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  • From: Tvoivozhd <tvoivozd AT infionline.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Strong language, feeble actions, Hightower
  • Date: Fri, 03 Sep 2004 10:08:26 -0700

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.






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