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Waste in the US fiscal world.

Waste in the US fiscal world.

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Fast and Curious

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Here is one example: It seems to me to cost money, lots of money, to process the paperwork involved in IRS deductions, etc., so why does the US government have federal employees and armed forces personnel and SS recipients pay income tax when that money comes from income tax. So Joe Schmo gets $50,000 bucks from the US as an employee at the state deptartment, say, and then the IRS turns around and says, you have to give us $10,000 of it back to the same deptartment that payed him. Sounds like waste to me, a bunch of that 10K gets lost reprocessing the same financial trail. So why not just say, ok, you get $40,000 and now just don't file a return unless you have income other than what we just paid you? Same thing with Armed forces, they make little enough as it is, then the same federal system that pays them demands some of it back. Same with Social Security. Why pay $X amount of dollars if the recipient only gets $X-0.2X? Why not just pay them $0.8X in the first place and eliminate the double billing, saving billions in return.

w
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Originally posted by sonhouse
Here is one example: It seems to me to cost money, lots of money, to process the paperwork involved in IRS deductions, etc., so why does the US government have federal employees and armed forces personnel and SS recipients pay income tax when that money comes from income tax. So Joe Schmo gets $50,000 bucks from the US as an employee at the state deptartmen ...[text shortened]... pay them $0.8X in the first place and eliminate the double billing, saving billions in return.
I couldn't agree more. Unfortunately your example, as you probably know, only scratches the surface.

One of the goals of the Libertarian party is to eliminate the IRS. Entirely. They're one of the few political parties in the US that at least make some half-@$$ sense.

s
Fast and Curious

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Originally posted by wib
I couldn't agree more. Unfortunately your example, as you probably know, only scratches the surface.

One of the goals of the Libertarian party is to eliminate the IRS. Entirely. They're one of the few political parties in the US that at least make some half-@$$ sense.
If you eliminate the IRS what would you do to collect money for the feds? I think you would agree the feds need money, they do stuff only the feds can do like defend the country, help out in national disasters like Katrina (admittedly they did a poor job there but I think lessons will be learned) and help the elderly. How will they do these things without collecting money somehow. Nobody is going to volunteer their hard earned money for sure.

dsR

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Originally posted by sonhouse
If you eliminate the IRS what would you do to collect money for the feds? I think you would agree the feds need money, they do stuff only the feds can do like defend the country, help out in national disasters like Katrina (admittedly they did a poor job there but I think lessons will be learned) and help the elderly. How will they do these things without collecting money somehow. Nobody is going to volunteer their hard earned money for sure.
The problem is transparency -- if the American people truly understood how much of their money is taken from them through hidden fees, excise taxes, wealth transfer schemes, etc., they would call for the abolishment of the IRS immediately. A much more honest system would eliminate all these taxes (hidden and otherwise) and instead, everyone would write a check each month to the government. That way, all would know the exact cost of the total panoply of government programs we're funding and they might be a little more reluctant to call for things like cheap college loans, universal health care, subsidies for sugar beet farmers, etc.

zeeblebot

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Originally posted by sonhouse
Here is one example: It seems to me to cost money, lots of money, to process the paperwork involved in IRS deductions, etc., so why does the US government have federal employees and armed forces personnel and SS recipients pay income tax when that money comes from income tax. So Joe Schmo gets $50,000 bucks from the US as an employee at the state deptartmen ...[text shortened]... pay them $0.8X in the first place and eliminate the double billing, saving billions in return.
you'd put all those federal employees collecting the money, and all those private tax accountants, etc., out of a job. they all have lobbyists, and they ain't gonna take it sitting down.

s
Fast and Curious

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Originally posted by zeeblebot
you'd put all those federal employees collecting the money, and all those private tax accountants, etc., out of a job. they all have lobbyists, and they ain't gonna take it sitting down.
Nah, they take EVERYTHING sitting down🙂 They haven't actually stood up for years. But still, why waste all that money double counting?

t

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Originally posted by sonhouse
Here is one example: It seems to me to cost money, lots of money, to process the paperwork involved in IRS deductions, etc., so why does the US government have federal employees and armed forces personnel and SS recipients pay income tax when that money comes from income tax. So Joe Schmo gets $50,000 bucks from the US as an employee at the state deptartmen ...[text shortened]... pay them $0.8X in the first place and eliminate the double billing, saving billions in return.
Not to defend the IRS, but nearly all tax situations are slightly different.

You have several IRS employees making $50,000 per year, but...
person A is single
person B is married with no kids
person C is married with one kid
person D is married with two kids
person B contributes $2000 to an IRA
person C contributes $1500 to an IRA
person E is single, but makes $3500 in investment gains.
person F is single, makes $3500 in investment gains, but lives in a different state than person E (thus paying different state income tax).

You couldn't just drop everyone down to $40,000 and call it even without changing net results for almost all. Eventually, in order to adjust salaries to eliminate tax filings, you'd have to replicate tax filings as input to your payroll process. That would be more work to produce forms similar to all the IRS forms in order to get the pay right.

Also, one can easily overestimate the cost of each additional tax form. If on average it cost the IRS $50 to process each form, you do not save $100 by eliminating two forms. If you have computers in place to process millions of tax forms, it costs almost nothing to process the 1,000,001th tax form. Getting everything working for the first form is difficult, but after that, the marginal costs go down a lot.

w
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Originally posted by techsouth
Not to defend the IRS, but nearly all tax situations are slightly different.

You have several IRS employees making $50,000 per year, but...
person A is single
person B is married with no kids
person C is married with one kid
person D is married with two kids
person B contributes $2000 to an IRA
person C contributes $1500 to an IRA
person E is sin ...[text shortened]... ing working for the first form is difficult, but after that, the marginal costs go down a lot.
Just put a 5% federal sales tax on every purchase except food and medicine. And then all of that jigsaw puzzle of a tax code goes away.

t

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Originally posted by wib
Just put a 5% federal sales tax on every purchase except food and medicine. And then all of that jigsaw puzzle of a tax code goes away.
There is a book out about that, but it says the national sales tax would need to be about 19%. That would be fine by me and would save me a lot of money.

I was merely pointing out that a company withholding doesn't easily match a person's net tax bill the way things are now.

s
Fast and Curious

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Originally posted by techsouth
There is a book out about that, but it says the national sales tax would need to be about 19%. That would be fine by me and would save me a lot of money.

I was merely pointing out that a company withholding doesn't easily match a person's net tax bill the way things are now.
Just another example of the stunning inefficiency in the system. Just make everyone pay 15% or whatever and thats that. If you make 100 bucks a week,

w
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Originally posted by techsouth
There is a book out about that, but it says the national sales tax would need to be about 19%. That would be fine by me and would save me a lot of money.

I was merely pointing out that a company withholding doesn't easily match a person's net tax bill the way things are now.
Yeah, and you're right. But when I say a 5% sales tax I also mean that ALL deductions go away. No home mortgage deduction, education, IRAs, none of it. No deductions. The goverment would probably end up collecting more by eliminating those. Plus you wouldn't have to file your taxes every year.

It's just an old "pay as you buy" system. But I like it.

The fist step of course is for the governement to cut spending. That appears to be an impossible step for them to take. So the whole thing is moot anyway.

t

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Originally posted by sonhouse
Just another example of the stunning inefficiency in the system. Just make everyone pay 15% or whatever and thats that. If you make 100 bucks a week,
Hey, I am not arguing that it is not inefficient.

What does it mean to make 100 bucks?

If you run a business and sell something for 100 bucks, how much did you make? What if you paid $90 for that item, and have paid employees?

If you sell land on a payment basis, you bought it 40 years ago for $50,000, you sell it in 2006 for $500,000, you accept paymentments of $10,000 and have agreed upon an 8% financing rate. You receive your first 3 payments in 2006, how much did you make in 2006? Do you count interest as part of what you made? Assuming the answer does not require the person to pay taxes on $450,000 in 2006, how would we know if the person paid taxes for payments received in 2007.

t

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Originally posted by wib
Yeah, and you're right. But when I say a 5% sales tax I also mean that ALL deductions go away. No home mortgage deduction, education, IRAs, none of it. No deductions. The goverment would probably end up collecting more by eliminating those. Plus you wouldn't have to file your taxes every year.

It's just an old "pay as you buy" system. But I like it. ...[text shortened]... That appears to be an impossible step for them to take. So the whole thing is moot anyway.
This would be a better system. No need for you and I to squabble over what the actual percent would need to be. Another advantage is that it would tax consumption rather than production.

w
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Originally posted by techsouth
This would be a better system. No need for you and I to squabble over what the actual percent would need to be. Another advantage is that it would tax consumption rather than production.
Yep. Exactly. The more people make, the more they spend. Anyway, it's too simple for the government! 🙂

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