Originally posted by telerion
The taxes are collected by the folks collecting the cash: the merchants and service providers.
Sure, but these guys have an incentive to cheat the government just as much as anyone else. If nobody (e.g., the IRS) is looking over their books, why should they send any money to the government? In the end of the day, a government has to have some agen ...[text shortened]... to support them. Even in those cases they are usually heavily subsidized.[/b]
If nobody (e.g., the IRS) is looking over their books, why should they send any money to the government? In the end of the day, a government has to have some agency that monitors and collects taxes.
Granted. Let's set up a monitoring agency for the express purpose of reporting and investigating the financial activities of merchants and service providers. Let's give each investigator 1000 businesses to cover the 30M or so businesses in the US. This puts the new agency at 30K employee base--- down from its present (estimated) 125K. At 1000 businesses each, the investigators will be able to devote nearly 50 minutes to every business every year.
Nearly all businesses have employees, and they're the ones currently reporting income to the IRS, right?
Is that enough? Maybe, maybe not. Given that most businesses will fall on the side of compliance, it's not likely there will be need to investigate anywhere near 30% of those 30M businesses--- let's call it 9M requiring further analysis. Now the 30K employees will be concentrating on 300 businesses: an average of nearly seven hours for all potential scalawags.
I don't think you are correct at all on the first count.
I might not be. My household brings in $100-$120K a year: how much am I allowed to spend? Well, all of it--- and more... if I'm foolish. At what point should I change my spending habits: first eviction? Second car repossession? Third foreclosure? The point is, I am the captain of my own financial future, and my success or failure thereof is wholly dependent upon me. Why should we allow the government to be any less fiscally prudent?
We could use your formula, and allow the people to speak. How much do we want to dedicate to governmental spending? 10%? 15%? More?
Besides don't you think that if installing subways in every 350K+ city were cost effective, you'd already see that happening regularly?
I live near Cleveland.