« Of Course You Know, This Means War | Main | History's Greatest Monster »
August 1, 2005
That's Rich
Kevin Drum makes an interesting comparison:
Republicans lined up to denounce the IRS as "Gestapo-like" and a law was quickly passed that handcuffed agents and slashed the budget for audits and enforcement, especially against high-income taxpayers. It was a boon for the rich in the same way that it would be a boon for drug dealers and street criminals if Congress slashed the budgets of local police departments.
Am I to infer that to Kevin, the rich are like drug dealers and street criminals in that they will absolutely commit crimes unless forced not to by the overwhelming force of the government? Ummm... I don't think so.
I am all in favor of having IRS auditors, lots of them. But not as the situation now stands. The tax code is so complex that it is not possible for an ordinary person to follow it. As a sole proprietor (that is, I own my own business, but am not shielded from liability and my income is not differentiated from the company's income), the taxes are terribly difficult to do. And I get to do them four times per year, followed by sending a big check to the government. Get it wrong in any way - miss an instruction in the tens of thousands of pages of IRS rules and regulations, misunderstand a rule that is contradicted or modified in a completely different place, get bad advice from the IRS itself - any of these things could result in massive fines, on top of the payments of taxes. Complying fully with the tax code is simply impossible unless you have one employer, no dependents, and virtually no deductions. Otherwise, your options are to claim as little as possible to ensure that you don't get it wrong, and thus pay higher taxes than you owe under the law, or face ruination if you mess up.
Now, if the tax code were to be simple, like Forbes' proposed flat tax ($x consolidated deduction per adult and $y per child, z% of all money over that is what you owe in taxes), I'd be happy to let the IRS audit as many people as they wanted whenever they wanted. But in the meantime, it's simply wrong for the government to abuse citizens under an assumption of guilt, which (contrary to Kevin's apparent belief) is precisely what the IRS was doing before the Roth hearings and their aftermath.
Just as an example, assume that Forbes' flat tax comes with a $15000 deduction per adult and a $2000 deduction per child, and a tax rate of 15%. (You'd have to manipulate those numbers to get a revenue neutral system.) This means that a single, childless person pays no tax unless their income exceeds $15000, and a couple with two children would pay no taxes unless their income exceeded $34000.
Let's say a couple with 2 children make an income of $50000, and another couple with two children make an income of $250000. For the first couple (lower middle class), their taxes would be $2400. For the second family (upper middle class), their taxes would be $32400.
There's no reason taxes couldn't be that simple to figure.
Well, there is: such a simple tax makes it very difficult to manipulate people's behavior and votes using the tax system. Also, it puts social security and medicare back into normal government spending, which further reduces their power as manipulative institutions.
So make that, there's no good reason taxes couldn't be that simple.
Trackback Pings
TrackBack URL for this entry:
http://www.caerdroia.org/MT/mt-tb.cgi/370