Wait a minute, there is a distinction between Tax Avoidance and Tax Evasion.
Tax Avoidance is perfectly legal and encouraged by the IRS. There are many exemptions and credits for anyone who is eligible to take advantage of. If you’ve ever seen “whichever is lower” on a tax preparation form, that’s an example of avoidance. Why pay more when the law says you don’t have to?
Tax Evasion is the illegal activity of not paying taxes you were supposed to pay. This is where fraud comes into play. People should absolutely be prosecuted for evasion, but they should not shamed for avoidance.
> Why pay more when the law says you don’t have to?
Yeah, it makes no sense. I would not do that, not sure why I should expect others to do that. I think this whole thing is BS.
I can very well agree that some people can afford to pay more tax, but tax is not some trust based charity system. I would say simplify tax laws so people can avoid tax easier without having to hire an army of tax professionals, and then increase the effective tax rate on the people who can afford to hire an army of tax professional.
If you are not for this approach but you whine about tax avoidance I think you are just looking for a way to score political and ideological points.
They should not be prosecuted for avoidance. I think at a certain point it's fair to shame people for seeking out loopholes, even if they're technically legal. Not that they probably care.
> > I think at a certain point it's fair to shame people for seeking out loopholes, even if they're technically legal. Not that they probably care.
> Governments should just close the loopholes.
Calling attention to the existing wrong — its existence, it's wrongness, and it's connection to the present state of the law — is a key part of changing the law, so such public shaming is directly part of that process in a democratic republic, though perhaps not in a regime where “the government” is an aloof dictator unconcerned with public opinion.
> public shaming is directly part of that process in a democratic republic
When the wealthy can collectively lobby their way out of paying taxes, this process is pretty much useless. The middle/lower class don’t care so much to do public demonstrations.
Do they do this though? I don't see anyone making specific policy proposals, just blaming "loopholes". What is the moral wrong here? Can anyone state it in a way that doesn't also apply to everyone else.
I suspect that people are less concerned about loopholes and more just jealous that some people make massively more than them.
Many of the loopholes were 100% known by everyone passing the law. They were often an agreement to keep certain stakeholders happy.
For example, this year in the UK there is a special question on the tax form for if you are a deep water diver. Why? Because divers have a different taxation system put in place as a sweetheart deal for BP (who employ a lot of divers for their offshore oil rigs)
I don't care in the least if someone makes more money than me. Good for them. But if they make significantly more than me and yet pay a significantly lower effective tax rate than I do, well then I get a bit annoyed.
An accountant once told me a loophole is just someone else's deduction. I don't think you can even just go with the intent of the law, 401ks famously weren't intended at all, they were a loophole that are now viewed as a pillar of most American's retirement plans.
Ya, but there are a lot more ways to avoid taxes than just deductions. Sometimes going way out of your way and doing things like renouncing your citizenship or creating shell corporations or never paying dividends and just using corporate profits to buy back your own stock forever.
Not for the ones they fall victim to, but what is hacking but the exploitation of bugs for personal gain? I assume you or your company would blame a user who exploits a security bug and uses it to compromise your product/business/other customers
Loophole is a loaded term because it itself implies morality or lack thereof. If it's legal, it's legal. Period. Calling it a loophole implies otherwise.
I know it won’t work because some businesses work on high volume, really slim margins (such as grocery stores) but I really believe the solution is still to have a tax based on gross receipts with no credits, deductions, or anything like that. Call it like alternate minimum taxes for businesses maybe?
As for personal income tax, I strongly believe all credits, deductions, exemptions should be abolished/phased out completely. These are nothing but an extra tax on the lazy, the stupid, and the poorly educated like me. Whether you have zero dependents or a hundred, your tax obligation does not change. Whether you donated nothing or all your income, your tax obligation does not change. Why can’t we have that?
Except it's not that simple. There are a lot of legal grey area techniques that people use to avoid taxes. Tricks that the average person cannot take advantage of because it would not be cost effective to have to defend them in tax court.
That really depends on what is a loophole. Should people be publicly shamed for making pension contributions or buying an electric car? I sympathise with where you are coming from. Someone employing themselves via a company in Ireland that owns one in Barbados and calling the money a loan is likely shameful. But there is no hard line between these two...
There's no hard line, but there's a soft line at the letter vs intent of the law. More concretely, when the wealthy as a category are contributing less than their fair share to society, the intent of the law is not being fulfilled. Even if it's a tough thing to solve.
I don't think people should be shamed for trying to minimize how much they pay for something they didn't consent to, that ends up mostly enriching government sector insiders in powerful unions.
I personally detest the phrase Tax Avoidance. If an exemption exists and allows me to pay a tax lower than I would have otherwise, what tax was avoided? Why are exceptions viewed differently than the tax tables? They all collectively constitute the “tax code”.
Tax avoidance means “following the tax code and being an honest citizen”. Why would you apply such an Orwellian term to something so banal?”
Well, tax avoidance implies that you are taking actions or modifying your behavior for the express purpose of avoiding taxes. If you increase your ira contribution amount at the end of year to more than you normally would have in order to decrease your taxable income, then that is an example of tax avoidance. If you schedule a corporate team building retreat in the Bahamas instead of taking a personal vacation there, that is tax avoidance. Moving from California to Texas right before you sign a $100m contract is another example of tax avoidance. Denouncing your US citizenship before cashing in billions in stock is another example of tax avoidance.
Eliminate capital gains all income is taxed as earned income.
Eliminate all deduction except primary residence and dependents.
Since all deductions are eliminated lower tax rate to the effective tax rate for that tax bracket.
We've just closed all the loopholes, and given most people a tax break.
Add two new tax brackets:
>$5M with a tax of 45%
>$10M with a tax of 69% (back to the good old days).
This simplifies tax for everyone, gives all but the 1% a tax cut, eliminates all the loopholes, makes auditing a breeze, because it simplifies everything the size of the IRS can be reduced and their effectiveness can be increased.
There are about 16,000 people in the U.S. negatively impacted by these changes. For the other 353 Million people it's a huge plus.
Even simpler solution: Switch entirely to sales tax to fund everything. Whittle things down to three sales taxes: federal, state and local and the federal also gets the benefit of import taxes.
If you consume more, you pay more.
Everyone has skin in the game (everyone pays proportional to their consumption) and thus everyone now has a vested interest in advocating for a leaner, smarter and more efficient government that is less wasteful.
A progressive income tax is actively counter-productive to getting a greater return on investment for governance.
Furthermore, a progressive income tax also massively distorts the price of labor so no one paying for labor is paying the true cost of labor which should be the sum of (1) the disposable income paid to a laborer and the (2) taxes that laborer pays to the government. You're not actually making people better off with a progressive income tax because the market will just lower the amount paid to be equal to the disposable income portion.
So if I don't spend but save, there's no limits on the growth of my wealth? That's not going to be a popular option. People are concerned about wealth growing without bounds (and the growth of power that comes with it). Taxing that less is concerning in terms of the effect on social dynamics.
The primary benefit of wealth is in liquidating it and spending on consumption.
If you're growing your wealth, you're doing something good that society should want more of: investing. You can't grow wealth without reinvesting that wealth. That is what powers the economy and creates jobs and drives R&D and innovations.
> People are concerned about wealth growing without bounds (and the growth of power that comes with it)
The purpose of taxes is to fund the government: nothing more, nothing less. It is not the government's role nor purpose to limit wealth creation in any way shape or form. That's never been its mandate in why it collects taxes. SCOTUS even made this observation about taxes:
"the power to tax involves the power to destroy." – Justice Marshall in McCulloch v. Maryland (1819)
That said, government may be used to place checks on certain types of uses of power when individuals go to exercise it. While wealth may result in power, it doesn't necessarily result in uses of power that need to be checked by the government.
> Eliminate capital gains all income is taxed as earned income.
I don't own property, I rent, trying to save for an apartment. I am currently paying CGT on savings (I think at income tax rate). People who do own property where I live get tax rebate because they have mortgage, and they don't pay CGT on residential property. How is that fair? I am poorer than most people who own property but paying higher effective tax rate than them, and it makes it more difficult for me to buy.
Easy. Put your estate into a terminally settled, non-transferable, future-callable, sale-leaseback with a partial-repo feature, with a European or Japanese bank.
Impossible to tax (aside from the income stream), no downside except for some additional tax headaches. But I assume a few tax headaches are worth it in order to keep billions of dollars in your family.
> Easy. Put your estate into a terminally settled, non-transferable, future-callable, sale-leaseback with a partial-repo feature, with a European or Japanese bank.
is this word salad or legit? If so, any resources to learn this?
Why should you be punished if you do something entirely legal? Can't we rather just close the legal avenues that allow people to avoid them? Why keep it legal? What do you gain by having these loopholes?
Advertising has perverse incentives, which encourage business models that require invading privacy and optimizing "engagement" at the expense of civil discourse and mental health.
When you don't pay for something, you are the product.
We should come up with some sort of alternate system which enables wide participation in non-predatory media platforms.
Taxes are whack, the more you make the more you get to keep. But you wanna know whats really whack? My mom died and I'm going thru the process of transferring her property to me. I've got to pay a MF'ing inheritance / property transfer tax on it. She owned it 100%, the house and property have been in the family for 60+ years. My grandparents paid tax on it when they bought it. Nothing like America to come back and double dip at every turn.
$10M is insanely generous. Here in the UK inheritance tax is 40% on everything over £325K ($450K USD), unless you leave it to your spouse (unlimited) or a charity.
Even if you leave your estate to your kids or grand kids, it's only £500K ($700K) and that is only if you're leaving the family home (another example the UK being obsessed with property ownership).
It's also payable by the recipient, not the executor of the will.
On the one hand, it's really frustrating to be in that situation, because the property is clearly already yours.
On the other hand, an inheritance tax is one of the few mechanisms I can think of to keep a wealth distribution at least somewhat under control. There's a constant accumulation of wealth at the top already anyway; re-distributing some of that back down the ladder when rich people die seems like a good idea.
It of course would make more sense if the (elusive) middle class was hardly taxed at all in this scenario, and the 1% a ton, but... that would of course upset a lot of people with a lot of power.
Corruption, incompetence, differing priorities, mismanagement, bloat, misallocation, probably a mixture of a bunch of factors really.
It will still generally find itself in the hands of people with less wealth than the richest portion of society, but it almost always stops much higher than the bottom run.
True, it is not exactly the same, because the wealthier people would probably still benefit disproportionately from most government spending. But by taking wealth out of the system at the top, you at least limit the growth of the divergence between rich and poor. And of course, you could in theory use the additional tax income to actually help the poor with better public education and better government-sponsored healthcare -- but that I guess would be dirty socialism.
My point is you take the money from the top, you kick it some distance (but not that far, generally) down the ladder and then that money inevitably makes its way back up.
The problem isn't that we don't tax rich people enough. It's that the way the system is built, rich people become black holes that suck in any wealth that enters their orbit. Once they have it, it's effectively locked away from everyone.
Taxes are one way to try and slow that down but it's clearly not a perfect solution and simply turning up the amount of tax isn't going to stop it.
We don't really know anything about the OP. It's possible he is not rich, the house is not worth that much and that's all he has/inherited, he doesn't have money to pax the tax, and thus will need to sell the home at (probably) a discount to cover the tax bill.
He could be actually slipping from middle-class as we speak.
That was my initial impression of the OP actually, but after looking at [1], it seems they wouldn't have to pay an estate tax at all if the inheritance wasn't worth at least $5.3 million.
I'm not sure you'd want to live in that kind of America.
We aren't talking about "free riches" here, we are talking about keeping a country and society stable. And I'm convinced you can't do that without keeping inequality of all kinds -- income, wealth, education -- in check, because you'd cripple the country and ultimately end up with revolts otherwise, and probably justifiedly so.
Every individual benefits from the (infra)structure and stability that a country and society offers them, so pretending it's okay for someone to make millions by using those benefits and then turning their back and saying "yes but all this is now solely my own and taxation is theft" is kind of ridiculous.
The company employing you likely paid tax on the money it got, now it passes it to you as wages and you pay "another" tax. The same for investments. Why shouldn't you pay on inheritance? You haven't paid tax on that property before right?
And with an inheritance, the inheritors haven't done anything to deserve not to be taxed. Workers have worked, investors invested, inheritors are basically lottery winners.
People don't like how inheritance tax feels but its actually one of the most logical, fairest, least economically expensive taxes.
Sorry for your loss, and apology to bring up what I'm about too.
Since you didn't contribute anything for this house, why should it go to you? Why shouldn't it go back to society at large?
I understand that we've all grown with this cultural idea of legacy and inheritance, but I find it more and more problematic and morally unjustifiable as I get older. It just seems like as much as we try to create equal opportunities for all children, we keep around this massive inequality where children whose parents have more wealth pass it along and create privilege classes, giving some unfair advantages over others.
Already we see that the wealthier the parents the more successful the child, due to better education and care. To also have them inherit wealth they didn't amass themselves seems a tad too much in my opinion.
I can see some reasonable scenarios, like when the child is still a dependent, or leaving behind a certain amount of sentimental goods, but beyond that it seems unfair to me.
I tend to be very much aligned with the idea of equal opportunities, unequal outcomes. Each one of us should be able to compete on an even playing field with the rest for a bigger slice of the pie, and so if you contribute more to making the pie bigger you deserve a bigger slice and can enjoy it for yourself. Your kids though didn't, and shouldn't have unfair advantages of opportunities. Similarly, I think everyone deserves a minimum, which allows you to again have the necessary safety net to be able to equally compete with others. Traditionally this safety net has been provided through these inheritance schemes and the parents you have determined if you get a safety net or not.
> Since you didn't contribute anything for this house, why should it go to you?
That's the wrong way to look at it. The former (deceased) owner of the house did contribute to it. It belonged to her and she had every right to dispose of it as she wished. That includes giving it away to someone else of her choosing upon her death. It's not the recipient's property rights that are being infringed upon here, but rather the donor's. The only thing "unfair" about this situation is that the effort of earning and deferring consumption and investing which the deceased put into acquiring the property is being stolen by uninvolved parties who contributed nothing toward it for their own enrichment contrary to the explicit wishes of the owner, and not left to the beneficiary the owner intended.
> It belonged to her and she had every right to dispose of it as she wished
That's a moral argument, but the issue with moral arguments is they can be made in every direction just as easily.
For example, Thomas Jefferson said:
"A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
And Smith said: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."
Morally speaking, the founding fathers were against inheritance and the right of one person to be binding over future generations after their death.
Morally I agree with this, as I can't really see the justification for it. But as I said before, that's the issue with moralist arguments, they can be made both ways. So I'm more interested in practical aspects, maybe inheritance is actually responsible for greater wealth inequality, free market inneficiencies, political instability, and other downsides, but maybe it has upsides as well, though more and more I'm starting to see it as a net negative personally.
Jefferson, and the founders in general, were referring to covenants or trusts governing the use of property after death, such that no living person had unrestricted use of it ("to bind it up from posterity", not to decide which particular posterity inherits it). I would generally agree that someone currently living must always hold the property rights—the dead cannot own property, so if the rights did not transfer then the property would be abandoned and free for anyone to claim via homesteading. That, however, is a separate matter from transferring rights to a designated benefactor at the time of death via an explicit prior arrangement such as a will.
As for Smith, here we'll just have to disagree. I find it beyond bizarre that anyone would claim that a person has the right to dispose of their property as they wish at any point before death, but not at the moment they die. That distinction is nothing but the most trivial technicality.
> Jefferson, and the founders in general, were referring to covenants or trusts governing the use of property after death, such that no living person had unrestricted use of it
Did you read the article I linked? Cause that doesn't seem to be the case. He repealed the laws of primogeniture and entail, and he himself quoted Smith, showing that he was in agreement with Smith.
And confirmed here as well:
> Some founders wanted to eliminate inheritance entirely. In a letter to James Madison, Thomas Jefferson suggested that all property be redistributed every fifty years, because "the earth belongs in usufruct to the living." Madison gently pointed out the plan's impracticality. Benjamin Franklin unsuccessfully pushed for the first Pennsylvania constitution to declare concentrated wealth "a danger to the happiness of mankind."
Primogeniture is again a different matter—that is the idea that the estate, or at least a certain portion of it, must be inherited by the firstborn heir, not a beneficiary chosen by the owner. I would 100% agree with repealing primogeniture laws. Entail, "an interest in land bound up inalienably in the grantee and then forever to his direct descendants"[0], is a reference to the covenant or trust concept I mentioned earlier. Transferring the rights upon death is one thing; making it so that the recipient is subject to restrictions imposed by the deceased donor and unable to dispose of the property as they wish is another. My own position is that for any action to be considered off-limits (i.e., sufficient justification for any punishment or reciprocation involving force) there must be some living person whose rights would be infringed by the action; deceased former owners lack standing in the matter.
The article that you linked was behind a paywall, but I read as much of the intro as I was able.
Jefferson himself was mostly anti-property in general, as your quote about redistributing all property every 50 years shows, but that was a fringe position among the founders.
Jefferson, Franklin, John Adam, Hamilton, Washington, Madison, all seem to have some quotes referring to this. And Paine, Smith, Tockevile which were all influential thinkers similarly.
In general I feel the consensus of that stackexchange answer seems right to me:
> Although quotes from founding fathers directly addressing an estate tax are scarce, it is commonly argued in related articles that they did not want a privileged aristocracy; and that they believed individuals should achieve wealth through merit and hard work, not inheritance. The founding fathers were rebelling against empires that had large concentrations of power, generational wealth, and class status that was earned through birth rather than labor
So while there's no way to know where precisely they'd land on the matter of abolishing inheritance, it seems pretty clear to me they'd at least have some concerns over any form of inheritance schemes or other schemes that allows wealth to be acquired or transferred without risk and/or labor.
But again, what the founding fathers would think don't make it best, we can value their hindsight, but we should be able to argue for our positions on its own as well.
Morally there is the natural right to property, which neither of us disagrees with. But I consider the right to transfer your right to someone else problematic, in that, once you choose to let go of your property, I'm not sure you own it anymore, and don't get to decide who it goes too similarly.
Also, your natural right to property is conditional on having acquired it fair and square. If you stole it for example, it doesn't count. In my opinion, within the value framework of capitalism, that would extend to if you didn't earn it it doesn't count, and I don't see how inheritance can be defended as having earned it. Same goes for having it be gifted to you. Anything outside the markets shouldn't count as earning it in my opinion. You got to show up for it with merit and hard work, which the markets are a measure of.
So schemes where you can acquire wealth by birth or blood association, or by friendship or courting, they seem immoral to me.
And on a non-moral angle, from a practical standpoint, I do feel it hinders free markets, optimal competition, and societal stability. Now I reckon it would be tricky to get rid off now, and finding the replacement strategy will be challenging as well, some alternatives could be worse, so we'd need to be careful, etc. But basically because of all I just said I've started to rethink this whole inheritance thing.
And maybe like Theodore Roosevelt of the Republican Party did a while back, a graduated estate tax is the best solution, and we should revise it to today's proportions and inflation. As he said:
> We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community … The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.
Though I'm not as onboard with the graduated income tax, some amount of it as needed to provide the minimum of opportunity to others, but beyond that if you earned it, you deserve it. That said, gifting it to others or transferring it to heirs or friends or spouses, that doesn't sound merited to me.
No, I've seriously been rethinking the assumptions, benefits and merits of inheritance. I'm actually curious to learn what is the history behind it and the current philosophies for it. I'm not yet at a point where I'd fight against it, but it's been gestating in my head that it seems to be a wart to the system more than anything.
But they're not paying the least, they are paying the most (of course, not as much as they are legally obligated to pay).
Moreover correctly paying your taxes starts to get really difficult the more and more money you make: income starts to come from many different sources and figuring it all out is super difficult.
If we drastically simplified the tax code, I think the IRS would collect more taxes, people would pay more taxes, and high earners could easily calculate their tax burden without hiring very expensive professionals. This would unequivocally be a net win, though entrenched interests would never allow it to happen.
A simpler tax code would likely make for fewer unintended loopholes so revenue may very well go up but I don't find "oopsie" to be a remotely plausible explanation for this state of affairs.
The wealthy have wealth managers who know exactly what they are doing.
You started at so complicated that tax avoidance happens by accident and now you're talking about finances so simple you could drop it off at HR Block.
I feel like I should probably chime in here. I’m an expat, working remotely with several income sources. Some of them can be taxed in the US, some can’t (because it’s tax exempt income) but is taxed where I reside — corona relief cough. It gets really dicey, really fast, once you throw in FBARs and accountants trying to follow various tax laws, etc. It’s really easy to miss one in the EOY shuffle. For example, last year I almost nearly forgot I had a TransferWise account and all the fees were tax exempt (where I reside). I thought my accountant was going to have a conniption since it was the final draft before submitting it.
Yeah, it’s all “really simple” but it’s simple, as in “distributed systems are made of simple things, how can it be complicated?” It gets complicated, quickly, and with enough bank accounts in enough countries, it is easy to forget one or two.
I think you got it backward (though OP can chime in). I think he means that complicated tax laws makes it very difficult for tax authorities to figure out and trace their tax bill. If say, the rich guy has 250 complications that each require 20 man hours, that'll cost 5.000 man hours. It's not clear if the study that's promising 7-6 bucks for each buck spent on the IRS is taking that into account. It's not clear, also, if investigating these complicated setups will require more experienced professionals.
I don’t think the person you responded to is being disingenuous, and I didn’t sense that they were advocating for top earners to avoid paying because of complexity. Far from it. They were mentioning how incredibly complicated tax returns become once income becomes significant and diverse. A myriad of loopholes and accounting tricks make determining their “fair share” very difficult. The poster is asserting that a much more simple tax code would help alleviate this.
People in the top 1% don't have an issue paying a CPA to make sure their taxes are correct. That being said the tax code and filling process is made purposely obtuse due to lobbying for tax prep companies.
The tax code is also heavily influenced by the very wealthy allowing for massive tax relief through various tax havens, shell companies and loopholes. Of course that all takes a team of high power accountants to figure out.
A CPA only knows what you tell them and ultimately relies on you remembering to tell them about a new bank account, invoices, etc. If one is forgotten or missed, the CPA won’t add it the books.
The total wealth of all American billionaires is $4 trillion, the same amount Bernie Sanders estimates M4A would cost on an annual basis.
So if you took all those assets, somehow found $4 trillion of buyers (lots of Chinese, Russians, and Saudis would line up, I'm sure) we'd get 1 year, not 3.
Universal healthcare in the USA would have a negative cost; that is, today, the US government spends more than Canada does per capita on providing healthcare to the population. And then private individuals spend as much more again. And for all that spending a huge proportion of the population has effectively zero healthcare.
So if the US could implement Canada's system wholesale not only would your health insurance costs and direct payments drop vastly but you'd also get a tax refund.
And it is about to get much worse according to the CDC in 2017. [1] IIRC there were some articles cant find them that talked about the Department of Defense tracking this as an existential threat to the future of the United States of America.
This is more of a problem with legalized obstruction of justice by financial arbitrage. There is no easy solution to that problem, and it plagues all areas of modern life.
>>legalized obstruction of justice
That's a contradiction in terms. No person owes a red cent more than what their legal required to pay. There is no obstruction of justice unless you're of the persuasion that sovereignty & property rights mean nothing while any government should have a right to pilfer bank accounts as they see fit.
They're talking about shell games. Basically, you can play audit chicken with legal fictions.
In order for the IRS to enforce accurate tax collection, they rely on you and everyone else you work/interact with to provide an accurate picture of your fiscal status quo. That requires footwork once you start making any amount of money sufficient enough where it becomes doable for you to establish multiple independent legal entities worth of books that then have to be combed through in order to ensure compliance.
The IRS continually has their funding restricted to the point they can't muster the kinds of effective enforcement actions that span multiple taxable entities, possibly distributed across international boundaries.
They can, however, root out Susie Q. Small-Business-Owner taking out deductions she shouldn't be.
That's what they mean by legalized obstruction of justice, even if they are abusing the term a bit. Those that make their affairs difficult or time conbsuming enough to work through, but also avoid "low-level gotchas" are effectively shielded from the risks of enforcement actions. You'd really need some pretty significant whistles to be blown to even get enough auditors mustered to a case to make it worthwhile to invest the effort, and if you're making enough to be worth it, you probably make enough to hire a few tax attorneys capable of getting you off the hook, miring the tax authority in jurisdictional squabbles or doing the requisite financial engineering to exploit the loophole of the year. That's the issue.
Nevermind the IRS makes more money for the government for every dollar invested. Never mind that the tax code is a nightmare because of Congress more so than the IRS. It's a multi-faceted perennial political problem that shows no hint of going away until 99% of tge country accept that in order to get the government funded to do their job better, you've got to equip it enough to make everybody's life miserable, and at that point you're kind of at best back to square one, where operationally, you'll have 1% screaming their unfairly burdened and everyone else isn't pulling their weight, and it's unfair, yada, yada, yada. Of course, this is all exacerbated by all kinds of deficit spending doubled down on every couple of years, which if we're ever going to dial that back as a country and stop playing games with MMT... Eh. Let me stop. The horse is dead, no use beating it further.
Criminal behavior. Where is the “war on white collar crime”?? Much easier to scapegoat minorities and poor on why the country lags behind in most major indexes that measure education, healthcare, safety, equality and happiness.
Good. High income people get almost nothing for the amount that they have to pay. Some day we’ll have flat fee city states for remote workers who will only have to pay for what they use. How can you justify taking so much when a person’s customers, education, employer, etc. are all located outside of the region that they live in? What is so special about the people living nearby that makes them deserving of another guy’s money even if their lives are entirely independent? It makes no sense...
Because their lives aren't independent. They're all connected through the economy and social interactions. Would Jeff bezos be worth as much if millions of people didn't throw money at his company and he didn't squeeze as much productivity out of his employees whole paying most of them as little as possible? Probably not.
>High income people get almost nothing for the amount that they have to pay.
The whole environment that made it possible for them to have a high income and keep, from instracture to law, and from defense to consumer markets, has been paid almost entirely by others.
I think they meant get from the government (unless you believe in an extreme collectivist view of the economy and think all wealth fundamentally belongs to the government, not the person who received it through voluntary transactions with other people).
One of the only convincing rebuttals to the statement "taxation is theft" I've heard relies on the fact that the government is the entity that bootstraps the very concept of private property as we know it. Without this guarantee of private property, there is no way to accumulate wealth for an individual in the first place.
The main problem with that argument is that it's based on false "facts". Private property predates government; it wasn't created by government. People have to actually have stuff worth taking before the predatory protection rackets will appear to prey on them.
Afaik governments emerged during the transition from hunter gathering to agriculture. Hunter gatherers have some concept of private property, but it's in no way the same extent as in modern society. For one, hunter gatherers wouldn't really even think about owning land or animals.
The government created the systems (the markets, the laws, etc) that allowed that person to acquire their wealth. Fundamentally there is no way they would acquire it without this government. Most rich people's wealth is stored in legal fictions back-propped by the legal system they live in.
That’s why I singled out remote workers. The governments who created the systems that allow people to acquire wealth are different from the ones that collect taxes. The government that allows my employer to exist could invade the one I pay taxes to.
Here's a thought: paying to live in a functioning society where people less privileged than us don't die destitute serving us... might mean they don't have to guillotine us to survive when it comes to that. Just, you know, keep it in perspective if you don't have a moral compass about what you "get" living in a society where other people besides you are safe and healthy.
That is a half-decent practical argument for those with means to donate to charity, though it presumes that the "less privileged" are inherently irrational. Guillotining the rich (or just taking their money and turning them out on the street) isn't likely to do much at all to aid their survival. Barring some regrettable but ultimately trivial examples of conspicuous consumption, the mostly-paper wealth of the rich is tied up in capital investments aided at producing goods desired by the masses. Liquidate that and you have a bunch of useless cash and no goods to purchase with it.
It isn't in any sense a moral justification for taxes.
Neither do I, for what it’s worth. My approach to this subject is probably too brash, but it comes from a time when I was among the servants and being priced out of the place I would live to continue that work.
Almost everyone in the world who provides anything for us already lives in terrible conditions and makes a few dollars a day. The people nearby are even less deserving since they’re so much less cost efficient to help.
Honestly... I wish I could wish the same on you when you inevitably need to depend on others, but I don’t have it in me. I’m not even mad, I’m just amazed that people who think this way are so unthreatened they think they can say it outloud without consequence.
You are getting downvoted, but I feel you (tax bill is approaching here...). The reality is, you need to strike a balance somewhere: Taxes are a matter of supply/demand. If you increase the taxes, at some point people are going to move somewhere else. If you reduce the services, you have to reduce the tax bill otherwise people and business will feel ripped off.
Most people here are either 1. employees who can't evade taxes because of how the system is setup, or 2. Entrepreneurs who are virtue signalling because of the magic internet Karma or 3. Simply have no money and think somebody else should pay for stuff. In reality, pretty much everyone will try to avoid taxes if he gets the chance (isn't that what the article is about?).
Tax Avoidance is perfectly legal and encouraged by the IRS. There are many exemptions and credits for anyone who is eligible to take advantage of. If you’ve ever seen “whichever is lower” on a tax preparation form, that’s an example of avoidance. Why pay more when the law says you don’t have to?
Tax Evasion is the illegal activity of not paying taxes you were supposed to pay. This is where fraud comes into play. People should absolutely be prosecuted for evasion, but they should not shamed for avoidance.