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#614100 08/14/11 05:28 PM
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I thought I would put this question out there. I am reading a book by Arthur Laffer called the "Return to Prosperity." He details a lot of policy choices in both spending and revenues that he would put into place.

One he mentions in passing is tax amnesty. He quotes stats from the IRS that 15-20% of individual income tax filers are noncompliant (read as illegally underpay, either through ignorance or deliberately). He estimates, based on historical state programs that the federal government could raise as much as $400 billion from negotiating lesser fines for back taxes.

To me, this seems like a win-win. It would knock a large amount off the debt in a short period of time without raising any rates on existing taxpayers in the middle of economic uncertainty. However, I am a bit skeptical; it sounds like its really too good to be true.

I don't have a lot of experience on this, but I think there are some of you out there who know the tax code much, much better than I do. Does this sound right, and does it seem like a viable option?

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tjs7 #614101 08/14/11 06:59 PM
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While I am no tax expert I have heard of an argument similar to this matter before.

The first problem that jumps out is the way to account for said transactions. The government already has a branch trying to keep track of money, and they already go after the biggest of the guys.

The second problem is the tax code itself and that it's confusing. Some people don't pay enough, some people don't take all of the breaks they are entitled to.

Finally, to be completely fair then you would have to account for all transactions. Did your kid make $20 a month over the summer mowing lawns? Did you get a gifted check from friends and family for your birthday? How about people who are 1099 employees and work for multiple providers? If you aren't issued a 1099 or are paid strictly in cash then you might be able to get away with it.

Obviously this isn't a lot ... but even a hundred (or a few hundred) dollars per month ... or even a few bucks per transaction might start to add up when you total it over the course of a year and by a few hundred million people.


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tjs7 #614102 08/14/11 09:37 PM
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I work in public accounting in the tax department of a Cleveland CPA firm. The government often does provide amnesty programs for taxpayers who wish to become compliant. Amnesty programs typically involve the waiver or reduction of penalties and/or interest but usually still require the payment of back taxes for a few years. Amnesty programs do occur from time to time, as I said. A lot of states will allow taxpayers to submit voluntary disclosure agreements and will waive certain penalties and interest. Additionally, the feds will have some amnesty type programs from time to time. Recently the feds announced they would provide some shelter from the heavy penalties for taxpayers who have failed to comply with the FBAR rules.

tjs7 #614103 08/14/11 10:09 PM
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Quote:

To me, this seems like a win-win. It would knock a large amount off the debt in a short period of time




It is definitely Win-Win and is and should be used on a regular basis.
It doesn't even dent the debt, however. It would offset maybe 30% of a single year's deficit at our current spending rate, but compared to our overall debt, $400 billion is nothing (sadly).


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BirdDawg81 #614104 08/14/11 10:09 PM
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Ah, the FUBAR rules. Our gov't. is admitting they exist?

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Quote:

Quote:

To me, this seems like a win-win. It would knock a large amount off the debt in a short period of time




It is definitely Win-Win and is and should be used on a regular basis.
It doesn't even dent the debt, however. It would offset maybe 30% of a single year's deficit at our current spending rate, but compared to our overall debt, $400 billion is nothing (sadly).




How dare you say that?

After all, our gov't. just agreed to cut 2 trillion from our "deficit"spending. Over 10 years. Which means our deficit spending is only going to increase about 7 trillion over the next 10 years.

Our gov't. has it handled - just listen to them.

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Now, is this idea really fair to those that paid their taxes in full each year? It's kind of like the mortgage bailouts. The folks that bought what they could afford and struggled to make all of their payments on time seem to be the ones losing out.


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Now, is this idea really fair to those that paid their taxes in full each year? It's kind of like the mortgage bailouts. The folks that bought what they could afford and struggled to make all of their payments on time seem to be the ones losing out.




If I'm reading this right, it's not an amnesty on what you originally owed, but only on the penalties for being out of complience? So is it unfair to those that paid? I don't really think so especially if it helps to collect the money!


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Damanshot #614108 08/15/11 10:28 AM
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Precisely. As long as they still pay the tax amount owed and only get a break on penalties, there is no harm-no foul. Basically, they are just waiving the interest on the money they took from you, lol.


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Precisely. As long as they still pay the tax amount owed and only get a break on penalties, there is no harm-no foul. Basically, they are just waiving the interest on the money they took from you, lol.




Good points.

60 minutes had a good program on last night and they were talking about the corporate tax on business here in the states that is currently 35% and the biggest reason companies our moving south of the border and over to Europe. Ireland for example has a corporate tax rate of 12 .5 %.
to the tune of about 100,000 + jobs that were lost to Americans in the last decade.

Many are quick to blame the capitalist who move their companies abroad, but in reality it is our own government that has not given them a level playing field. Would it not be better to lower the tax rates to say 20% and increase the money that is brought back to this country by companies from this country.

There our trillions of dollars tied up in foreign banks that can not come back to are economy and there is talk of amnesty for those companies who would like to reinvest it back at home.

Only Japan has a higher corporate tax rate in the global economy.


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FL_Dawg #614110 08/15/11 11:22 AM
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The problem is that the tax rates just aren't high enough.

If only we could get to 100% taxes, then employers would create jobs and the world would acheive nirvana .........

Just ask the President ...


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Quote:

The problem is that the tax rates just aren't high enough.

If only we could get to 100% taxes, then employers would create jobs and the world would acheive nirvana .........

Just ask the President ...




Are you feeling ill today old buddy

Don't drink the cool aid

A level playing field would go a long way in solving our problems and that includes employers hiring citizens over illegals.
Corporations and small business a like are at a disadvantage in this global market here at home.

Lower interest rates are good for the short term, but in the long term they stifle future growth and might be the straw that breaks the camels back.


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Quote:

The problem is that the tax rates just aren't high enough.

If only we could get to 100% taxes, then employers would create jobs and the world would acheive nirvana .........

Just ask the President ...




I'm sure you would understand that a 100% tax rate on all things everywhere for everybody would not nearly be enough to pay to keep the economy.

There would just have to be a way to create revenue by raising taxes on the 100% , because somebody is going to have to pay for the interest on the money borrowed to pay for the folks who won't pay because they don't earn anything.

You see if we can tax the productive people at 500% or maybe even 10,000% of their annual income, then we might begin to have an amount that would approach the amount that we would need to subsidize these taxpayers

because we would have to subsidize these taxpayers with a goverment check because otherwise it would be IMPOSSIBLE for a taxpayer to pay 500% to 10,000% of their annual income.

So if the Govt, can give a check to the Taxpayer, so that the Taxpayer can then give a larger check back to the Govt, then the Govt would have enough to pay the non taxpayer

So what the goverment has to do to make this work is print more money, out of thin air, and borrow it, and when they borrow it, the resulting interest owed back from the privelage of borrowing ... that interest is new value created, and whoever is owed that interest can then borrow on that to build something like new houses or something ... but then the mortgage market might bubble and collapse.

Tax and spend liberals need to wake up!

You see, if you live on, work for or get paid with $$$, then you are the one getting stolen from.
That is why this goverment is so bad, they are stealing the value of the work of every American

But have faith. We can survive EVEN if the democrats steal everything that was ever created in this country.

Because Theft is never the recipe for prosperity in the long run.
Try telling that to a liberal.

FL_Dawg #614113 08/17/11 12:18 PM
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The latest push that I heard on the corporate tax amnesty was to have a tax holiday for a specified length of time to let companies bring the money back into the US from tax havens around the world and the tax rate would be dropped from 35% to 5%.

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The latest push that I heard on the corporate tax amnesty was to have a tax holiday for a specified length of time to let companies bring the money back into the US from tax havens around the world and the tax rate would be dropped from 35% to 5%.




I heard that, but that still doesn't fix the basic problem and that is why they where forced to move their assets a broad in the first place.

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FL_Dawg #614115 08/17/11 01:48 PM
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They are keeping their assets on a ship?


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DCDAWGFAN #614116 08/17/11 06:43 PM
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All this talk is whitewash.

Until we actually have a serious discussion about spending in this country, it's all moot.


Squeezing a few more bucks out of this person or that corporation doesn't amount to a pile of dung.



All this other talk is simply diversion tactics.



It's time to talk turkey.



At a household level ,if we were spending $800 a month more then we brought in, I think the talk would be more than talking about looking for better coupons in the Sunday paper.



It's insane.


If everybody had like minds, we would never learn.

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