Spending a couple billion on the IRS seems like it would be as pretty smart investment:
More than 20% of the wealthiest Americans’ income isn’t being reported to the Internal Revenue Service, according to a new study that calculates U.S. tax evasion is far higher than previously estimated.
Random audits of the rich can detect some tax evasion, but the study’s authors found that the IRS easily misses income hidden in sophisticated ways, including in private businesses and offshore structures. Collecting all unpaid income tax from the top 1% would boost revenue to the U.S. Treasury by $175 billion a year.
The wealthy have made so much in gains the past few decades while the rest have just been screwed, and they cheat because they can. It’s to the point they don’t even know what to do with the money, they have so much of it:
I have just taken a picture of my chair. I am not going to go through the trouble of doing any of this, but I have it on good authority that I can now host an auction for that digital photo, and sell the unique “ownership” of it to the highest bidder. That winner can then display the photo online, and while anyone could simply download it and own a lossless copy of it themselves, a record on the blockchain will confer the true owner the knowledge that they have the original.
They get nothing else, really, except that knowledge. Anyone in the world can look at or even acquire the same JPEG file from the internet. This is ownership as a feeling. And it’s the biggest innovation in the art world. One of these JPEGs just sold for $69.3 million (not a typo). And it’s further confirmation that decades of inequality have left the idle rich with entirely so much money that they do entirely ridiculous things. And where money goes, scams are sure to follow.
There is a point to crypto art, though you have to squint to see it. Artists put out limited-edition prints all the time, which aren’t entirely discernible from a printed copy, aside from the artist’s signature and the knowledge that there aren’t many in the world. By auctioning a non-fungible token (NFT) that confers ownership, artists can also deliver a scarce object to fans, and get direct compensation for it. This could prove useful in businesses with a lot of direct intermediation between artists and fans, like music. Kings of Leon selling an NFT that can unlock concert tickets and digital art gives big Kings of Leon fans a way to support the band’s work, rather than funnel their funds to a record label or streaming company.
Wasn’t that a market manipulation purchase, and creator and seller were in cahoots?
Goku (aka Amerikan Baka)
NFTs are so pointless. I’m convinced that $69 million auction price was somebody trolling
Goku (aka Amerikan Baka)
Hey, btw, a few weeks back you were talking about your new book and made a joke about it. Were you making a reference to what happened to John Green back in 2015 on Tumblr?
Well shit line up the virtual tumbrils…
Confiscatory tax rates to wring the idle capital out of the soft palms and Birkin bags of the too wealthy and put it to use for the social good. The Social Good shall be broadly defined and include effective, efficient modes of transportation; direct government hiring and fully staffing departments and agencies that fosters the employment of youth, differently abled, full service public schools with no public funds for religious, private or for profit charter schools; ruthless investigation and prosecution of white collar crime and corruption with hard time and then enough years of supervised probation to prevent a return to the days of Michael Milken. And that’s just for starters.
If Tony Jay is around I’d be thrilled to hear his opinion that sole purpose of Brexit was to ensure that offshored capital remains outside of the accounting for and taxation of this special rich people’s wealth that the EU put in place as a result of the Panama Papers.
Don’t just tax them. Get rid of their shelters and preferential rates.
@laura: When I asked, Tony said yes, it’s all about the laundered money that the EU is going to flush out and that Boris and his cronies want to keep hidden.
@Frankensteinbeck: Whoa whoa whoa. Next you’ll be saying that if A sells an item to B for $10 million, and B sells it back to A a minute later for $10 million, that the value of the item is not in fact $10 million. Think of the disruption that would cause in the markets. Or worse, the damage it would do to A’s and B’s commissions.
Give the IRS a couple of billion to audit the rich. Raise the capital gains tax to the same as the tax on earned income. Lower the exception for estate tax. Repeal the earned interest thing that shelters so much hedge fund money.
Lord Fartdaddy (Formerly, Mumphrey, Smedley Darlington Mingobat, et al.)
We should have confiscatory tax rates on income above some threshold. We don’t need plutocrats.
@Goku (aka Amerikan Baka): I don’t think NFT’s are pointless — they can authenticate intellectual and creative property produced in otherwise easy-to-copy digital formats. You can attach an NFT to absolutely any piece of crap, however, which is what happened in the case of the $70 million-dollar, well, collage. At this rate, the cover of my daughter’s school folder should be worth at least $25 million.
Aaron Rupar has a tweet pinned at the top of his feed with a video clip of some Fox “*News*” person reporting that Biden’s DHS Secretary Mayorkas had resigned. The Fox woman was on the phone at the time with Former Guy, who thought — and said — that it was great news. Then she had to walk it back.
One thing the Biden administration should carry over from Trump is a willingness to brazenly strongarm other countries with all kinds of threats to get what you want. Except instead of threatening allies like Germany or Canada, threaten to kick the shit out of countries whose only purpose on earth appears to be to shelter income from the global elite so they don’t have to support the governments of the countries that made them rich? Cayman Islands? Bermuda? Luxembourg? Switzerland? Tell them to (tell their banks to) open their books, or get ready to feel the pain.
We are about to find out that accountability cannot be incrementally restored. Then what?
Taxing is not enough. Debilitating penalties.
At this point, I think it would be a good start just to make them pay everything they owe. I would also like to change the law about criminal tax evasion. Right now, the law makes it nearly impossible to convict someone of criminal tax evasion. It effectively says the tax code is so complex nobody can be expected to know if what they’re doing is illegal. That makes it impossible to prove criminal intent without either documentary evidence the defendant knows their scheme is bogus or the defendant depending on one of the handful of excuses for not paying taxes the courts have explicitly excluded, like claiming the 16th Amendment wasn’t validly ratified. That situation has to change. I don’t know if we should move all the way to a strict liability standard, but we certainly need something stronger than what we have.
@Goku (aka Amerikan Baka):
I have no idea who John Green is, so probably not!
Before- or at least at the same time- we go after other countries for helping tax cheats, we should stop doing so much of it ourselves.
@Goku (aka Amerikan Baka):
Shame on them for not bidding 69.69 million then. The bastards.
Your proposed solution lacks the kind of vindictiveness I think is necessary, but I can accept it. ?
The exact analogy is that the folder is not worth anything, but if you send me an email saying I own the folder, that’s worth $25 million.
And how about a small transaction tax on per trade stock market shares. That could raise a tidy sum in tax revenue while also pissing off traders, speculators and “investment firms.” It’s win-win to me.
Remember that after WWII the highest tax rate was 90% and the rich still got richer than everyone else, now the effective tax rate is much, much lower, because. The highest marginal tax rate is 37% according to the latest figures. But how much of say Bezos income is actually subject to that rate and one much lower because of how income is now measured. Warren Buffet a few years ago compared his income tax rate to that of his personal secretary and he made something like 500 times her salary but paid a smaller rate than she did, by a noticeable rate. His annual salary is only twice hers but he makes a lot of money off his trading.
Put a carbon tax on all cryptocurrency
@Ken: I’ll sell you the blockchain-verified ownership of this comment for $1M. Ownership of all Benw BJ comments for $10M
@jackmac: I can see Katie Porter now. “Sir, you have testified that the proposed 1% sales tax on stock transactions would make the stock market unprofitable. Yet the Burger King just down the street operates with an 8.5% sales tax. Are you saying that your activities on the stock market do not generate as much added value as a high school student flipping burgers?”
@Delk: Tax the hell out of churches – especially megachurches that preach politics from the pulpit. And fuck Joel Osteen’s massive mansion.
I’m not saying we shouldn’t raise taxes on the rich; I’m just saying that they aren’t even paying what they owe with today’s low rates. And I certainly think allowing a more relaxed standard for prosecuting tax cheats would be a good approach no matter what. The rules right now means there are very few consequences for trying to cheat. At most the cheater will have to pay what they always owed plus some penalties. A serious threat of prison time would help get people’s attention.
@Ken: “Sir, is a Whopper 8.5 times more valuable than you?”
The Moar You Know
I was watching a TV show from 2005 last night and it was hard to miss how much wealthier the nation was than it is now. And it’s because the rich are hoovering up all the cash.
And they’re not going to stop until they are made to stop.
@Benw: What’s your Venmo handle?
And fuck the cable news motherfuckers peddling staged border crossings to feed the latest bullshit aimed at Democrats.
CNN uses staged footage
This post made my downstairs neighbor’s heart go pitterpat (in a good way).
@The Moar You Know:
I don’t think the nation was wealthier in 2005 than it is today. There were a lot of people in 2005 who were living beyond their means by borrowing against their inflated house price.
Fuck the fucking fuckers.
Damn straight. Plus, they should be installed in housing blocks north of 50 degrees latitude so they can use the heat for something, instead of a gazillion tons of AC to keep them cool.
It’s almost literally the stupidest concept I’ve ever encountered.
Steve in the ATL
Will Telfar bags still be allowed? Asking for the Brooklynites among us.
the creator may have made money on that sale, but I guaran-damn-tee you the artist will get cut out of the sale in the future. Even for sales of trade marked goods. Robber Barons always figure out how to steal labor from the rest of us and profit off it.
Since the IRS has admitted openly that it mostly goes after the poor because it doesn’t have the resources to audit the rich, I hope that Biden’s next agenda item, after addressing voting rights, is a rollback of TFG tax cuts plus a bill that approves adequate funding for the IRS to investigate everyone who needs to be investigated, no matter how rich.
There was a recent article which I failed to save (maybe NYT?) suggesting that one easy solution would be to require better reporting of corporate income using bank records and variations of Form 1099 (you would also have to do something about offshore accounts).
This also should apply to Schedule C businesses , S Corporations and partnerships and LLCs.
But apart from raising tax rates, the Democrats need to look at revising the tax system to prevent individuals from turning taxable income into non-taxable income. Eliminating or restricting Roth IRAs, for example. Currently, the growth in these IRAs are never taxed. Estates need to be looked at, and certain types of trusts restricted or prohibited. The Walton family is fabulously wealthy, but uses certain types of trusts and foundations to shelter income.
Mike in NC
@HumboldtBlue: The Border Patrol is hopelessly corrupt and needs a leadership shakeup.
@Mike in NC:
Agreed, but it needs a lot more than a shakeup of leadership. It and ICE are nothing but white supremacist orgs at this point.
Along with all the wonderful suggestions so far, I suggest mandatory counseling akin to AA sessions….”my name is blah de blah, I’m addicted to money and it’s made me a greedy, horrible excuse of a human being.”
In the most IRS audited county, in the most audited State, in the US, the average annual income of 90% of those audited, is less than $12,500.
When the IRS says you owe an extra $200, you scrimp, save, cut corners and pay it, unless you are rich, then you hire lawyers.
I am not rich, but in filing my taxes and then going to the IRS website to see what income they have for me, it sure seems like they are missing large blocks of 1099 income.
Here’s how: you have a self employed job and you got an ein (Employer ID number) for the business, and you are paid so that the 1099’s list your EIN, not your SSN. You then file your schedule C and list your social security number on it – but forget (for the first 15 years) to include the EIN on it.. (We actually paid taxes on the amount of income on all the 1099’s)
BUT, the IRS has never sent a letter to the owner of the EIN asking why taxes were never filed on all this 1099 income. WTF??
If you are talking to the IRS, they can identify 1099 income that is on your SSN, but not any with the EIN – even though when you register for the EIN, you tell who you are and what your SSn is. WTF??
Is Yutsano around? Probably wasting time at work.
Curse your quicker fingers!
@Mary G: +1
There are too many categories of “income” and they exist to be abused.
Too many CEOs and MotUs claim that they only make $1 a year or something ridiculous while their total compensation is in 7-8-9 figures. Clamp down on that crap.
If you want to claim that you’re not making an hourly or salary wage, then fine. Everyone pays taxes on total money (cash, stocks, housing allowances, travel allowance, etc.) in minus total money out. If you’re “worth” $1B a year because of all the “value” you bring to investors, fine. Pay Uncle Sam $1E9 x 0.37 = $370M in taxes. If you’re spending $630M a year and generating real economic activity, good for you and welcome to America.
Bezos’s $500B (or whatever) is in Amazon stock that he doesn’t touch? Fine. He pays 37% whenever he sells any of it.
There are lots of corner cases, of course, but the idea holds. The rich don’t continue to get out of supporting society because they’re somehow special. The rich are rich because they have taken advantage of society (patent and trademark rules, lobbying Congress, demanding special favors from localities, etc.) not because of some inherent genius that only they possess.
I like the idea of a wealth tax, but I haven’t seen an explanation of how it is constitutional. Inheritance taxes need to be much higher and rules about trusts need to be tightened. The Gates Foundation and others spend the bare minimum (5%) annually – just enough to keep their tax status. They should spend much more. (Billionaires shouldn’t be throwing their weight around long after they’re dead.)
I think Roth IRAs are the least of our worries. They were created with the goal of encouraging people to invest by giving them tax advantages, so it’s unreasonable to complain about them being tax advantaged. They are also limited both by contribution limits, which keep them from getting really big, and by limiting contributions by people with higher incomes. There should be rules to prevent abuse of the system- IIRC, there ways private equity people took advantage of Roth IRAs that need to be looked into- but the basic principle is reasonable.
Rmoney’s $102M IRA…
I’m concerned your ideas will cost my side job as ass wiper to the rich and famous. Why do you hate people who work for a living?
@Another Scott: Inheritance taxes need to be much higher and rules about trusts need to be tightened.
No. Throw out estate taxes, but income is income. For example, if I inherit $1M, that is income to me and I pay taxes on it. It does not matter if i inherited it from my father or from Bill Gates.
The problem with rich peoples taxes is they can be very complicated, easily running over a hundred pages in total with all the schedules and backup information.
Successfully auditing a very, very rich man requires top notch accountants and lawyers to counter his army of top notch accountants and lawyers.
The complexity of the tax code gives wealthier people ways to lower their taxes or avoid paying taxes all together.
Can we sell NFT tumbrels?
You know they’d buy them.
IIRC, Schedule C filers can file with their SSN’s, and do not need EIN’s.
There is no legal distinction between sole proprietor’s business and the proprietor as an individual, unlike with corporations and LLC’s.
You may need an EIN, if you have W2 employees or have a retirement plan.
@Mike in NC:
The border patrol needs a lot more than a leadership shakeup. Most of the rank and file need to be replaced, too. The easiest thing to do would be to start over from scratch.
KM in NS
Meanwhile, those of us who are dual citizens get to have our paltry bank accounts in Canada reported to the IRS.
ps- not sure the link fromCBC pasted . I’m a Luddite lol
Well, that is easily solved by offering Letters of Marque to the Big 4 accounting firms. Find the cheated taxes and you keep 25% (whereas the IRS keeps 275% because penalties)
You bet they would buy up all the AI computing power in AWS and Google to hunt for every penny.
Yeah, that was the kind of abuse I was thinking of. IRAs should be limited to publicly traded securities.
This was just a quick example of situations where accumulations of income are never taxed. So even if you raised tax rates, you would not increase revenues.
I don’t have time right now to list every freaking example of this in the tax code.
But again, quick example, look at how Section 529 plans have been expanded to include K-12 schools, not just college education. Yeah, good in principle for everyone, but another way for the wealthy to leverage their wealth and let asset grow tax free and escape future taxation.
And as the Bloomberg story and the NY Times noted, there are billions that could fairly easily be recovered:
@catclub: But that gets back to the problem of income vs wealth. Bezos isn’t so powerful because of his income, it’s because of his wealth and what that allows him to do. Transferring huge fortunes between generations without taxing it is bad for society. It usually takes it out of productive use.
One could argue that working farms and working ranches are different, but I’m not so sure anymore. Someone here made the point a while back that people farm out in rural areas because there’s nothing else economically viable out there. And while we all need to eat and support farmers and food distribution, that’s true to a large extent. But if farms near cities are being broken up to create much needed subdivisions, that’s a reasonable tradeoff and the selling farmer’s estate should pay tax on it – the gains shouldn’t be buried in some land corporation and hidden from tax.
Top 10 landowners in Montana. Those folks [should] be paying higher taxes. Why do the Mormons need nearly 152,000 acres of land in Montana??
Coming soon from Dan Brown…
The US already has a statute that rewards whistleblowers with a share of any proceeds the government gets from their tips.
@Roger Moore: “Salve, citizen! Might you have time for a chat on the old and noble custom of decimation?”
They know what to do with it – spend it on ridiculous crap that screams how little they need the dough. Some of them probably have a club to invest in the biggest market losers for fun.
I guess they feel the need to spend vast amounts of money on something totally useless so the rest of us know they are very very rich. News Flash – we don’t care.
There’s currently $18T in negative yield bonds – bonds that let you loan money to someone else and get less back than you loaned.
The whole debate between capitalism and socialism is at its core – who will make better use of surplus capital – private individuals or government. It’s pretty clear when you have $18T doing negative amounts of work.
@Roger Moore: Yeah, my dad retired off of that. But it’s not easy. In his case it was a decade of documenting the tax fraud, and his employer would have gladly paid him more to not reveal it.
A marginal tax rate for capital gains would be great, although larger margins for capital gains than income would be reasonable due to the risk involved with involvements.
Before we give billions to the IRS to tax the rich, we need to give the IRS millions, probably billions, just to get up to speed. Their software is hopelessly out of date, they don’t have enough people and have lost a lot of the really experienced people they had. Too many years of Congress starving the IRS.
@KM in NS:
you’re not subject to tax in both countries. The source country imposes a withholding tax on interest payments, but the residence country gives you a credit for the source-country tax.
Tax them, & time to start a good root canal audit on all the upper 1%, with penalties for foreing tax dodges.
KM in NS
@Burnspbesq: yeah I know. But bank accounts are still reported. It’s a privacy issue at least.
J R in WV
To acquire that wealth, at some point it was income, and we have a Constitutional amendment that makes income tax legal. This is just a tiny extra tax on realized income above a certain amount.
J R in WV
You that well and tightly connected to Bill Gates?
Can you help me, I want to be really really rich, after seeing Steve Jobs’ yacht off a Cabo last time we traveled.
Ya’ll saw the photos.
I can resend them if people want to see how the REALLY rich folk live. OMG what a set of
J R in WV
@KM in NS:
Tax the rich, eat the rich, the choice is theirs.