
Computer Scientists Wield Artificial Intelligence to Battle Tax Evasion - hvo
http://www.nytimes.com/2015/10/10/business/computer-scientists-wield-artificial-intelligence-to-battle-tax-evasion.html
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raverbashing
> Could the federal tax laws — 74,608 pages of legal gray areas and welters of
> credits, deductions and exemptions — be accurately rendered in an algorithm?

Funny how the discussion is never to simplify the code

Government is very good at creating their own problems. Then they get to
complain about how there's not much money for actual benefits to the
population

The tax code should be designed to fit into 100 pages (or even better, 20
pages)

Reducing nominal taxes AND complex deductions would probably result in a net
gain in revenue

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rayiner
Everyone wants to simplify the tax code. They just want to simplify the parts
other people like. We could cut out a big chunk by getting rid of farm
subsidies. My wife (went to high school and college in Iowa) doesn't think
that's acceptable. We could simplify by getting rid of all the handouts for
older people (mortgage interest deduction). My parents, who save tens of
thousands in taxes each year from their McMansion, don't like that idea. I'd
love to have a flat tax with no brackets. But my liberal friends like the
whole progressive taxation thing. The tax code is a soup but it's one that
reflects an equilibrium of all these interests.

Also, the idea of government creating a complex tax code just for funsies is
naive. The tax code is huge because accounting is complicated, and taxation is
basically a superset of accounting. The GAAP rules are 25,000 pages. That's
probably the lower bound in how much you can simplify the tax code (without
incorporating the GAAP by reference, which basically would outsource writing
tax law to a private organization).

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ams6110
I own a home with a mortgage. I would gladly trade the exemption for a simple,
fair tax code.

Accounting in large part is complicated because of the tax code. Revenues -
Expenses = Profit is not complicated otherwise.

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harryh
> Revenues - Expenses = Profit is not complicated otherwise.

LOL. Nope.

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tomohawk
Better idea: use the AI to aid people in filling out their taxes instead.

Even better idea: simplify the tax code

~~~
gaius
Singapore's tax code fits on 4 pages of A4 and they have a 99% compliance
rate.

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eru
It's more hassle to cheat than to pay your taxes, since they are also famously
low.

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mamon
Also, since tax rules are so simple there are no ways to cheat, because that
usually comes with complex and vague rules of tax deductions, which Singapore
simply does not have.

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eru
Yes, you'd have to hide your income. And that's harder than getting it
misclassified in a more complex system.

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abdias
Why not use it to find corruption in government - that would be much more
useful for the most.

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thrill
Buffer overflow.

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maxharris
The tax code should be simplified, and tax rates should be flattened as well.

A vast improvement over the status quo would be that everyone pays the same
low percentage, no matter the amount they make. If you make your money
honestly (and the vast majority of us do), it isn't morally right that you get
soaked from the very moment you begin to succeed.

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Frondo
Of course it's morally right--the people who are doing best in society have
the highest obligation to society, just like the strongest and most capable in
a family should be the one bringing in the bread. We even instinctively recoil
when we see the deadbeat who won't work, forcing their
children/siblings/whatever to support them.

We even used to have a common phrase for it, _noblesse oblige_ , though that's
fallen out of favor in the last generation.

~~~
afsina
Society is not your family. Your responsibilities are very different in both.
But the main issue is who decides what your social obligations are? Helping
people is a moral issue and right for "me", but may not be a moral issue for
somebody else.

So, I disagree, this is not an obligation. I know that this is the debate of
the likes of Rawls versus Rothbard. Just could not help replying.

~~~
Frondo
Well, ultimately, we all decide what our social obligations are, because we
live in a democratic society. We discuss, we persuade, we elect, we vote, and
so on. The conversation never really ends, and each new generation chooses
again for itself where to draw the line.

But things, historically, have gone pretty good for everyone, the more the
rich chip in, and pretty badly for almost everyone(though better for the rich,
of course), the less they do.

Now, I get that a lot of people decide "these are the principles I think are
important, and damn the consequences," but I think that's silly--if a
principle I like ends up leading to a crummy society in one way or another
(e.g. I don't think pollution should be regulated, full stop, and suddenly
everyone has shitty air quality), then I'm going to rethink that principle.
Others stick to their guns no matter what.

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togusa
Soon: tax consultants using artificial intelligence to battle tax anti-tax
invasion artificial intelligence leading to a new arms race...

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nickpsecurity
Heck yeah! Matter of fact, I proposed this when the tax shelter boom was
happening a long time ago and I said then I doubted it was original. The
reason is that scandals like BCCI show the accounting has to be a maze as much
as possible. So, logically, the next trick is to have software that automates
creating that maze while still able to get the truth out of its for parties
with access. And get money to the right place.

At the time, I saw malware authors doing it with program obfuscation kits.
Accounting information systems were often boring programs following simple
rules. The obfuscation of accounting similarly followed straight-forward rules
albeit with different rules for different schemes. Automating them should also
be straight-forward. And need no AI whatsoever: just templates, heuristics,
and maybe source code in Unlambda or INTERCAL.

[http://www.madore.org/~david/programs/unlambda/](http://www.madore.org/~david/programs/unlambda/)

~~~
togusa
Yep. I work in finance and have seen inference engines used to work out
investment goals. It doesn't take much to turn those into tax goals :)

There is a ton of money in writing something that does this.

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kirk21
Maybe governments should stop being such a big spenders. The problem is that
they never cut their costs and people seem to accept that (at least in
Europe). What are these people (politicians) even doing the whole day? Most
countries in Europe are super small and quite easy to manage.

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gaius
Well this is how it works: there's an economic boom and profits are up and
payrolls and bonuses are up and because these things are taxed as percentages
tax revenue goes up too. Some of it gets spent on stuff, like schools and
hospitals or whatever, but most of it goes on the salaries of public sector
workers.

Then there's a downturn, profits are down, people are getting laid off, no
bonuses are paid and because these things are taxed as percentages, tax
revenues are down. But your public sector workers demand to be kept in the
style to which they have been accustomed, and the money has to come from the
government's "real" spending.

Then the next cycle rolls around, and every time the public sector ratchet up
their pay and benefits a little more, until eventually that's all the
government can spend money on. There is a very good case that people employed
by the government, should not get a vote, because they cannot be objective.

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Retric
Not really, governments regularly cut back in the short term. The real long
term ratchet is people keep wanting the government to do more, ex the EPA did
not exist in 1969. Health benifits don't get to provide 1990's levels of care
they need to keep up with an ever expanding array of new and more expencive
treatments. Domestic partners now qualify for government benifits. The public
never says, we don't need you to do this anymore.

Hell we have started doing DNA testing for Robbery's.

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grkvlt
> A _recent paper_ by Mr. Rosen and four other computer scientists [...]
> demonstrated how an algorithm could detect a certain type of known tax
> shelter used by partnerships.

The bit.ly link to the paper in the article is broken. The actual PDF can be
found here -
[http://taxprof.typepad.com/files/taxpaper.pdf](http://taxprof.typepad.com/files/taxpaper.pdf)

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xacaxulu
Yay. Solving the important problems of our lifetime...</sarcasm>

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sebastianconcpt
Who is John Galt?

~~~
WesternStar
Someguy who lives in Brooklyn. Has a trust fund.Tells you about how great he
is and how the man is always keeping him down.

