I've had to sit through some very amusing telephone calls to Tokyo while the local Social Security Office was apprised that, nope, Japan really does occasionally sign treaties on the subject of taxes and "We can't help you with that" is in fact not acceptable procedure when asked for the relevant documentation to secure one's status under the treaty. (I subsequently learned that there are roughly 400 natural people who apply for that treaty's benefits in the entire world and 399 of them use one of a handful of legal firms in downtown Tokyo.)
(+) for our American friends: a licensed form-filler-inner who are combination notaries, paralegals, and gophers who you can grant Power of Attorney to. For example, if you have a fairly straightforward visa situation, you could give one of them $2,000 and they'd prepare the relevant documents for you. (And, should the Ministry of Justice not agree that your situation is straightforward, everyone will politely pretend that "Really, are you sure about that?" does not mean "Look, he was good for $2,000, how bad could he possibly be? We've been buddies since high school, do me a favor here.")
As it turns out, what I should have done was nothing. Instead of trying to figure out the proper, "by the book" procedure, I would have been much better off if I had either A) done nothing or B) just reported it as some kind of supplemental income on my 1040 or whatever.
The lesson I learned is that strict rules and procedures in any system that largely involves humans can usually be ignored, at least on the first pass. If you've missed something that's actually important, they'll let you know. Otherwise, everyone's better off leaving well enough alone.
If I ever get elected president, I'd insist the tax code get smaller by 10% each year. If congress/senate can't figure that out then every item whose number ends in a particular digit would be automatically deleted (eg all ending in '3').
Over $12 billion is spent each year on tax preparation. That is a huge waste and there are many many better places for that to be spent.
Not in jest: This would be terrible for the poor and middle class and wonderful for the rich, which is the only reason you've ever heard of this cockamamie scheme.
The reason is that the poor and middle class need to spend a greater proportion of their income just to survive, whereas the richest can more-or-less sit on most of their money (in banks and other investments, to be sure) and still live like rich people. Taxing spending is therefore what's known as a 'regressive tax', in that it affects the poor more than the rich, as opposed to a 'progressive tax', which affects the rich more than the poor.
In fact, the progessivity of the tax system has very little impact on inequality. You can have a highly progressive system (like the US, which by some measures has the most progressive tax system of any first world country), or a relatively regressive system like most of Europe, and it just doesn't matter. In which case, anything to simplify the tax system in the US is probably a good idea.
Further, the "rich" in your example are able to easily evade most taxes. Consumption taxes - specifically if implemented as a VAT, as in Europe - are effectively impossible to dodge, even if you're very rich. You may not pay a lot as a percentage of your total income, but you will pay. The (nominally) highly progressive system in the US is unable to guarantee that.
(And in any case, as recursive pointed out, the prebate check would make the system arbitrarily progressive, undermining your entire complaint. Although personally, I'd favour just implementing a straight up European-style regressive VAT, and if you want to redistribute income, do it via welfare payments; that's what they're there for. And unlike tinkering with the tax code, they actually are capable of effecting significant redistribution. Your entire argument seems predicated on the idea that the US tax code has something to offer that the typical European tax code does not. Will all due respect, I question this. The US tax code is a disaster, and US prosperity has been achieved in spite of it, not because of it.)
They do, but they also have higher overall tax rates, which includes an income tax. It's hard to point to European-style VATs as an argument for replacing income tax in the US when that's not how most European governments use VATs.
Very funny. In fact, VAT is actually the easiest tax-dodge of all: just buy through a business and you can claim VAT relief, getting an effective 20% discount on everything. Say you are a graphic designer with your own Ltd company: you can now buy your Spider-Man DVDs, file them under "research expenses", and get 20% back (or whatever VAT is in your country). There are guidelines on what is acceptable, of course, but they are enforced only to a degree. Where they are strictly enforced, it's exactly because the system itself is otherwise wide open for abuse by individuals.
As soon as your business is large enough and diversified enough, abuse cannot realistically be detected -- your 3-people agency will indeed need DVDs for research... and printers, iPhones, vacuum cleaners, dishwashers... most small-firm owners and CEOs never pay VAT, as simple as that. VAT is a tax on fixed-income employees, an incredibly regressive tool. Its popularity is yet another cause of the widening disparity between have and have-nots throughout the continent.
People still abuse this, claiming e.g. that the Spiderman DVDs used for "research" ended up inside the final product and thus qualifies for tax relief -- but if they audit you, that might not fly, and a VAT audit is one of the easiest way to get in real legal trouble.
This is why vat auditing is so ruthless: because it's routinely abused by everyone, so the enforcers have to be harsh to maintain a shred of credibility.
I'm not saying VAT is bad per se (it's just another tax), only that is a clever way to tax consumption by fixed-income employees in a regressive way, which is really not what you want if you're trying to make the system fairer for, er, those fixed-income employees.
Being largely unable to implement the same degree of redistribution (remember also that income taxes are higher in Europe), I don't buy the argument that having more regressive taxation schemes ala a higher Sales/VAT in the United States would have a negligible effect on inequality.
I don't know about you, but 50%+ of my income went into consumption.
Plus, any way you cit
Anyhow, to the best of my knowledge, the best study on the subject is summarized in this graph:
What that shows is that no tax system has a significant impact on Gini. Switching from the most progressive tax system in the study (the US one) to the least (the UK one) would result in a change of Gini of around 0.02. If you rank OECD members by Gini coefficients, such a large change in taxation wouldn't even change the ranking; the US would remain at 4th most unequal. As such, I think it's fair to say that we can tinker with the tax system without fear of victimizing the poorest off. (And, also, that if we want to help the poorest off, we need to pull some lever other than tax policy.)
Yes, 100% true. I agree: the resolution obviously lies in pursuing redistribution more aggressively.
I'm just uncomfortable with regressive solutions as a whole. If your answer is "it raises overall revenue which allows more redistribution" I may be persuaded, but again your correlation between Gini coefficients and the regressiveness of a given tax system feels specious at best.
I reserve the right to admit that I am wrong at a later date, however.
As I citizen of one of those, I can attest that this is true, but surely not for the reason that we have high consumption taxes. Those are actually regarded with uniform disdain.
It's for other reasons --like a proper welfare state, the hold of certain socialist ideals regarding wealth and redistribution, etc. Namely, we don't view being poor as a personal failure, and we don't try to "punish" the poor for being so. We understand that there are systemic reasons for poverty and try to correct or counter-balance some of those.
Thank you for pointing that out. I was very surprised when I moved to Japan from Europe that being poor is highly frowned upon and soelely seen as a personal failure. Obviously, that is mostly not the case and people in Japan work therefore sometimes multiple jobs, just to not look poor through their spending habits/clothing/gadgets w/e. Resulting in being more accepted by the society.
More surprising actually is, that really poor people (read: homeless) seem to view themselves as having failed in some regard and actually dont ask other people for empathy/remorse (they wont beg, mostly).
Japanese society seems batshit crazy, what with all the obsession on never losing face, committing suicide after making a mistake, working until you collapse, always bowing to "superiors" and kissing ass, even changing your grammar to please other people according to some byzantine rank system, etc. How can they live like that?
Hell, Sweden has those tendencies too but we are pretty much libertine anarchists compared to Japan.
You read too much into this. I don't know that much about the European tax code.
You don't frakk around on these things; it makes you look extremely unprofessional and can have grave consequences. Grow up.
It was my first time dealing with this situation and I wasn't trying to "go cheap". I thought I was doing everything correctly. I was unaware that it is standard practice to use a professional accountant in cases like that. I was actually trying to "do the right thing". I just apparently didn't know what that was, despite my best intentions.
Who do I look unprofessional to? The IRS? I can live with that.
The problem is, the IRS could quickly become suspicious out of sheer bureaucracy and start auditing you closely and then you could be in for another lesson on your obligation to preserve records, bills and book keeping etc... And at least in Europe, if you fail to pay taxes and especially insurances, they could notify your customers, no less, that whatever money those owe you has to go to them instead. At that point you are pretty much done for unless you are fortunate enough to have enough cash to quickly take care of any open debts to them.
I really understand your best intentions but unfortunately the tax authorities aren't exactly in the service industry and they are extremely used to getting only exactly the right kind of input, any deviation from the standard usually ends in chaos, in the best case. And your story suggests you were STILL trying to remediate it on your own, despite them sending you bills including fees for being late... I hope this is not the case.
> If you've missed something that's actually important, they'll let you know. Otherwise, everyone's better off leaving well enough alone.
This is generally true, one of the nice things of being a freelancer - you only have to worry about things that actually matter. On the other hand missing certain deadlines could mean disadvantages or more bureaucracy for you, that's where the professional help comes in. Also, opening your own company/one-man-show comes with certain responsibilities and unfortunately knowing a bit about taxes or at least knowing enough to realize you typically can NOT do them yourself is one of them. So, while your approach is surely commendable trying to do the right thing, it is also somewhat naïve - that's where the tone came from, as a friendly reminder "this is serious business"! :)
I was led to believe the issue was resolved for a significant period of time. After I started receiving letter again recently, I went to H&R Block. They filled out a bunch of forms for me to mail, which I have done. I am willing to do anything to resolve this. I'm nearly ready to just pay what they say I owe, about $2k, out of pocket to make it stop. I do not know what else I could be doing to resolve this. Fortunately my main source of income is not freelancing, because there's no way I'd survive an audit. And experiences like this make me not want to do it at all, at least in the USA. I'm not sure how it is elsewhere.
(I'm aware that this might sound cynical to some, but it's pretty much common sense if you have lived in Japan for some time.)
In any case, I'm not saying being Japanese is the only factor. But it's very likely a factor.
The phrase "It's easier to ask for forgiveness than it is to get permission" is attributed to Grace Hopper, who developed the first compiler(!) and is credited with popularizing the term "debugging" for fixing computer glitches.
The phrase has always resonated with me and I was blown away to see that it originated with a pioneer in computer science.
And also, a woman. Like, the first programmer, IIRC (Ada Lovelace). It took a woman to first get us programming, and another one to write the first compiler.
Just a trivia to keep in mind.
That programmers are now ~90% male, is surely just further evidence that the tables are turning, and women will be running the world soon. jk (kinda)
You're betting that the postal workers don't know or care enough to go against the book, and you're probably making their job easier anyway.
And this never seems to occur to people who think faxes are any more 'secure' than unencrypted email.
This, plus any of the 'send a fax from my PC' services or software, just never seem or occur to anyone who demands faxes for security reasons.
There was a problem later on in the process - The signature I gave at the Post Office (produced in a crowded situation, under stress) did not match the one on the forms (6 pages, all individually signed in the comfort of my home). As a result, I was asked to re-send the 6 pages and have them match with my initial PostIdent signature. Not redo the process so all match - reproduce the PostIdent signature six times.
As this was in dealing with an online service, I could see exactly what those pages and their signatures looked like in my account and indeed, the PostIdent signature looked a lot different. It looked: impossible to reproduce.
Cutting the story short: I found myself having to fake my own signature 6 times. I tried for about half an hour to reproduce my meaningless squiggles. I ended up taking a completely different route than using this service - not solely based on this problem, but hugely influenced by it.
That is to say: Yes, signatures truly are a ridiculous form of verification.
E.g., if you follow the "fraud-closure" robo-signing story, you know that the banks and mortgage agencies are all guilty of perjury. In some cases, there are 20 distinct signatures supposedly by the same company officer, at least 5 of which were supposedly signed on any given day.
Not that the government or attorney general wants to actually prosecute and I doubt anything will come out of this. But if there was no "wet signature" (handwritten ink signature on the original document) requirement, there would likely be no evidence of wrongdoing, especially after the mass deletion of emails and shredding of printed documents that the mortgage industry practiced.
I used this technique to get three desks in two offices as an undergrad in uni (undergrads typically did not get any desks allocated at all). We were also given access to the postgrad labs and made use of the postgrad kitchen facilities (though we were careful not to get in the way of any of the actual postgrads and to leave it as we found it as we didn't want to be a burden to them).
That said, couldn't you get around it by printing them with a handwritten font (or even your own handwriting, scanned)?
That's what I do with any PDF form that needs to be hand signed and faxed - sign with a handwritten font, fax using an online service...
Pretty much what happened to me every time I sked a question in Japan. Extremely helpful people, even though some times the incompetence of the helper was too much to bear.
Possibly, but people who are constantly apologizing are usually annoying, manipulative, cloying, or insincere.