The Average Joe sucker does not have much opportunity to cheat on his taxes because the taxes are taken out of his paycheck before he has a chance to lay his hands on the $$$.

Both irrelevant and untrue. The taxes that you pay has nothing to do with the taxes that are withheld from your paycheck. Your taxes are determined by your income tax return. If you cheat on that and show that you only owe $10, then all but $10 of what was withheld from your paychecks of the course of the year will be returned to you. If you prefer to "lay your hands on it" up front, then all you have to do is claim more exemptions on your W-4 (which is perfectly legal, by the way -- though you will get hit with penalties if you have to pay more than $1000 above what was actually withheld (and there are some other rules associated with this)).

Multinationals also move their operations overseas so they don't get taxed as a U.S. corporation. But they sure as Hell use up all sorts of goodies from the U.S. government like installing politicians that are friendly toward their interest.

Well, if we didn't have a higher corporate tax rate than nearly every other country on the planet, then perhaps corporations would not be so motivated to move so much of their revenue overseas. And it doesn't get them out of paying U.S. taxes by a long shot, only reduces them.

Then there is the issue of "undocumented" workers who get paid in cash (with no income or other taxes taken out) and send it back to their home country as "remittances". I know this for a fact because I infiltrated one of the "hiring centers" where contractors pick up undocumented workers. The government (and the big banks) know it's going on and they even condone and promote the practice. It's well known in California that the government provides a load of social services for these undocumented workers and their families.

This seems to be getting further and further afield from whether Microsoft will be taxed on their underwater data center, but since it's your thread...

I don't know what point you are trying to make or how it connects to your prior remarks. If you are saying that the policy should be that illegal immigrants should not receive public services and that companies that hire them should be heavily fined for doing so, both civilly and criminally, then you are not going to get any argument from me.

 

Both irrelevant and untrue. The taxes that you pay has nothing to do with the taxes that are withheld from your paycheck. Your taxes are determined by your income tax return. If you cheat on that and show that you only owe $10, then all but $10 of what was withheld from your paychecks of the course of the year will be returned to you. If you prefer to "lay your hands on it" up front, then all you have to do is claim more exemptions on your W-4 (which is perfectly legal, by the way -- though you will get hit with penalties if you have to pay more than $1000 above what was actually withheld (and there are some other rules associated with this)).



Well, if we didn't have a higher corporate tax rate than nearly every other country on the planet, then perhaps corporations would not be so motivated to move so much of their revenue overseas. And it doesn't get them out of paying U.S. taxes by a long shot, only reduces them.



This seems to be getting further and further afield from whether Microsoft will be taxed on their underwater data center, but since it's your thread...

I don't know what point you are trying to make or how it connects to your prior remarks. If you are saying that the policy should be that illegal immigrants should not receive public services and that companies that hire them should be heavily fined for doing so, both civilly and criminally, then you are not going to get any argument from me.

Regarding the issue about the withholding of taxes from a worker's paycheck, the government is taking out (in advance) what it believes the person will owe at the end of the year. The income tax return is to officially determine what the person actually owes and whether the person will owe more or less.

If all of a person's income is solely from working for an employer, there's no way to conceal any income on the tax return and hence it is not possible to cheat.

 

I am now testing the "Ignore" button

 

Regarding the issue about the withholding of taxes from a worker's paycheck, the government is taking out (in advance) what it believes the person will owe at the end of the year. The income tax return is to officially determine what the person actually owes at the end of the year (and whether the person will owe more or less).

If all of a person's income is solely from working for an employer, there's no way to conceal any income on the tax return and hence it is not possible to cheat.

No, the government is NOT taking out what it believes you will owe and they are NOT taking out in advance.

Every time you get paid, you owe income taxes on that income right then and there -- not at the end of the year and not on April 15th of next year, right then at the moment you receive it. Just like you owe sales tax at the time of the sale.

YOU told your employer what filing status you intend to use and how many exemptions you intend to claim (or the number of exemptions that are equivalent to the total effect of everything that influences your taxes). Based on that, your employer (not the government) calculates what you would own in taxes on the income they are about to pay you and then, on your behalf, submits it to the IRS at the time it is due (not in advance).

Concealing your income is just one way to cheat on your taxes. You also have this thing called a tax return and it affords all kinds of opportunities to cheat.

Another thing to take into account is that the tax rate for corporations is well above the tax rate of the overwhelming majority of individuals. The median household income is right about $52k/year and the median household size is about four. So what is the rate that a couple with two kids files just filing the simplest form using just the standard deductions and exemptions would pay? First they get a $12k standard deduction and then they get four $4 personal exemptions for another $16,000. So the first $28k of their income has no income tax on it at all and their taxable income is down to $24k. The first $18k of that is only taxed at 10% and the remaining $6k is taxed at 15%. So their total tax burden is only $2.7k on $52k of income, for an effective tax rate of 5.2% -- and this does not take into account the Child Tax Credit, which for this situation would be $1000 for each child, reducing the tax liability to just $700 on $52k of income (just 1.3%). Compare this to the 34% corporate tax rate paid by all but the smallest companies.

 

"Every time you get paid, you owe income taxes on that income right then and there -- not at the end of the year and not on April 15th of next year, right then at the moment you receive it."

You got it right. And the taxes were taken out of my check right then and there. That's why my net pay is less than my gross pay and the government has got my taxes until I can get a refund for excess payment.

By the way, people don't always owe taxes at the time they receive it. Banks are not legally required to deduct and send taxes from interest on a savings account every day of every month and the account holder can legally hold on to the $$$ until/if any taxes are due at the end of the year. If a person has a history of paying on time, the IRS (and state) tax codes DO allow a person to keep earnings from liquid investments until the end of the year.

 

"Every time you get paid, you owe income taxes on that income right then and there -- not at the end of the year and not on April 15th of next year, right then at the moment you receive it."

You got it right. And the taxes were taken out of my check right then and there. That's why my net pay is less than my gross pay and the government has got my taxes until I can get a refund for excess payment.

If you don't want the government to have some of your money that you have to wait until you can get a refund, then why do you give it to them in the first place? YOU have control over whether or not there IS any excess payment. The optimal approach is to adjust your withholding (which, again, YOU control) so that you have to pay the maximum amount possible on April 15th without incurring penalties. Perfectly legal and rational. Sure, the IRS would love to give you a big fat refund each year because they have gotten an interest-free loan for the entire time they've had it AND most people are too stupid to realize that they are merely getting money that was already theirs and that they never owed back. Instead, they think that the government has given them money and don't even consider how much they actually paid in taxes. In fact, there are lots of people that don't believe they even paid any income tax at all as long as they get any kind of a refund back.

By the way, people don't always owe taxes at the time they receive it. Banks are not legally required to deduct and send taxes from interest on a savings account every day of every month and the account holder can legally hold on to the $$$ until/if any taxes are due at the end of the year. If a person has a history of paying on time, the IRS (and state) tax codes DO allow a person to keep earnings from liquid investments until the end of the year.

You are completely missing the point -- You claimed that the government took out taxes in advance. No. They didn't. They (and all the other taxes) are due at the time the transaction occurs. However, the IRS generally allows you to make actual payment at some time AFTER they were incurred (not in advance) without penalty.

 

Then there is the issue of "undocumented" workers who get paid in cash (with no income or other taxes taken out) and send it back to their home country as "remittances". I know this for a fact because I infiltrated one of the "hiring centers" where contractors pick up undocumented workers. The government (and the big banks) know it's going on and they even condone and promote the practice. It's well known in California that the government provides a load of social services for these undocumented workers and their families.

I'm not exactly a proponent of illegal immigration, but let me point out that without them California's biggest business (agriculture) would be bankrupt unless you think the kid at Starbucks's that makes your latte would rather be out in the 100 degree heat picking avocados.
Besides, most don't make enough to need to pay taxes anyway. If they were such good jobs, don't you think there would have been more guys in suits and ties in your hiring center?

 

I'm not exactly a proponent of illegal immigration, but let me point out that without them California's biggest business (agriculture) would be bankrupt unless you think the kid at Starbucks's that makes your latte would rather be out in the 100 degree heat picking avocados.
Besides, most don't make enough to need to pay taxes anyway. If they were such good jobs, don't you think there would have been more guys in suits and ties in your hiring center?

My attitude is that if a business has to commit illegal acts to stay in business, then perhaps it shouldn't stay in business.

If we imposed and enforced sufficiently strong penalties for using illegal immigrants for cheap labor, then companies and the economy would adapt to the new playing field. The entire agricultural business would NOT go bankrupt, it would adapt. You would see higher wages in the short term coupled with a stronger drive toward increases in productivity and automation in the long term. Market prices would go up -- but that just reflects and underscores the fact that present market prices are artificially low and that we aren't paying the proper price for these commodities. Market demand would go down somewhat, but it is a pretty price-inelastic industry since people still have to eat. Some businesses would go under, but again, if they can only survive by committing illegal acts, then they shouldn't survive.

Now, if we impose and enforce regulations that are sufficient to discourage businesses (and individuals) from conducting and condoning illegal activities, then we have lots of legal options available to us to mitigate the impact. We could (and at times have) have migrant worker visas that allow foreign workers to legally enter the country, after being vetted, to work in certain industries under relaxed regulation (such as minimum wage and benefits). I would not even be opposed to provisions that granted some amount of credit toward becoming permanent legal residents based on how long you worked as a legal migrant worker. One thing I would propose would be that migrant workers and their employers not be required to pay into social security or medicare (since they shouldn't qualify for benefits under such programs), but that, instead, a comparable tax be collected and used to provide government services, such as education for children, commensurate with the taxes collected.

 

My attitude is that if a business has to commit illegal acts to stay in business, then perhaps it shouldn't stay in business.

If we imposed and enforced sufficiently strong penalties for using illegal immigrants for cheap labor, then companies and the economy would adapt to the new playing field. The entire agricultural business would NOT go bankrupt, it would adapt. You would see higher wages in the short term coupled with a stronger drive toward increases in productivity and automation in the long term. Market prices would go up -- but that just reflects and underscores the fact that present market prices are artificially low and that we aren't paying the proper price for these commodities. Market demand would go down somewhat, but it is a pretty price-inelastic industry since people still have to eat. Some businesses would go under, but again, if they can only survive by committing illegal acts, then they shouldn't survive.

Now, if we impose and enforce regulations that are sufficient to discourage businesses (and individuals) from conducting and condoning illegal activities, then we have lots of legal options available to us to mitigate the impact. We could (and at times have) have migrant worker visas that allow foreign workers to legally enter the country, after being vetted, to work in certain industries under relaxed regulation (such as minimum wage and benefits). I would not even be opposed to provisions that granted some amount of credit toward becoming permanent legal residents based on how long you worked as a legal migrant worker. One thing I would propose would be that migrant workers and their employers not be required to pay into social security or medicare (since they shouldn't qualify for benefits under such programs), but that, instead, a comparable tax be collected and used to provide government services, such as education for children, commensurate with the taxes collected.

You won't get a big argument from me except on the issue of what it would do to the farming industry. Not to say it couldn't be automated, but timing is everything. I suppose we could make them legal with the intent of not letting any more come, but I think we tried that once so I don't see that happening anytime soon. We may lose those jobs anyway to poorer countries. Ever notice how much is imported now. It's kind of like complaining about China. All we gotta do is buy American.
I think we still have a kind of worker visa, but it is difficult and expensive to navigate. Most of these workers pay SS & Medicare so they may be paying more taxes than we think since they won't collect.
But, your right. easy to stop. Why do you think we don't do it?

 

You won't get a big argument from me except on the issue of what it would do to the farming industry. Not to say it couldn't be automated, but timing is everything. I suppose we could make them legal with the intent of not letting any more come, but I think we tried that once so I don't see that happening anytime soon. We may lose those jobs anyway to poorer countries. Ever notice how much is imported now. It's kind of like complaining about China. All we gotta do is buy American.
I think we still have a kind of worker visa, but it is difficult and expensive to navigate. Most of these workers pay SS & Medicare so they may be paying more taxes than we think since they won't collect.
But, your right. easy to stop. Why do you think we don't do it?

We've actually had similar problems before and sometimes the government took one stand and sometimes it took the other. I can't recall very many specific instances, but usually when we took the stand that a particular industry had to just suck it up and compete that industry did so and came out okay (of course, sometimes it didn't). Usually it was a case of an industry demanding protectionist tariffs and, if granted, then failing to modernize and automate while foreign competitors did. This creates a vicious cycle where foreign competitors can offer increasingly better prices which force the tariffs higher in order to protect domestic producers (who then continue to have no incentive to modernize). At some point the tariffs become so large that they were unsustainable and there would be too much pressure from people paying too artificially high a price to remove them and, at that point, the industry would be so far behind that they couldn't catch up prior to losing too much market share to foreign competition and would die out. Other times the tariffs would be rejected (seldom because of an intentional desire to keep free trade as the goal, but rather just due to a failure to get enough political support for the tariff) and then the industry had the opportunity to innovate incrementally. Of course, as with any human endeavor, these haven't always been the outcomes and counter-examples certainly exist -- there's a lot of noise in this kind of system. So I certainly won't claim to know for sure how things would turn out for the agricultural producers, but the fact that such markets produce high-volume, high-demand perishable products provides a strong, intrinsic advantage for domestic producers. It may, of course, not be enough.

As for why we don't do it... government has seldom been about doing what is right, particularly in the long-term, but rather about what is politically expedient and profitable in the short-term. If that weren't the case, we wouldn't be in the financial mess we are in and wouldn't be making that situation markedly worse and unsustainable in order to make short-term promises to people that we can't afford or pay for -- and we are hardly alone in that regard as you look as most countries around the globe.

 

We've actually had similar problems before and sometimes the government took one stand and sometimes it took the other. I can't recall very many specific instances, but usually when we took the stand that a particular industry had to just suck it up and compete that industry did so and came out okay (of course, sometimes it didn't). Usually it was a case of an industry demanding protectionist tariffs and, if granted, then failing to modernize and automate while foreign competitors did. This creates a vicious cycle where foreign competitors can offer increasingly better prices which force the tariffs higher in order to protect domestic producers (who then continue to have no incentive to modernize). At some point the tariffs become so large that they were unsustainable and there would be too much pressure from people paying too artificially high a price to remove them and, at that point, the industry would be so far behind that they couldn't catch up prior to losing too much market share to foreign competition and would die out. Other times the tariffs would be rejected (seldom because of an intentional desire to keep free trade as the goal, but rather just due to a failure to get enough political support for the tariff) and then the industry had the opportunity to innovate incrementally. Of course, as with any human endeavor, these haven't always been the outcomes and counter-examples certainly exist -- there's a lot of noise in this kind of system. So I certainly won't claim to know for sure how things would turn out for the agricultural producers, but the fact that such markets produce high-volume, high-demand perishable products provides a strong, intrinsic advantage for domestic producers. It may, of course, not be enough.

As for why we don't do it... government has seldom been about doing what is right, particularly in the long-term, but rather about what is politically expedient and profitable in the short-term. If that weren't the case, we wouldn't be in the financial mess we are in and wouldn't be making that situation markedly worse and unsustainable in order to make short-term promises to people that we can't afford or pay for -- and we are hardly alone in that regard as you look as most countries around the globe.

It's the capitalist way. You can bring the low cost way here or you can take your business to the low cost. It is truly becoming a global economy.
Some that didn't make it are the steel and tire companies. Sometimes it doesn't pay to be the first to automate if you need to start over with new equipment.