The New Yorker Discovers That Americans Are Hiding Money from Uncle Sam

CashPublic DomainOver at the New Yorker, James Surowiecki has clued in to the fact that much taxable income in the United States is going untaxed, and that Americans appear to be flocking to an underground economy beyond the reach of regulators and the Internal Revenue Service. He bemoans the resulting tax gap and the loss of "confidence in the system," but he barely touches in a credible way on why so many Americans seem to be surging into the shadow economy, even though most economists agree that people flee high taxes and strict regulations.

Surowiecki first notes the"tax gap" that has bedeviled tax collectors, politicians and economists for years. Writes Surowiecki:

When we all finished filing our tax returns last week, there was a little something missing: two trillion dollars. That’s how much money Americans may have made in the past year that didn’t get reported to the I.R.S., according to a recent study by the economist Edgar Feige, who’s been investigating the so-called underground, or gray, economy for thirty-five years. It’s a huge number: if the government managed to collect taxes on all that income, the deficit would be trivial. This unreported income is being earned, for the most part, not by drug dealers or Mob bosses but by tens of millions of people with run-of-the-mill jobs—nannies, barbers, Web-site designers, and construction workers—who are getting paid off the books. Ordinary Americans have gone underground, and, as the recovery continues to limp along, they seem to be doing it more and more.

Collecting those uncollected taxes is a long-time dream, but it's wildly unrealistic. As I wrote in the run-up to last week's tax day, "the IRS is already the envy of tax collectors around the world for the relatively large degree of cooperation it receives from the American people, resulting in a smaller tax gap than other nations could ever hope to achieve." In dollar terms, the amount of uncollected taxes in the United States seems vast, but as a percentage of taxes owed, it's smaller than that in any other country. The tax compliance figure in the U.S. is 83.10 percent; the next highest figure I've seen is 77.97 percent in the U.K.

But it's true that tax compliance seems to be dropping in the United States, and that Americans seem to be flocking to the shadow economy. As U.S. News & World Report's Rick Newman did, a few weeks ago, Surowiecki notes that consumer spending is strongly outstripping what you'd expect from official income numbers. Writes Surowiecki:

Measuring an unreported economy is obviously tricky. But look closely and you can see the traces of a booming informal economy everywhere. As Feige said to me, “The best footprint left in the sand by this economy that doesn’t want to be observed is the use of cash.” His studies show that, while economists talk about the advent of a cashless society, Americans still hold an enormous amount of cold, hard cash—as much as seven hundred and fifty billion dollars. The percentage of Americans who don’t use banks is surprisingly high, and on the rise. Off-the-books activity also helps explain a mystery about the current economy: even though the percentage of Americans officially working has dropped dramatically, and even though household income is still well below what it was in 2007, personal consumption is higher than it was before the recession, and retail sales have been growing briskly (despite a dip in March). Bernard Baumohl, an economist at the Economic Outlook Group, estimates that, based on historical patterns, current retail sales are actually what you’d expect if the unemployment rate were around five or six per cent, rather than the 7.6 per cent we’re stuck with.

I usually quote Friedrich Schneider for my shadow economy figures, mostly because he offers the widest range of countries to compare. But Edgar Feige is also well-respected, and the different approach he uses for examining the U.S. economy has been coming up with larger non-compliance rates than official numbers suggest. Reported Feige and Richard Cebula in a 2011 paper: "18-23 % of total reportable income may not properly be reported to the IRS."

The why of this flight from the legal protections and relative security of the above-ground economy isn't a huge mystery. Surowiecki tries to emphasize cultural changes that have companies and workers both preferring contactors and temp work, but many of those shifts seem likely responses to taxes and regulations that make traditional employment more expensive and less attractive than it once was. As Surowiecki concedes, "Feige points to the growing distrust of government as one important factor. The desire to avoid licensing regulations, which force people to jump through elaborate hoops just to get a job, is another."

To quote myself again:

Overall, though, Christie and Holzner conclude that tax rates matter — when rates are higher, people hide more money; when rates come down, people put less effort into evading the authorities. "[W]e found as our most general result that tax evasion is positively correlated with the tax rate itself ... reducing average effective tax rates should positively impact on compliance rates."

Schneider agrees, writing in Shadow Economies of 145 Countries all over the World: What do we really know? (PDF), "In almost all studies it has been found out, that the tax and social security contribution burdens are one of the main causes for the existence of the shadow economy." He adds, "The bigger the difference between the total cost of labor in the official economy and the after-tax earnings (from work), the greater is the incentive to avoid this difference and to work in the shadow economy." ...

But it's not only taxes – the rest of the economic environment matters, too. Remember, two of the four reasons Schneider gave for people fleeing the tax man have to do with regulations and bureaucracy. And, indeed, he finds, "every available measure of regulation is significantly correlated with the share of the unofficial economy and the sign of the relationship is unambiguous: more regulation is correlated with a larger shadow economy." In particular, enforced regulations — not just nominal red tape to which people turn a blind eye — drives people into the shadows.

Summarizing the argument, Professor Pietro Reichlen of Rome's Luiss University told the Financial Times in a June 2011 article on Europe's hidden economy, "Among the main causes of the black economy is the level of taxation. The higher the tax and the regulatory burden the bigger the shadow economy of the country." He recommended simplifying and reducing taxes, reducing the regulatory burden, including laws that make it difficult and expensive to hire and fire workers, and improving often-corrupt, archaic and unresponsive judicial systems.

Surowiecki bemoans the "damaging effects of this trend," but he should pay more attention to the damaging taxes and regulations that caused this trend by pushing people to work off the books. People aren't depriving themselves of legal recourse and traditional benefits because it's suddenly hip to do so — they're hiding in the shadows because red tape and taxes are strangling the legal economy.

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  • Fist of Etiquette||

    GASP!

  • Fist of Etiquette||

    There's always money in switching from an income tax to a national sales tax. And in the banana stand.

  • Hugh Akston||

    GOD DAMMIT FIST. Also never trust your banana stand to a huge flamer.

  • Hugh Akston||

    Simple Fix: switch from penaltaxing income to penaltaxing consumption.

  • Paul.||

    But if the government doesn't know what you do all day, who you do it with, and for how much, how is policy going to be effectively set?

  • fish_remote||

    But if the government doesn't know what you do all day, who you do it with, and for how much, how is policy going to be effectively set?

    Somewhere there is a cocksucking Okie in fear of ineffective policy being set.

    Gonna be a goood day Tater!

  • Aresen||

    Simpler fix: Stop taking people's money and giving it to bureaucrats, corporate cronies, and other politically favored groups.

  • Dr. Frankenstein||

    Then people will pay cash to stores who may not always report the sale. Especially if the consumer gets a break on the cost.

  • Aresen||

    That is exactly what happens in Canada with the GST and provincial sales taxes.

  • califernian||

    That's what cash discounts are for! duh

  • Aresen||

    When we all finished filing our tax returns last week, there was a little something missing: two trillion dollars. That’s how much money Americans may have made in the past year that didn’t get reported to the I.R.S., according to a recent study by the economist Edgar Feige, who’s been investigating the so-called underground, or gray, economy for thirty-five years. It’s a huge number: if the government managed to collect taxes on all that income, the deficit would be trivial.

    No it wouldn't, even assuming Congress didn't use the additional taxes for some new "necessary" program.

    Take that much more money out of the real economy and everything will slow down. Big time. Also, your expenditures on food stamps and unemployment and welfare will soar.

  • Aresen||

    Also, according to this:

    http://www.pappasontaxes.com/i.....zed-world/

    The actual extra tax income would be $337B. Which would still leave a deficit of over $600 billion in 2013, assuming no other effects.

  • Sevo||

    "assuming no other effects."

    And there *would* be other effects.
    As soon as Congress saw that new revenue, it's amazing how many new expenditures absolutely must be funded!

  • Auric Demonocles||

    If we assume 20% tax rate on that $2 trillion, it's still only $400 billion. That's less than half of the deficit, and giving the generous assumptions that the average tax rate works out that high and the additional taxes don't lower the total productivity. With those assumptions, there's still a half a trillion dollar deficit.

  • Bobarian||

    There is a real math and logic failure here as well.

    Nannies, barbers and what-not are all in the 47% who pay no real income tax and are mostly getting paid by people who are in the highest marginal rates. Properly claiming a lot of this income allows someone at the highest rate to write off their tax burden and the nanny to continue to not pay taxes ( just ss). Bottom line is a net loss to the government, so... uh, um... Go IRS?

  • Tman||

    Truly nannies, barbers, Web-site designers, and construction workers are the scourge of this income tax wasteland. Their dereliction is what is LITERALLY taking the food off the table of low income Americans. They also shoot children with assault rifles (sorry, wrong speech.)

    We should just make nannies, barbers, Web-site designers, and construction workers illegal. Problem solved.

    /Obama logic

  • buddhastalin||

    If only the rich would pay their fair share (i.e. all of their money), then we'd have enough money to fund our government. Then, we wouldn't have to tax nannies and barbers, who would then have no income tax to avoid! Problem solved.

  • Rufus J. Firefly||

    If only we could find a way to both take over the entire economy AND be free and prosperous! There must be a way!

    /Social democrat high five.

  • UnCivilServant||

    The government doesn't need to be funded, we'd only waste it.

  • WomSom||

    Sounds like some crazy smack to me dude.

    www.Ano-Surf.tk

  • Michael||

    ...two trillion dollars. That’s how much money Americans may have made in the past year that didn’t get reported to the I.R.S....

    I have to admit that reading this figure resulted in a reflexive fist pump punctuated by a "fuck yeah."

  • ||

    How dare people think that their money is theirs!

  • ||

    Don't they know taxation is totally voluntary?

  • Paul.||

    Are the roadz you drive on yours?

  • Rufus J. Firefly||

    I have a friend, from Boston actually, who once said, "it's the government's money. Sez so right on the money."

  • Enjoy Every Sandwich||

    Kulaks! Hoarders! Wreckers! Standing in the way of the Socialist Worker's Utopia!

    Yeah, I can read between the lines.

  • SugarFree||

    Locking your car and house is also a form of bitter oppression against the underclass.

  • Tony||

    People will rationally exploit whatever loopholes there are in the law to maximize their take. Tax avoidance is not evidence by itself that taxes are too high. Indeed taxes have been at historic lows.

    Everyone's for simplified taxes, of course--except the quite influential tax prep business lobby.

  • RyanXXX||

    "Taxes have been at historic lows"

    Have you actually looked at the data on this? Like, how much people ACTUALLY paid during those fabled days of super-high rates?

  • Irish||

    No. He also hasn't looked at changes in state tax rates, increases in state gas taxes, etc. and is only looking at statutory federal rates.

    We've mentioned this to him before. He ignores it because he is mentally ill and his name is Tony.

  • Tony||

    Revenues have also been low, for many reasons including huge cuts in tax rates.

  • Red Rocks Rockin||

    Revenues have also been low, for many reasons including huge cuts in tax rates.

    A 4% rate cut isn't "huge" by any standard. When you have a government spending far more than it historically takes in tax revenues as a percentage of GDP, that's the real problem.

  • Tony||

    Then it should be little concern to raise them back by 4% to make up for some of the shortfall, which was caused by recession but also an inability of Republicans to match tax receipts with massive spending increases.

  • Anonymous Coward||

    Better plan:

    Cut spending to match tax receipts.

  • Sevo||

    Tony| 4.22.13 @ 6:50PM |#
    "Then it should be little concern to raise them back by 4%"

    No, shithead, the 4% is merely a good start. A 25% cut this year sounds about right.

  • Red Rocks Rockin||

    Then it should be little concern to raise them back by 4% to make up for some of the shortfall, which was caused by recession but also an inability of Republicans to match tax receipts with massive spending increases.

    4% won't begin to cover the spread--and will also take that out of the economy.

    But if you want to stretch an already over-stretched middle class even further, please go right ahead with your shitlib economics.

  • Calidissident||

    Revenues have been near all-time highs. Revenue as a % of GDP has been a little low compared to post-WWII standards, mostly due to the recession. Pre-recession, tax revenue as a % of GDP under Bush was a little lower than it was under Clinton, but not abnormal historically, even comparing to eras where marginal rates were much higher. Tax revenue as % of GDP was abnormally high under Clinton, despite the fact that marginal rates were much lower than they'd been from 1930-1986

  • VG Zaytsev||

    Tax revenue as % of GDP was abnormally high under Clinton

    Due to inflated capital gains from the tech bubble and excessive payroll taxes to build up the SS 'trust fund'.

    And both of those factors were once in a century (or so) situations.

  • Calidissident||

    True

  • Calidissident||

    And even then, by "historic" he means from 1930-1985. And of course that doesn't account for payroll and other taxes

  • OldMexican||

    Re: Tony,

    People will rationally exploit whatever loopholes there are in the law


    No shit, Sherlock!

    to maximize their take.


    It's not their "take", you fascist. It's their money. They produced it. It's MY money - *I* produced it.

    Tax avoidance is not evidence by itself that taxes are too high.


    No, it's evidence that people do think taxation is stealing. Which it is.

    Indeed taxes have been at historic lows.


    Tax rates, not taxes.

    Everyone's for simplified taxes, of course - - except the quite influential tax prep business lobby.


    Don't tell me you had this epiphany today, Tony.

  • Tony||

    If it's money owed to the Treasury, it's not their money, in fact. Your claim to ownership of money or anything else is established by law, i.e, government paid for by taxes. If you're enjoying taxpayer-funded services (and we all do) without paying your legal share, then you are the one stealing, not the government.

  • OldMexican||

    Re: Tony,

    If it's money owed to the Treasury,


    It's not, Tony. If I decide to stop working and stop making money, can the Treasury then enslave me? Because that is the implication of what you argue. Don't try to wiggle your ass out of it.

    Your claim to ownership of money or anything else is established by law i.e, government paid for by taxes.


    My claim is not established by law, Tony. It is protected by law which means my claim comes FIRST, the law comes SECOND. It is not the other way around.

    If you're enjoying taxpayer-funded services


    What are those services you claim I am enjoying? Unsolicited services are not enjoyed by definition. Like I told you, I don't need no stinkin' cops - just try to break into my house to give you a demonstration of what I talk about.

    then you are the one stealing, not the government.


    "The thief and the robber will always think ill of those that hide their wares."

  • Anonymous Coward||

    If it's money owed to the Treasury, it's not their money, in fact. Your claim to ownership of money or anything else is established by law, i.e, government paid for by taxes.

    And the law is always correct. Remember the good ol' days when they jailed sodomites like yourself as a matter of LAW?

    If you're enjoying taxpayer-funded services (and we all do) without paying your legal share, then you are the one stealing, not the government.

    Set up tolls and/or send me an itemized bill, douche.

  • Willfiredog||

    "If it's money owed to the Treasury, it's not their money, in fact. Your claim to ownership of money or anything else is established by law..."

    What utter and total bullshit. Money is a tool, a convenient measurement of work. It allows one person to indirectly exchange their output for another's.

    What you're stating is that we do not own the output of our labours. That our primary role in life is to toil in support of the government.

    Fuck off slaver.

  • califernian||

    Indeed taxes have been at historic lows.

    Even if this dubious claim is true (it's not, all you have to do is look at the first fucking 5 years of income tax rates wtf moron),

    it doesnt's justify current tax rates.

    It's like saying "Racism is at historical lows so the current level of racism is acceptable"

  • Tony||

    Except taxation isn't inherently bad, as it is the generally accepted means for which people pay for the civilization they enjoy.

  • OldMexican||

    Re: Tony,

    Except taxation isn't inherently bad,


    If it's based on initiation of force instead of mutually-voluntary trade, then it IS inherently BAD.

    as it is the generally accepted means for which people pay for the civilization they enjoy.


    This is just bullshit, Tony. Civilization does not come out of a barrel of a gun but from the beneficial effects of Division of Labor, which allowed people to be more productive and less dependent on their own labor for everything.

  • Irish||

    as it is the generally accepted means for which people pay for the civilization they enjoy.

    Except when most of the taxes are nothing but direct transfer payments from one person to another. That has nothing to do with 'civilization we enjoy.'

  • Tony||

    Every tax ends up being a direct payment to someone else, but anyway. Transfer schemes are crude but they get the job done a hell of a lot better than fantasy bullshit schemes like trickle-down regressivity. Old person care, the big transfer scheme, can be seen a simply one of the many costs of civilization. It's a universal concern and we either distribute the cash or we watch poor people starve when they get old. Your choice.

    Keeping the poor from being desperately poor is similarly something worth the cost. No different in principle from a road, the only difference being you might not ever drive on a road you pay for, but you gain the radiant benefit of not having a starving underclass littering your sidewalk.

  • califernian||

    Transfer schemes are crude but they get the job done a hell of a lot better than fantasy bullshit schemes like trickle-down regressivity.

    False dichotomy alert!

    You sir, are a moron.

  • Rufus J. Firefly||

    That's the new narrative among liberals I notice. That taxes are equal to advanced civilizations. In fact, it's when taxation is LOW and little state intervention does civilization thrive.

    But don't expect liberals to understand history. They only understand their own version of it. Notice their abject failures between 1861 and 1945.

  • buddhastalin||

    I wonder why Hong Kong civilization only costs $6,000 per person while US civilization costs $17,000 per person. Even after you take out defense from the US number, it's still more than twice Hong Kong's.

  • UnCivilServant||

    It's China, everything's cheaper in China. Life, liberty, bribes, all cheap, and cheaply sold.

  • UnCivilServant||

    *Continued

    /snark

  • Anonymous Coward||

    Except taxation isn't inherently bad, as it is the generally accepted means for which people pay for the civilization they enjoy.

    By this reasoning, Zimbabwe should be the most civilized nation on Earth.

  • Sevo||

    Tony| 4.22.13 @ 6:43PM |#
    "Except taxation isn't inherently bad"

    Wrong, shithead.
    It's wrong under principle as coercion and under utility in that it reduces the overall wealth of humanity.
    It is wrong everywhere and always.

  • Homple||

    "Except taxation isn't inherently bad, as it is the generally accepted means for which people pay for the civilization they enjoy."

    The civilization I would enjoy is to mind my own business and pay my own way while everybody else does the same. The tax system currently funds the very antithesis of this: supporting layabouts and empowering meddling busybodies armed with guns threatening forfeiture and incarceration for not instantly obeying their commands.

    Civilization indeed.

  • Tony||

    The civilization I would enjoy is to mind my own business and pay my own way while everybody else does the same.

    Then get off my fucking roads you no good moocher. I paid for them (and everything else) willingly, because I like having institutions in place so that I do not exist in a disease-ridden ignorant medieval hellscape.

    The layabouts our system funds are the very rich kind. You might be surprised by how much you agree with actual popular will in the matters about which you express concern. Howabout we stop supporting the layabouts who actually have the resources to influence policy (thus influencing all policy), instead of employing radical individualist romanticism as a saccharine coating on a policy of maximizing their wealth and influence?

  • Red Rocks Rockin||

    Howabout we stop supporting the layabouts who actually have the resources to influence policy (thus influencing all policy), instead of employing radical individualist romanticism as a saccharine coating on a policy of maximizing their wealth and influence?

    I'd rather stop supporting the layabouts who expect the middle class to pay for their food and shelter.

  • califernian||

    because I like having institutions in place so that I do not exist in a disease-ridden ignorant medieval hellscape

    False dichotomy alert. You sir, are a moron. But you already knew that.

  • Rufus J. Firefly||

    I'm not enjoying this version of civilization. Wanna know what the sales tax is up to in Quebec? 15%. 15%! For what? To pay for what is now one big gigantic entitlement welfare apparatus? What civilization do we have exactly? In Quebec, apparently, it means having second-rate services, high levels of corruption and state-sanctioned language discrimination.

    50% of Quebecers don't pay taxes. In a province with high levels of unemployment it basically means about 1 millions people support 7 million.

    At this point you may be asking yourself, how does it manage? It doesn't. It's $250 billion in debt. No wonder the assertion it survives on equalization payments from wealthier provinces is so strong these days.

    We're takers.

    Some civilization.

    A Tony's paradise indeed.

  • Rufus J. Firefly||

    I might add, whining takers. Quebec's idea of progress is not to clean up its own shit. No way, man. No votes in that. rather, it's idea of success (as evidenced by the peasants in the Parti-Quebecois) is to pick fights with Ottawa.

    After all, blaming others for your ills is a tried and tested tactic for losers.

  • Rufus J. Firefly||

    "Rather, its idea"

    Man, three posts to wasted. Sorry.

  • Tony||

    So are you a loser or do you blame yourself for all the stuff you're bitching about?

  • Rufus J. Firefly||

    What the hell are you talking about?

    It's always "bitching" when it doesn't fit your world view, eh, Tony?

    Get bent.

  • califernian||

    that's the same thing the racists say about racism.

  • Paul.||

    People will rationally exploit whatever loopholes there are in the law to maximize their take. Tax avoidance is not evidence by itself that taxes are too high.

    No, but massive tax avoidance often is an indicator that taxes are too high. The more onerous the taxes, the more tax avoidance occurs.

    The U.S. has always enjoyed one of the highest voluntary compliance levels in the civilized world. Europe, one of the worst.

  • Certified Public Asskicker||

    The tax prep business lobby?

    Fuck you Tony. I don't know many CPAs who have the time to go and lobby for more ridiculous laws so we can masterbate to filling forms out. Most CPAs,in my experience at least, are conservative and know what a clusterfuck the system is. No, we do not lobby for more of it.

  • califernian||

    The CPA lobby is the reason taxes are so high. If it weren't for the CPA lobby we'd have much lower and simpler taxation. EVERYONE knows this is true. Just ask Tony.

  • Kurbster||

    In dollar terms, the amount of uncollected taxes in the United States seems vast, but as a percentage of taxes owed, it's smaller than that in any other country. The tax compliance figure in the U.S. is 83.10 percent; the next highest figure I've seen is 77.97 percent in the U.K.

    what can we do to lower that percentage even more?

  • Anonymous Coward||

    Eliminate payroll withholdings, make people pay everything at once on April 15th.

    Then sit back and watch the tax revolt happen.

  • txgypsy||

    If the mxicans can come here,work for cash under the table, get all those cool bennies from tio sam,drive expensive suv's with huge hotwheels rims, and still have money left to send back home.....hell, why shouldnt I do the same!!!!.............[/s]
    REALLY!!why shoulnt I do the same??

  • Jordan||

    dafuq?

  • OldMexican||

    Re: txgypsy,

    REALLY!!why shoulnt I do the same??


    Because the government still has most of the guns?

  • ChrisO||

    Consequences. Funny how they happen, eh?

  • OldMexican||

    Surowiecki bemoans the "damaging effects of this trend,"


    "What about the tax eaters? Who thinks of them???"

  • orangeclawhammer||

    Re: Tony taxes at historic lows. My land and school taxes have tripled ib less than 10 years, is he dishonest or a dogdik arecktion.

  • Red Rocks Rockin||

    This unreported income is being earned, for the most part, not by drug dealers or Mob bosses but by tens of millions of people with run-of-the-mill jobs—nannies, barbers, Web-site designers, and construction workers—who are getting paid off the books.

    Count waiters/waitresses and similar occupations who underreport their tips (which pretty much everyone does) among these occupations.

    The IRS likely doesn't go after these types because the money spent to audit and pursue back taxes, even after penalties on the back end, likely exceeds what they'd actually take from those people on the front end.

  • AlmightyJB||

    Articles like this make me feel like a total sucker. I pay all my taxes, pay all my bills, only buy things I can afford including my house. I just must be a total fucking idiot.

  • ||

    You're either the piglet or the teat.

  • AlmightyJB||

    I guess it's time for some bbq baby pork butt.

  • VG Zaytsev||

    The american economy is becoming more and more like a game of poker.

    Every game has a sucker and if you don't know who it is, you're probably it.

  • SugarFree||

    This time arguing with Dipshit Tony will be the time I convince him! Totally!

    What's that definition of madness again?

  • Auric Demonocles||

    Who said it was about convincing him of anything?

  • Paul.||

    It's about getting a rebuttal in print. They read H&R comments over at Slate.

  • Irish||

    Yeah, I argue with him for the sake of lurkers.

    At least I don't read Slate, like Paul does. Jesus, have some taste.

  • Ted S.||

    What's that definition of madness again?

    A threesome involving SugarFree, Epi, and Warty?

  • UnCivilServant||

    I thought argument for the sake of argument was the point of Hit and Run

  • Rufus J. Firefly||

    I have to admit ignorance here. 83% compliance? Next highest in the UK? I coulda sworn Canada would have out-complianced the U.S. given the level of apathy up here.

    Meh. I guess it's true what they say about Anglo-Saxons being deference to authority.

  • AlmightyJB||

    The year I don't pay taxes I would be the one guy they decided to make an example of.

  • Rufus J. Firefly||

    Exactly. My father, who hated the government (and had little regard for Quebecois politics) always taught us to pay and shut up because A) in the end you lose against the government and B) you'll end up being the sucker they fuck over.

  • Rufus J. Firefly||

    The liberal take on things about Boston:

    http://ruthobrien.org/a-day-of-terror/

    Could you imagine how annoying it would be to work in a liberal prison if one were to exist?

  • Irish||

    This said, the mortuary pictures of the older brother of the two are extremely disturbing, raising questions as to whether the Boston Police Department captured him with too much force.

    Wait, he got run over by his brother and dragged down the street. I question how that can be blamed on police.

  • Tman||

    I just read the first sentence- "I always know it’s my birthday when things start blowing up" and heard enough to not give a shit what the rest of the article had to say.

    "HO HO HAHA SO FUNNY, IT'S MY BIRTHDAYS SO I KNEW THERE WOULD BE BOMBS!!! LOLLLLLLLLLSSEEEE!!!!"

  • Stilgar||

    @JD - please don't be a dork and quote obviously stupid figures "The tax compliance figure in the U.S. is 83.10 percent; the next highest figure I've seen is 77.97 percent in the U.K." Can you please give us error bars on those? Are you really certain they are acurate to two decimal places? Please refer to http://www.phy.ilstu.edu/slh/Errors.pdf before quoting such nonsense again.

  • jdtuccille||

    The 83.10 percent figure is the official IRS figure, while the 77.97 figure was calculated by a team of economists and is widely accepted. Of course, you could just click on the colored text and go to the sources yourself to figure that out. If you don't like the numbers take it up with the sources. I'll continue to use them.

  • ||

    I just bought as many rounds of 45 long colt ammo as I could possibly afford. I think I'll use them as currency now.

  • Dweebston||

    if the government managed to collect taxes on all that income, the deficit would be trivial.

    Does anyone truly believe this? Lemme pose another possibility: if the government managed to collect taxes from an additional two trillion dollars, the feds would pyramid an equivalent level of debt atop it and we'd be that much further in the hole.

    Garbage.

  • widget||

    From the ref'd article:

    "In a recent California survey of three hundred thousand contractors, two-thirds said they had no direct employees, meaning that they did not need to pay workers’-compensation insurance or payroll taxes."

    'Contractor' is a very general term. Just about all business, outside of retail product sales, is conducted with some form of contract. It might be an email exchange, a handshake, a purchase order, a head nod, or a formal contract. An architect, real estate agent, and barber are contractors but would have no employees by the nature of their business. Who wants a team of barbers to cut his hair? There are not 300,000 general contractors in CA.

    The contractor always pays worker's-comp for himself, though he is not eligible to collect on it. Payroll taxes are the responsibility of the sub-contractor. The contractor will almost always file a 1099 for the sub (why wouldn't he?, if he doesn't the expense in not deductible), after that it's not the prime contractor's problem.

  • some guy||

    I didn't RTFA, but I wonder how much of this is due to ignorance. The tax code is so complicated it isn't always clear what type of income needs to be reported, or how you should report it. If you don't get a 1099 for it, you just have to guess (or do hours of research).

    Some of it could be due to frustration too. The person knows the should report it, but they don't feel like reading up or paying a tax pro to tell them what forms to use. I'll bet this is particularly true for tiny businesses. Why bother figuring out your deductions and amortizing expenses, etc. when you can just not report. Is the IRS really going to come after you over 100 bucks?

  • West Texas||

    I very idea that I owe someone anything by virtue of just being alive and engaging in commerce - any commerce - with another person is repugnant. Funny how any discussion of "tax reform" these days never even comes close to that conclusion. The very premise of "income tax" is what's faulty.

  • ||

    "The tax compliance figure in the U.S. is 83.10 percent [in terms of money paid]"?? Good grief, that number is so high that there may be something wrong with the standard libertarian account of taxation as robbery and looting. Well, it's no secret that a minority of Americans take home most of the income, and it's also well known that American commerce is not only thoroughly rigged and subsidized but also sheltered from justice by armed, aggressive goons, e.g. the military.

    Hmmm, perhaps many of the 83 percenters are happy to pay taxes because payment is conducive to concentrating wealth in their hands and to living gluttonous lives in outlandish luxury. So, for this subset of the 83 percenters, taxes are just a cost of doing business. Makes you wonder for a few moments why they do not as a class demand elimination of most taxes and handle matters like security through voluntary means. Surely they have the financial means to support organizations devoted to the cause of dramatically reducing taxes. If successful, they'd be in better control of their own lives.

    Then you suspect that the tax ideologues among the 83 percenters often do not trust each other enough to support the tools (e.g. military and police) conducive to grabbing and hoarding vast amounts of wealth. Hence their desire for a powerful government with the appearance of authority to collect taxes and to redistribute it to the tools of plutocracy and empire.

  • ||

    Even payments to welfare queens can be written off as a mere cost of doing business, and it's no coincidence that plenty of bleeding hearts can be counted among the 83 percenters. The do-gooders' motivations seem clear enough. They want tax rates high enough to compel other people to bear most of the burdens implied by the alleged caring about the poor, and I have found among those bleeding hearts a considerable amount of bitterness towards wealthy people who prefer not to carry rabble on their backs. So taxation is also a means to settle a vendetta.

    Probably we can extend the analysis to include roads, airports, and a wide variety of other things desired by tax ideologues but which they are too greedy to pay for on their own and too risk averse to trust that others will offer voluntary support at a level high enough to satisfy the tax ideologues. Since they fear and loathe not getting what they imagine theirselves entitled too, they sneer at the suggestion that the correct rate of tax compliance is zero percent.

    Now, would it really be shocking to discover that much of Reason's financial support comes from tax ideologues?

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