Tax Information Awareness

Faithful reader Rick Barton passes along a Boston Globe report on the latest tools for tax collectors:

The [Revenue Department] has launched a technology offensive with the goal of pulling together stray bits of information about every Massachusetts taxpayer, searching for clues that would indicate who isn't paying the taxes they owe.

State officials dismiss the notion they are playing Big Brother, but the potential is rather Orwellian. In theory, said Revenue Department Commissioner Alan LeBovidge, the state may eventually be able to track down so much information about a resident's finances that the state, rather than the individual, could complete the individual's tax return.

Comments

[matt]

Orwellian indeed. Any big surprise this begins in Taxachussetts

[Rick Barton]

Noting that the best way to avoid tax increases is to collect all existing taxes, the commissioner stressed...

Gee, and I thought that cutting government spending would be the best way to avoid tax increases.

... "We're in the embryonic stages of where this is going to go,"

Oh yeah, well this is a case where we can all root for an abortion.

[Swamp Justice]

Canada has had some new tax reforms too. Here is their new "1040 EZ2DO" tax form:

1. How much did you make? $________
2. Send it to us.

PDF: http://bureaucrash.com/arsenal/propaganda/canadataxes.pdf

[matt]

Rick,

Agreed, and good story btw...

The thing that puzzles me is how the commisioner thinks that collecting "existing taxes" (money people decided they didn't want big brother to get its grubby hands on) is not the same thing as a tax increase. With this system in place, citizens will have more money confiscated by the goverment. So the question I'd like to ask this bozo is, how exactly is that not a tax increase?

[grylliade]

Yes, it seems Orwellian. But if the government demands that I send them money, can't they do the work too? I mean, why should I spend hours (well, minutes; I'm poor) filling out my tax return to prove to the government that I paid what I should have? Now, there should be some fact checking, certainly; I wouldn't necessarily trust a bureaucrat to do simple math. But there's also a good argument on the other side, I think.

Just more fuel for the flat tax argument, IMNSHO. Sending in 15 % (ideally less) of what you make is simpler than figuring out deductions, alternative minimum taxes, earned income credits . . . ad nauseum.

[Russ D]

This is the scary shit:

"Eventually, LeBovidge said, his agency will start tapping into private databases as well."

[grylliade]

grylliade,

I see your point, but do you really want a more "efficient" government?

[JimInNoVA]

Considering how much they screw it up when I do the math, I'm not so sure I want some underweiner of taxation mucking about with my finances. At least now I know what they owe me. If they start doing the math on that too, good luck ever being able to challenge their decisions about your deducations.

[Richard]

When I lived in the UK, the revenuers sent me a form stating what I had paid and how much I had paid into the state pension plan. That is it. No exemptions, or credits, or deductions, everyone (at least in my tax bracket...not sure if they have multiple brackets...was the lowest) paid the same percentage on the money they were paid from their employers who did all of the paperwork. The only the thing the government did was make sure you didn't work two jobs under different tax identities.

My statement was mailed to me on a postcard that listed this info and asked if it needed correcting. That was it. No paperwork to fill out unless I wanted to contest the amount or alter my allowances. How EZ and more fair is that?

[Swamp Justice]

I once made a simple math error on my 1040. Even though the error was $50 in their favor, they notified me and sent a check! I was pleasantly surprised. However, this does mean that their double-checking of tax forms essentially makes my hours of effort unnecessary.

If I must pay taxes, I wish the IRS required one lump sum on April 15, instead of quietly taking from every paycheck. My lefty friends get quite excited when they get a tax "refund", not understanding that they gave the IRS an interest-free loan. If they had to pay their taxes in one lump sum, they would realize how much money they are REALLY paying each year. Maybe then people would get upset when they have to write checks for thousands of dollars. 🙂

[matt]

oops...the grylliade post at 3:21 was by me.

[Ricky]

Swamp,
i thought a person could choose to not have any federal tax money withheld from their pay check and then that person could just pay the lump sum come tax paying time.

[Mo]

Ricky,
But if the bill is greater than a certain amount, you have to pay interest. Funny how that only goes one way.

[Murray]

"If I must pay taxes, I wish the IRS required one lump sum on April 15, instead of quietly taking from every paycheck."

One of Milton Friedman's bad ideas...

[thoreau]

I happen to like that idea of Milton Friedman.

Give us the option of keeping our money until the last possible minute, and investing it as we see fit. If I owe (hypothetically) $4000, and I can put it in a CD that yields 2% (a puny yield, but when I checked a few months back not bad in the current climate), that's $80 that I wouldn't have otherwise had. Not a lot, but it's a night out with my wife at a fancy restaurant.

[Swamp Justice]

My reasoning is not that I really need that extra $80 in interest. I just want tax supporters to get stuck with a big deal. Most people don't notice how much the IRS siphons away from their paychecks.

[alkali]

If the Mass. DOR is doing it, it's more like "Big Brother With Severe Closed-Head Injury."

In theory, said Revenue Department Commissioner Alan LeBovidge, the state may eventually be able to track down so much information about a resident's finances that the state, rather than the individual, could complete the individual's tax return.

In practice, the DOR will, as usual, be unable to find its ass with both hands and a compass.

[Phil]

If I must pay taxes, I wish the IRS required one lump sum on April 15, instead of quietly taking from every paycheck.

Actually, that's exactly what used to happen -- regular withholding of personal income tax from wages and salaries was not performed until 1943, when the costs of both the war and ongoing New Deal programs became so high that the government couldn't afford to wait for the money. Charming, eh?

[StMack]

Yes, but tax withholding was temporary.

[Hick American]

"The agency has launched a technology offensive with the goal of pulling together stray bits of information about every Massachusetts taxpayer"

And you guys are worried about the Patriot Act?

[Mark Fox]

Ricky: You will owe not only interest on your underpaid tax, but also a penalty for having underpaid. The interest is charged at a reasonable rate; the penalty discourages people from "borrowing" their tax liability from the state.

My personal favorite Friedman quote:
"I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible."

[JimInNoVA]

Of course, Friedman was also for reducing spending. Someone needs to send the Republican party the rest of the book, because the condensed version they're using isn't cutting it.

[Randy]

"curmudgel"

Do you mean "curmudgeon," (a cranky old person), or do you mean "cudgel" (a wedge, or a device used to split things apart through blunt force rather than leverage)? Just wondering. 🙂

[JimInNoVA]

Maybe it's a cranky old device used to split things apart...

[Douglas Fletcher]

Where the hell is joe when you need him to defend statist policies from the great liberal Northeast?

Come on, man, remember that eternal vigilance is the price of...hmm, wait a minute, I'll get back to you on that.

[tchiers]

I have to agree with Akali.

Years ago, I took over the books of a small business in MA that hadn't paid its state witholding in a few years. I signed us back up for the trustee system, and if I had known then what I know now that would've been it. But I also told them we hadn't paid for the last couple of years and owed them $X. It took over 18 months to resolve the mess, and none of the facts were in dispute. Typical paperwork turnaround was 24 hours for me, 4 months for them. You couldn't even call to ask about your case for weeks after you sumbitted a form, because it took that long for them just to enter the data into the computer.

The only reason the DOR knew how much to charge for back taxes, interest, and penalties, is I _told_ them how much. If we had just started paying the tax again as quietly as we had stopped, they'd have *never* known we had been delinqient.

The DOR couldn't find its own ass with both hands, a map, a compass, AND a flashlight.

[Randy]

Ah, the MA DOR. They're the guys who open envelopes, run to cash the checks, and put all the accompanying forms in a big pile in another room to be gone over at some undetermined future date. My suggestion? If you're in MA, and you know you owe money, send in your tax forms first, then, when they send a notice to you about your payment being missing, THEN send the payment. That way, you know they've processed your taxes (if they do it the other way around - cash check, then leave forms for later - any further errors you may have missed will remain unchecked for a LONG time, and YOU get screwed for that) and if you have any issues about what you owe, they've already got the information in the system. Keep in mind I'm neither an accountant nor a tax lawyer, but the logic of it seems airtight (though that doesn't necessarily mean anything in a state where the DOR can't find its ass with two hands, a compass, a flashlight, and a dozen bloodhounds).

[rst]

To the left it seems, due process and equal protection are good so long as they're in the context of progressive goals. If violation thereof is being used as a curmudgel against the heads of the Evil Rich And Powerful, such as this de facto added state tax on the middle and upper class, then that's ok.

Welcome to Assachusetts.

[Posniak Beth]

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DATE: 05/21/2004 05:07:26
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