IRS Collects $1B in Back Taxes from Millionaires
forbes.com
forbes.com
The problem is the federal government spends $1billion dollars every 1.46 hours.
We collect an _absurd_ amount of taxes. Far Far Far Far too much. The vast majority of it is wasted.
Collecting more isn't going to solve the problem and it never has.
Someone could probably make the same arguments for/against local taxes, but OP appeared to be referring to federal taxes as wasteful.
Either way, it’s very evident in many urban areas that taxes paid result in both economic and quality of life benefits.
Perhaps there's a correlation.
I do find it amusing how one of the reasons for the "original" (I know) settlers of the US was to get away from feudal landholders dictating politics and life, only to speed run a system where 33,000 sq mi in Wyoming that holds 90,000 people (3 people per square mile) have the same weight as 20 million people elsewhere.
This system made sense 200 years ago. Probably.
I don't understand why there's this belief that the Founding Fathers were infallible. They certainly weren't. Or this belief that they were all wizened old men. > It’s a simple question—perhaps so basic that it’s been overlooked: How old were the leaders of the American Revolution?
> As it turns out, many Founding Fathers were younger than 40 years old in 1776, with several qualifying as Founding Teenagers or Twentysomethings.
The Declaration of Independence was signed by:
A sixteen year old, a 21 year old, 2 26 year olds, a 27 year old and a 29 year old. Source: https://slate.com/news-and-politics/2013/08/how-old-were-the...
It is very likely that unaccounted-for money wasn't lost so much as diverted to black budget projects.
As for Musk - he didn’t get Tesla to pay him anything. Shareholders voted and approved this compensation package, twice. When he was given the package initially many years ago, it was worth a lot less. Musk led the company through a 20x gain in value which is why it is worth more now. Shareholders got far more than they ever imagined. But even the targets they set out initially were considered impossible by most, and it was thought to be a very risky deal for Musk and great for everyone else, since he received no cash.
// Shareholders voted and approved this compensation package, twice. // Just because shareholders voted for it doesn't' mean it's not a big fat waste of money. While we're on the subject, how about Musk paying 2x the real value of Twitter?
// ure there are some packages that are irresponsible but usually there’s a good reason they are what they are, //
And again, most of what is pilloried as "government waste" usually has a good reason too. To suggest otherwise is hyperbole.
// simply don’t understand hiring for those kinds of roles
chuckle let me tell you a story about the time I made $25 million in one all-nighter :-) I was working in Manhattan, for a very well-known financial firm. One day I noticed that one of our regulatory filings was going to be late. I told my boss and he said not to worry about it. So I escalated it to his boss--who also told me not to worry about it.
I figured that I could regenerate the report and submit it on time, but only if I worked all night. So I did. I was just finishing up at about 8:30am, when the president came to my desk and said "THANKYOU so much for submitting that report!" I thought great--I finally caught the attention of the execs.
He came around again at 5:00pm and thanked me again. I thought wow, I'm in.
The next day they fired him :-) Turns out, he had a $25 million golden parachute--and one of the conditions was that there were no late regulatory filings....so I worked all night, and he got $25 million.
But wait!!! There's more!! in 24 hours, I had gone from the president's favorite--to being the guy who just cost the company $25 million. You can't really fire somebody for obeying the law, but you sure can gaslight the shirt out of them. I eventually had to quit, and I'm still looking for a job.
Don't tell me in those condescending tones that I don't know what those bonuses are for. And again, if you think the private sector is some uniformly wonderful example of efficiency you are the one who is out of touch with what goes on in the C-suite.
If they were as wasteful as you said and as willing to give out such bonuses they wouldn't have cared, but you yourself said they did.
In the end the private sector wants to make money, that includes clawing back bonuses promised to execs etc, they want to save money however they can. The same can't be said for the public sector. That makes them entirely different.
Not at all, and sorry if I gave that impression. I only wrote what I know and saw. I don't know anything more than that.
> You just provided evidence that private companies work hard to not pay execs those bonuses to save money, that goes directly against what you are arguing.
Surely you are not equating cheating with efficiency? And surely you aren't suggesting that nobody in government ever cheats :-)
the waste in the private sector is nothing compared to the public sector. you have no idea.
> Elon Musk just got Tesla to pay him $50 billion. For what, exactly?
for this: https://fortune.com/2021/03/16/elon-musk-net-worth-tesla-sto...
Does anyone have an idea? I hear this so much but I’ve never seen hard numbers on it.
Individually they don't seem so bad, but it's death by a thousand cuts with these things.
And that one costs more than the numbers shown. The process to get security clearances can take 12 months or more, time when people may not be able to work on whatever they were hired for, or they may quit rather than sit twiddling their thumbs for a mediocre salary.
https://www.gao.gov/reports-testimonies - lots of reports here
You hear about musk getting 4/50 billion, you say, oh well, its what the shareholders voted for...
You hear about stuff that happens in government---yeah, that's what the voters voted for too.
Even any fraud which happens: the voters are the one's who determined how much funding the watchdog departments get. But watchdog departments are expensive too, so you've got to trade off.
Everybody hates the government but loves their congressman. Probably because he's saying that he's cutting government waste. But if we keep electing the same congressmen over and over, decade after decade, thing's won't change.
Another example of DOD waste is in hiring if clearances are required and the new hire doesn't already have one. Because of the problems in the current clearance system it can take 12 months to get a clearance, being very generous that's $200k to have someone sitting at a desk twiddling their thumbs. If there are only 1000 new hires across DOD without clearances every year (and there are more) that's just $200 million wasted paying salaries but getting no value from them. Every year. Again, the real number of new hires without clearances is a lot higher than that.
That's one reason I chose the example I did. The project is late, it's forced them to maintain (for hundreds of millions of dollars) the system it will replace, and the clearance process is taking close to a year for many, if not most, new hires. The total cost of this new system being late is billions of dollars, not just the $1.3 billion or whatever they directly measured for it. For an IT system.
And this is common in DOD IT system acquisitions and sustainment. Each one of these would bankrupt a medium-sized business (without VC money if they thought it could be a unicorn) if it didn't have the DOD infinite cash backing.
Other than the absolute largest, highest profit margin companies (with cash to burn) no private business can be this inefficient.
I hate that there is not way for me too tell whether you are even real or not. This business of having computers which can pass the Turing test really has its disadvantages.
Paying somebody $200k? I think it should be obvious that a spy who slipped in because of weak vetting cost the U.S. more than $200k...an hour. E.G. a harpoon-class cruise missile costs almost $2 million---and compromised intelligence could have us firing one of those off at innocent people. E.G. the second gulf war and "weapons of mass destruction" We could have saved a couple of trillion dollars.
What a remarkable misrepresentation of what I wrote.
I don't want us to spend less (necessarily) I want us to waste less and spend effectively. If you aren't just trolling and really don't understand that, then I'm honestly surprised you successfully found and clicked the reply button.
And since your reading comprehension is so bad, the $200k is not their pay, their pay is likely around $60-90k/year. The $200k was total cost to keep someone sitting in a desk producing nothing for a year, and a lowball. Quite frequently what happens, in high COL areas especially, they sit there for a year, get a Secret or TS clearance, and then bounce to a contractor for 2-4x the pay. US tax payers get nothing for it, but got to spend at least $60k on salary, another $30k on benefits, another $30-50k in other overhead, and $50k or more on the security clearance process itself. And in the end the position the person was hired for is vacant, has to be filled again, and the process repeats.
This is not effective, it is not efficient, it's just wasteful.
sigh and I don't like it either. I miss the days, not long ago, when if something was making reasonably grammatical and coherent sentences, that mean it was a person.
One of the broader points is that government waste and private sector waste look different. We would like organizations to provide services at cost (or as close to at cost as possible) to consumers. That’s zero waste. Profits are waste (arguably a necessary evil, but a waste from the consumer’s perspective). Paying people to do nothing is waste.
One of the promises of the private sector is they can keep costs low by innovating on the product, figuring out ways to make it faster and cheaper. But very often that’s hard, or not possible, or not convenient. So they “innovate” on price or market position instead. Tacit collusion, enshittification, monopolization, cartel behavior, acquahires, shrinkflation, etc. are all symptoms of private sector waste. Not innovation.
You are trying to conflate organizations that aim to make money, and do it so efficiently that the organization-owners can buy those things with the proceeds, with what this person is talking about, which are inefficient organizations that do not aim to make money. There is no overlap.
For that matter if the inefficient organizations in question were more efficient (required fewer tax revenues to function well), there would be net more yachts, not fewer.
The examples you gave seem serious but don’t suggest the public sector is that much less efficient than the private sector, if at all. Bureaucracy is a reality of most sufficiently sized companies.
As another data point, the team events I’ve experienced were dramatically different between sectors. In government, we reserved a local park and had a pot luck. Nominal public cost if any. At another company, they bought $50 baseball tickets for 200 people. Certainly within our rights as a company but it came at the cost of our customers. Not “efficient”.
https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-....
I always felt that America had low taxes and most of it was used to deliver the bare minimum services (police, defense, public servant, social program) or even below (public schools, teacher, justice, IRS...) what is necessary for a society to sustain itself.
Here’s one example among a LONG list of grifts that illustrates how reckless politically biased elected officials can be with everyone else’s money - spending millions so some activist group can run a minor survey: https://www.seattletimes.com/seattle-news/politics/seattle-s...
Another example: here, funding for public schools has increased a huge amount - it is more than double what it was a decade ago. Our schools spend something like 20-25K USD per student per year now. But the schools are in poor physical condition, the quality of education is low, programs like music are on the chopping block, many schools are being closed to save money, the teachers and their unions are unaccountable for performance, and the school/district leaders are focused on political battles like injecting ethnic studies into math (https://www.seattletimes.com/education-lab/new-course-outlin...).
The thing is government programs are generally not held to any standard of performance and accountability, and citizens don’t have much time to watch over them. Spending and budgets always go up not down, because there is always some dedicated group fighting to extract something for themselves. The leaders who are enabling all this act in ways that ensure election and re election, not good results for their citizens. And they act in favor of their personal political and ideological goals instead of being neutral. This type of “corruption” then causes many people to want to just reduce taxes because they’re not even getting the basics they thought they already pay for. I don’t have a solution, I just think it is some kind of spiral that leads to people believing taxes are wasted more as time goes on.
https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-....
The top 1% of people pay 45% of federal income taxes. The top 10% of people pay 75%.
Rates are already highly progressive.
https://taxfoundation.org/data/all/federal/latest-federal-in....
75% of what? Income tax? Very misleading--there is more than one way to make money, and those in the top 10% are probably not making most of their money via income. Warren Buffet famously said his secretary has a higher tax rate than he does.
// I wonder how that perception problem can be tackled? //
The best way would be an even distribution of wealth. The top 1% own half.
The other 99% share the other half. You can quote any statistic you'd like, but when 1% own half, the other 99% are not going to think they have a perception problem.
Well they own more wealth than the entire bottom 90%, so it seems like they're still underpaying.
If the point is simply to tax people until you have a more egalitarian society, then obviously it is too low.
If the point is to pay for services that people use, the rich are far exceeding the cost of services they use, and subsidizing everyone else by a huge margin.
Simple examples are toll roads, gas taxes, permit fees, ect. SSI is closer to a use tax, but has some redistribution built in. Many cities fund infrastructure using parcel taxes, which approach per capita use taxes as well given that hey are paid by home owners, or often passed on to renters.
Not if their wealth is being subsidized by everyone else and not via their own labor, as in that case, they are using the services of others and underpaying for it. And this goes for anyone, regardless of their amount of wealth.
I think this just collapses into the first case where the purpose of taxes being equality. Unpaid labor/service value is just the rationale.
I know that this opinion is disregarded as a conspiracy by some, but I see the very real effect of it where I live (in Germany). We have a large part of the populace who do not see value in Work because we accidentally created equality of outcome by not raising the wage limit needed to hit the highest tax bracket for decades.
I'm not kidding. There exist multiple showcases that show there to be just a tiny difference in net income anywhere between 3k and 5k Eur before tax, if you're a single earner with a family of two in any large city.
Two points here, I guess:
1) The nice thing about compounding growth is that it just doesn't care about individual or personal anything. People who start with more get more, and they get it faster without them even doing anything.
2) Executives are standing on the backs of the people doing the actual labor. Children of rich families are born on top of mountains of money. Let's not pretend like their success is entirely personal. Unless maybe you want to eliminate inheritance and trusts? If we can entirely eliminate inheritance and trusts, that would probably go a very long way.
> raising the wage limit needed to hit the highest tax bracket
Feel free to put another bracket to differentiate 10% and 1% if you want. That's entirely orthogonal.
2) Not all success has to be personal. You can and should profit from the wealth that your parents accumulated. I am fine with taxing the obscenely rich and with eliminating their insane schemes to circumvent the tax code. They should pay their fair share.
The entire reason I originally answered you is that it's not entirely orthogonal, and keeping the distinction here is incredibly important.
Being within the top 10% currently puts you into the 160K a year range. That is not rich. This is your ordinary handyman and his wive, doctors, lawyers, engineers, air traffic controllers, etc.
These people are hardworking and in the process of accumulating wealth, for them and hopefully their children. Grouping them with the ultra rich and demanding their taxes to be raised any further is unfair.
Remind me how we got from "individual responsibility" and "personal success" to "inheriting wealth from parents by luck of birth" again?
Generational wealth transfer can only ever increase the divide between upper and lower classes over time. There's no way around it.
Talk of "individual responsibility" and "personal success" is diametrically opposed to inheritance. You cannot have both. The person inheriting has done absolutely nothing to deserve it.
"Individual responsibility" is the easy part and can mean paying your debts.
"Personal success" can simply mean advancing from your starting position, whatever that may be.
I tend to agree with the parent post that building generational wealth and benefit is desirable. It makes sense for perspectives and systems that aren't zero sum.
increasing individual and national prosperity is not zero sum activity. however, Income inequality is inherently a zero sum metric. Optimizing for income equality means it is better for each of us to have $1 to spend than one of us to have $3 and the other $2.
This is extremely out of touch.
Also consider that payroll tax has become an increasing portion of what is collected, health insurance is now required to be paid by the individual regardless of health status, and auto insurance is now required for all drivers. These are effectively regressive taxes on the general population.
https://en.wikipedia.org/wiki/History_of_taxation_in_the_Uni...
combined State+ federal taxes look to be on par with 1950s levels. It also ignores the fact that the inflation controlled GDP has gone up 4.5X since then too. The government is rolling in 4X the cash as the 50's, but cant build a fraction of the infrastructure.
>Also consider that payroll tax has become an increasing portion of what is collected, health insurance is now required to be paid by the individual regardless of health status, and auto insurance is now required for all drivers. These are effectively regressive taxes on the general population.
Payroll, health, and auto insurance aren't regressive taxes, they are flat taxes and slightly progressive taxes. High earners still subsidize low earners for SSI. auto and health are flat.
My first point is to question if %GDP is the right framework to even think about this, rather than dollars.
>However, my point was that the origin of the income has shifted significantly.
I dont think it has. Income taxes seem to be within a percent or so of 1950 values, but payroll taxes have increased massively. This means income tax revenue is pretty similar as a % of GDP, and massively increased in real dollars.
>Parent says 45% progressive tax is high, it's not - it's half as progressive as it was in the 50s before including other societal changes that effectively serve as a regressive tax.
Thats not evident from the data. You would have to look at actual breakdown of federal revenues from income group, not just the tax brackets. It could be that taxes were far more flat/regressive in the 1950s (e.g. to 1,10% paid a much smaller share.
Table 5 of this link goes back to the 80s, and shows the fraction paid by the top 10% earners increase from 32% to 52% in the last 40 years. That is a huge progressive taxation swing.
https://taxfoundation.org/data/all/federal/latest-federal-in...
In the context of the previous 25 years its not. "following World War II tax increases, top marginal individual tax rates stayed near or above 90%, and the effective tax rate at 70% for the highest incomes (few paid the top rate), until 1964 when the top marginal tax rate was lowered to 70%..."- wikipedia
it would be interesting to have the full historical data set to play with
Founded by the Chairman and CFO of General Motors, and the President of Exxon to ostensibly "improve lives through tax policy research" but has in its 86 years of existence NOT ONCE supported:
- increasing individual taxes
- increasing business taxes (actively the opposite)
- the existence of excise taxes
- the existence of tax credits
and generally argues for "significantly smaller" government, "significantly smaller" budgets and such.
While it describes itself as non-partisan, it is generally rated:
- heavily business-friendly
- conservative
- center-right to right
I am shocked that such an organization, founded by "titans of industry" would claim that we need to tax the wealthy far less and tax the corporations they own and run far less. Entirely shocked.
Like Peter Thiel's tax-free $5B Roth IRA account.
If every person in Houston deposited the maximum they were allowed into their account, it wouldn't equal what self-dealing and obfuscation allowed Thiel to deposit (how many people have share portfolios that they control AND control the valuation thereof).
The Tax Foundation knows that the 1% doesn't have all their income captured under "Elon Musk, SSN XYZ" when he files his tax return. But they still like to paint it as such, because it advances their talking points. Like a sibling said, when you look at the wealth controlled and earned, pointing to just the total paid is garbage, because there's no proportion. "Oh, they paid 1.5 times more than [demographic]" means very little when they control 70x the wealth of that other demographic.
Source: https://www.propublica.org/article/lord-of-the-roths-how-tec...
If money isnt collected because of tax shelters, then it isnt represented. This is why looking at actual collection data is more useful than just looking at tax brackets.
But then if you learn that that 1%s earnings are dozens of times more than that next 9%, you realize “hey, it’s not that proportional or progressive as they’d have us believe”.
The Tax Foundation openly wants the rich to pay less tax.
Even if you taxed "rich people" harder, say tax all billionaires at 90%, there isn't enough to cover what is being spent and it's not even close.
For instance, there is approximately 5 trillion currently held by billionaires in the US. That, coincidentally, is approximately 1 year of current federal spending.
Then the following year you have no more billionaires to harvest as it took them many decades to get the money.
On the other hand you have people who say "well, the federal government needs to stop spending so much" (and this does make sense at the same level "tax the rich more does "). But the problem with removing, or even substantially reducing, federal deficit spending is the resulting giant black hole would economically collapse many things in the short term at least.
I don't know that there are easy answers for the problems the US finds itself in at the moment. Probably some sort of financial reset at some point, which is unlikely to be either clean or painless.
Personally, I was shocked. I thought for sure the increase in taxes would push an already wobbly economy into deep depression. What happened instead is that---after the Government stopped hovering up all the money available to lend--interest rates decreased, and people both had to and could lend their money to actually productive businesses. It was boom city after that.
There is no unsolvable debt problem. If we couldn't repay our debt, people would stop buying our bonds. And the solution is so simple. Raise the taxes until interest rates are low enough to trigger an investment boom.
It didn't last very long and soon we were to Bush 2 spending and massive deficits again. Every subsequent administration has dug the hole deeper to the point we spent 140 billion in June alone on federal debt interest payments.
Who will you raise taxes on? The "Rich"? (see my other comment, it's not enough money), the "middle class" who are being squeezed silly by inflation at the moment? I don't know that they can shoulder much increase without big upheaval.
I agree no problem is unsolvable, but that doesn't mean the problem will be solved gracefully. I suspect a new order of things economically is how it works out in the end, and what that looks like and when it occurs I do not know.
Fast forward 45 years and his party is telling you that in orders to save the country, you have to accept a lesser benefit because they spent all the money from a fund that was supposed to be a social safety net.
You can also stop defending people who are tax cheats with “the rich really do pay”. Apparently not, because that is the premise of the entire article that the IRS collected tax due.
I find this claim to be intellectually dishonest.
It's pretty well-known that deficits drop during Democrat presidencies and then skyrocket again during Republican presidencies. But because democrats haven't been able to bring the deficit to zero since Clinton, somehow they still get blamed for the debt continuing to rise, even when they still manage to reduce deficit while Republicans increase it.
It drove me absolutely bonkers that people blamed Obama for skyrocketing debt when he inherited a huge deficit because of Bush's tax cuts.
Fun Fact: Ronald Reagan raised my taxes. Graduate student stipends did not used to be subject to federal taxation---and then they were. Just a bit more than $100 was taken out of my pay check. $100 is a lot of money, when you are only making $800 a month.
So yeah, Reagan gave tax cuts to one class of people, and paid for them by raising taxes on another class of people (as I recall, he started taxing me to 'fix social security.' I hear that fix is about to run out, and they'll need another one if it is to last through my retirement.). Forgive me if I don't look back on the Reagan years with a golden, warm, fuzzy glow of nostalgia.
I think economics is a lot like physics, in a sense. Part of it breaks down when the powers that be become incredibly dense, heavy, and large.
Tax cheats are basically stealing money from our pockets. So when the IRS comes for them I’m not going to be upset.
And I am sure these are people who would say they love America if you asked them. I bet. If you love America so much then pay your taxes.
I hold the opposite opinion. You don't have universal healthcare and who your parents were has a greater determination over your life than you will ever have. Those without rarely get the opportunities you and I ignore every day. You don't pay nearly enough tax for a first world country.
> Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation). Unlike technical defaults where payments are merely delayed, this default would be much larger and would reverberate across the U.S. and world economies.
https://budgetmodel.wharton.upenn.edu/issues/2023/10/6/when-...
We need to reduce spending and increase taxes, but that's politically unpopular.
Ideally, when the economy is good, one should try to pay off the national debt, so that you can run a deficit when the economy is in recession. But the US just spent the last eight years running up incredible deficits; now, the debt needs to be reduced ASAP.
Like imagine if the average person could just decide they arnt going to be able to cover interest on the debt they have, yet they still could print tons of money. Money that's only backed by their word, and the debt gets used in your local town negotiations as a weapon.
Is the assumption here that if one’s skills are worth $400k, one isn’t hardworking?
So, this isn't even a drop in the bucket.