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[Tvoivozhd <tvoivozd AT infionline.net>]

Walter H.Jeffries wrote:

> On Sep 2, 2004, at 8:58 PM, Tvoivozhd wrote:
>
> > So, Bush very quietly zeroed out a request by the IRS to increase by 
> > half the number of investigators it has to follow the money trail of 
> > terrorism. This is painstaking work that requires substantial staff 
> > with the expertise, time, and backing to do the job. But in his 
> > latest budget, which George hailed as evidence of his "robust" 
> > pursuit of the bad guys, there is zero funding for the 80 additional 
> > criminal investigators requested by the IRS.
>
>
> Good! While I am no fan of Bush I would love to see the IRS 
> eliminated. The whole idea of an income tax is backwards. We should be 
> rewarding work, not punishing it. What we should do is tax 
> consumption. A single national sales tax is what we need, that covers 
> all the government's budget and then the government should have to 
> live within that budget with the exception of extraordinary situations 
> (e.g., real war) where bonds would be sold and then paid back out of 
> the regular budget. Individuals are supposed to live within their 
> means and the government should too. The IRS is a waste of money. With 
> a sales tax the system would be much simpler and require less overhead.
Tvoivozhd:

(a) You will never see the IRS eliminated---I repeat NEVER.  Any tax 
system has some people who are compliant, some who evade taxes---the 
proportion varies as the size and activity of the tax collector ranges 
up and down.  I lived in the Bahamas for quite a while, which has a 
sales tax and their equivalent of the IRS.  It collects taxes fairly 
easily and accurately from large hotels whose guest list is easily 
matched against airport and shipborne immigration records.  They collect 
nothing from smugglers bringing in appliances, clothing, building 
materials, office equipment and thousands of other items sold directly 
to consumers for cash, no receipts..  In the many countries in which I 
have lived, a sales tax is even less collectible than an income tax, 
ranging from fifty percent in the Bahamas to ten percent in 
Haiti----consequently being imposed in an unequal and wholly arbitrary 
manner.  Who you are  and bribes dictate whether you pay a little, a 
lot, or nothing.  Elsewhere, as in Italy, income taxes are the principal 
source of government revenue, but they are negotiable---you pay whatever 
an IRS agent and your lawyer work out as a compromise between what 
income records would require and the cost of the reluctance-to-pay factor.

Smuggling is a hell of a good business in the Bahamas, Iraq and every 
other country in the world dependent on a sales tax for government 
revenue.  Smugglers don't pay a dime in taxes and leave no paper trail 
to follow.  Sales are in cash, and principally direct-to-consumer.  
Another huge tax avoidance plan is the bribing of customs 
officials---really big business in the many foreign companies where I 
built and operated factories.  Customs Official salaries are low---their 
chief source of income is bribes to let goods in without payment of 
sales taxes.  Another good way to avoid sales taxes is to enlist the 
help of an Army Officer, who can and will intimidate Custom Officials to 
give them the merchandise without either records or payment of any 
taxes.  Port Captains are another fine leakage point for sales 
taxes---merchandise shipped to them are a black hole from which no 
information ever emerges and sure as hell no taxes..

Rewarding work or punishing it is a chimera---taxes and their 
catch-as-catch can collections have one and one only purpose, which is 
to finance government activity.  As some Frenchman once observed, it is 
to produce the largest amount of feathers with the least amount of 
squawking.  And more recently the U.S. system turns more and more to 
easily-collected income taxes---from the middle class who cannot afford 
legal fees to combat artitrary tax impositions upon them.  The IRS does 
not pursue rich individuals precisely because as Loretta Helmsly 
accurately observed, "only the poor pay taxes". The rich hire tax 
attorneys and accountants to make collection of taxes from them an 
impossibility.  Making matters worse, collecting taxes from 
multinational corporations doesn't happen---moving fake offices to an 
offshore postoffice address, and arbitrarily allocating costs, sales 
(and profits) to a series of  disclosed or undisclosed subsidiaries is a 
total bar to tax collection on a multi-national.

The only way a multinational can be forced to pay taxes is to bar 
imports from them until an IRS determines what they should pay.  I don't 
see that happening either, they are too big and bribes to Presidents and 
Congressman are a hell of a lot cheaper for multinationals than actually 
paying taxes.