If you listen to the political left, you know who cheats on their income taxes – it’s those millionaires and billionaires and large corporations, right?
Wrong‼️
According to the IRS, 75% of the tax cheating is done by individuals—mostly middle-income earners. Most of the rest of the cheating is done by businesses. Cash-intensive businesses and service providers, from self-employed handy-people to doctors, are the worst offenders.
It’s easy to pick targets unrelated to average people, average people have the most votes so no politician wants to upset them.
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We certainly have a dilemma here. One time the IRS says 75% of cheaters are middle income people and small business operators and another time it is mostly the wealthy and large corporations. That creates a problem of which direction should the agents turn to collect from tax shirkers in order to justify their salary as federal employees.
PEW research says 79% of people think it is wrong to cheat on taxes so I suggest they look for the other 21% and scrutinize their returns from top to bottom.
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Simplify the tax code I would love to be able to file my taxes on a postcard.
There’s a catch, though. There’s always a catch.
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I’ll go one better. How about not filing at all.
36 countries, including Germany, Japan, and the United Kingdom, permit return-free filing for some taxpayers. Nearly all countries that offer return-free systems have an “exact-withholding” system.
Denmark and Sweden operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities.
Britain’s Pay As You Earn system, which has incorporated exact withholding since the 1940s for return-free filing. It treats the individual (rather than the family) as the unit of taxation.
I am sure that there are problems with these systems too. However since the IRS already requires W-2s & 1099’s to be filed, they already know what the taxpayer has earned. If we simplify the tax code, millions of dollars can be saved from the lack of doing the paperwork to IRS agents needing guns to process the paperwork and sending out of the checks.
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I’m game.
We had an expression in the Navy, “Do something, even if it’s wrong.” *
For years, I did my own taxes. One year, there was a letter included with my refund… I had made a math error, and as a result my refund was larger than I had calculated. Less than $100 difference, but still…
Somebody’s watching you, and that’s not always bad.
*Theodore Roosevelt said, “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”
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There’s a catch.
Simplifying the tax code would likely save $Billions, both in government employees and in private tax preparation costs for citizens.
And…
Put untold thousands out of a job. Preparers, suppliers, office space, transportation costs, you name it.
That’s the American (government) way of thinking.
Jerry Brown’s way; We need more welfare, not less. We don’t need jobs, we need things, like food, housing, clothing, services, etc.
Send the excess workers home, and send them a check. It would be cheaper than wasting the resources in infrastructure, transportation costs, you name it.
Save a tree, simplify taxes.
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I heard that it is the tax preparer’s lobby that is preventing the IRS from having free electronic filing for all wage earners.
I currently use H & R Block software to help me file my taxes and the federal return is included but not the state. New Jersey offers free filing online. So I print out NJ return and entered on the NJ website instead of paying H & R Block to file NJ for me.
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Richard – It is misleading to say that 75% of the tax cheating is done by individuals and mostly middle income people. Of course it is, because the vast majority of taxpayers are middle income individuals, not businesses. You know better than to use misleading statistics. This is what you complain about politicians doing.
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“The so-called tax gap has surged in the last decade. The last official estimate from the I.R.S. was that an average of $441 billion per year went unpaid from 2011 to 2013. Most of the unpaid taxes are the result of evasion by the wealthy and large corporations, Mr. Rettig said.”
New York Times, Oct. 13, 2021
Because, that’s where the money is.
Willie Horton
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According to the Tax Foundation, Pew Research, 79% percent of people think that it is morally wrong to cheat on their taxes. According to the IRS, individual taxpayers do 75% of the cheating – mostly middle-income earners.
So how do people cheat on their taxes? Most people deliberately underreport income. This is called tax evasion. Others, self-employed taxpayers, for instance, over-deduct business-related expenses. Top deductions in question are: home office deduction, job expenses, rental losses, schedule c expenses (business deductions), and charitable contributions. Some don’t report their gambling winnings, which is against the law. A few have fabricated a dependent. However, auditors are trained to look for tax fraud. If you’re caught cheating, you might end up with civil fines, penalties or worse.
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