Underground econmy

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Originally Posted By: Panzerman
Call me cruel, but I think a flat tax and thats it. I dont hate the rich and I dont pity the poor. I think the poor need a initiative to quit being poor. The more miserable you make them, the quicker they may change their own attitude. I would consider myself middle class. I make too much to get any tax breaks, too little to be comfortable and relaxed. I am not above going to Goodwill for jeans, so why should the poor be so protected. The Rich are ussually rich for a reason, the poor are ussually poor for a reason. I am in transition and I am not sure which direction, I am headed. But with fuel at $4 a gallon, its not helping matters.
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Originally Posted By: PandaBear
It happens in every single "cash only" business. I'm not surprised at all. The point is, every type of taxation will be cheated in their own way. Income tax, property tax, expense tax all have loopholes, and it is easy to cheat especially if you are a small business.


+1, for all the talk of small business being the backbone of America, it is amazing what some folks get away with.

A guy I used to work with came from his own business, where most everything was passthrough and he had very little actual income on the books. Car was leased by the business, many other expenses were covered that way, so he would only show, say, $30k in income, pay next to no tax, and many other things got covered by the business.

It is very slimy, when some of us get penalized to the point of being unable to deduct student loan interest, no roth IRA, paying excessive AMT, etc., with no way out.
 
Originally Posted By: Panzerman
I think the poor need a initiative to quit being poor.


Im sure Ill catch flak for this, and it is a rough thing to say, but Ive gotten to the point where I believe most of the payments made to the "poor" are really to prevent them from excessively robbing the functional population, as it is easier to pay them then to watch them.

And I fear that the reality will be that if payments are stopped, they wont have initiative, they will just go to crime.

I wish it wasnt so, but I dont have a ton of faith that many will turn around given some impetus like this, and meanwhile we have wal-marted ourselves out of having jobs for them anyway...
 
Originally Posted By: javacontour
I feel your pain and then some. By the time they take State and Federal Income Tax and the FICA taxes, my cut is just over 50% on bonus money, etc.

Originally Posted By: Cutehumor
Taxes are a joke for sure. I just earned a 1500 bonus at work for doing a great job, but 550 of it went to fed tax, social security, and medicare taxes


The amount taxes taken on "bonus" money are up to your employer at the time. There is no difference between "bonus" money and your salary as at the end of the year, the taxation rate is exactly the same. The only thing bonus money can do is potentially push you slightly into the next tax bracket which may there reason for pulling more taxes out. The more than usual tax rate is to likely stave off complaints at the end of year in owing money.
 
I am must be the rarity who paying taxes does not bother me that much. I have visited many other countries and life in the United States is where I like to be. It is also relatively easy and gives lots of opportunity if you work hard for it and have some luck coupled.

I could go completely "underground" and not pay taxes. None of my income, which is foreign sourced, is reported to the US government. However I do not commit fraud like many small business owners who complain about folks and the system and at the same time are stealing. These same small business owners complain about lack of credit however do not properly report their income.

I don't worry much about taxes just pay my quarterly's and move on with life.
 
Originally Posted By: JHZR2
Originally Posted By: PandaBear
It happens in every single "cash only" business. I'm not surprised at all. The point is, every type of taxation will be cheated in their own way. Income tax, property tax, expense tax all have loopholes, and it is easy to cheat especially if you are a small business.


+1, for all the talk of small business being the backbone of America, it is amazing what some folks get away with.

A guy I used to work with came from his own business, where most everything was passthrough and he had very little actual income on the books. Car was leased by the business, many other expenses were covered that way, so he would only show, say, $30k in income, pay next to no tax, and many other things got covered by the business.

It is very slimy, when some of us get penalized to the point of being unable to deduct student loan interest, no roth IRA, paying excessive AMT, etc., with no way out.


and many of them would blame that tax kills them hard and therefore they are making nothing.

Originally Posted By: rjundi

The amount taxes taken on "bonus" money are up to your employer at the time. There is no difference between "bonus" money and your salary as at the end of the year, the taxation rate is exactly the same. The only thing bonus money can do is potentially push you slightly into the next tax bracket which may there reason for pulling more taxes out. The more than usual tax rate is to likely stave off complaints at the end of year in owing money.



Indeed, many of them complains about a "deduction" on their bonus instead of the "tax" of their income.
 
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Originally Posted By: Smokescreen
What could keep people more honest...than by asking for a receipt for your purchase.


Taiwan and some cities of China have a lottery number on the receipt that they give out a prize if you get a lucky number, to encourage the customers to get the receipts every time.

However, many mom and pop retailers (and in my case a large restaurant that provide 10 course banquets) just offer a small discount (10%) if you do not ask for a receipt.
 
When I say Flat tax, what I really mean is a Federal sales tax. One rate and no more income tax at the end of the year. This would catch everyone, legal and illegal. Most illegals simply list as many dependants as possible and never file. Not to mention drugs dealers , gun runners etc.. who buy very nice stuff, yet pay no income tax.
 
Originally Posted By: JHZR2
Im sure Ill catch flak for this, and it is a rough thing to say, but Ive gotten to the point where I believe most of the payments made to the "poor" are really to prevent them from excessively robbing the functional population, as it is easier to pay them then to watch them.

And I fear that the reality will be that if payments are stopped, they wont have initiative, they will just go to crime.

I wish it wasnt so, but I dont have a ton of faith that many will turn around given some impetus like this, and meanwhile we have wal-marted ourselves out of having jobs for them anyway...

These payments are made to make people dependent on the government for as many things as possible. Sapping their motivation to better themselves and incentivizing them to be happy with what is arbitrarily given to them is the entire point of wealth transfer payments.
 
Originally Posted By: Panzerman
When I say Flat tax, what I really mean is a Federal sales tax. One rate and no more income tax at the end of the year. This would catch everyone, legal and illegal. Most illegals simply list as many dependants as possible and never file. Not to mention drugs dealers , gun runners etc.. who buy very nice stuff, yet pay no income tax.


I had once heard this idea from an economist being interviewed on NPR; characterizing wealth not as what assets you accrue, but what you spend. Why tax income?, he asked, tax spending! He pointed out, like you, that evading this type of tax is much more difficult than hiding or obfuscating income. Criminals and undocumented residents will pay just like others.
 
Originally Posted By: uc50ic4more
Originally Posted By: Panzerman
When I say Flat tax, what I really mean is a Federal sales tax. One rate and no more income tax at the end of the year. This would catch everyone, legal and illegal. Most illegals simply list as many dependants as possible and never file. Not to mention drugs dealers , gun runners etc.. who buy very nice stuff, yet pay no income tax.


I had once heard this idea from an economist being interviewed on NPR; characterizing wealth not as what assets you accrue, but what you spend. Why tax income?, he asked, tax spending! He pointed out, like you, that evading this type of tax is much more difficult than hiding or obfuscating income. Criminals and undocumented residents will pay just like others.


Great idea. Then everybody pays. My accountant finds creative ways and write offs to lower what I pay yearly. I pay no tax on money I spend on fuel,vehicles,my toys because my company buys it all,and since its equipment its not taxable.
Even my summer vacation is a write off as well as the meals because I integrate a few meetings in the mix.
It makes way more sense to tax spending. At least everyone pays the same and it would close loopholes
 
Originally Posted By: JHZR2
Originally Posted By: Panzerman
I think the poor need a initiative to quit being poor.


Im sure Ill catch flak for this, and it is a rough thing to say, but Ive gotten to the point where I believe most of the payments made to the "poor" are really to prevent them from excessively robbing the functional population, as it is easier to pay them then to watch them.

And I fear that the reality will be that if payments are stopped, they wont have initiative, they will just go to crime.

I wish it wasnt so, but I dont have a ton of faith that many will turn around given some impetus like this, and meanwhile we have wal-marted ourselves out of having jobs for them anyway...


No doubt it costs 40k year for inmates? Easier to pay the welfare and food stamps
 
Not a fan of a federal sales tax, or VAT. Those types of taxes drive people to barter, trade and they foster a huge underground economy.

Far better to have a fair income tax, with only one rate and a limited number of deductions. Everyone has "skin in the game".

The income tax is actually a very well thought out system. Yes, it's gotten out of control in recent years. But, the basic premise is sound. Get the money before it gets into the economy.
 
Originally Posted By: Tempest
Originally Posted By: JHZR2
Im sure Ill catch flak for this, and it is a rough thing to say, but Ive gotten to the point where I believe most of the payments made to the "poor" are really to prevent them from excessively robbing the functional population, as it is easier to pay them then to watch them.

And I fear that the reality will be that if payments are stopped, they wont have initiative, they will just go to crime.

I wish it wasnt so, but I dont have a ton of faith that many will turn around given some impetus like this, and meanwhile we have wal-marted ourselves out of having jobs for them anyway...

These payments are made to make people dependent on the government for as many things as possible. Sapping their motivation to better themselves and incentivizing them to be happy with what is arbitrarily given to them is the entire point of wealth transfer payments.


I hear ya, but cut that stuff out and there will be folks in every inner city and every trailer park that go out and rob those with any semblance of owning anything in order to "get ahead". Thus my comment, IMO the "wealth transfer" (and let's face it, there is nothing wealthy about the amount of money that even someone good at gaming the system will get), is more to numb this segment of the population so they remain more benign.
 
I Cant believe you actually advocate paying welfare out of fear, they may raise up and rob you. Thanks to the 2and amendant, which I will never surrender, we have the ability to protect what is ours. I do not agree to pay them to be lazy and I certainly dont fear them. They wish to act like animals, they will die like animals too. As far as flat tax, being one flat tax rate on income, you still dont get any tax dollars from illegal services, you dont get any illegal workers to even file, you still miss the bulk of money being spent. Not to mention the Honst hard working "true" middle class get hit the worst. The Underground economy, wont be as popular as you think, if your a drug dealer knocking down $500,000 a year, your not doing garage sales.
 
Originally Posted By: Panzerman
I Cant believe you actually advocate paying welfare out of fear, they may raise up and rob you.


Being afraid or fearful is crippling. Plus, your fear should not affect me. Period.
 
Originally Posted By: Panzerman
I Cant believe you actually advocate paying welfare out of fear, they may raise up and rob you. Thanks to the 2and amendant, which I will never surrender, we have the ability to protect what is ours. I do not agree to pay them to be lazy and I certainly dont fear them. They wish to act like animals, they will die like animals too. As far as flat tax, being one flat tax rate on income, you still dont get any tax dollars from illegal services, you dont get any illegal workers to even file, you still miss the bulk of money being spent. Not to mention the Honst hard working "true" middle class get hit the worst. The Underground economy, wont be as popular as you think, if your a drug dealer knocking down $500,000 a year, your not doing garage sales.


Let's be honest here, anyone willing to work for cash at below market rate can do what you said the illegals are doing. It is very easy to get away with small amount of income, but for large amount, say at today's rate making more than $200k a year, would be very hard to hide and not get caught.

Same for other types of tax. It is easy to hide a $5k flat screen TV or a $20k home remodeling without paying property value based tax (by giving cash to the contractor who build it or pay cash at Bestbuy to buy it), but when you are talking about a house, a shopping mall, a 50k sqft office building, it is very hard to hide the asset and cheat on taxes. Same for consumption based taxes. It is easy for mom and pop to cheat on sales tax by accepting cash only, but you can only do that if you are not selling large items or if you are not a large chain. Large organization cannot easily cheat on sales number and even small businesses selling cars cannot easily cheat on the sales price by much (say selling a new $20k car for only $5k) and not raise an alarm.

Oh, for drug dealers that want to keep those income, they usually have to "launder" it by going through a legal business as an income, and PAY TAX on it. It is much easier to hide the laundered money than some $20 bills totaling a couple millions.

Any system can be cheated in small amount, but not the large numbers. So, let's not bring other political issues like immigrations of which nation's citizens are more "hard working" than the others.
 
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Originally Posted By: PandaBear
Oh, for drug dealers that want to keep those income, they usually have to "launder" it by going through a legal business as an income, and PAY TAX on it. It is much easier to hide the laundered money than some $20 bills totaling a couple millions.


I worked for several years as a croupier (table games dealer) at a casino and saw laundering taking place a *lot*.

For example, a player might have $1200 worth of chips. He would "colour up" (exchange small-denomination chips for a larger one) $1000 worth of $100 and $25 chips to an orange ($1000) and put it in his pocket, leaving himself with $200 in chips on the table. Inevitably, at some juncture he would lose his $200. Choosing to remain at the table, he would - instead of bringing the orange chip back out - produce several thousand dollars in cash and buy $25 and $100 chips. He would play (conservatively) for an hour or so, then "colour up" again. At the end of the evening, he may have won or lost a normal amount of money for a player who has spent some hours in a casino (the house edge, statistically over time, is a mere ~5%, depending on the game) and would then be able to cash in the orange chip he amassed for **clean** money back at the cashier's counter; while I, at the table during the course of his stay there, tidily took in all of his "dirty" money!

I have read that most criminals are OK with losing 20% laundering. I know there is only so much money you can launder playing blackjack or roulette, but 5% is a steal for these guys... And sometimes they'd end up winning and had no opportunities to turn their dirty money over! At first it was puzzling to see a player, right in the middle of a "hot streak", get up and leave to go find a "better" table!
 
Yep. My brother also worked at a casino and saw pimps / drug dealers laundering their $$$ on a daily basis.
 
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