Posted on 01/17/2015 6:35:09 PM PST by SeekAndFind
As Stephen Moore at Fox News reports, the IRS has some big changes planned for for you in 2015. They’re finally going to eliminate all the scandals and abuse and become more accountable to the public! Hurrah!
No… I was just kidding. They’re going to be delivering even worse service than they already provide.
Complaining about belt tightening budget cuts, this week IRS Commissioner John Koskinen lectured: “People who file paper tax returns could wait an extra week—or possibly longer—to see their refund. Taxpayers with errors or questions on their returns that require additional manual review will also face delays.” It says it will cut enforcement efforts to root out identity theft.
Another IRS official went even further, suggesting wait times of at least half an hour to get through on the 1-800 help line. She warned that people who call in might want to bring some knitting, and that by the time you get through to a live human being, “you might be able to knit a sock.” And they call this a “help” line!
Moore does a fine job of explaining the staggering level of dysfunction here by comparing the IRS to any private industry business in the United States. If you consistently delivered poor quality of services and horrible customer support, and then went out to publicly announce that you were scaling back so things would be getting even worse, you would quickly find yourself in bankruptcy court and being driven out of the market space by your competitors. (Unless, of course, you happen to be Comcast or Time Warner.) This is because the IRS has a government mandated, iron clad, unassailable monopoly on the “market” in question. (Again, see Comcast / Time Warner, or nearly so.)
As a possible remedy, Moore suggests that the public hold the IRS accountable and demand the firing of Mr. Kostiken. Those are actually two separate tasks, and I would suggest that each is equally futile and/or impossible. If the endless Lois Lerner hearings proved anything to us, it’s that Congress is seemingly incapable of anything beyond public displays of frustration and bluster when it comes to the Internal Revenue Service. The scandals which “rocked” the agency over the last few years were of a nature which the reasonable observer could assume would have resulted in massive changes and the imprisonment of many principal actors. But for all the sound and fury which occupied the media for months and years on end, when all was said and done the main culprit was “punished” by heading off to a comfy retirement and the agency remained essentially unchanged. (At least until now, when it will get even worse.)
The IRS is not accountable because they mostly only answer to the White House, and if the Administration doesn’t pay grievances against the agency anything more than lip service, little can be done. You can’t just stop collecting taxes (as much as many of you will hate to hear me say it) or else the few necessary things the federal government does will cease to function. And you can’t make the system work any better for the customers without massive restructuring.
Say… didn’t I hear a bunch of candidates talking about systemic tax reform during the 2014 election cycle? And in 2012? And 2010? And for as long as some of our younger readers can even remember? I wonder what ever happened to that. Again.
IMHO, the number one reason the “Fair Tax” will never be implemented: you cannot explain it in an understandable way to LIVs in less than 30 seconds. Any more time than and they’ll lose interest. Such is America today. They’ll really loose attention when you explain the pre-bate.
The “Flat Tax,” on the other hand is super simple and can be explained in less than 15 seconds:
1) how much did you make
2) send us 10% of that.
Source: http://www.freerepublic.com/focus/news/3247338/posts?page=45#45
Despite the advantages of both these plans, it will be very difficult to get either voted into law. Unfortunately the vested interests in the current tax system are many and they have enormous sums of money to lobby for the current system.
That and the Obama tax return agencies lobbying for the IRS
“They’re going to be delivering even worse service than they already provide.”
If we all stopped sending in large envelopes stuffed to the gills, their collective “efficiency” might improve? Didn’t think so
The nrst is awfully quick to explain, upchuck.
1. Pay tax on retail purchases
There is no longer a need to fill out a postcard.
There is no longer any need to define income or imputed income. No need to keep records of expenses or receipts for hsa accounts.
There is no longer any need for deductions - everything is deducted!
While I do not like the tax refunding mechanism in the nrst proposal, it’s still a crap ton better than any tax that requires your income details.
Since my senators in ga (shockingly) introduced it, I’ll have plenty of communications with them to change the refund mechanism to a system administered by each state as it sees fit.
I am STILL saving my money for mr. Cruz.
I will never file electronically again. Make them use real people to look over paper work. Computers make tyranny too easy
Fair tax to LIV =. Money back each month... Not april refund
Flat tax is subject to change into what we have now
Fair tax to LIV. = no taxes on used items, ever.
No withholding, paycheck is all yours.
One word: FREEDOM!
FReedom to work, earn, save, and invest without the heavy hand of government being your “partner.”
Just imagine what never again having to consider the tax implications of opening or expanding a business would do for the economy! That alone makes it worth doing!
Is inheritance income?
What about capital gain? or loss? I did all these improvements on my house before I sold it...
rental income v documented expense [still have to keep up w/ all that?]
What about the stock sale? How much of that is income - I bought it 5 shares per quarter for 40 years... how much did I gain? Still have to keep up with all that too?
What about all the miles I volunteer to drive to deliver meals on wheels?
What about my donations to charitable organizations or church? Who tracks that?
See, tax based on income is never simple. It’s defining income that is the challenge. If we didn’t have to define income, today’s tax could be done on a postcard too -
+how much did you make?
+multiply by your marginal rate.
The only difference is there is more than one rate that can be used. The part that’s tough is determining taxable income. That does not go away if your tax base is income. Nope.
Correct.
You make good points.
“How much did you make?” can be determined by looking at your W2(s) at the end of the year. And that is how much you pay the tax on.
No withholding, no quarterly estimated taxes, no deductions, no need to track mileage, etc.
One situation I see that would have to be handled is municipal bonds which, now, are tax exempt.
The need for collection and enforcement would still exist but I would guess 90% of the taxing authorities would disappear.
If the Fair Tax could figure out a less complicated way of calculating the tax and a different way of doing the prebate then I think the Fair Tax would have a shot.
Truth be told, though, any tax scheme which takes power away from the government and reduces the number of people employed in the “tax/government” complex hasn’t a chance in Hell of being enacted.
Help! People are saying that the Fair Tax is a tax on income.
I thought it was a tax on purchases and completely eliminated all taxes on income.
It's not that simple at all. If it were, we would be doing that now. But it's much, much harder to define income to be taxed than simply looking at a W-2.
W-2 is only wage income. What about imputed income from employee benefits for example? What about dividend income? Sale of stock? Bonds? Inheritance? Rental income? Commissions? All of those are examples of income that do not show up on W-2s.
Any income tax has, at its core, the problem of defining income. It is the main problem. So a system that simply reduces the number of marginal rates from 4 to 1 doesn't do much. Income still has to be defined along with all the accountants, lawyers, and government intrusion that comes with it.
If the Fair Tax could figure out a less complicated way of calculating the tax and a different way of doing the prebate then I think the Fair Tax would have a shot.
The fair tax is simpleton to calculate. If you want a way to figure out the price after tax, just add 30% [at the proposed rate]. That's easier than figuring your net effective tax rate on income by a good measure!!!
Regarding the prebate - we agree that it's something we don't like - but maybe for different reasons.
You didn't say why you didn't like it. Me, well, i'd rather forego the prebate and lower the rate. If States want their peeps to have a refund on necessities, let each state figure that out. JMHO
The tax will be paid on new, retail purchases only. So when a manufacturing company purchases supplies for producing their product, that purchase is not taxed because it's not a retail purchase. But when that product is sold at Home Depot, the tax will be paid by the consumer. When a neighbor holds a garage sale to sell old junk, the junk is not taxed because the junk is used [the idea is to tax retail items once, and only once.]
Labor would not be taxed either - it is an input to production. No FICA taxes under this nrst.
Sorry Taxman to jump in... just thought I'd add what I could ;)
And that's the only income to be counted for taxing purposes. Capital gains, rental income, et al, you make it, you keep 100% of it.
After thinking about this for awhile, let me modify the definition of income to include Form 1099-MISC income earned by independent contractors, etc.
Havatem, Principled!
I am presuming Principled answered your question?
Please to to https://www.fairtax.org/faq for more information about FairTax.
Thanks you for your interest and support.
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