All the plans I've seen promise that no one would pay more in taxes, most people would pay less in taxes, and yet government revenue would go up.
That's right. And why is that?
Because the people talking about the plans are lying.
Is it, as you contend, that the poor would carry a higher burden? Although I wouldn't care if it were true, it is not true.
Well, it certainly wouldn't be the rich that carry a higher burden, because it's a primarily regressive tax which would replace a primarily progressive tax.
The poor actually would carry less burden. You eliminate the hidden tax on them, by removing payroll taxes and thereby increasing their salaries.
How are payroll taxes hidden? Because most businesses don't tell you (and by the way, we deducted $52.83 in order to pay for your retirement and $3.43 in order to pay for your medicare and $5.87 to buy insurance in case you become unemployed)? Would a national sales tax make it illegal for people to roll the cost of the tax into the product and say "tax included"?
More importantly, how does a tax which costs more money carry a smaller burden just by not being hidden? If you're going to make such a statement then I want to see numbers and details. How would you create such a sales tax. What would be taxed (what type of goods, what type of services) and at what rate.
Now taxing everyone spending money in America, including people earning money in the black markets
But not including people spending money in the black markets.
under-reporting, tax-evading, foreign tourists
You can't under report or evade a sales tax? Yes, you might get more revenue from foreigners, of course to do that you'll have to greatly lower your exports and raise the trade deficit.
Spending less on maintaining/changing the tax code.
I think you misestimate just how complicated the sales tax code would need to be.
People spending less on the reporting of taxes. Rather than hiring experts or paying for TurboTax, or spending hours on their own figuring taxes, it is very simple to figure a sales tax.
It's almost surely simpler than our current personal income taxes, but I still think you're underestimating many of the complications. Do you tax new products, or old ones too? What about services? What about things which are part new and part old? What about leases? How about rentals? The loopholes would likely be enormous unless you tax everything that would be taxed under an income tax anyway.
Who cares?!
Everyone except the super-rich care, because if they have to pay less in taxes it means either I'll have to pay more or I'll receive worse services.
They have more money than you
Sure do, since I'm not super rich.
they are saving more money than you
Probably...
they are investing more money than you
Probably...
(which benefits you indirectly)
Depends what they're investing it in.
most importantly, THEY ARE SPENDING MORE THAN YOU
Maybe, maybe not. It depends for one thing what you consider spending.
All this talk about progressive and regressive taxes misses the point.
Perhaps.
The purpose of taxation isn't to redistribute wealth, it's to fund the government.
That's the primary purpose, but there are certainly secondary purposes in the minds of some people.
The regressiveness of a tax is certainly one factor to consider when choosing a tax system, but it's only one factor out of dozens. The fairest tax (if there's such a thing as "fair") would be a flat head tax.
I have to disagree. The fairest tax would be to base the tax on the services received by the government. And since the main and most expensive service of the government is to protect people's wealth, people should be taxed at a flat rate based on wealth.
Of course, those in poverty couldn't afford to pay such taxes, so you should probably make an exception for them, in the interests of encouraging people to break out of poverty, but that's just a small factor in the first place.
My pet theory is to tax only public corporations, since they're artificial government created entities anyway.
What about LLCs, or partnerships? What about private corporations?
You can't escape the reality, however, that under the national sales tax, the people with more money are paying more in taxes than those who make less.
That may or may not be true. What's certainly true is that the people who spend more money are paying more in taxes than those who spend less. But people with more money may or may not pay more in taxes than those who make less (if you could even compare how much someone has to how much someone else makes, but I think I know what you mean.
Why are you trying to couch it in terms of how much they make?
The question was raised as to whether or not it was a regressive tax. That is a term based on how much they are taxed as a percentage of how much they make.
What does it matter how much they make, as long as those with more money are paying more than those who make less?
Actually I personally think people should be taxed as a fixed percentage of how much they own, without regard to how much they make or how much they buy (though with an exception for necessities at the poverty line).
The tax is fair because they pay more, because it is a fixed tax rate, and because no one pays taxes on the basic necessities of life.
Mathematically regressive, perhaps, when you look at income earned versus expenditures.
I believe that's what people mean when they say something is "regressive".
But when you look at *utility gained* versus expenditures, a sales tax isn't regressive anymore.
Sure, you can redefine "regressive" to mean something that doesn't apply.
It's equitable, and some might even say it's progressive if you consider the necessities of life (shelter, food, etc.) to have a higher per dollar utility value than luxury goods.
One can certainly argue that a regressive tax is more equitable, but let's not pretend that that's not what you're saying.
On the other hand, I would say if you're going to look at the utility gained vs. expenditures, then you have to look at the utility of the expenditures. After all, a $100,000 tax means a lot less to a millionaire than it means to an average Joe.
Personally I'd say the two cancel out and that the most fair tax is a flat one, but that there are other considerations such as the fact that those in poverty simply can't afford to pay taxes and still live (that's pretty much the definition of the poverty line).
Money by itself, in the absence of something to buy with it, serves no purpose and has no value.
Well, yes and no. Money serves a value more than just things you can buy for personal consumption. In fact, I'd say that the more important value of money, once you've paid for the necessities, is not using it for personal consumption, but using it for control.
Bill Gates may have a big house, but most of his money isn't in his house, it's in his stock ownership. And that's the real power that Bill Gates has. He could decide today that Windows will be licensed under the GPL, and that wouldn't be money "spent", certainly not in the traditional sense. He wouldn't owe a sales tax on the subsequent drop in Microsoft's stock. Perhaps a bit extreme of an example, and maybe not 100% realistic, but I think it illustrates my point. Money is power, and that's much more important for the rich than it being simply a tool to buy stuff for personal consumption.
Why should a person get taxed on the money they don't spend and don't get any real benefit from?
To encourage them to put it to good use. Use it or lose it, don't pass it on from generation to generation without giving anything back to the society which set up the laws which gave it to you in the first place.
That's already a concept implemented in traditional IRAs, where money saved in the IRA is not taxed, but when the money is withdrawn (presumably, when you are about to spend it) you pay taxes then.
At least one flaw in that argument is that once you turn 59 1/2 you must start withdrawing the money. Also, traditional IRAs cannot be passed on from generation to generation tax free.
"First of all, someone who makes $200,000 almost certainly has a large mortgage, and no sales tax I've ever heard of taxes interest payments."
Speaking of which, what if someone bought a new home, for, say, $200,000 (and the sales tax rate was 30%)? Would they owe $60,000 in sales taxes?
That seems crazy, and I figure it must have some serious negative consequences to the economy, though I can't really figure out what they'd be (it'd probably discourage new home building for all but the super-rich who could finance the enormous down payments, but then again maybe not).
It's been my experience that most upper class earners spend virtually everything they earn.
This hasn't been my experience at all, but also consider that much of what they spend wouldn't be taxed anyway. First of all, someone who makes $200,000 almost certainly has a large mortgage, and no sales tax I've ever heard of taxes interest payments. People who make more almost certainly save/invest more, and savings/investments aren't taxed. Then there's services. Many sales taxes do tax some services, but you couldn't possibly tax all services, because then you'd have an income tax. For instance, if a rich person has employees who work for them, and they spend money on that, that wouldn't be subject to sales tax, would it?
But don't just take my word for it. The government has set up a chart of the estimated sales taxes paid by people based on their income. In Florida, someone making $25,000 is estimated to pay $509 in sales taxes. Someone making $200,000 is estimated to pay $1474. Those aren't numbers out of my ass, they're actual IRS estimates.
As structured in H.R. 25, everyone gets a monthly check to prevent exactly what you describe.
That doesn't make the tax non-regressive. Remember, regressive means that those who make more money pay less as a percentage of income. The only way to avoid that is to have an income tax, you can't do it by having a sales tax and then giving everyone a monthly check.
(2) government programers are going to be about 10 times more efficient thatn contractor programers
Contractor programmers? That's not at all how the e-file program works. The government hasn't entered into any contracts with anyone to create e-file software. They've just opened up their systems to those who can demonstrate that they've created e-filing software and let the free market do the rest.
If you want to fix the tax system, how about closing the loopholes the rich use?
One person's loophole is another person's fair system. If we were going to fix the tax system by closing the loopholes, first we'd have to agree on what is a fair tax system.
Look at John Edwards. Before he was elected to the Senate, he worked as a liability lawyer. He won a big case, and had $600,000 in taxes due. Instead, he formed a corporation and using tax laws, did not pay one penny.
First of all, I heard about this case, and it was not at all like you make it out to be. Yes, Edwards paid less in taxes than he would have had he not formed the corporation. But he still paid a lot in taxes, and depending what you consider fair, it's quite reasonable to say that he paid his fair share. Medicare taxes are only supposed to paid on earned income. There is a valid argument that some portion of the money that he received from that company was unearned income. Maybe it was earned income. And maybe Edwards knew this. But even if so, then Edwards was evading taxes (and could be fined by the IRS if he were audited), not utilizing a loophole.
Now, this of course brings up the question of whether or not we should be treating earned income and unearned income differently in the first place. But that just brings me back to my point - you can't elminate "loopholes" until you get agreement on how things are supposed to be taxed in the first place.
however the IRS did spend a bundle creating the e-file API, documentation, certification, support and regulation programs.
A lot of which already existed. Businesses have had access to e-file for a long time now. If you count submission on magnetic tape, even longer. It's only the consumer e-file which is relatively new.
if they had decided to make their own front end from day one, opening up the e-file API to third parties would not have been necessary, and the money saved by not doing that could have been used to make a free public front-end.
I highly doubt it. Creating an API and some docs, when you've already got an internal file format, is not very much work. The support and regulation costs are much less when you only have to support and regulate a couple thousand instead of a couple hundred thousand. You'd still need an API and docs to run e-file yourself. So I don't see how it could possibly cost the same thing.
personally I use the e-file-capabable software but at the end print it out and file on paper in protest of their idiotic and corrupt management. the IRS has done nothing to make my life easier, so there is no reason why I should make theirs easier.
I didn't e-file to make the IRS's life easier, I did it to make my life easier. I'm not going to cut off my nose to spite my face, even if I did want to spite my face in the first place.
OK, so one person earns $20,000 and spends $20,000. She pays 0% in taxes. Another person earns $40,000 and spends $35,000. She pays $4500 in taxes (13% of income). Another person earns $100,000 and spends $50,000. She pays $9000 (9% of income). Another person earns $1,000,000 and spends $125,000. She pays $31,500 (3.15% of income).
Except for those at the very lowest end of the spectrum, it's still regressive. And this ignores the fact that the ultra-rich could easily avoid paying any tax at all (just buy a farm, an auto factory, a movie theatre, anything else you want to consume, and hire someone to create the things for you instead of buying them).
Of course, you can argue that what makes a tax "regressive" is based on how much you spend. But the common definition of a "regressive tax" is when those who earn more pay less as a percentage of their income. The only sure-fire way to make a tax non-regressive by that definition is to have a progressive or flat income tax.
(Also, one might argue that there's nothing wrong with those who earn more paying less as a percentage of their income, and I'd be apt to consider that point, but that wasn't the argument you were making.) Personally, I don't think income is a good judge on how much one should pay anyway. My own personal idea of what a fair tax is is a flat tax based on wealth, with an exemption set at the wealth of those at the poverty line. But again, you were arguing that a sales tax isn't necessarily a regressive tax. It necessarily is, at least for some part of the curve beyond a certain point (and any tax which is actually going to work is going to set that point relatively low on the income scale, to do otherwise would never work in practical terms; at least not without severely cutting revenues).
All the plans I've seen promise that no one would pay more in taxes, most people would pay less in taxes, and yet government revenue would go up.
And how does giving everyone the same amount of money in a "pre-bate" change whether or not the tax is regressive? The rich will still pay less as a percentage of their income (or wealth), because the rich almost universally save more and therefore spend less as a percentage of their income (or wealth). I really don't see how you can define progressive or regressive in order to avoid that conflict. But definitions don't matter all that much anyway. My problem with this is that in order to implement it in a way that you could eliminate income taxes and not lower revenues you'd have to greatly increase the tax burden on the poor, especially on poor families who currently pay absolutely nothing in income taxes (many of whom pay negative taxes when you factor in the earned income credit and/or the additional child tax credit). You'd also most likely wind up severely cutting taxes on those with a large amount of earned income, and probably cut taxes on a lot of the super-rich, at least those that haven't figured out how to avoid income taxes completely.
I'm all for cutting income taxes, but not if that means increasing sales taxes. I think a good first step would be to eliminate FICA taxes. Now there's a regressive tax by any definition.
Because it isn't happening. No one is disclosing personal information to a third party without explicit consent. They're using cookies to track where people go on their website. The quote was taken way out of context. Yes, it's technically possible for them to "capture your name, your Social Security number or any other information that you willingly pass to a Web site", but it's not actually being done!
It costs much more for the IRS to print and process a paper return than an online one
I wasn't comparing printing and processing a paper return to e-filing them. I was comparing the government writing its own e-file software with them outsourcing that job to third parties.
Re:The morality of the story:
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Tracking Your Taxes
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· Score: 3, Informative
Or, for that matter, you could file on paper, for cheaper.
In an ideal world, you'll be sufficiently under-withheld that you don't have to worry about getting a refund anyway, removing the only rational reason to e-file.
I've got another rational reason to e-file. You save the cost of the stamp (actually to be safe you should probably use two stamps as one is probably not enough), as well as the hassle of printing out the form and mailing it in. In my case, I save the hassle of driving to the post office and buying stamps, since I generally don't have any stamps around anyway.
Of course, I wound up working less last year than expected, so I wound up with a refund, and I'll probably get one again in 2005 since changing my exemptions to 7 probably won't be enough (should have gone for 9, I guess). But yeah, the target is to owe $999 at the end, unless of course you can manage to get your income taxes down to $0, which is actually not too hard for 2005 (a married couple can earn $41,000 if they both contribute $4000 to an IRA and have $3000 of capital losses; if they have kids or one is a teacher or have student interest or have rental property or paid tuition costs they can earn even more; just having a few rental properties can theoretically raise that number to $66,000).
Filing on paper is still legal (as long as you prepare your own return, anyway).
For the federal return it's still legal. California (and possibly other states), has made it illegal for a paid preparer who files more than 50 (or something like that) California returns from not e-filing an eligible state return unless the customer specifically requests not to e-file, but the federal government has done no such thing - yet.
Re:The morality of the story:
on
Tracking Your Taxes
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· Score: 3, Interesting
If the IRS would actually come out with a method of E-Filing that does not require third party involvement, they would go a long way towards elimenating this type of problem.
It would also be a large taxpayer expense. As it stands now you could get access to send your tax return directly to the government. But you'd have to write the software, and pass the tests, and undergo a criminal background check. This ensures that the government needs to do the least work once it's received a return. It also makes it very hard for criminals to screw up the system by for instance filing false returns for people other than themselves.
Look at the E-Filing instructions and it's all about how to find the right third party to do it for you (for a Fee!).
Actually, at least one third party (the makers of TaxAct), offers e-file for free to everyone. They make it hard to find the link, but if you go to the IRS free-file page, scroll down to "TaxACT.com", click the link, click "Leave IRS Site", and then click on "Start Free Return" then you can e-file your federal return absolutely free.
Only an idiot would file his tax return via the Web.
Why? Because Wal-Mart might find out how much I made last year? Because Brown & Company might find out that I trade a lot of options? I'll take my chances and save the 37 cents (or whatever the price of postage is, I don't even know). Plus I got my refund check in like 2 weeks.
Now, if a Major Media Outlet were to carry this story, say, Reuters, then you would hear about it on NPR, you'd see it on ABC, and you'd read it in the New York Times.
Of course, that would require there to be a story. Intuit isn't giving away your personal information, for marketing purposes or any other reason. They're tracking how people use their website, where they're coming from, what part of the site they're at when they leave, things like this.
But this guy is in India, so I doubt he's a military contractor, and certainly not for the US military.
No, but maybe he works for an an Indian call center. OK, it's a software company, so he's probably talking about source code, but maybe not (using the ambiguous term "IP" makes it hard to know for sure).
Some problems just can't be solved at all. I believe the saying is that "three people can keep a secret, if two of them are dead." This is true if you're going to be ultra-paranoid, but in reality it's possible to make the cost of obtaining the information more than the value of the information, and that's usually good enough. This can be done with technology, and any sane scheme is going to use technological protections as well as social ones (lumping legal protections in with the social ones).
I have to agree with this one. The best way to stop IP theft is to not have IP in the first place. Make money by providing a useful good or service to people, not by keeping secrets.
In fact, I would like it to create millions or billions of these works and to submit them for copyright:)
You don't have to submit something for it to be copyrighted. Of course, you probably can't copyright something generated in this manner anyway. And most importantly, copyright only covers copying. If someone independently comes up with the exact same work without having ever been exposed to your copyrighted work, then they haven't broken copyright law. In theory, if two people independently came up with the exact same work, they'd both have a copyright on their work, and neither would be infringing on the other's copyright. This is opposed to a patent, where even if you independently come up with an idea which is patented you're still committing patent infringement.
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All the plans I've seen promise that no one would pay more in taxes, most people would pay less in taxes, and yet government revenue would go up.
That's right. And why is that?
Because the people talking about the plans are lying.
Is it, as you contend, that the poor would carry a higher burden? Although I wouldn't care if it were true, it is not true.
Well, it certainly wouldn't be the rich that carry a higher burden, because it's a primarily regressive tax which would replace a primarily progressive tax.
The poor actually would carry less burden. You eliminate the hidden tax on them, by removing payroll taxes and thereby increasing their salaries.
How are payroll taxes hidden? Because most businesses don't tell you (and by the way, we deducted $52.83 in order to pay for your retirement and $3.43 in order to pay for your medicare and $5.87 to buy insurance in case you become unemployed)? Would a national sales tax make it illegal for people to roll the cost of the tax into the product and say "tax included"?
More importantly, how does a tax which costs more money carry a smaller burden just by not being hidden? If you're going to make such a statement then I want to see numbers and details. How would you create such a sales tax. What would be taxed (what type of goods, what type of services) and at what rate.
Now taxing everyone spending money in America, including people earning money in the black markets
But not including people spending money in the black markets.
under-reporting, tax-evading, foreign tourists
You can't under report or evade a sales tax? Yes, you might get more revenue from foreigners, of course to do that you'll have to greatly lower your exports and raise the trade deficit.
Spending less on maintaining/changing the tax code.
I think you misestimate just how complicated the sales tax code would need to be.
People spending less on the reporting of taxes. Rather than hiring experts or paying for TurboTax, or spending hours on their own figuring taxes, it is very simple to figure a sales tax.
It's almost surely simpler than our current personal income taxes, but I still think you're underestimating many of the complications. Do you tax new products, or old ones too? What about services? What about things which are part new and part old? What about leases? How about rentals? The loopholes would likely be enormous unless you tax everything that would be taxed under an income tax anyway.
Who cares?!
Everyone except the super-rich care, because if they have to pay less in taxes it means either I'll have to pay more or I'll receive worse services.
They have more money than you
Sure do, since I'm not super rich.
they are saving more money than you
Probably...
they are investing more money than you
Probably...
(which benefits you indirectly)
Depends what they're investing it in.
most importantly, THEY ARE SPENDING MORE THAN YOU
Maybe, maybe not. It depends for one thing what you consider spending.
All this talk about progressive and regressive taxes misses the point.
Perhaps.
The purpose of taxation isn't to redistribute wealth, it's to fund the government.
That's the primary purpose, but there are certainly secondary purposes in the minds of some people.
The regressiveness of a tax is certainly one factor to consider when choosing a tax system, but it's only one factor out of dozens. The fairest tax (if there's such a thing as "fair") would be a flat head tax.
I have to disagree. The fairest tax would be to base the tax on the services received by the government. And since the main and most expensive service of the government is to protect people's wealth, people should be taxed at a flat rate based on wealth.
Of course, those in poverty couldn't afford to pay such taxes, so you should probably make an exception for them, in the interests of encouraging people to break out of poverty, but that's just a small factor in the first place.
My pet theory is to tax only public corporations, since they're artificial government created entities anyway.
What about LLCs, or partnerships? What about private corporations?
You just pointed out that each person earning more and more money is paying more in more in taxes.
But that they are paying less as a percentage of their income, which is the definition of a regressive tax.
Yet you deem it regressive because you are basing the tax paid on the percentage of income earned.
Right, because that's what the term "regressive tax" means. http://www.answers.com/regressive+tax
You can't escape the reality, however, that under the national sales tax, the people with more money are paying more in taxes than those who make less.
That may or may not be true. What's certainly true is that the people who spend more money are paying more in taxes than those who spend less. But people with more money may or may not pay more in taxes than those who make less (if you could even compare how much someone has to how much someone else makes, but I think I know what you mean.
Why are you trying to couch it in terms of how much they make?
The question was raised as to whether or not it was a regressive tax. That is a term based on how much they are taxed as a percentage of how much they make.
What does it matter how much they make, as long as those with more money are paying more than those who make less?
Actually I personally think people should be taxed as a fixed percentage of how much they own, without regard to how much they make or how much they buy (though with an exception for necessities at the poverty line).
The tax is fair because they pay more, because it is a fixed tax rate, and because no one pays taxes on the basic necessities of life.
By your definition, that would be a fair tax.
Mathematically regressive, perhaps, when you look at income earned versus expenditures.
I believe that's what people mean when they say something is "regressive".
But when you look at *utility gained* versus expenditures, a sales tax isn't regressive anymore.
Sure, you can redefine "regressive" to mean something that doesn't apply.
It's equitable, and some might even say it's progressive if you consider the necessities of life (shelter, food, etc.) to have a higher per dollar utility value than luxury goods.
One can certainly argue that a regressive tax is more equitable, but let's not pretend that that's not what you're saying.
On the other hand, I would say if you're going to look at the utility gained vs. expenditures, then you have to look at the utility of the expenditures. After all, a $100,000 tax means a lot less to a millionaire than it means to an average Joe.
Personally I'd say the two cancel out and that the most fair tax is a flat one, but that there are other considerations such as the fact that those in poverty simply can't afford to pay taxes and still live (that's pretty much the definition of the poverty line).
Money by itself, in the absence of something to buy with it, serves no purpose and has no value.
Well, yes and no. Money serves a value more than just things you can buy for personal consumption. In fact, I'd say that the more important value of money, once you've paid for the necessities, is not using it for personal consumption, but using it for control.
Bill Gates may have a big house, but most of his money isn't in his house, it's in his stock ownership. And that's the real power that Bill Gates has. He could decide today that Windows will be licensed under the GPL, and that wouldn't be money "spent", certainly not in the traditional sense. He wouldn't owe a sales tax on the subsequent drop in Microsoft's stock. Perhaps a bit extreme of an example, and maybe not 100% realistic, but I think it illustrates my point. Money is power, and that's much more important for the rich than it being simply a tool to buy stuff for personal consumption.
Why should a person get taxed on the money they don't spend and don't get any real benefit from?
To encourage them to put it to good use. Use it or lose it, don't pass it on from generation to generation without giving anything back to the society which set up the laws which gave it to you in the first place.
That's already a concept implemented in traditional IRAs, where money saved in the IRA is not taxed, but when the money is withdrawn (presumably, when you are about to spend it) you pay taxes then.
At least one flaw in that argument is that once you turn 59 1/2 you must start withdrawing the money. Also, traditional IRAs cannot be passed on from generation to generation tax free.
"First of all, someone who makes $200,000 almost certainly has a large mortgage, and no sales tax I've ever heard of taxes interest payments."
Speaking of which, what if someone bought a new home, for, say, $200,000 (and the sales tax rate was 30%)? Would they owe $60,000 in sales taxes?
That seems crazy, and I figure it must have some serious negative consequences to the economy, though I can't really figure out what they'd be (it'd probably discourage new home building for all but the super-rich who could finance the enormous down payments, but then again maybe not).
It's been my experience that most upper class earners spend virtually everything they earn.
This hasn't been my experience at all, but also consider that much of what they spend wouldn't be taxed anyway. First of all, someone who makes $200,000 almost certainly has a large mortgage, and no sales tax I've ever heard of taxes interest payments. People who make more almost certainly save/invest more, and savings/investments aren't taxed. Then there's services. Many sales taxes do tax some services, but you couldn't possibly tax all services, because then you'd have an income tax. For instance, if a rich person has employees who work for them, and they spend money on that, that wouldn't be subject to sales tax, would it?
But don't just take my word for it. The government has set up a chart of the estimated sales taxes paid by people based on their income. In Florida, someone making $25,000 is estimated to pay $509 in sales taxes. Someone making $200,000 is estimated to pay $1474. Those aren't numbers out of my ass, they're actual IRS estimates.
As structured in H.R. 25, everyone gets a monthly check to prevent exactly what you describe.
That doesn't make the tax non-regressive. Remember, regressive means that those who make more money pay less as a percentage of income. The only way to avoid that is to have an income tax, you can't do it by having a sales tax and then giving everyone a monthly check.
i guess the irs isn't realy concerned about making sure your electronic information is private.
I'd hope not. Regulation of contracts is the job of the state legislature, not the federal executive (the IRS).
(1) they probably already have all the software
They're just hiding it from us?
(2) government programers are going to be about 10 times more efficient thatn contractor programers
Contractor programmers? That's not at all how the e-file program works. The government hasn't entered into any contracts with anyone to create e-file software. They've just opened up their systems to those who can demonstrate that they've created e-filing software and let the free market do the rest.
If you want to fix the tax system, how about closing the loopholes the rich use?
One person's loophole is another person's fair system. If we were going to fix the tax system by closing the loopholes, first we'd have to agree on what is a fair tax system.
Look at John Edwards. Before he was elected to the Senate, he worked as a liability lawyer. He won a big case, and had $600,000 in taxes due. Instead, he formed a corporation and using tax laws, did not pay one penny.
First of all, I heard about this case, and it was not at all like you make it out to be. Yes, Edwards paid less in taxes than he would have had he not formed the corporation. But he still paid a lot in taxes, and depending what you consider fair, it's quite reasonable to say that he paid his fair share. Medicare taxes are only supposed to paid on earned income. There is a valid argument that some portion of the money that he received from that company was unearned income. Maybe it was earned income. And maybe Edwards knew this. But even if so, then Edwards was evading taxes (and could be fined by the IRS if he were audited), not utilizing a loophole.
Now, this of course brings up the question of whether or not we should be treating earned income and unearned income differently in the first place. But that just brings me back to my point - you can't elminate "loopholes" until you get agreement on how things are supposed to be taxed in the first place.
however the IRS did spend a bundle creating the e-file API, documentation, certification, support and regulation programs.
A lot of which already existed. Businesses have had access to e-file for a long time now. If you count submission on magnetic tape, even longer. It's only the consumer e-file which is relatively new.
if they had decided to make their own front end from day one, opening up the e-file API to third parties would not have been necessary, and the money saved by not doing that could have been used to make a free public front-end.
I highly doubt it. Creating an API and some docs, when you've already got an internal file format, is not very much work. The support and regulation costs are much less when you only have to support and regulate a couple thousand instead of a couple hundred thousand. You'd still need an API and docs to run e-file yourself. So I don't see how it could possibly cost the same thing.
personally I use the e-file-capabable software but at the end print it out and file on paper in protest of their idiotic and corrupt management. the IRS has done nothing to make my life easier, so there is no reason why I should make theirs easier.
I didn't e-file to make the IRS's life easier, I did it to make my life easier. I'm not going to cut off my nose to spite my face, even if I did want to spite my face in the first place.
OK, so one person earns $20,000 and spends $20,000. She pays 0% in taxes. Another person earns $40,000 and spends $35,000. She pays $4500 in taxes (13% of income). Another person earns $100,000 and spends $50,000. She pays $9000 (9% of income). Another person earns $1,000,000 and spends $125,000. She pays $31,500 (3.15% of income).
Except for those at the very lowest end of the spectrum, it's still regressive. And this ignores the fact that the ultra-rich could easily avoid paying any tax at all (just buy a farm, an auto factory, a movie theatre, anything else you want to consume, and hire someone to create the things for you instead of buying them).
Of course, you can argue that what makes a tax "regressive" is based on how much you spend. But the common definition of a "regressive tax" is when those who earn more pay less as a percentage of their income. The only sure-fire way to make a tax non-regressive by that definition is to have a progressive or flat income tax.
(Also, one might argue that there's nothing wrong with those who earn more paying less as a percentage of their income, and I'd be apt to consider that point, but that wasn't the argument you were making.) Personally, I don't think income is a good judge on how much one should pay anyway. My own personal idea of what a fair tax is is a flat tax based on wealth, with an exemption set at the wealth of those at the poverty line. But again, you were arguing that a sales tax isn't necessarily a regressive tax. It necessarily is, at least for some part of the curve beyond a certain point (and any tax which is actually going to work is going to set that point relatively low on the income scale, to do otherwise would never work in practical terms; at least not without severely cutting revenues).
All the plans I've seen promise that no one would pay more in taxes, most people would pay less in taxes, and yet government revenue would go up.
And how does giving everyone the same amount of money in a "pre-bate" change whether or not the tax is regressive? The rich will still pay less as a percentage of their income (or wealth), because the rich almost universally save more and therefore spend less as a percentage of their income (or wealth). I really don't see how you can define progressive or regressive in order to avoid that conflict. But definitions don't matter all that much anyway. My problem with this is that in order to implement it in a way that you could eliminate income taxes and not lower revenues you'd have to greatly increase the tax burden on the poor, especially on poor families who currently pay absolutely nothing in income taxes (many of whom pay negative taxes when you factor in the earned income credit and/or the additional child tax credit). You'd also most likely wind up severely cutting taxes on those with a large amount of earned income, and probably cut taxes on a lot of the super-rich, at least those that haven't figured out how to avoid income taxes completely.
I'm all for cutting income taxes, but not if that means increasing sales taxes. I think a good first step would be to eliminate FICA taxes. Now there's a regressive tax by any definition.
Because it isn't happening. No one is disclosing personal information to a third party without explicit consent. They're using cookies to track where people go on their website. The quote was taken way out of context. Yes, it's technically possible for them to "capture your name, your Social Security number or any other information that you willingly pass to a Web site", but it's not actually being done!
If there is an actualy test the software manufactueres have to pass, i'm assuming somethign on it owuld be surrounding privacy.
No, the test is to ensure that the software is properly formatting the data it sends to the federal government.
Were can i find out more about the croteria on writing fileing software?
e-file for Software Developers/Transmitters. You might want to learn how to write English first, though.
It costs much more for the IRS to print and process a paper return than an online one
I wasn't comparing printing and processing a paper return to e-filing them. I was comparing the government writing its own e-file software with them outsourcing that job to third parties.
Or, for that matter, you could file on paper, for cheaper.
Cheaper than free? I don't think so.
In an ideal world, you'll be sufficiently under-withheld that you don't have to worry about getting a refund anyway, removing the only rational reason to e-file.
I've got another rational reason to e-file. You save the cost of the stamp (actually to be safe you should probably use two stamps as one is probably not enough), as well as the hassle of printing out the form and mailing it in. In my case, I save the hassle of driving to the post office and buying stamps, since I generally don't have any stamps around anyway.
Of course, I wound up working less last year than expected, so I wound up with a refund, and I'll probably get one again in 2005 since changing my exemptions to 7 probably won't be enough (should have gone for 9, I guess). But yeah, the target is to owe $999 at the end, unless of course you can manage to get your income taxes down to $0, which is actually not too hard for 2005 (a married couple can earn $41,000 if they both contribute $4000 to an IRA and have $3000 of capital losses; if they have kids or one is a teacher or have student interest or have rental property or paid tuition costs they can earn even more; just having a few rental properties can theoretically raise that number to $66,000).
Filing on paper is still legal (as long as you prepare your own return, anyway).
For the federal return it's still legal. California (and possibly other states), has made it illegal for a paid preparer who files more than 50 (or something like that) California returns from not e-filing an eligible state return unless the customer specifically requests not to e-file, but the federal government has done no such thing - yet.
If the IRS would actually come out with a method of E-Filing that does not require third party involvement, they would go a long way towards elimenating this type of problem.
It would also be a large taxpayer expense. As it stands now you could get access to send your tax return directly to the government. But you'd have to write the software, and pass the tests, and undergo a criminal background check. This ensures that the government needs to do the least work once it's received a return. It also makes it very hard for criminals to screw up the system by for instance filing false returns for people other than themselves.
Look at the E-Filing instructions and it's all about how to find the right third party to do it for you (for a Fee!).
Actually, at least one third party (the makers of TaxAct), offers e-file for free to everyone. They make it hard to find the link, but if you go to the IRS free-file page, scroll down to "TaxACT.com", click the link, click "Leave IRS Site", and then click on "Start Free Return" then you can e-file your federal return absolutely free.
Only an idiot would file his tax return via the Web.
Why? Because Wal-Mart might find out how much I made last year? Because Brown & Company might find out that I trade a lot of options? I'll take my chances and save the 37 cents (or whatever the price of postage is, I don't even know). Plus I got my refund check in like 2 weeks.
Now, if a Major Media Outlet were to carry this story, say, Reuters, then you would hear about it on NPR, you'd see it on ABC, and you'd read it in the New York Times.
Of course, that would require there to be a story. Intuit isn't giving away your personal information, for marketing purposes or any other reason. They're tracking how people use their website, where they're coming from, what part of the site they're at when they leave, things like this.
But this guy is in India, so I doubt he's a military contractor, and certainly not for the US military.
No, but maybe he works for an an Indian call center. OK, it's a software company, so he's probably talking about source code, but maybe not (using the ambiguous term "IP" makes it hard to know for sure).
Some problems just can't be solved at all. I believe the saying is that "three people can keep a secret, if two of them are dead." This is true if you're going to be ultra-paranoid, but in reality it's possible to make the cost of obtaining the information more than the value of the information, and that's usually good enough. This can be done with technology, and any sane scheme is going to use technological protections as well as social ones (lumping legal protections in with the social ones).
I have to agree with this one. The best way to stop IP theft is to not have IP in the first place. Make money by providing a useful good or service to people, not by keeping secrets.
Just because it isn't something tangible like jewelry doesn't make it less of a crime.
Not in the eyes of the law, maybe, but that doesn't mean the law makes any sense.
What good is your IP if they don't have anyone routing it to them?
In fact, I would like it to create millions or billions of these works and to submit them for copyright :)
You don't have to submit something for it to be copyrighted. Of course, you probably can't copyright something generated in this manner anyway. And most importantly, copyright only covers copying. If someone independently comes up with the exact same work without having ever been exposed to your copyrighted work, then they haven't broken copyright law. In theory, if two people independently came up with the exact same work, they'd both have a copyright on their work, and neither would be infringing on the other's copyright. This is opposed to a patent, where even if you independently come up with an idea which is patented you're still committing patent infringement.