IRS budget cuts cost $34.3B in lost revenue from big business • Hacker News Board

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#191

Post by sdinsn » Tue, Aug 20, 2019, 8:03 PM UTC

abtinf wrote: post #80

sdinsn wrote: post #70

Earlier quoted context omitted.

The governor of Alaska just signed a bill that cut 41% off the state budget for higher education.

Thank you for the example. However, it appears that the governor reversed course just yesterday: https://news.yahoo.com/alaska-governor-reverses-course-contr... I've noticed this is a frequent occurance--one faction will try to score political points by appearing to take an action, only to capitulate at the end when fewer people are looking.

Partially revered course. Now it's just ~8%, but its still significant.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#192

Post by nybble41 » Tue, Aug 20, 2019, 8:03 PM UTC

tasty_freeze wrote: post #173

Taxing businesses at all has been objected to as double taxation: the business is taxed, then the residual profits are distributed to shareholders, who are taxed. It isn't a fringe idea: in 2015, many of the Republican candidates in the running for President stated they thought making corporate tax rates 0% would not only "boost the economy", it would essentially remove all tax laws from the books, greatly simplifyin…

> So, to get to the point: why should I pay higher tax to protect the business interests of Grumman, and GE, and farmers, and Apple, etc?

You'll end up paying those taxes regardless. When companies are taxed directly then those taxes are baked into the prices of everything they sell, just like every other business expense. This functions like an inefficient and regressive sales tax except that, unlike normal sales taxes, buyers don't see it as a separate line-item on the bill.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#193

Post by [deleted] » Tue, Aug 20, 2019, 8:04 PM UTC

MuffinFlavored wrote: post #83

metamet wrote: post #78

Earlier quoted context omitted.

Elizabeth Warren has set this up as the core paradigm in her campaign. She posits that greed and corruption have overtaken the American government's purpose, especially in the last 25 years. Money, through lobbying and other forms of influence, now dictates who the government works for. It works for large corporations, pharmaceuticals and the oil industry (for example) rather than America's citizens and workers--spec…

I read her plan to tax businesses with $100m in profit is easily sidestepped by spinning off child-subsidiaries of your businesses right around that $100m mark and report back "womp womp, no over $100m profits here".

[deleted]

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#194

Post by vinay427 » Tue, Aug 20, 2019, 8:05 PM UTC

rayiner wrote: post #182

metamet wrote: post #78

Earlier quoted context omitted.

Elizabeth Warren has set this up as the core paradigm in her campaign. She posits that greed and corruption have overtaken the American government's purpose, especially in the last 25 years. Money, through lobbying and other forms of influence, now dictates who the government works for. It works for large corporations, pharmaceuticals and the oil industry (for example) rather than America's citizens and workers--spec…

Jimmy Carter told people the truth. (And he got promptly voted out, and so subsequent politicians have hidden the ball with the truth.) With respect to the environment, for example, he told people to put on a sweater. Because the truth is that almost all GHGs result from consumer-facing industries where consumers are the primary beneficiaries of pollution being artificially cheap. Concrete example, since you mention…

I really like this and agree with virtually all of it. To add, however, there's no absolute need to raise taxes or expenses depending on what Americans feel they prioritize. Countries can also have lower personal income taxes in addition to corporate taxes by reducing other expenses, for example by choosing a partially privatized universal health insurance system instead of single-payer health insurance, or a smaller military that might be slightly less up-to-date.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#195

Post by munk-a » Tue, Aug 20, 2019, 8:07 PM UTC

kortilla wrote: post #114

munk-a wrote: post #64

Earlier quoted context omitted.

I think it's particularly egregious because the part in control while the budget has been broken has classically been the one to strongly advocate for a balanced budget - and will probably start advocating as soon as they fall out of power. Granted, both parties are terrible when it comes to corporate interest so... they both suck - but one really has a strong tendency to advocate for balancing the books.

The budget has been broken with both sides in control. There is no longer a political motivation to actually balance the budget now that there is no way for the government to really run out of money any time soon.

That is one monetary school of thought that I believe will remain valid as long as other nation's currencies are measured against our own, if that standard slipped though that debt would suddenly be realized and repayment would be required at a respectable rate to continue doing international business. It's a major problem I have with MMT - it assumes American prosperity in perpetuity, but history has established that perpetuity isn't a thing and those chickens will come home to roost... If we're smart then the US economy can fade gracefully, like England, otherwise it'll likely get violent and revolutionary.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#196

Post by bduerst » Tue, Aug 20, 2019, 8:12 PM UTC

pwinnski wrote: post #190

bduerst wrote: post #165

Earlier quoted context omitted.

Because there are a number of thin-profit margin industries that wouldn't exist if you taxed revenue. You'd see more dollar marts and less grocery stores, for example.

More realistically, the price of everything in grocery stores would go up by the amount of the tax, as would the price of everything everywhere else. It's not clear that this would change much for most grocery stores: their own profit margins would remain the same. It would make things harder for the poorest customers, but many of them are already stuck with less-than-ideal higher-margin options for groceries.

No, it would not. Consumers are price sensitive for food, and profit margins are not the same across different types of substitute goods.

It's precisely how Dollar Trees and Dollar Generals have been pushing out grocery stores in the US right now, by not offering fresh produce, meat, or other traditional loss items. Planet Money even has a podcast on it: https://www.npr.org/sections/money/2019/04/26/717665452/epis...

Imagine the grocery store in your area carrying only frozen and canned meat and produce, because that is what it would push.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#197

Post by leetcrew » Tue, Aug 20, 2019, 8:12 PM UTC

DanBC wrote: post #159

jacquesm wrote: post #156

Earlier quoted context omitted.

VAT is corporate revenue tax, but between businesses you can claim it back in the EU.

No, VAT is a tax paid by consumers.

are you making a claim about tax incidence or who literally pays the tax?

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#198

Post by metamet » Tue, Aug 20, 2019, 8:13 PM UTC

rayiner wrote: post #182

metamet wrote: post #78

Earlier quoted context omitted.

Elizabeth Warren has set this up as the core paradigm in her campaign. She posits that greed and corruption have overtaken the American government's purpose, especially in the last 25 years. Money, through lobbying and other forms of influence, now dictates who the government works for. It works for large corporations, pharmaceuticals and the oil industry (for example) rather than America's citizens and workers--spec…

Jimmy Carter told people the truth. (And he got promptly voted out, and so subsequent politicians have hidden the ball with the truth.) With respect to the environment, for example, he told people to put on a sweater. Because the truth is that almost all GHGs result from consumer-facing industries where consumers are the primary beneficiaries of pollution being artificially cheap. Concrete example, since you mention…

> "Access to healthcare" is similar. Why do people in Sweden have universal healthcare while people in America do not? Is it corporations? No, Sweden's corporate tax rate is quite a bit lower than ours. (It's similar to the current federal rate, but in the U.S. most corporations also pay a state rate. In Delaware, for example, it's an additional 8.7%.) So who benefits by Americans not having universal healthcare? It's middle-class Americans who don't pay the high middle-class taxes that middle-class Europeans pay.

I believe that the argument here is that insurance companies are the unnecessary middleman gumming up American healthcare. Making $21b in 2018, insurance companies exist to make as much money as possible--by denying coverage when they can and paying out as little as possible. They complicate the process by requiring both the providers and consumers to get tangled up in paperwork, also slowing the process (and quality) down. Her argument there is that we could provide a better experience for all and invest that $21b of profit being leeched out back into actual coverage by going to Medicare for All.

> intended to make people falsely believe that you can have universal healthcare and a cleaner planet without decreasing your material quality of life

I don't think that's what she's intending. Her plan for cleaning up the planet involves scientific investment in clean/green industries and becoming a leader in providing those services commercially throughout the world. The US is only 20% of the problem, which is why we need an industry to really push this throughout the rest of the world--something that other countries are currently leading in.

In case your curious about Warren's approach here: https://medium.com/@teamwarren/my-green-manufacturing-plan-f...

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#199

Post by ceejayoz » Tue, Aug 20, 2019, 8:14 PM UTC

AnthonyMouse wrote: post #170

ergothus wrote: post #77

Earlier quoted context omitted.

And yet, we've been in a state for decades where a $1 increase in IRS budget results in more than $1 in income, yet their budget has continued to be cut. I'm all for closing down those well-known loopholes, but that doesn't mean there won't be loopholes, or just people/companies not paying what they owe. At this stage, those of us that ARE paying our taxes are the ones being taken advantage of.

> And yet, we've been in a state for decades where a $1 increase in IRS budget results in more than $1 in income, yet their budget has continued to be cut. That's because the point where $1 in IRS spending brings in $1 in government revenue is well past the optimal level. First, it's not just government spending that matters. If you have the IRS spend $.60 and the taxpayer spend $.60 to recover $1, you're spending a…

Instead of contrived, low-ball numbers, you could use the real ones:

> Congress appropriated $11.4 billion for the IRS in FY 2018 and IRS enforcement programs collected $59.4 billion, for a return on investment (ROI) of about $5.2 for every $1 invested in the IRS.

https://home.treasury.gov/system/files/266/02.-IRS-FY-2020-C...

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#200

Post by chris11 » Tue, Aug 20, 2019, 8:16 PM UTC

gok wrote: post #174

Reading the actual study [1], the headline is a bit deceptive. The study looked at audits between 2000 and 2010, a period during which funding to the IRS increased, and found that generally more funding for audits led to more money recovered from audits (duh). But that $34.3B figure is over 10 years, so it's a tiny fraction of a percent of overall federal revenue, and it's not offset by the amount of more money the I…

> Also unmentioned is the very real negative externalities that IRS audits cause. Audits disproportionately affect poor people [2], who are also the least able to spend time dealing with them. The United States already has extremely low tax evasion rates [3]. Rather than spending money to catch more of the very few cheaters by audits, other country's tax authorities have found "nudge" letters were found to be similarly effective and vastly cheaper.

That's not a strong argument against audits. I'd just take that to mean the IRS should mainly audit people or businesses based by how large the underreporting was.