The IRS has upgraded its technology to track virtually everything you do online
money.msn.com
money.msn.com
Better still, the exact nature of all this -- wait for it -- is a secret.
The long-term trend here is pretty clear. Congress has the Big Data hammer out, and it's not afraid to use it on whatever political cause of the week makes them upset. NSA was first, because terrorism was so bad. But dang it, tax cheats are pretty bad too!
There's no slippery slope argument that needs to be made. We're already sliding down it. Just standby for the next travesty. Don't worry, the wait won't be long. Maybe a year or two.
The American people remain amazingly ignorant and/or apathetic, though. One wonders how many wake-up calls it will take.
ADD: The very interesting question here is this: since the IRS is authorized to go after emails and social chats without a warrant, how are the big service providers going to report this? Even if Google shows its thousands of NSLs, this type of activity wouldn't be covered by them. Some more info here: http://money.usnews.com/money/personal-finance/mutual-funds/...
What's the specific travesty here? The IRS already looks at and analyzes your private financial data both as reported by you and others and this is generally considered acceptable and a necessary part of them doing their job. So say now they noticed you reported $20k in gross annual income but are buying Ferraris on eBay. It seems pretty reasonable to assume, from that piece of public data that you might be mis-stating your taxable income.
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWo...
It's a tax on buying. Think about that for a moment. Fair Tax proponents claim that the current tax system causes disincentives for things like exports and U.S. manufacturing. Why would the Fair Tax proposal then not cause a disincentive on the demand side of the economy? ("How will the plan affect economic growth" in the FAQ clearly espouses a particular economic ideology that has yet to be supported by any of the facts of history.)
It also places the entire tax burden on the consumer. Annual pre-tax corporate profits are somewhere between $800 billion and $2 trillion, depending on which data you decide to believe. Why is all that money being left on the table in favor of drawing the entire national budget from consumers?
Corporations are owned by people (consumers as you call them), tax the person, not the intermediary.
And in any case the corporation would also have to pay the tax on everything they buy.
"With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase."
This might help your customers, but it doesn't help you (unless you charge the sales tax and don't forward it). So the cheating incentives are much lower.
And if you're suspected of misrepresentation, they'd still have good reason to go rummaging through your publicly or legally accessible info to make their case. These steps appear independent of the details of the tax code.
You have to wonder, if an agency of the government is not answerable to Congress who represents us, then why do they exist?
But, ah! Is this a "reasonable" search on the part of the IRS? Congress thinks so, but we would have to leave it to the Supreme Court to decide.
Sadly, the train has left, even courts are neutered. They can and are supposed to nip it in the but they will not do it. Journos are harassed at airports for doing investigative works, and no one wants to do anything about it
You know how people complain about the DMV? That's because they don't have to wait in line as long at their bank. It's the same thing with the IRS and Big Data, when a government agency doesn't use the latest technology, they can rightfully be accused of being antiquated. It just so happens that people are much more supportive of shorter DMV lines than they are of paying sales tax on Amazon purchases -- go figure.
Furthermore, if government uses big data to catch polluters, that good. But if government uses big data to catch someone planning a bombing, that's bad?
No one is saying the governments use of Big Data is bad except in the circumstances where our government sees fit to hide its usage or utility even when it directly impacts its citizenry.
It is not the use of modern technology or even the goals, which many on HN will admit are admirable. It is about the path used to reach the end just as much as it is about the end.
I believe that we have very smart law enforcement officials who don't need to routinely violate the privacy of Americans to do their jobs.
There are entire families on the streets and cities like Detroit are crumbling, yet tax payer money is siphoned into more prisons and spy technology.
The logical conclusion is that we need to cut the military in half expenditure wise (saving $340+ billion per year instantly, and cutting our budget deficit in half instantly, while still leaving a massive budget for the military). We need to close 9 out of 10 military bases around the world, perhaps more. End Homeland Security and the TSA. Strictly enforce privacy laws, including the 4th amendment, such that anybody in the government that violates them does hard prison time. Cut the espionage budget ($80+ billion) substantially, including all of the budget allocated to illegal domestic spying. Pass new restrictions on the ability of the executive branch to wage undeclared war (ie without congressional approval), both in the style of what we're doing now in Syria and the more traditional war in Iraq. We should also simplify the tax code, simultaneously wiping out a lot of tax fraud by ending 99% of all loopholes and deductions, and slashing the IRS in half, saving tens of billions per year in tax compliance costs.
We should also, obviously, end the failed war on drugs, and end the mass prison system. The policy of holding in prison millions of political prisoners should be immediately stopped, bringing the extremely violent 'war on drugs' assault on liberty by the government from 1980 until now, to an end. This war of power and greed, costs hundreds of billions of dollars per year in government expenditures, lost lives, lost productivity, prison costs, and the destroyed futures of those held captive as political prisoners (many to be enslaved for labor in corporate prisoners). Not to mention the tens of thousands of lives it ends around the world every year. We currently spend over $100 billion just to keep 2.2 million people in prison.
Your conclusion at the end presents a false choice. Simple black and white example: if you don't like violent gestapo politics, you might as well give up on all organized society (you can actually insert any government action, which proves your position to be filled with holes). The parent never said "no cent should be spent on something I don't like."
I wasn't starting a debate on how we should spend tax revenue, just a comment that this sort of statement is inherently silly.
At one point, the manual explains to examiners how to use DomainTools to search for domain names, but cautions examiners that the site may ask for email addresses sometimes, at which point the examiner is no longer allowed to use the service and must instead revert to asking the taxpayer questions.
It's this kind of writing that drives me crazy. IRS may be overreaching, or they may not be; who knows? We get all our information through a game of telephone by media organizations that incentivized to write the most lurid stories possible.
Yes, that's the point. Breathless speculation is obnoxious, but that's all we're left with when our government hides its activities from us.
What we don't know—what the article speculates about—is what's in the IRS's databases, how those databases are populated, and the extent of the IRS's claimed powers in audits generally. As with the NSA's secret surveillance program, we're left guessing what's under the IRS's gaze and what oversight, if any, ensures that its scrutiny is circumscribed to what's appropriate in a free society.
[1] http://www.propublica.org/article/how-the-maker-of-turbotax-...
That will solve every budgetary crisis going.
And contrary to the faux Mother Theresa like notion of government that some people like to project, that money will not mostly go towards relatively positive things like feeding hungry children, giving a helping hand to out of work people, or building libraries. This extra cash will mostly go to agencies like the NSA to spy on people more, subsidies to big farming companies, payoffs to the right corrupt dictators, to the FBI to throw more people in cages for consuming a plant, or to corrupt military contractors to build more useless bombs for the next war.
The 16th Amendment (income tax) was only instituted in 1913 and the whole income tax is based on the disgraceful concept that you don't own the fruits of your labor but the government gets it before you do and only allows you whatever cut of it that they can decide on. The US was incredibly prosperous up until that time and was completely functional mostly running on limited tariffs. We would be even more prosperous today without the government sucking up such a large portion of creative wealth that exists in this country.
The IRS should flat out be abolished not just for economic reasons, but also for political reasons. It is unacceptable that they are spying on people even more and that their power can be used to target political enemies.
The 16th Amendment was instituted in 1913, but the first US federal income taxes were adopted during the Civil War, and the first peacetime federal income taxes were adopted in the 1894.
The 16th Amendment wasn't passed to give Congress the power to collect taxes on income, it was passed mainly to expand Congress well-established existing power in that domain to include the power to tax income from on sales of real and personal property without apportionment according to population as a direct tax (and to avoid future similar problems that might apply to some other sources of income), in response to Pollock v. Farmers' Loan and Trust, 157 U.S. 429 (1895).
No, it hadn't. As I stated earlier (and cited the case in which the decision was made), tax on certain forms of income (specifically, income from sales of property) was ruled to be a direct tax requiring apportionment under the Constitution.
> An "excise tax", which was the same thing, was implemented as a workaround.
Presumably, this is a reference to the Corporate Excise Tax of 1909, which wasn't the same thing, as the Court had explicitly previously ruled that a tax on corporations that was an excise for the privilege of operating a corporation, even when assessed by income, and even when the income included income from sales of property, was not a "direct tax" under the Constitution and thus did not require apportionment.
> The income tax amendment eliminated the unconstitutionality
...of Congress taxing income from sale of property without apportionment, yes. That was the problem with the tax act that had been struck down -- the fact that it included taxes on that one particular source of income in a non-apportioned tax.
Makes me want to collect my family and leave the US. Become an expat in a low income tax state.
http://www.bostonglobe.com/business/2013/04/29/americans-abr...
I have no idea if Skatteverket (IRS equivalent) were right in their decision but the guy did lose in the first court instance.
Also: If the Facebook page was public and Skatteverket were questioning the legitimacy of the 'business purchase', why shouldn't they check the page? Basing the decision on only one status update seems a bit strange though.
Now I have less faith in the lower courts than I should but it does bring legitimacy to Skatteverket's decision.
We see:
At the top is a U.S. News & World Report button,
4/10/2013 4:15 PM ET
By Richard Satran, U.S. News & World Report
At the bottom of story we see
`More from U.S. News & World Report:...'
-None of this links back to original source.
If I fb share it, or link it, this `Bing' becomes the link. without more further digging to get the original url, looks like I have to use this copycat of full-content `Bing' thing.
That isn't closely private information, but it isn't something I would call public activity.
"The IRS last year used a profiling test model to study 1,500 tax preparers with histories of reporting deficiencies and managed to recover $200 million. It cited the experience as proof that its data analysis works."
They recovered $200M from 1,500 citizens? That's $133k each. Seems like an extraordinarily large amount.
Going after only high income citizens might also create a reasonable situation where $133k/taxpayer in their biased sample set might happen. It's often not unreasonable to focus only on those individuals who might produce the largest numbers...
GE paid 7% in 2010, partly due to the poor economy.
How many of us wish we could get away with only paying 7% tax?
http://money.msn.com/taxes/latest.aspx?post=26d490bd-7317-4f...
The article you link discusses the very wealthy having taxation dominated by the lower taxes on investment income. I think such taxes could be higher without having significant impact on investment (lots of rhetoric suggests that even tiny changes would cause investment to collapse, that's silly), but there is plenty of room to discuss whether government spending is a better use of the wealth than private investment (and such taxes do more or less have the effect of directly moving private investment dollars to government spending).
Yes. Corporations themselves want to apply the Constitution to the corporation as if they're a "person", therefore, it makes sense to compare the corporate tax rate to the personal tax rate.
You may argue that tax rates are too high or low for both or that there are too many loopholes but that is a different discussion. I don't think anyone actually wants to see the same tax legislation for businesses and for people - it makes no sense what so ever.
With regard to tax law, accounting is generally different between corporations and individuals. Specifically, individuals use cash accounting while businesses frequently use accrual accounting. Furthermore, businesses can deduct far more in expenses than an individual. One can argue about that, but I think it makes sense when you realize that corporations are ultimately owned by individuals, but individuals cannot be owned by other individuals or corporations. Individuals are ultimately the "base case" of ownership, so I think the different tax treatment of revenue/profit/income makes sense.
Most opponents of corporate "personhood" aren't really opposed to juridical personhood of corporations and other non-natural persons, they are opposed to the effect given to corporate personhood in certain domains; corporate personhood has never been fully equivalent to natural personhood in the law, and there are quite different ways in which corporations could be treated as juridical persons without directly holding the particular rights that have recently caused a lot of people to get offended about "corporate personhood".
My personal opinion is that both personal and corporate tax legislation is more or less flawed and that the(effective) tax rates probably need to be adjust but that doesn't mean that I want them to have the same legislation.
I favor a tax based on percentage of gain. If a Mega-Corp makes $30Bn a year, and I only make $30K, we each pay accordingly, at the same percentage rate.
Of course there would be a great debate about exactly what that percentage should be, but it should be equitable and not too onerous.
Why not hold corporate entities to the same standard as individuals?
Isn't the USA supposed to be about equality? (Remember, freedom & equal rights for all?)
But the problem is: we've already crossed that bridge. Corporations are treated like people in enough regards, that it only makes sense to make these comparisons now.
But yes.. its retarded. It doesnt make sense. But it's how things are now. And until something changes with corporate personhood, they should be held to the same standards as people. This way people will wake up to how stupid it is.
And I'll put U.S. free speech absolutism over most of Western Europe any day.
That's not what corporate personhood is. Before corporate personhood became the law of the land, people retained all their individual rights despite forming legal entities. Neither does losing those rights happen in any other western country that does not recognize corporate personhood, btw.
> It doesn't mean their corporation gets a vote or can collect food stamps.
Oh, it does mean a corporation can lobby, which is very close to voting (and statistically, way more powerful than voting).
And it means a corporation can be found guilty of criminal negligence or even criminal behaviour, and yet not a single natural person is guilty. If you look at e.g. Germany, Sweden, or Norway - if there's criminal behaviour, the person responsible for it gets indicted EVEN if they did it as an officer of a corporation.
It's a kludge because, because for the small benefit it gives (allowing a legal entity to own property, which was solved in simpler ways all around the world), it lets the natural persons in control of a corporation evade criminal liability, and allows them to legally bribe, sorry, lobby with a force that they cannot without controlling said corporation -- at least not legally.
> And I'll put U.S. free speech absolutism over most of Western Europe any day.
Care to explain what you are talking about here, compared to (e.g.) Germany, Sweden, Norway, Switzerland? If you say "most", I guess at least ONE of these countries fall in your "Western Europe" group?
Did you, or do you, have experience living in western europe and/or the US, that you base that on?
Count the "hate speech" laws and provisions against insulting the government or religion.
The number and content of laws is irrelevant. The way they are practiced is. E.g., if you read the 4th amendment you'd think the us government would need reasonable suspicion and a warrant before border search, wire tapping, stop and frisk, etc.
(1) Instead of spending inordinate resources in tax avoidance schemes, companies would have the freedom to focus on investing human and financial capital in serving customers by providing better, cheaper products and services. Remember, the cost of those tax avoidance schemes are embedded in the prices you pay for goods and services.
(2) Taxes would only be due when gains are realized, thus allowing compounded growth to further spur the economy;
(3) It would raise the effective tax rate of individuals who receive a large portion of their income from capital gains (something that seems to really bother those who worry about such things;
(4) It's a more consistent approach to taxation. Today we are taxing the owners of a company's stock both within the corporation's income structure and then again when income and growth is distributed to shareholders as dividends and capital gains, respectively.
NSA is one thing... But IRS? I have a hard time believing this is anything but grossly exaggerated.
I take objection to this. The NSA stuff is indeed questionable. Reading your gmail, that's very clearly a breach. But the IRS does have legitimate interest in knowing about when money changes hands. It's kind of their job.
Let's take away some of the linkbait and media sensationalism about this article. IRS already gets a privileged amount of information on the "usual" way in which money changes hands. Bank transfers, stock sales, dividends, your paycheck, interest - they're getting that info already. So how might social media fit into this? I say if a modern day Al Capone figures out a way to launder money based on Farmville credits, yes, I want the IRS to know about it. If sites like Facebook are introducing things like payment platforms, I don't see why the IRS should not be notified that money is changing hands, the same way they are notified for other transactions. That's not the same as reading your messages.
Which brings me to another point:
> An IRS audit based on trawling public data
A fluffy MSN article about what IRS might be doing is not the same as evidence that this is actually happening. If someone has evidence of innocent people being subjected to this in any substantial number, then please, let them come forward. Absent that kind of evidence I don't find it very believable.