That way they would garbage collect themselves.
The tax code is not that long because they are not able to simplify it. They don't want to.
Let Larry Wall throw some regexs at it. It will become the greatest Perl script ever. It might just be the origin of sky net.
I always love it when someone uses the doublespeak version of the word fair. Fair is everyone paying the same rate. Unfair is singling out people who have worked hard and become successful to pay not just their share, but the share of others who have not worked as hard or become successful.
I do not concede that it is fair to make a group of people pay a higher rate simply because they were more successful. That is not fair. It is inherently unfair, especially when one considers that the ones paying the lower rates will be getting the highest benefits.
Here, let me fix that for you:
You, like a growing number of idiots, don't have a clue as to what "necessities" actually are. One does not go out and buy clothing every week, or even every month. One doesn't need a car if one lives and work near a bus line. One does not go out to eat four days a week or a month. I suggest you get a clue, you overly-entitled, middle-class loser and learn what you can live without.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
The tax form should be 2 lines:
How much did you make?
Send us 15% of that.
It is meant to prevent something like this: we're going to institute a tax to benefit my buddies from my home state. Or things along those lines. I'm sure, like many clauses in the Constitution, it has been bastardized over time.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer
GOSPLAN. That's the name for the required facility.
Besides raising revenue, a complicated tax code helps the government regulate our behavior. It's about control.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
I recall a statement made by James Burke in the last episode of the first Connections series where he talks about science and technology taking away the reassuring crutches of opinion and ideology and leaves only what is demonstrably true about the world. IMHO, a major tenet of the left wing ideology is how something makes them feel as opposed to whether or not something is practical, efficient, or cost effective. To the left, screwing over those "rich" people with higher taxes makes them feel good. The left sees such behavior as a moral imperative that is "fair" and no facts about who really pays what in taxes matters. $250,000 is rich to them and in their mind's eye they picture some heartless CEO or "greedy Wall Street speculator" when in reality that's what a typical Quizno's takes in every year. Given all of this, I have no doubt that the left will excoriate any attempt to use technology to remove personal bias and the nebulous concept of "fairness" (aka whatever is going to get them re-elected) in the tax code.
When the computer churns out a $100,000 yacht credit, people will see how badly the tax code favors the rich.
Politician: Bravo, Madge. Well done. Taxation is indeed the very hub of my gist. Gentlemen, we have to find something new to tax.
Second Official: I understood that.
Third Official: If I might put my head on the chopping block so you can kick it around a bit, sir...
Politician: Yes?
Third Official: Well most things we do for pleasure nowadays are taxed, except one.
Politician: What do you mean?
Third Official: Well, er, smoking's been taxed, drinking's been taxed but not ... thingy.
Politician: Good Lord, you're not suggesting we should tax... thingy?
First Official: Poo poo's?
Third Official: No.
First Official: Thank God for that. Excuse me for a moment. (leaves)
Third Official: No, no, no - thingy.
Second Official: Number ones?
Third Official: No, thingy.
Politician: Thingy!
Second Official: Ah, thingy. Well it'll certainly make chartered accountancy a much more interesting job.
Planning to be moderated ± 1: Bad Pun.
The sad thing about the tax code is that there isn't any underlying principle behind it, other than "we want your money." Generations of thousands of competing interests then went to work on modifying that, so that if you make your income in the "right" form or spend it on the "right" things, then you don't have to pay (or you have to pay extra, if you consider sales and sin taxes to be related to all this). But "we want your money" remained the closest thing the tax code had to an ideal.
If you replace its maze of exceptions with a simplified function that is mechanically derived, then you lose that last vestige of "purity," tainted though it be. At that point the tax code will not be just effectively arbitrary but even philosophically arbitrary too. There just won't be any defense or even flawed justification for taxes anymore.
Maybe that's not so bad, if you view it as a step toward the ultimate goal of destroying it (by further discrediting it first) so that it can be replaced by something more sensible. But if that's the goal, and if you've already premised that Congress would be willing to make such a sweeping change anyway (pretty idealistic) then why not work more directly?
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Just because you can use genetic optimization to modify the tax code doesn't make it optimal to do so. If you want to reform the tax system, reform it. Don't simply take the current mess and reduce complexity slightly. Because if you do, all those accountants out there would have to study the new system. There would be huge mistakes. Remember that in any given year, the tax code doesn't change that much. To suddenly release a computer-generated 5000 page tax code would be a huge, expensive shock to the system.
No, a radical change to the tax code must be a radical simplification, or you can't afford to do it.
I agree with the common sentiment (@bryan1945) that taxes should be drastically simplified. But there is a definite reason for deductions. It isn't fair to tax you on money you don't have, and for example, a company may take in lots of cash but have to spend money on R&D. The travesty is that companies are far better able to deduct than people. If Intel gets to deduct for R&D, the notion that people don't get to deduct for a degree program is absurd. And of course, there is all sorts of special one-off legislation protects specific kinds of companies and individuals. But the notion that deductions are somehow evil is not really a good idea.
The mortgage deduction has been criticized for simply encouraging too much home ownership. It is in the interest of the government to promote home ownership because it makes for stable prospering communities. On the other hand, an unlimited home deduction supports ever-bigger houses. However, in the current housing climate, no one wants to kick housing, because it's unclear just how much further prices might fall as a result, and we have enough problems in that sector already. The mortgage deduction is hugely skewed in favor of the rich of course -- the more your house is worth, the greater your deduction. One idea is to cap the mortgage deduction, so you only encourage minimal home buying.
Another proposal from a couple of congressmen caps deductions to 2%. I don't know about the percentage, but it's a reasonable idea. You have a basic standard deduction, and if you exceed that, you can itemize, but only claim up to a fixed percentage. That would force people to take the best deductions -- want to install solar to your house? You can, if that's the best economic course this year, but you can't deduct for something else at the same time. It would force you to pick and choose (or pay for it yourself).
The fundamental unfairness is that corporations play by completely different rules. But it's not trivial to clear that up. Should Intel, or drug companies, be taxed on their gross when they spend billions in R&D? It's not fair, because in a business like grocery stores, there is no R&D. Why shouldn't they be allowed to deduct their legitimate expenses? But the minute you agree that makes sense, definition of "legitimate" gets hazy. The system starts getting abused, which is why we have million dollar parties for the sales staff, the chairman flying in a private jet after retirement, all the abuses that we hear about. I don't have a solution, but it isn't a simple problem.
And Bryan, if you only spend 4 hours a year on your taxes, you're very, very lucky.
Republicans: "This system obviously isn't working correctly. It keeps telling us to tax the rich."
Technoli
All men are NOT created equal. Anyone who tells you otherwise is selling something, or has an agenda.
There are as many people with an IQ below 100 as above it. Don't believe me? Take a road trip to your local Wal*Mart or DMV. There will always be people who cannot earn a living wage, yet work up to their potential. "Getting off their ass" is easy for somebody with an education who has a bit of grey matter, but not everybody does. Globalism has shipped out most of the higher paying low skill jobs and they aren't coming back. And what about disabled people? Do you propose we throw them away? Maybe we should reintroduce some sort of Dickensian workhouse plan to keep them.
Pray that you never become disabled or have a retarded child under your "fair to successful people" plan. After all, we don't want governmental insurance supporting your lazy ass or your kid. And if you starve... Well tough shit.
And no, I am not disabled and do not have any disabled kids.
While revising the US Tax Code seems like a good idea, any attempt is doomed to an ultimate failure. Even if a "perfect" fix is found and enacted, the lobbyists and the Congress-critters they own will put back their favorite tax breaks. It happened in the 80s and all the tax code fixes before that. Often the tax breaks that they will put back in will be worse than the ones that the tax code fix eliminated.
Along the lines of the P=NP commenter, I see the problem of, well, this task involves the computer translating natural language into internal symbolism subject to rules of valid inferential reasoning, in order to achieve the desired solution (this would be a necessary thing to do if one is to check for redundancies, contradictions, loop-holes, and so on).
That would be no problem if the computer had a bunch of WFF in some synthetic formal language with appropriate grammar and lexicon available. But it doesn't. It has natural language as input.
I realize there is tax software out there that already have turned the tax code into a series of software states. (meaning I don't think the programs refer to rules translated from tax code and draws inferences from them, I think it just transitions from one valid state to another according to hard-coded conditionals that direct program flow. I don't know if that would be better as input than the tax code in English, but it might help as a verification tools)
So my final thought is, this would be a monumental project involving some serious AI, NLP, machine learning, and heavy linguistics. A very, VERY expensive project that would take years and would likely produce seriously erroneous results.
There are people who already understand the tax code well enough that the best solution is to just start from scratch rebuilding it. It'd be cheaper, and faster.
When we citizens speak of 'simplifying' the tax code, we generally actually mean two things:
- Reducing the complexity for people like you and me
- Reducing the advantages to corporations and the wealthy
We hope this means we pay less taxes, and someone else pays more. And we assert our virtue by intending that those who earn more pay more.
So Brin figures that analysis of the tax code could yield a simpler code with the same results. Um, we don't WANT the same results. Really.
No, really. We want that General Electric pays some reasonable tax on corporate income. If you believe, as I do, that corporate income taxes are just a cost that is passed on to consumers, you could live with abolishing it entirely and ending the facade. We also want to the very, very wealthy, who claim to have incomes in excess of, say, $1 million, should pay some reasonable tax. And that 40% or so of U.S. households that do have actual income also pay some reasonable tax. It doesn't have to be much, but the concept that nearly half of all U.S. households pay NO income tax is flawed. Besides trying to consider all this in the miasma of federal v state v local taxes, payroll v income, total tax burden, blah blah blah, look at how they 'pay no taxes'. Earned Income Credit. Sheesh. Simplify this, please. But the tax code is used for many purposes, and one is to win votes. Which also leads to creating heros and villains.
The tax code is so complex, it has to be increasingly made more complex to solve the problems it causes. Ergo, EIC.
If nothing else it breeds a lack of interest in the cost of government, and at worst breeds contempt on the part of many (that pay noticeable amounts) for the entire system.
JUST simplify the tax code, please. If you want to encourage industry and the economy, consider tarriffs. These worked once.
deleting the extra space after periods so i can stay relevant, yeah.
There's still educated adults who think laws are passed to optimize things? Really?
In addition, you clearly have no idea what a K-map is -- because this article just sounds like the application of a k-map (its underlying principle) to the current tax code. If the tax code says, "Everyone who is over 5' tall must pay $10" and "Everyone who is 5'6" tall must pay at least $7", you can eliminate the second rule because everyone who is 5'6" is also over 5' and therefore must pay $10 which is trivially greater than $7. Is that not what this article says?
Perhaps a better way yo simplify this would be a flat sales tax (perhaps 20%) on all items aside from a couple exemptions (namely food). This way everyone decides whether or not they want to pay tax, and how much they pay. If you're genuinely poor you won't be buying many new items, and thus will pay little or no taxes. The poor could always buy used items second hand in private transactions, avoiding the tax. Those who can afford new TVs, new cars, yachts, etc. can pay the taxes. Everyone pays what they can afford and are willing to pay, and there is no presumption that the government owns everything you produce and allows you to keep some of it.
Obama wanted to follow CA in having the IRS do your taxes for you with you merely sending in corrections (if there were any) thus saving a great deal of money for everybody involved.
CA proved such a system briefly until the lobbyists had it killed. Obama dropped the issue after discovering how difficult a fight it would become.
Simplification of tax code likely will threaten accountants enough that they will oppose it; while the public has no lobbyists to counter them. (one could say the representatives are our lobbyists but not anymore... marketing has trumped democracy; the people's "free will" is not strong enough, or has been merely an illusion all along.)
Democracy Now! - uncensored, anti-establishment news
Comment removed based on user account deletion
it'd also be nice to see a geometric algorithm used to redistrict precincts instead of the cherry picking that currently takes place.
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I tried to interest people in redistricting on the same idea. Have the politicians state what their trade-space is? state the value of having districts simply shaped versus ones that include more diverse/less divers people or follow natural contours like housing development or rivers. Then have a computer bark out lors of possible district maps.
No interest.
The problem is that politicians are interested in their own power not fairness. THey want certain companies in their districts. They want mayors that owe them favors in their districts. they want gerry mandered advantages.
If you want this you have to impose it by referendum or other force. they will not agree on their own accords.
In the case of the tax code. How is a politician supposed to promise intel a tax break if they give him a boatload of money? he can't unless the tax code is adjustable.
Some drink at the fountain of knowledge. Others just gargle.
Last I checked, we don't have a Disposable Income Tax. We have an Income Tax. If you want to be fair on an Income Tax, then you assign a single tax rate that applies to each unit of income.
As far as Schedule A goes, anyone can fill it out. You don't need a mortgage deduction to "activate" it. The only reason a lot of people don't bother with Schedule A is that there is a standard deduction which is often higher than what you'd write off in Schedule A. My mortgage deduction alone has never been higher than my standard deduction, but with all of the other write-offs available, it is higher. In fact, all of my other Schedule A write offs are usually enough to beat standard without my mortgage interest.
You know what I've always said? Fuck deductions.Tax deductions are already the most regressive tax imaginable. Oh, look, we'll reduce a rich guy's taxes if he installs solar panels, and we'll reduce the taxes of a poor guy if he does also...oh, you say he doesn't pay taxes, so can't use a deducation? Well, they, we'll give him no reward at all, I'm sure his contribution to society was worthless, whereas the rich guy deserved to be paid.
Look, if we want to pay people money for doing stuff, let's pay people money for doing stuff. If we want to give the people $X for doing something, they can take their damn receipt and mail it in, and we'll send them a check.
It would be a lot more obvious than all these idiotic deductions. I mean, I'm in favor of some of them.
But not the mortgage deduction, which helped blow up the economy. We don't want to reward people for buying a house, we want to reward them for staying in one place (And hence building community.) Which is a fuckload easier if we're just sending out cash based on documentation than giving them a 'deducation'. We give you $1000 for living in the same place 5 years, $2000 for ten, whatever.
And, as a bonus, human beings could stop doing taxes at all. Everyone's company could just pay them, because there's no actual 'options'. If they pay you X, they pay the government whatever X says on the tax schedule. That's it. The only people who would have to do their own taxes are the self-employed, and it would just be an easy 'add up everything you made, and look it up' (I'd also be against the weird semi-corporate existence of business deductions we allow, trying to figure out 'income' for the self-employed. You want to run your own business, you give it a fucking separate bank account, and it writes you paychecks, and you pay taxes on that money when it gets to you.)
If corporations are people, aren't stockholders guilty of slavery?
It would be an easier sell if someone implemented it, and went to the public with the optimized tax code in hand.
I want to optimize the US Tax Code with a chainsaw.
I write sci-fi for metalheads
Fair is everyone paying the same rate.
I agree. Everyone should pay the same tax rate.
Like, for example, the superrich, who have managed to wrangle a 15% tax rate for their income, which is in the form of stock gains, which results in them paying a lower tax rate than anyone but people making under $16,000.
Although I suspect, somehow, it's the people making under $16,000 that people like you are talking about.
If corporations are people, aren't stockholders guilty of slavery?
Make the first $30K income-tax free. Everything over that is one rate.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
The ideal tax code cannot be gamed, yet something ungameable has inscrutable logic. Something so unreasonable can only be passed by Nature, not Congress.
On the technical side, this isn't nearly as challenging a problem as Mr. Brin suggests. Taxation, of any sort, can be represented with very simple math models which could be evaluated very quickly for any "representative" population. Depending on the mathematical details, this is the sort of problem which could be solved on a typical laptop in the range of seconds to hours, even for very large numbers of variables describing the design of the tax scheme and populations of people. I would be a little surprised if someone economist hadn't already done this, because it would make for a pretty easy paper. A Folding@Home type project is massive overkill.
The trick, as anyone who has done a fair bit of practical optimization knows, is in how the problem is formulated not the method used to find the "optimal" solution. First, you need to define exactly the "goodness" of the candidate tax codes, or an objective function in optimization parlance. In this case we seek the simplest tax code; how do you define that? What seems simple in mathematics might not seem simple to your average taxpayer (e.g. just solve this transcendental equation for income normalized by PPP, acres of land owned, ratio of capital gains to income,... , and out pops you tax rate!) and vice versa. Brin suggests that you could just deactivate some rules and try to augment the effects of existing rules to compensate, but that is likely to leave a very small space of solutions.
Secondly, you need to define your constraints. Brin suggests a sort of "do no harm" principle. For the same revenue, this implies under the assumption of no cheating or loss that everyone will be taxed exactly same amount. It's very possible that there are no substantially simpler tax codes that would result in everyone in a truly representative population being taxed the same amount. So, you probably don't want hard equality constraints--you'd like to have *similar* taxes which were much simpler. So, how close of a match for the overall tax is close enough? How do you even define closeness across the whole population in a sensible way? (e.g. $X, X%, (X-X_0)%?)
So, even this "optimal" approach leaves a lot of room for "fuzziness," and therefore would still be a very political process. The implementation would be very easy, if we could all agree on how to do it. I wouldn't hold my breath on a computer-assisted solution being adopted anytime soon. We've made little ground on getting optimal redistricting to be accepted--and even where redistricting software is used, it's passed through political committees who tweak the input and outputs to get the overcomplicated and suboptimal solutions they'd like to see.
Deductions by and large do not affect "the rich," if you're using the IRS's definition of "rich" to mean anybody that makes $175,000 or more per year and is subject to the alternative minimum tax. They don't affect "the rich" since "the rich" get to take few to no deductions due to the alternative minimum tax. The alternative minimum tax phases out deductions and exemptions such that if you make ~$300k/year as a single person or a little under $450k as a married household, you get absolutely no deductions and pay the AMT tax rate on every dollar you earned. Deductions are all about trying to ensure that most of the general population do not have to pay much in taxes, since they are most of the voter base. "The rich" are at most a few percent of the voters.
Just "gittin-r-done," day after day.
Consumption taxes, when level and consistent are recognized as being really highly efficient and non-distorting in comparison to other schemes.
The thing that stinks is that those at the lower and lower middle parts economic scale generally consume just about 100% of their income.
As a result, this sort of tax hits them the hardest.
In European countries, this is offset by directed government largess. I propose that instead of directed government largess with all the complexity/inefficiency and corruption that invites let's have the government's largest expenditure be transparent, no strings attached supplementation of legally earned pay, per pay period.
That supplement could start at a fixed level and then match fractionally increases in pay with a lower fractional match as these numbers rise and eventually, past a certain good upper middle class income at which point the match should go away and it just becomes a fixed figure (if the desire strikes to have the this figure decline as income rises, you haven't set your consumption tax high enough). This paired structure would work like a progressive income tax in terms of who it draws revenues from and at what rate except that it automatically captures the black market, those who legally (but still annoyingly!) mooch off others, and those who inherited money from dead relatives and do nothing to produce on their own.
If the fixed initial supplement were generous enough to bring a household just past poverty level then you could make the statement that we have no working poor anymore... which would be a amazing. And if you'd take that level and add in current minimum wage, you could abolish the minimum wage, which would make more marginal people employable and provide a path for them back toward a law abiding existence. In fact I'd wager it would more or less solve the problem of unemployment except for those with pretty severe disabilities. If you have a good system for recognizing that and caring for those people then could solve the problem of poverty in this country entirely except for the very few who are capable of work, but unwilling to do so. I'm fine with letting them go.
Anyways, just a suggestion, and yes I know the consumption tax rate would have to to be very high to do something like this. I still think it's the right way to go.
Consumption tax, amount determined by income. Issue tax cards to everyone. when you buy something, it computes tax based on your income, which is looked up from IRS at point of sale after swiping card. Income gets recalculated on the fly based on how much you spend (if the system sees impossibly low income for the amount of spending you are doing)
Catches drug dealers, oil barons, people with offshore businesses, illegal aliens (who can no longer legally purchase anything until they get a green card, unless they pay max tax). No one gets away without paying tax. Foreigners and people without tax cards default to highest tax rate possible.
Problem solved. No more tax dodgers or fiscal problems due to bullshit tax shelters. Fuck them all.
No more tax returns to process, IRS shrinks to nearly nothing. People are paying the tax they can afford. People are spending what they can afford. Elderly/Fixed Income/Handicapped on social security pay minimum tax rate which is less than what they pay now for sales tax.
The IRS, as we know it, needs to be dismantled and shut down, to be replaced with a ruthlessly efficient consumption tax system, the amount of which is based on income, or spending if reported income is obviously artificially low.
Don't kid yourself. It's the size of the regexp AND how you use it that counts.
I had one taxable event not usually covered by the regular forms and pamphlets. The tax professional I ended up hiring after scratching my head about it for many hours took care of it using his professional expertise. That meant interpreting the code the best way to minimize my taxes, not get hit with an audit, and then not have to pay if audited. None of the language in my situation could be reduced to an equation. There's the rub.
... can be achieved by predictive analytics software already available. Someone just needs to pipe the tax data into the system. Its really quite trivial to accomplish from a technological perspective. Its the political perspective that stops any such endeavors from happening.
--
Opinion:=TMyOpinion.Create(Me);
Opinion:=TMyOpinion.Create(Me);
stop taxing corporation. .007% buys AND sells.
Tax the people who get money from corporation. All incomes and dividends.
Remove all exemptions.
Tax Wall Street trades at
Raise min. wage 2 dollars.
Now we have a significant surplus. Use it to pay off debt.
once paid off, put it all into education.
The Kruger Dunning explains most post on
"Given an initial allocation of goods among a set of individuals, a change to a different allocation that makes at least one individual better off without making any other individual worse off is called a Pareto improvement. An allocation is defined as "Pareto efficient" or "Pareto optimal" when no further Pareto improvements can be made."
"Pareto efficiency is a minimal notion of efficiency and does not necessarily result in a socially desirable distribution of resources: it makes no statement about equality, or the overall well-being of a society."
http://en.wikipedia.org/wiki/Pareto_efficiency
For every type of tax simplified or repealed, entire chapters can be dropped from the statute books.
However, fittingly for the Land of the not-so-tax-Free and the Home of the Brave especially on IRS filing day,
How bout this idea, your employer deducts your taxes from your paycheck and that is it. I give back my tax breaks in return for not having to file a tax return at the end of the year. Think about it no more tax returns to file, goodby HR Block, good by most tax attorneys, send the CPA scrambling OMG anarchy in the streets !
Exactly. And replace it with this.
In exchange for forgoing all deductions, you don't have to even file a tax return if you OPT IN to an auto-deducted system at around 18%. Employers already automatically withhold the taxes and make regular payments to the fed and state treasury. So, just make that withholding your tax payment at a flat rate, skip deductions, and you get to skip filing altogether!
That's what I'd propose if I were president.
It's called 'rm -rf '.
No names have been changed because no one is innocent.
Unless the computer can prioritize the tax code based upon the amount of lobbyist money fed into it while considering each tax provision and then send said money into an approved congressman's "foundation" then it is doomed to failure.
The tax code could easily be simplified if the US implemented something seen in other countries: making each line the same across the various forms.
For example, when you fill out a 1040, 1040 A, 1040 EZ, 1040 NR, you have to write your income on different line items.
Do the same as in Canada: income goes on line 1, regardless of form.
This means that some forms will not include some line items, so you might jump from line 4 to line 39, but that doesn't matter.
The problem with that suggestion is there are not 10,000 pages for any individual to deal with. I believe what Brin is really after is a flat tax or much flatter than what we currently are forced to endure.
"Dodge" he says?! Well, according to his own log, that makes the lower one third to one half of earning Americans a tax dodger!
Way to go Brin! You're just another Marxist idiot.
The only simplification needed is to replace the tax code and its lobbyist-paid loopholes with a point-of-sale consumption tax that uses rebates to achieve a progressive impact on low-income earners.
The FairTax achieves this, and has bipartisan support, because the biggest partisan issues in our country are not in how we *collect* taxes (which everyone agrees sucks), but in how *much* we collect and how we *spend* it.
I guess you didn't read my entire comment where I referred to embedded taxes. Perhaps you should do actual research before spouting off with your obvious hatred of all things you perceive right wing. However, sad as it is, your type is the norm for around here. Your just rattling numbers out of context. You obviously don't want to do the research to show the effective rates paid versus.
So, next time read my whole post before knee jerk replying with your obvious pent up hatred.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
10 LET TAX = INCOME * 0.15; 20 PRINT TAX; 30 END
We all know that greedy algorithms aren't necessarily optimal.
Maybe somebody knows something about computer science that I don't, but you need to have a good idea of the results you expect from an algorithm before you can implement it. You can't just hand a computer a tax code and expect it to output something that fills your vague requirements. A computer is simply a machine that can calculate (or compute) instructions fast. It does not have any more intelligence or insight than the person who programmed it. If there is someone out there smart enough to simplify the tax code, then they can do it by hand. Doing it by hand would probably be more efficient because any program that does it would probably boil down to a series of sed statements. And all the people in the general population who think computers are capable of AI need to learn what a computer is capable of too. If you're building something that is AI then it should be called a brain, not a computer.
The politicians are afraid of the very thing they claim the people wanted: change. Their "change" means continuing to push the USA toward dependence and ruin, while real "change" would be to end the framework of exploitation created over the last 100 years.
Gamingmuseum.com: Give your 3D accelerator a rest.
California Proposition 17 (2010), about Auto Insurance, would have amended Insurance Code section 1861.02(b)(3) to read:
(A) This subdivision shall not prevent a reciprocal insurer, organized prior to November 8, 1988, by a motor club holding a certificate of authority under Chapter 2 (commencing with Section 12160) of Part 5 of Division 2, and which requires membership in the motor club as a condition precedent to applying for insurance from requiring membership in the motor club as a condition precedent to obtaining insurance described in this subdivision.
Sounds like AAA to me.
(B) This subdivision shall not prevent an insurer which requires membership in a specified voluntary, nonprofit organization, which was in existence prior to November 8, 1988, as a condition precedent to applying for insurance issued to or through those membership groups, including franchise groups, from requiring such membership as a condition to applying for the coverage offered to members of the group, provided that it or an affiliate also offers and sells coverage to those who are not members of those membership groups.
I'm not sure which insurer this is. Maybe GEICO.
So to your request for examples, this is the stuff they were willing to write in legislation put on the ballot for every single registered voter in California. If they would put it before millions of folks, I can imagine what sorts of things end up in non-voter-reviewed legislation.
Cut it out.
My figures were *per year*, so that's a nice try to switch units and try to troll me with per-month and per-week straw examples. My examples were one pair of pants every six months and one pizza dinner party every three months. I didn't put in a home phone in my example, so you straw-added that in order to take it back out, and I said cell phone not smart phone. You finished it off by calling me an overly entitled loser for being able to drive to work.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Understanding the Tax code requires understanding the legal classification of things, which requires a strong understanding of history and language. This is not what computers are good at or for.
Alas, only perhaps 1% of the responses actually dealt with the actual core content of my proposal... that simplification can only happen if the heat of self-interest were largely removed from the process. The specifics of the process (genetic algorithms would work) aren't the issue.
The issue is that current tax debates and proposals (from flat taxers to simple brackets etc) CANNOT HAPPEN! Because any large minority of heated opposers can stymie even a majority that wants a change, in today's America.
"No-losers" reduces the heat and the number of angry opponents down to a level where the attraction of simplification might actually get a sufficiently large majority behind it to steamroller over the remaining screaming objectors.
That is the key point. I hope some of you will talk about that. As well as the greater lesson that it offers regarding modern politics and the unfortunate phenomenon of "minority-rage-veto" that long ago banished majority rule.
With cordial regards,
David Brin
http://www.davidbrin.com
blog: http://davidbrin.blogspot.com/
twitter: http://twitter.com/DavidBrin1
PS there's a lively group down in comments at "Contrary Brin"... bright folks and almost no trolls. ;-)
David Brin is clearly not a computer programmer.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
If we were to replace all income, sales, gasoline, use, and inheritence taxes with a simple 1% tax on all transcations (0.5% paid by seller, 0.5% by buyer) we would have no deficit and no recession. Even if we ignore all cash transactions and only tax credit cards, checks, and electronic transfers. People could legally pay no taxes by buying everything in cash, assuming their landlord doesn't mind taking cash. And why wouldn't he? It saves him when he accepts the money, although he still has to pay the tax when he uses the money to pay down his mortgage. Your wages might go down, but you'd no longer be paying 30-50% (federal and state income tax) before spending a dime, and you'd no longer be paying 10% (California) sales tax when you do spend that dime.
Oh wait, that wouldn't work, because 70% of all stocks are owned for less that 11 seconds. Those who make their money in speculation couldn't afford to pay 1/2 a percent on a deal that only makes them 1/10 of a percent. Those bastards don't create value and don't contribute to society, but they're smart. They'll figure out a way to make thousands of trades a day that make 0.6%, and continue to live parasitically off those of us that actually work for a living.
To show you how stupid your comment is, I am now going to do math:
Now, you say "who have managed to wrangle a 15% tax rate for their income, which is in the form of stock gains". First off, what do you mean by "stock gains"? Do you mean an increase in the value of the stock they hold? Do you mean stock options? Do you mean dividend payments from held stock? Did the person in question earn any OTHER income?
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
As a lawyer who unfortunately has to occasionally work with particularly complicated areas of the tax code, I don't believe this will be nearly as successful as Brin seems to think. A lot of the complexity comes from trying to close off loopholes, not from trying to give people exemptions, and a computer is not going to help much there.
Yes, the AMT is mostly an effort to fix the deduction problem at the top end, you're right in that I shouldn't have said 'rich'. (Although while they don't get 'deductions', they instead can get all sorts of weird tax shelters and stuff.)
But, seriously, it's still fucked up. Let's assume that the government lets you deduct $5000 worth of solar panels.
A guy who makes $100,000 a year, and puts up $5,000 worth of solar panels, now pays taxes on $95,000, which is the equivalent of writing him a check for $1,500.
A guy who makes $20,000 a year, and puts up $5,000 of solar panels, now pays taxes on $15000, which is the equivalent of writing him a check for $750.
A guy who makes $10,000 a year, and puts up $5,000 of solar panels (Somehow), now pays taxes on $5000? Which is the equivalent of writing him a check for $0, because he's not paying taxes at either $10,000 or $5000.
And people are like 'Good, if he doesn't get pay any money he shouldn't get any back'...really?
So the middle class guy that put up those solar panels did us $1500 worth of social good, the poorer guy did less, and the poorest guy didn't do any? Someone's going to have to explain that logic to me. Seems like the poorer did the exact same amount of good, and at greater expense to themselves!
It's totally fucked up because deductions work at the top tax bracket. And, you're right, they work for exactly the voters, instead of, oh, I dunno, actual rewarding with an even hand the entirety of people who do those things we invent deductions for.
Let's get rid of deductions, period. If the government wants to reward people for doing social goods, to give people an economic incentive to do those things, the government should write people a damn check.
If corporations are people, aren't stockholders guilty of slavery?
short answer == 42
Now, what was the question?
Now, you say "who have managed to wrangle a 15% tax rate for their income, which is in the form of stock gains". First off, what do you mean by "stock gains"? Do you mean an increase in the value of the stock they hold? Do you mean stock options? Do you mean dividend payments from held stock? Did the person in question earn any OTHER income?
Do you have no idea what 'the capital gain tax' is? I'm not going to explain it. In short, yes, an increase in the value of the stock they hold. Did you want me to say 'stock capital gains', I thought talking about taxing 'stock gains' was obvious what I was referring to.
And, yes, other income, people don't pay most capital gains until they hit higher tax brackets.
5% of an adjusted gross income (AGI) of US$1,000,000 is US$150,000 which 9.375 times the $16,000.00 income of which you say pays more in taxes. Even if one considers an AGI of $100,000 as one being superrich, at 15%, that is still $15,000.00, almost as much as the $16,000.00.
What the fuck are you talking about? Why did you invent a millionaire of thin air? How does that have anything to do with what I said?
My example is perhaps a little confusing, because $16,000 isn't actually the cutoff, that was just a random example. You're right, at that point they're still playing a total rate of 2.6% less than capital gains tax. They have to make about $39,000 to pay at least 15%, thanks to all sorts of recent tax cuts.
I will point out that that is very recent. In 2001, someone making $16,000 would be paying exactly a rate of 15%. Which is, in theory, exactly the same amount of taxes that a millionaire would pay on earning $16,000 in stock dividends.
And, of course, someone who had no income but with stock capital gains might even end up paying no taxes on them at all.
If corporations are people, aren't stockholders guilty of slavery?
Comment removed based on user account deletion
Sweden is considered advanced in the area of financial management of tax for the benefit of the community. Yes, you may 'pay more' but the result is that Swedish society benefits overall.
One benefit, I suppose, is that the Swedes don't get highly stressed for two to three weeks every year trying to calculate obscure values for their tax return :-)
In Australia it can be less complicated.. the Government offers a program called 'E-Tax' from which you download from the Australia Tax Office, install on your computer, fill in the forms, and submit your tax. If you have only a 'basic' tax return it is very easy, fast, simple and does not require a trip to a tax agent (and the loss of $150 + to have someone review information you collect, to produce a form submission for which you are liable for).
Australia has a Pay As You Go ( http://www.ato.gov.au/individuals/pathway.aspx?sid=42&pc=001/003/023&mfp=001/002&mnu=44725#001_003_023 ) which means that for most people the tax you owe is taken out of your wage every pay. So, come tax time, the only question is 'what can I claim?'.
The main problem I can see with the proposition from the article is that much of the 'manual accounting' for which takes place may not be possible to calculate without extensive input. This means that if you have that many laws, with so many permutations then you would need every detail about everyone in the system for the system to calculate the tax for each person. Would Americans allow this? I suspect that they would see it as an invasion of privacy or similar.
I agree that Sweden probably gets the 'better end of the stick'. In the end the money and services flow.. and in the end someone pays. The only question is... Who?
(in relation.. my sig is quite appropriate for this discussion.. :-) )
You have a sick, twisted mind. Please subscribe me to your newsletter.
Yes, a computer can simplify the tax code. Watch:
# rm -rf /irs
Are you sure you are in a free market?
Because in Europe, a great many people think they pay taxes although they are actually receiving them.
I recently read a statement of a deluded German judge (who wants to sue Merkel over having said to be happy about the death of OBL), who stated his opinion "as a taxpayer". If even a judge can be so grotesquely mistaken about who's actually paying whom, it's understandable that most others are too.
And as a receiver of taxes, the alleged generosity begins to look rather hypocritical.
So, which one is it?
"disposable income"
Some people just have money to dispose, right? Family A "needs" their money without cutting into their ability "to live". Unlike Family B.
This is because you "need" a car, a tv set, holiday, education and whatever else is fashionable. If you want something less fashionable (an own company for example, for which you might need savings), fat chance: You don't "need" that. Destroying this dream of yours doesn't cut into your "standard of living", because that term is coined by people who would never share such a dream.
KermodeBear and I don't look down on Family A, SleazyRidr, like you want to make it look in order to undermine our credibility. We look down on you.
If you think of "the government" as some outside thing, that does seem pretty unreasonable. If you think of it more as "society" or the "community" then it doesn't necessarily seem so unreasonable.
I think of "government" as "society", which again makes me think of people like you.
I skimmed the article a bit: Here's a taste: Votes are public to "encourage responsibility", parties are abolished and replaced by a "union of electors", because else the government would be ruled by "international financiers". The secret ballot is "Jewish".
See Karl Marx' "On The Jewish Question" for a more popular analysis on what the Jews have to do with this.
One interesting system that Heinlein mentioned [...]
The same Heinlein who devised a society in which only those who serve in the military have a right to vote?
Interesting. Can anyone enlighten me whether he was a Commie before he turned fascist or the other way round?
Of course I have no idea how to structure something like this in light of real human behaviour, greed, and the rewards of cheating any system we try to put into place.
I'm sure you know full well, it's been widely known and tried, see 1984 for a rough sketch.
You misunderstood Lord Nachos good intentions I'm afraind.
What he actually meant to say, but struggled to do so clearly while not compromising the civility we all cherish, is that you please give him money lest he might be forced to steal your car and that this is surely in your own best interest.
Run the algorithm in reverse. A politician says "I want more tax breaks for people in X circumstance. Find the combination of smallest tax law adjustments which would result in this while not affecting anybody else by more than 0.05% (because then they'd complain)."
Alternatively, run thousands of parallel copies of the algorithm to find out the smallest changes you could make to your life (or even how you report your cashflow) in order to maximise your after-tax income. Who needs an accountant when the computer can find out you get a $10,000 tax break if you invest $20.68 in Jim's Fruit, Film-Making, and Not-Farming Franchise?
Yes, I know what capital gains tax is. I also know how it is calculated. Do you? You do know that the rate at which capital gains is taxed is based on one's total income, right? Apparently not. And, your statement of when people pay capital gains if false as well. The only time one doesn't pay capital gains is when one has held the investments for more than one year AND one has had no other income during the years. I suggest you go learn about capital gains tax because what you know is horribly incomplete. Here, let me help you with what is probably your favorite resource.
Why did you invent someone making $16,000.00 a year out of thin air? You did, however, specify a "superrich" individual in your example. I chose an arbitrary, hypothetical "superrich" person making one million dollars a year. Do you suggest that someone making one million dollars a year is not "superrich"? And, I notice you completely ignore the person making $100,000 a year. Why was that?
So, both people are earning $16,000.00 but one should be taxed more because why exactly? Just because one has one million dollars in investments and is living off the $16,000.00 in interest and not working at $8.00/hr? What is if that millionaire is a 69yo retiree?
So, 10 years ago is very recent? Really? I prefer even more recent, and more importantly under the current tax laws. Now, then stop trying to use laws that are no longer in use to justify your arguments.
You really don't have any idea about which you argue, do you? So far, you have tried to justify your positions and statements using hypothetical situations proven false and laws that were changed 4 years ago. You use a hypothetical situation and the say "What the fuck" when I use a hypothetical situation to prove you wrong. And, most importantly, you make statements about a law that are factually incorrect.
Oh, and before you spout off again, I have let something go, but I suggest you research whether one has to pay capital gains AND income tax on INCOME from stock sale.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Have you ever had to file your own tax return? Have you ever had to file something other than the 1040EZ?
Do you own any stock? Have you ever sold any stock you own? Have you ever had to claim capital gains?
I make around $100,000 a year, rent, own a 4 year old car, own stock, have sold stock, and have had to pay capital gains tax. Have you?
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Have you ever had to file your own tax return?
As opposed to magical fairies doing it for me? Uh, yes.
Or do you mean do I calculate it myself? Yes, I do. My grandmother is very knowledgeable about that, (She has a lot of investments.) and has managed to teach me most of how that.
Have you ever had to file something other than the 1040EZ?
I've only managed to use that three times, back when I was in college a decade ago, every other time I couldn't because of something random.
Do you own any stock?
Yes. Although not much public stock at the moment, I don't like the market at all. I do, however, own about a third of the company I work for.
Have you ever sold any stock you own?
Yes. Although I don't do that except when money runs short.
Have you ever had to claim capital gains?
Yes.
Right now, even if I did sell some stock, I wouldn't have to pay any capital gains (Assuming I actually made money on any stock, which I doubt I would if I sold them this year.), as I'm probably not going to break into 25% tax bracket this year. I didn't last year.
If corporations are people, aren't stockholders guilty of slavery?
If all you said were true, then how did you miss the part on your tax return where you had to add the proceeds from the stock sale to your income as well as paying the capital gains?
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
You do know that the rate at which capital gains is taxed is based on one's total income, right? Apparently not.
Yes I do, which is why I said 'people don't pay most capital gains until they hit higher tax brackets',.
The only time one doesn't pay capital gains is when one has held the investments for more than one year AND one has had no other income during the years.
And that's just wrong, since we're in stupid nitpicking land. You don't have to pay long term capital gains if you make less than $34,000, not 'have no income'. You're exempt if if you're in the 15% or less tax bracket, Mr. I-Know-Everything-About-Capital-Gains. Which is exactly what I said.
I don't normally do idiotic nitpicking like this, I would assume that by saying 'have no income', you meant 'have almost no income', and not debate the quibbling matter that, technically, people who do have some income are still exempt. Attempting to misread what the person you're talking to is a sign you're not actually attempting to reach the truth at all.
You did, however, specify a "superrich" individual in your example. I chose an arbitrary, hypothetical "superrich" person making one million dollars a year. Do you suggest that someone making one million dollars a year is not "superrich"?
They are indeed superrich, although in the actual world, almost no one has that much in 'income'. I just have no idea what the point of listing them was, because you started talking about their overall taxes, which I didn't mention at all. And then inexplicably started comparing it to how much money the other person makes.
I was talking about how much taxes they paid on their stock gains, which is, wait for it, 15%.
And it is perhaps worth pointing out that the superrich rarely have 'incomes' of $1,000,000 dollars. They earn their money, instead, using things like stock investments.
You know, that thing they pay only 15% tax rate on?
So, 10 years ago is very recent? Really? I prefer even more recent, and more importantly under the current tax laws. Now, then stop trying to use laws that are no longer in use to justify your arguments.
Did you even read what I said? I said that capital gains taxes were lower than the tax rate people paid, unless they were making under $16,000.
You are correct in that that was incorrect, it's currently closer to $39,000. I picked $16,000 as a random number in the second lowest tax bracket, but you are correct in that strictly speaking, people in the second lowest tax bracket are not paying a rate of 15%. They're only paying that on the income over $8,000, and less on the amount under, which means that only people in the 25% tax bracket hit an average rate of 15%.
Good point. You have won that argument, $16,000 was the wrong number. People making slightly over $16,000 are still paying a slightly lower rate than capital gains, although a rate of 12.8% is pretty close to 15%.
And that doesn't really change my point at all: We have decided to tax investments at a very low tax rate, despite the fact that they are often held by very rich people.
So, both people are earning $16,000.00 but one should be taxed more because why exactly? Just because one has one million dollars in investments and is living off the $16,000.00 in interest and not working at $8.00/hr?
YES. Someone who has a million dollars in investments and is living off $16,000 a year in interest should pay more in taxes than the guy working $8.00 an hour. Jesus Christ.
What is if that millionaire is a 69yo retiree?
What if that 69yo guy working $8 an hour wishes he was a retiree, but can't, because he wasn't able to invest any money because stock-owning millionaires aren't paying any goddamn taxes and he had to cover them?
I have let something go, but I suggest you research whether one has to pay capital gains AND income tax on INCOME from stock sale.
If corporations are people, aren't stockholders guilty of slavery?
YES. Someone who has a million dollars in investments and is living off $16,000 a year in interest should pay more in taxes than the guy working $8.00 an hour.
Why? Please explain why someone living on a fixed interest income should pay more taxes than someone who is working and making the exact same amount.
What if that 69yo guy working $8 an hour wishes he was a retiree, but can't, because he wasn't able to invest any money because stock-owning millionaires aren't paying any goddamn taxes and he had to cover them?
The stock owning millionaire in my example is paying taxes, and paid taxes on the money earned that was used to buy the stocks in the first place. You have yet to show where anyone is not paying taxes. You just assert they are without offering any evidence. Also, you have not shown that anyone is having to cover for "stock-owning millionaires". And, almost all "stock-owning millionaires" were, in fact, regular working people who saved and invested their way to "stock-owning millionaire" status, most especially those that are not living off the interest and investments. Very few inherit their wealth.
income you started with to buy the taxes
What?
Really, you need to read the other reply.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
What makes anyone think that it is in any government employee's interest to have the tax code simplified? Billions o dollars every year are sen to the government simply because people are afraid to take on the IRS. Anything King Obama has said in regard to reforming the tax code is pure political BS, as he also is a government employee and has no interest whatsoever in reducing the fear generated by the US Government. It looks to me as if he is simply angling for another line to gain more control, more intrusiveness into our lives, in some way that bypasses the bill of rights.