Editore"s Note
Tilting at Windmills

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January 10, 2006
By: Kevin Drum

TAX NOTES....As Max points out, tax fraud by the working poor is estimated at no more than $9 billion annually while tax fraud by the not-so-poor weighs in at about $340 billion. Nonetheless, Republicans in Congress have long insisted that the IRS focus a disproportionate amount of attention on policing requests for the Earned Income Tax Credit, a tax refund that's available exclusively to the working poor.

Still, at least honest poor people can get their EITC refunds, right? Think again:

Tax refunds sought by hundreds of thousands of poor Americans have been frozen and their returns labeled fraudulent, blocking refunds for years to come, the Internal Revenue Service's taxpayer advocate told Congress today.

The taxpayers, whose average income was $13,000, were not told that they were suspected of fraud, the advocate said in her annual report to Congress. The advocate, Nina Olson, said her staff sampled suspected returns and found that, at most, one in five was questionable.

....Ms. Olson said that 66 percent of those taxpayers who pressed for their refunds were found to be due all the money they sought or even more than they asked for.

They weren't even told they were suspected of fraud. Nice. And how about the rich? How's the IRS treating them these days? Good luck finding out:

Records showing how thoroughly the Internal Revenue Service audits big corporations and the rich, and how much it discounts the additional taxes assessed after audits, are being withheld from the public despite a 1976 court order requiring their disclosure, according to a legal motion filed last week in federal court in Seattle.

For decades, the information was given at no charge to a professor at Syracuse University, Susan B. Long, who made it available on the Internet at trac.syr.edu, with tools for people to conduct their own analyses.

....The agency has no plans to release the information, [IRS spokesman Frank] Keith said Friday. He argued that Professor Long's latest requests went far beyond the order, covering costly detailed information that could inadvertently allow the identification of specific taxpayers.

Professor Long said that was false. "There is no change in what we have asked for, and they know it," she said.

It's good to be rich. Especially under a Republican administration.

Kevin Drum 6:01 PM Permalink | Trackbacks | Comments (79)

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Comments

Then again - if you are George Soros, the IRS may be checking out your political affiliation. Rich and Republican - good. Democrat - bad. Poor - bad. Isn't all of this reminding you of Trick Dick & His Gang?

Posted by: progrolib on January 10, 2006 at 6:05 PM | PERMALINK

Keep pushing. There are more poor than rich, and their masses grow daily, and they are well armed. Additionally, most of the armed services are from less-than-priveledged backgrounds.

maybe the revolution will be televised afterall...

Posted by: Global Citizen on January 10, 2006 at 6:08 PM | PERMALINK

go figure the rich getting away with stealing.
much like the party now in power.

shame on us for being working poor.

Posted by: Honey P on January 10, 2006 at 6:10 PM | PERMALINK

Good Gawd - the first post is a Troll. Does Kevin's post mention Soros? No. If Soros has broken IRS rules than I and Kevin would say throw the f'ing book at him.

If you don't think the rich use all kinds of ways to cheat the tax man I've got I've got some land on Mt St Helens I'd like to sell you.

Posted by: Robert on January 10, 2006 at 6:10 PM | PERMALINK

This is just a perk of being rich. Rich people should have more benefits than poor people, or poor people would never aspire to be rich.

Posted by: Alf on January 10, 2006 at 6:12 PM | PERMALINK

French Revolution, anyone?

Then again, if they'd had TV back then, there wouldn't have been a revolution.

Posted by: craigie on January 10, 2006 at 6:13 PM | PERMALINK

bread and circuses, cake and Desperate Housewives...

Posted by: shortstop on January 10, 2006 at 6:15 PM | PERMALINK

Kevin wrote: It's good to be rich. Especially under a Republican administration.

Of course, it was plenty good to be rich under the Clinton administration. Under Clinton, the rich got richer, and got richer faster than any other sector of society. Under Clinton, the after-tax incomes of the rich skyrocketed.

But that wasn't enough for them. The rich don't want almost everything. They want it all. Bush's job is to give it to them.

Class warfare by the ultra-rich against everybody else -- not only within the USA, but globally -- that's what Bush and the Republican Party stand for.

Posted by: SecularAnimist on January 10, 2006 at 6:17 PM | PERMALINK

Mammon loves the little fatcats.
All the fatcats of the world.
Bow to the almighty buck,
you worthless little f-ck,
Mammon loves the little fatcats of the world.

Posted by: Mammon on January 10, 2006 at 6:21 PM | PERMALINK

Robert,

Actually, the first posting is NOT from a troll. Read again what the guy said: he is betting that while the Republicans generally favor auditing tax returns from the poor rather than the rich, they probably make exceptions for wealthy liberals like George Soros. He adds that it sounds a little like the tactics of Tricky Dick Nixon.

Not a troll dropping.

Posted by: Roger Keeling on January 10, 2006 at 6:23 PM | PERMALINK

This is all to convince the elites of middle eastern countries- the baathists and the mullahs and the 107 sons of the King of Saudi Arabia- that we are just like them.

Posted by: lib on January 10, 2006 at 6:37 PM | PERMALINK

Nevertheless, the only time you hear the words "class warfare" in a public context, it's used by Republicans against Democrats.

Nice, that.

Posted by: chaunceyatrest on January 10, 2006 at 6:59 PM | PERMALINK

Why should the working poor who rent, bother to pay money owed to the IRS?

Posted by: curveball on January 10, 2006 at 6:59 PM | PERMALINK

Typical. Absolutely typical.

Kevin, you should know there's no such thing as an honest poor person. If they were so honest, they wouldn't be poor! The government is just being efficient, and taking their money pre-emptively. It's a pre-emptive strike. Wait, I think I just realized where all the WMDs are!!

Posted by: theorajones on January 10, 2006 at 7:10 PM | PERMALINK

Personally, I think it is pretty weird that the author of both articles...the same guy...came out with these articles today. I have read both articles and they are pretty good. This is the stuff that makes you go hhmmmmmmmmmmmmm.

Why with-hold information....public information...and as the article states, only this specific website posts the info. And the lame excuse of not find a court order......shame! I took at look at IRS management...they appear qualified. Is this information classified? Has this information no longer public and why? Someone changed the policy..............

Posted by: avahome on January 10, 2006 at 7:31 PM | PERMALINK

Dirty stinkin filty rotten poor people have more of an incentive to cheat and steal.

The mere fact that I made them poor should be the telltale sign for the rest of you on how you should judge their character.

I only reward the pure. With gobs of cash.

Posted by: Mammon on January 10, 2006 at 7:54 PM | PERMALINK

What's up with this?
"She also said that the I.R.S. told her that its program had protected $2.1 billion of revenue. But she said this number was misleading.
"Just two refunds, from a scheme run by prisoners, accounted to $1.8 billion of the total, she said, citing testimony to Congress by Nancy Jardini, chief of the I.R.S. criminal division"
Two refunds were for $1.8 billion? I'd hope that would raise a flag when they're reading the returns- "Let's see, $200, $2500, $150, $900,000,000, $450..." What were the prisoner's names, Ken Lay and Jeff Skilling?

Posted by: SP on January 10, 2006 at 7:57 PM | PERMALINK

Looks like time for a flat consumption tax to return from this horribly regressive system to something a little more fair.

I wonder, how does a flat consumption tax vary from a VAT system?

Posted by: MarkH on January 10, 2006 at 8:08 PM | PERMALINK

Personally, I think it is pretty weird that the author of both articles...the same guy...came out with these articles today. I have read both articles and they are pretty good.

David Cay Johnston, the author, has a good book out on even more corrupt shenanigans by the super rich: Perfectly Legal. I recommend it. Not a happy book though.

Posted by: gq on January 10, 2006 at 8:20 PM | PERMALINK

"I want my fair share, and that is everything."
-attributed to one of the Koch brothers

Posted by: josef on January 10, 2006 at 8:55 PM | PERMALINK

This is the issue that will when Dems votes, stick to it.

While your at it, add simplify. Just knock off the filthy rich skip the rest. One thing the filthy rich are good for is cannon fodder for the outraged.

Posted by: Matt on January 10, 2006 at 8:58 PM | PERMALINK

Dirty stinkin filty rotten poor people have more of an incentive to cheat and steal.

The mere fact that I made them poor should be the telltale sign for the rest of you on how you should judge their character.

I only reward the pure. With gobs of cash.

Posted by: Mammon on January 10, 2006 at 7:54 PM | PERMALINK

I never could figure that out. Do I have to get rich first to prove my purity? Will my purity lead me to riches? Can one be pure and poor at the same time? Please send check or cash to:

Perplexed, Inc.
12332 S. Avarice Lane
Greedlion, VA

And look, James Brown died today. Now what?

Posted by: bobbyp on January 10, 2006 at 9:02 PM | PERMALINK

This is just a perk of being rich. Rich people should have more benefits than poor people, or poor people would never aspire to be rich.

Alf

Exactly. And people in prison - all of them - should be tortured mercilessly...or people would never aspire to stay out of prison. Waterboard 'em!

Posted by: adios on January 10, 2006 at 9:20 PM | PERMALINK

Interesting. I followed up Kevin's link, and apparently the IRS under the Clinton administration was also auditing more poor people than rich ones.

Oh, wait. Look at this (from this article.) Looks to me like this isn't exactly a Bush administration problem, or even a Republican Congress problem (look at the years after 94) Anybody know what the heck happened in 1997?

Posted by: tbrosz on January 10, 2006 at 9:40 PM | PERMALINK

Nina Olson, said her staff sampled suspected returns and found that, at most, one in five was questionable.

....Ms. Olson said that 66 percent of those taxpayers who pressed for their refunds were found to be due all the money they sought or even more than they asked for.

- Kevin

20% of these are questionable and 66% of 20% are due the amounts. This means 33% of 20% or 6-7%
are fraudulent.

That's a pretty high fraud rate!

The questions should be:

1. Should a society feel ethically obliged to put up with a 7% fraud rate, to improve convenience for the 93% left.

2. Would this fraud rate increase if they relaxed?

Bashing the rich is a distraction. Their fraud would be worth more - because they pay more taxes.

Posted by: McAristotle on January 10, 2006 at 9:44 PM | PERMALINK

And when we are in power the illegal NSA wiretaps will be used to ferret out their
overseas bank accounts.

Posted by: bob h on January 10, 2006 at 9:49 PM | PERMALINK

At the same time pensions are being cut, presumeably the GDP is rising. If this is so, why is it that the poor must pay more taxes?

At the same time the estate tax is being repealed, there are more and more homeless. If so, how is that a benefit to the poor?

I think we know exactly which side the "President" comes down on. The side of the rich.

Posted by: parrot on January 10, 2006 at 9:57 PM | PERMALINK

Those refunds need to be witheld to offset tax breaks for the wealthy. Giving it back to the poor would only result in it being spent on meth, cigarettes, beer, lottery tickets and syhpilitic whores. Jesus Christ, just clean my hotel room, pick my lettuce and shut the fuck up!

Posted by: Channeling Karl Rove on January 10, 2006 at 10:03 PM | PERMALINK

there are more and more homeless. If so, how is that a benefit to the poor?

Posted by: parrot on January 10, 2006 at 9:57 PM | PERMALINK

So why don't the Dems take a stand on illegal immigration to raise unskilled wages then?

Posted by: McAristotle on January 10, 2006 at 10:10 PM | PERMALINK

The difference is that the poor need the money and the rich dont. And we dont even know the fraud rate of the rich.

Posted by: Sandals on January 10, 2006 at 10:12 PM | PERMALINK

Taking a 'stand' on illegal immigration won't raise unskilled wages.

Posted by: Sandals on January 10, 2006 at 10:14 PM | PERMALINK

It's nice, for at least most of the day, to live in ignorance about our nation's bizzaroworld priorities. And then you are reminded of the way it is by something like this. Oh, the humanity.

Posted by: Alex on January 10, 2006 at 10:33 PM | PERMALINK

Anybody know what the heck happened in 1997?

Yeah, I remember when it happened. A bunch of rich tax cheats who had gotten caught and owed millions in back taxes and penalties appeared before Congress and testified that the IRS had been abusive and bullied them around, and then all the Congressmen pulled out their violins and started crying. Then the "victims" of the IRS made the rounds of all the talk shows, and it was a big deal about how the IRS was "out of control", etc.

Posted by: MillionthMonkey on January 10, 2006 at 10:39 PM | PERMALINK

The difference is that the poor need the money and the rich dont.

Posted by: Sandals on January 10, 2006 at 10:12 PM | PERMALINK

Sure.

But the other difference is when you are taxing income, the money is the result of savings (deferred consumption) or work.

Does 'need' outweigh the fact they earned the money?

Posted by: McAristotle on January 10, 2006 at 11:02 PM | PERMALINK

Anyone else notice Mammon's ditty scans the same as "Jesus loves the little children" ?

Posted by: opit on January 10, 2006 at 11:07 PM | PERMALINK

This is the lucky ducky component of starve the beast in pretty pure form, isn't it?

Posted by: Jeff on January 10, 2006 at 11:21 PM | PERMALINK

McAristotle,
There's a whopping big difference between producing a product or service by the sweat of your brow and embezzeling the profits from the work of others through the control of management and accounting nor does gambling (playing the stock and bond market through short term investments) provide a net benefit to the economy.
They are thieves and belong in jail. The fact that their thievery is legal is an incrimination of the values that are lauded in this country.

Posted by: joe on January 10, 2006 at 11:39 PM | PERMALINK

Damn. Stole my blog idea.

Posted by: Alexander Wolfe on January 10, 2006 at 11:50 PM | PERMALINK

McAristotle: "That's a pretty high fraud rate!"

Relative to what? The rate of fraud among wealthier taxpayers? Well, it seems we're not allowed to know what that is. I wonder why.

Can somebody tell me why the FOIA wouldn't apply here?

Posted by: chaunceyatrest on January 10, 2006 at 11:54 PM | PERMALINK

Can anyone tell me why we keep replying to the trolls? Let's just shun the dumb ones.

I'd agree that it's good to be rich. I'm prematurely retired, all of my income is unearned, and I pay less in income tax than I would be paying for Social Security and Medicare if I was earning a living. I'm not cheating, either.

I will note that when my income reflected my share of my company's profit, back during the Clinton administration, my taxes were routinely audited. Which meant merely that I'd occasionally get a friendly letter from the IRS, typed bizarrely in all caps, announcing that I'd paid a little too much or a bit too little, or asking for more information. At least someone was paying attention.

Posted by: bad Jim on January 11, 2006 at 12:22 AM | PERMALINK

Does 'need' outweigh the fact they earned the money?

I see. The fact they have the money proves they "earned" it?

Posted by: bobbyp on January 11, 2006 at 12:24 AM | PERMALINK

I'd take the taxpayer advocate's numbers with a grain of salt. I used to work in collections at the IRS. Towards the end of my time there I made a little game when I came across a taxpayer with EIC on their return. I could almost always find evidence that they didn't qualify (by researching their W2s, their spouse's payor info, and other people at their address). Like a boyfriend/husband at the same address, but filing returns from a PO box, or one who is self employed and doesn't file at all. Or the parent will live with grandparents who would disqualify her/him because only the person making the most money at the house is entitle to claim the credit. The truth is you can't survive on the little earned income it takes to get maximum benefit from EIC. You would be in the street!
The taxpayer advocate in my experience is just a push over. I doubt they looked very hard or even knew what to look for. The solution is not to audit poor people. The solution is to put welfare administration (that's what EIC is) under a welfare agency, and take it out of the tax code. And give people who work a living wage, instead of forcing them into defrauding their country.

Posted by: Memyself&I on January 11, 2006 at 12:27 AM | PERMALINK

product or service by the sweat of your brow and embezzeling the profits from the work of others

Posted by: joe on January 10, 2006 at 11:39 PM | PERMALINK

Kinda of a sweeping statement to say that you can't earn a high income without theft. Doctors, bankers, lawyers, engineers, small business owners are all thieves?

But those beliefs are convenient because it justifies taxation, doesn't it.

-----------------

Taking a 'stand' on illegal immigration won't raise unskilled wages.

Posted by: Sandals on January 10, 2006 at 10:14 PM | PERMALINK

Sure on that? Ever hear of demand and supply.

Immigration adds supply of labour. Illegals are usually persons with poor education who deem the travel worth the risk. They compete with poorly educated workers more than highly educated.

Liberal professionals are all for illegal immigration. Migrants pick their salad, and look after their kids. And without an education, don't compete with them for labour.

Posted by: Mcaristotle on January 11, 2006 at 12:51 AM | PERMALINK

Looks to me like this isn't exactly a Bush administration problem, or even a Republican Congress problem (look at the years after 94) Anybody know what the heck happened in 1997?
Posted by: tbrosz on January 10, 2006 at 9:40 PM | PERMALINK

This is what we liberals mean when we tell you that Clinton was not a liberal. Then you scoff, from your perspective on the extreme fringe of the rightwing, and claim that anything left of Zell Miller is Joe Stalin.

Posted by: whiskey tango foxtrot on January 11, 2006 at 12:59 AM | PERMALINK

Kinda of a sweeping statement to say that you can't earn a high income without theft. Doctors, bankers, lawyers, engineers, small business owners are all thieves?

Apples and oranges.

You're comparing folks who work 10-12 hour days, and pull in 100-150k/yr, with folks who don't really need to work at all, and who pull in 10-50 million a year.

Liberal professionals are all for illegal immigration.

I'm a liberal professional, and I sure as hell am opposed to illegal immigration. Migrants don't look after my kids, or cut my grass, and if paying a living wage to pick lettuce means my salad is $20, then so be it (though I doubt it - I suspect most of the cost would go into Archer Daniels Midland Co's CEO's pocket).

The solution to illegal immigration isn't to turn the US into a bannana-republic third world shithole like Mexico or Malaysia, and it sure isn't "build a wall".

The solution is to promote Liberal Democracies in these countries to invest in their public infrastructure so that their economies thrive, and their people don't NEED to illegally cross the border for a shitty $2/hr lettuce picking job, because they'll be able to get a job with a living wage in their own country, where they're near their culture, their family, and they'll have all the nice public services we have here in America (or even in real civilized countries like Canada or France or Sweden or the UK).


Posted by: whiskey tango foxtrot on January 11, 2006 at 1:11 AM | PERMALINK

66% of 20% are due the amounts

Son, dammit, you screwed up the math again!!! Its 66% of 100%. Augggh. You never did get story problems. Now go to your room and practice. I'm going out for a walk.

Posted by: Aristotle on January 11, 2006 at 1:13 AM | PERMALINK
So why don't the Dems take a stand on illegal immigration to raise unskilled wages then?

Well, for one thing, because in the WTO trade model to which the US is largely committed, restricting the local supply of labor encourages capital flight but doesn't substantially help -- that is, increase -- local labor prices in the long term, because the reduced local supply is, over the long term compensated by relocation of economic activity.

Now, if you restrict the supply of skilled, unsubstitutable service labor, specifically, that might increase the wages in that field. But unskilled labor, particularly, is fungible across market segments, and there are plenty of relocatable industries that employ it, so supply controls in a largely "free trade" international environment isn't a productive tactic.

The only way it would be is if it was accompanied, preferably preceded, by a massive shift in US trade policy to a fair trade policy; of course, that policy itself would also largely decrease the need for any specific policy to tighten immigration controls by improving labor markets and conditions in trade partners, and thus reducing the incentive to illegally immigrate, rendering your suggestion moot.

So, on its own, it wouldn't work, and in the only case where it could work, it wouldn't be likely to be needed. So, as is typical of your recommendations, it is a horrendously bad idea.

Posted by: cmdicely on January 11, 2006 at 1:52 AM | PERMALINK
Does 'need' outweigh the fact they earned the money?

Given that those "earning" more receive more of their ability to earn and retain money or other forms of wealth from the existence of the State and formal social and legal systems (especially such instruments and legal fictions as fiat money, corporations, etc.), it makes more sense that they should return more, proportionally, of what they receive to pay for the system that allows that.

It also makes sense, given the empirically demonstrated decreasing marginal utility of income and wealth, that those with more income and wealth should pay more.

Posted by: cmdicely on January 11, 2006 at 1:56 AM | PERMALINK

Just a note:

Consumption taxes don't work. They're regressive.

You consume X. You make X. You pay X share in taxes.

You make 10X. You consume at least X. Maybe X+X. But you're paying at most taxes on 2x while making 10X.

But the poo sot who only made X is paying on his whole X, which is the minimum to consume.

So you're left with many more Xs, tax free. Sure, you'd pay on them if you consumed with them, but you'll use them to make more money instead. Maybe on politics, so that...

Right.

Taxing on income (which isn't limited) is better than taxing on consumption (which both has a minimum and a maximum).

Posted by: Crissa on January 11, 2006 at 3:09 AM | PERMALINK

cmdicely:

Given that those "earning" more receive more of their ability to earn and retain money or other forms of wealth from the existence of the State and formal social and legal systems (especially such instruments and legal fictions as fiat money, corporations, etc.), it makes more sense that they should return more, proportionally, of what they receive to pay for the system that allows that.

It also makes sense, given the empirically demonstrated decreasing marginal utility of income and wealth, that those with more income and wealth should pay more.

Nice. Not logical, and it would be blown out of the water by any real tally of value for value (do the rich get special lanes on the highways?), or calculation of what tiny fraction of our taxes actually goes to fund things like the courts and corporate law systems, but nice.

If people really paid their fair share of the actual value they get from government, the lower income groups would be royally screwed and the rich would get away with very little taxation compared to now.

Don't know why you just can't own up to straightforward wealth redistribution. Some leftists are honest enough to.

The real answer is that the rich are taxed far more because that's where far more of the money is, and, of course, because the government can.

That, and one rich guy's vote doesn't nearly match the hundreds of votes of the folks you give his money to.

Posted by: tbrosz on January 11, 2006 at 3:30 AM | PERMALINK

WTF:

This is what we liberals mean when we tell you that Clinton was not a liberal.

I'm not sure that sharp 1997 downturn in the curve on that chart had anything to do with something Clinton specifically did. I haven't gotten a serious answer yet though as to what did cause it. Cripes, do I have to do ALL the research? But I think it's clear it wasn't anything to do with Bush, either.

Posted by: tbrosz on January 11, 2006 at 3:36 AM | PERMALINK

That, and one rich guy's vote doesn't nearly match the hundreds of votes of the folks you give his money to.
Posted by: tbrosz

you're being dishonest, which is par for the course with you. ... rich people buy significantly more representation through lobbyists, so your comparison of what different classes obtain from government is disgustingly biased if it doesn't address this fact.

but then, you're a sophist who will say whatever needs saying to protect his tax cuts.

Posted by: Nads on January 11, 2006 at 3:36 AM | PERMALINK

Nice. Not logical, and it would be blown out of the water by any real tally of value for value (do the rich get special lanes on the highways?), or calculation of what tiny fraction of our taxes actually goes to fund things like the courts and corporate law systems, but nice.

That, and one rich guy's vote doesn't nearly match the hundreds of votes of the folks you give his money to.

Yeah, the rich get nothing from the government. All those special favors like, I dunno, allowing them to own property, prosper, not be bothered by the cops and shaken down for tolls on the roads and heck! they get to drive across the country if they want, walk safely in their neighborhoods, not fear fire, theft, or harassment. Know their investments are safe - that's a big one.

Yeah, they don't get any benefits or even more benefits than poorer folk.

Posted by: Crissa on January 11, 2006 at 4:01 AM | PERMALINK

tbrosz,
The biggest screwover of the public was when the court ruled that monetary donations were a form of 'free-speech' and protected by the constitution. That flat-out gives more power to the wealthy and disemboweled any notion that the U.S. is still the egalitarian society it was intended to be. As for who enjoys the benefits of government, take a look at who benefits from the changes in trademark, copyright, and patent laws over the last 50 years and the way these laws are enforced.

Posted by: joe on January 11, 2006 at 4:18 AM | PERMALINK

Taxing on income (which isn't limited) is better than taxing on consumption (which both has a minimum and a maximum).

Posted by: Crissa on January 11, 2006 at 3:09 AM | PERMALINK

Taxing on income is bad. It discourages entrepreneurship and risk taking. It creates a disincentive to work. There is a maximum. Its the point at which someone retires or quits.

Posted by: McA on January 11, 2006 at 4:33 AM | PERMALINK


Son, dammit, you screwed up the math again!!! Its 66% of 100%.

Posted by: Aristotle on January 11, 2006 at 1:13 AM | PERMALINK

Funny how liberals try and lecture others without thinking.

20% of returns are flagged. 66% are genuine, implying 33% (rounding are false) are bad. Therefore 20% x 33% = 6-7% are flagged and bad.

Posted by: McA on January 11, 2006 at 4:37 AM | PERMALINK

All those special favors like, I dunno, allowing them to own property, prosper, not be bothered by the cops and shaken down for tolls on the roads

Posted by: Crissa on January 11, 2006 at 4:01 AM | PERMALINK

So the rich don't have the right to physical security without paying an extra price. with people like you around, I'm beginning to understand Gun Ownership maniacs....

Hey, next time an American backpacker is seen in Asia. Its OK, to take him hostage then. He's rich.

Posted by: McAristotle on January 11, 2006 at 4:39 AM | PERMALINK

Ahhh, but McA - you have more security over more area, which, by the way, costs more...

You're just a spoiled rat who doesn't even know why they're spoiled.

Such is life. You don't know what you have until you throw it away?

Posted by: Crissa on January 11, 2006 at 5:27 AM | PERMALINK

have more security over more area, which, by the way, costs more...

Posted by: Crissa on January 11, 2006 at 5:27 AM | PERMALINK

Sounds like a protection racket.

Posted by: McAristotle on January 11, 2006 at 5:29 AM | PERMALINK

Taxing on income is bad. It discourages entrepreneurship and risk taking. It creates a disincentive to work. There is a maximum. Its the point at which someone retires or quits. -McA

You can retire or quit?

Really?

Wow. Why didn't I think of that?

Oh. I remember. Rent. Food. Heat. Cable. These things cost money, which only comes from, I dunno, income.

Posted by: Crissa on January 11, 2006 at 5:30 AM | PERMALINK

It is a protection racket.

Why do you pay so much for the military which doesn't actually do anything? Police, who on their best day hope to do nothing? Hospitals who wish they were just handing out immunizations and vitamins instead of fixing broken bones and cancer? Firemen?

What do Firemen do when there's no fire? Why don't you go without, since you're not currently on, you know, fire?

Posted by: Crissa on January 11, 2006 at 5:34 AM | PERMALINK

Look, for you lack'o'mathwits:

Tax refunds sought by hundreds of thousands of poor Americans have been frozen and their returns labeled fraudulent, blocking refunds for years to come, the Internal Revenue Service's taxpayer advocate told Congress today.

Fact 'hundreds of thousands' (undefined number) were blocked. This isn't 20% of 100%, this is x% of 100%. X is unknown, and can't be found here.

The taxpayers, whose average income was $13,000, were not told that they were suspected of fraud, the advocate said in her annual report to Congress. The advocate, Nina Olson, said her staff sampled suspected returns and found that, at most, one in five was questionable.

One in five, yes 20%, of the withhelm returns - that would be 20% of 'hundreds of thousands' which is x% of the total.

....Ms. Olson said that 66 percent of those taxpayers who pressed for their refunds were found to be due all the money they sought or even more than they asked for.

66% of 'taxpayers who pressed'. 66% of another unknown number, but presumably less than X 'hundreds of thousands' were given their mony back. If 20% of X are bad, and 66% of Y are good, can X = Y? Why yes! Because 20+66 is less than 100!

Okay, are we done with that now? They gave us no useful information in that exchange, other than the IRS pulling 500% more returns than could be found errors in.

Posted by: Crissa on January 11, 2006 at 5:45 AM | PERMALINK

McAristotle seems to think there is something sacred and transcendent about the institution of private property. There isn't. We like our mixed, leaning-towards-free-enterprise economy because it rewards effort and allocates scarce resources better than a planned economy can. But the public/private mix has nothing to do with rights. It is a decision we make as a democratic nation, and one that we can change anytime we please.

Oh, and add the vast majority of the expenses of our forward-deployed military to the tab of the wealthy. We are under less threat of invasion and occupation than any nation in the history of the world. The primary reason for most of our strategic commitments (which I mostly support) is economic, and the per-capita benefit of those commitments is largely dependent on how much you make and how much you have.

Posted by: kth on January 11, 2006 at 9:19 AM | PERMALINK

I see we are treading close to tbrosz' religious beliefs in the absolute sanctity of all personal wealth. He does bring info to the table, though.

There was an excellent article on what happened in 1997/1998 which I am frustratingly unable to locate (I suspect it is not online); basically, William Roth, crusading anti-tax zealot, led Congress and the Clinton Administration into gutting the IRS. Nobody likes the IRS and he expertly set up and stage managed hearings and legislation to castrate the agency and yet solve none of the real problems.

There is some reference to it here, in a book review of Perfectly Legal.

The other Clinton era service to tax regression was the IRS Reform and Restructuring Act of 1998, signed into law by Clinton despite its major effect being handcuffing the tax police. This legislation followed well-publicized and hugely biased hearings organized by right wing Senator William Roth that made out IRS personnel to be jack-booted thugs threatening taxpayers with guns, using subpoenas to embarrass people, making people pay taxes they did not owe, etc. As Johnston says about this testimony, Most of it wasnt true. Some of it was truehe mentions six IRS agents and a few outside experts who described not a rogue agency, but one with problems created by Congress, namely, insufficient resources; pressure to go after the weak to generate success numbers; inability or unwillingness to pursue those with money to fight back. But the media picked up on the jack-booted thugs claims and gave passing mention to the serious internal complaints about the effects of Congressional intervention and policy. Subsequently, also, a report by William Webster on behalf of the General Accounting Office exonerated the IRS from the jackboot accusation and found that IRS cases were based on reasonable evidence. But the damage had been done and a law passed that made it dangerous for IRS personnel to pursue tax delinquents, who were provided with numerous bases of complaint, the mere filing of which could mean a grueling round of inquiries. The act was a windfall for tax cheats. Property seizures and other forms of collection for tax non-payment plummeted. Low-level IRS man- agers complained that the new message to them was dont aggravate taxpayers, excepting people like Maritza Reyes.

There's more there for the interested.

Posted by: S Ra on January 11, 2006 at 9:22 AM | PERMALINK

Thanks, kth, for reading what I wrote! And S Ra - that's what confuses me about tbroz. He actually shows up with good links, but then comes to insane conclusions.

Posted by: Crissa on January 11, 2006 at 9:41 AM | PERMALINK

I don't get it. I work in sales and in sales you go for the big fish first because that's where the payoff is. You know, 20% of your customers account for 80% of your revenues,so concentrate on the top 20%.

These Republican sales managers need to get canned.

Posted by: Nemesis on January 11, 2006 at 9:58 AM | PERMALINK

This is yet another feature of how the Repiglicans do things, that makes you wonder how they can keep getting elected in so many parts of America. Their mostly expert playing of "The Great Game" (our domestic version) is something to marvel at, and to war against always.

Posted by: Neil' on January 11, 2006 at 10:15 AM | PERMALINK

hey, tbrosz:

I followed up your link, and guess what I found:

One [factor in increased aduting of poorere filers] was the CONGRESSIONAL MANDATE the IRS reduce non-compliance in the Earned Income Credit program, a special tax benefit for low-income Americans. A second factor has been the substantial decline in the size of the IRS during the Bush and Clinton administrations. There were 31% fewer full-time IRS employees at the end of 1999 than in 1988. (By contrast, the FBI today is larger than at any time in its history.) With fewer IRS employees, the face-to-face district audits essential for the examination of larger and more complex returns have steadily slumped. In 1981, for example, the rate for these more intense kind of audits was five times higher than in 1999."

As I recall, it was under Bush I that auditing of poorer filers became an issue. At that time, it was administration policy. Under Clinton, it was by virtue of a congressional mandate.

Guess what the Bush I administration and the 1997 Congress had in common: Right, they were both Republican. So you alleged argument, as always, is completely full of shit.

Posted by: brewmn on January 11, 2006 at 10:16 AM | PERMALINK

PS - Who and how really decides what the IRS is going to do? Who has oversight, how can we influence it, etc?

Posted by: --Neil'' on January 11, 2006 at 10:19 AM | PERMALINK

That, and one rich guy's vote doesn't nearly match the hundreds of votes of the folks you give his money to.

That, and one Senator's vote that the rich guy can buy with campaign contributions doesn't nearly match the hundreds of votes of ordinary folks. See, e.g., the recent bankruptcy bill.

Posted by: Stefan on January 11, 2006 at 11:03 AM | PERMALINK

Ya, if we could just get rid of all the rich people, then we'd have all poor people left.

I think Cuba did that. But they have universal health care.

Posted by: conspiracy nut on January 11, 2006 at 11:07 AM | PERMALINK

Kennedy...Kopechne...Cuba...Mao...Soviet menace...Chappaquiddick...communist...Castro...bleep. Blip. Flop

Posted by: Random Conspiracy Nut Word Generator running through its entire limited vocabulary on January 11, 2006 at 11:19 AM | PERMALINK

I have no views on the EITC and whether or not there's a lot of fraud involved with it.

I do seriously question Max's unsupported claim that there is $340 billion of other tax fraud annually. What possible basis is there for this claim? Tax fraud is not the same thing as tax avoidance. Tax avoidance is perfectly legal - it's entirely legal and appropriate to arrange your affairs to minimize your tax burden. Taking an aggressive tax position, especially where the courts have never accepted the IRS's position, is not in any sense fraudulent either. Tax fraud is lying about your income or lying about your deductions.

It is completely irresponsible for you to repeat assertions like Max's which have no support and are unsupportable.

Posted by: DBL on January 11, 2006 at 11:22 AM | PERMALINK

Well, DBL, I found thisAccording to the IRS, individual taxpayers do 75% of the cheating -- mostly middle-income earners. Corporations do most of the rest. Cash-intensive businesses and service industry workers, from handypeople to doctors, are the worst offenders. For example, the IRS claims that waiters and waitresses underreport their cash tips by an average of 84%.And interestingly enough, I also found this

The fraud/error rate for EITC is huge -- with about $9 billion of the $32 billion expended each year going into the wrong hands.
So there will be some mitigating factors.

I guess Max is in favor of EITC fraud and wants to go after doctors and waitresses instead.

Posted by: conspiracy nut on January 11, 2006 at 12:05 PM | PERMALINK

Dang, hosed a blockquote, hope you can figure it out.

Posted by: conspiracy nut on January 11, 2006 at 12:06 PM | PERMALINK

Fonda...Moore...Sheen...Pol Pot...Ortega menace...Rathergate...Chomsky...Cindy Sheehan...bleep. Grep. Flerp.

Posted by: Random Conspiracy Nut Word Generator running through its entire limited vocabulary on January 11, 2006 at 12:08 PM | PERMALINK

Sure, tips are underreported. Great, that means millions of underreports.

But while they may be the most violations, do their violations make up the bulk of the revenue lost?

I doubt it.

Posted by: Crissa on January 11, 2006 at 12:23 PM | PERMALINK

Oh. I remember. Rent. Food. Heat. Cable. These things cost money, which only comes from, I dunno, income.

Posted by: Crissa on January 11, 2006 at 5:30 AM | PERMALINK

So I have to earn income 'cos of my consumption. So what's wrong with a consumption tax... it doesn't leave me with any incentives to pass up good income and economic activity.

If I'm living it up, I pay more. If I'm living cheaply, I pay tax as if I'm living cheaply.

Posted by: Mcaristotle on January 12, 2006 at 1:15 AM | PERMALINK




 

 

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