Reason #7,424 our tax system is messed up

Reason #7,424 our tax system is messed up

I have no problem in theory that taxes were raised on the top 1% or that they won’t go up at all (for the most part) on the other 99%.  But what really drives me nuts is the fact that it’s so easy for anyone to avoid paying taxes at all and there’s really no way to deter them.

I thought of this yesterday when I was called by a woman who was trying to get child support from her ex.  She knows where he works and sent a copy of the child support order to them to do a withholding.  They told her ex that they don’t participate in that program, as if it’s a choice to follow the law or not.  She reported them to the State, the State called the business, the business fired her ex, telling him that they don’t file taxes with the IRS and don’t want anyone snooping around there.

So he loses a job, she’s not getting child support and you and I are following the law like suckers.

It’s so easy to cheat on your taxes.  How many times have you been to a restaurant that is cash only?   You think those guys are following all the rules?  Fat chance.  You pay your baby sitter or nanny in cash and that never gets reported.  Tips to cab drivers, sky-caps (supposedly they make 100k+ in undeclared tips), counter workers, etc. all goes in their pocket.

It’s a problem that is basically ignored.  Never in the tax policy debate do you hear law makers discuss how to make sure everyone is paying, they just talk about what to do about the ones that are paying.

And if you know of a tax cheat as this woman does, what are you going to do.  It’s a crime, but you can’t call the police.  Good luck trying to get anyone on the phone from the IRS.  And if you do, what are the chances anything will happen?  I’d say just about nothing.

Some estimates state that almost half of the country cheats on their taxes.  It might be a few hundred from one person and many thousands from another, but man does it add up.  From payroll taxes alone we must lose billions every year.

But for some reason this doesn’t really bother anyone.  At least not until they can’t get child support or feed their kids. 

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  • The root of the problem is the income tax and tax code and the ease with which it can be used to punish or reward.

    People have cheated on their taxes since caveman days, but the current system is too easily manipulated for carve outs and favors and for punishment, not to mention that when is enough enough? Is it at 60, 70, 80, 90 percent of income (with no deductions)? When do quit working for the state and begin working for yourself and your family.

    BTW, some cash only places have been in biz since the dawn of the charge and credit cards, and refuse to change, because the discount rate of the credit providers makes the difference of staying or quitting the biz.

    Many services business do not take cards for this reason. Do you take charge and credit cards? Do you sometimes wish you didn't, especially when adding up the discount rate and considering the chargeback problems?

    This woman got screwed, but you are charging after the wrong prey.

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