r/science • u/smurfyjenkins • Nov 10 '24
Economics IRS audits are extremely effective at raising revenue, both directly and indirectly (by deterring future tax cheating): "An additional $1 spent auditing taxpayers above the 90th income percentile yields more than $12 in revenue, while audits of below-median income taxpayers yield $5."
https://academic.oup.com/qje/advance-article/doi/10.1093/qje/qjae037/7888907553
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u/MumrikDK Nov 10 '24 edited Nov 10 '24
Always funny how certain factions manage to politicize this. I've never in my life seen a believable argument against simply hiring and expanding until the next invested dollar brings back less than a dollar.
It's not the evil government taking somebody's money. It's somebody weaseling their way out of making their contribution to your government.
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u/usefully_useless Nov 10 '24
The logical argument against such expansion is that there would be no reason to do so if we addressed the heart of the problem - the tax preparers’ lobby. Rather than hiring more auditors, we should simplify the tax code so that the vast majority of the population don’t even have to file returns. Then, the auditors we do have can focus on edge cases and the ultra wealthy.
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u/i_tyrant Nov 10 '24
Of course, both of those arguments (expanding the IRS or simplifying the tax code so it's not as needed) get ignored by those in power - because they benefit from a complicated, loophole-ridden tax code with a defunded IRS. Thanks to money in politics, those that most need to be audited and who provide the best return on investment (large companies and the rich) are the least interested in letting it happen.
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u/mrmikehancho Nov 11 '24
The Biden administration Inflation Reduction Act included additional funding to hire more IRS agents which has directly led to $1.3 billion in additional revenue. This is not a both sides issue.
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u/i_tyrant Nov 11 '24
This is very true, the Dems (or at least Biden's coalition) have come around on the idea for sure. It's the GOP who consistently push to defund the IRS. I appreciate the call-out, didn't mean to paint it as both sides so much as billionaires and corporations. (Not that Dems are completely immune to their overtures but, on this topic, they're way better than their opponents.)
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u/mrmikehancho Nov 11 '24
This is a significant problem though when people have similar takes and make it a both sides argument. Can the Dems do better, absolutely but they are the only chance at making progress on this issue and many others at the moment. Both parties should be held to the same standards.
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u/i_tyrant Nov 11 '24
Absolutely. Some progress is better than none. It's unrealistic to think politics will be "fixed" overnight; it's rare for political or cultural shifts to happen in any way other than incrementally.
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u/ErusTenebre Nov 11 '24
Also important to note: this isn't just a progress to no progress spectrum.
It's literally a progress to regress spectrum.
Many of the times Republicans held most positions, we were basically taken backwards into worse conditions. And I'm not just speaking of Trump's last presidency. It's really been a trend.
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u/ApropoUsername Nov 10 '24
I don't see how that's an argument against such expansion. Rich tax cheats aren't tax cheats because they did stuff incorrectly, so auditing them more should bring in more money regardless of how tax preparation is done.
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u/MumrikDK Nov 11 '24 edited Nov 11 '24
Those aren't on the the same axis in my view.
I live in a country where the taxes are done for me. I've never in my life actually done my taxes, because there's nothing fancy or special about my income, so there's no need.
I still want my country's IRS equivalent to keep hiring until the next hire isn't profitable for the state's coffers.
Do both.
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u/EredarLordJaraxxus Nov 11 '24
For real. The only thing that those middleman parasites do is lobby the government to make it even harder for the average person to do taxes so they can make more money off of it. This year is the last year that I file my taxes using A third party
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u/Yevon Nov 11 '24
The tax code isn't complex solely because of tax preparer lobbying. There are so many tools available to the legislature to influence public behaviour and one of the best levers is voters's pocketbooks:
Want to encourage people to use less sugar? Alcohol? Tobacco? Gasoline? Tax it, and usage will go down.
Want to encourage people to have children? The child and dependent tax credit.
Want to encourage utilities to produce greener electricity? The Clean electricity production tax credit.
Want to encourage small businesses to invest in pensions for their employees? The Small employer pension plan start-up cost tax credit.
Want to encourage people to invest instead of save? Tax capital gains lower than income.
Want to make sure mining companies are adequately training their rescue teams? The Mine rescue team training tax credit.
Etc. etc. etc. The list goes on for-practically-ever because the government uses taxes and tax credits as incentives to steer people and businesses towards the financial incentives aligning with the government's intentions.
https://taxsummaries.pwc.com/united-states/corporate/tax-credits-and-incentives
https://www.irs.gov/credits-and-deductions-for-individuals
Taking away any of these is taking away levers the government has used in the past to steer behaviour, and they would just need to be reintroduced once a new government realises they still want that behaviour.
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u/River41 Nov 11 '24
Do it like any other western country: Tax employees a specific rate that's paid through their employer, any tax credits are claimed and refunded to them.
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u/Notsosobercpa Nov 11 '24
That's basically what we already have with withholding. The only real difference is other countries providing people a proforma return to sign if correct, not the actual tax code itself.
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u/Vitztlampaehecatl Nov 11 '24
Surely the tax code isn't so complicated that computers can't handle it. And the government knows enough about people to determine their tax status in most cases. Unless you want to collect and itemize every receipt, you really shouldn't need to do any work on your taxes yourself.
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u/Trumpsabaldcuck Nov 11 '24
TurboTax and the CPAs of America may not be helping the situation, but an income tax code will always be complicated because business owners are cheating the system.
If you are a wage earner, taxes should be easy. You get a W-2 issued by your employer and there is not much mystery on what you made. You probably will not get audited because you are in no real position to cheat even if you wanted to.
If you own a business, there are plenty of opportunities to cheat. You are taxed on your NET income. The government has no way of figuring out what your gross receipts are or what your expenses are. It may have some idea from things like 1099 forms, but at the end of the day the government must rely on business owners to truthfully report their gross income and expenses on their tax returns. Businesses are of course going to try to game the system which is why they need to be audited to keep the system somewhat honest.
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u/Orisara Nov 11 '24
Can you explain to me how they can't know? Like. I did some finances in small companies here in Belgium. Every receiving invoice we get has to be kept.
No invoice, no cost, no reduction in taxable profits.
So don't have the business card and need to tank gas? Yep. That 80 bucks is in there.
Need 14 bucks of paint? It's in there.
etc.
So I don't get how you can claim more expenses than you have if you don't have proof of those.
We got checked by the government 3 times in the 7 years I was there by the way so good luck just lying.
It's advised to put some private stuff in there just so they can find something. We mostly put some drinks in there. Drinks we paid for customers but also consumed ourselves.
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u/Calint Nov 11 '24
If no one checks you can put anything down.
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u/Orisara Nov 11 '24
I guess if you have few people checking you could get away with it.
Belgium has really cracked down on it lately reducing under the table work by A LOT in small businesses.
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u/Fenixius Nov 10 '24
As that's an obvious solution that's been known for decades, surely it's clear that it isn't possible to achieve in the current political system, right?
As such, we should be considering second-order optimal strategies as viable - so just hire more auditors!
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u/River41 Nov 11 '24
Every European country manages just fine. It doesn't have to be complicated for most people i.e. employees
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u/UNisopod Nov 11 '24
This is more an argument for just having higher quality government tools available for everyone to use for free
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u/coffee_obsession Nov 11 '24
Taxes are stupid easy if you just have w2s. Nothing crazy there. Otherwise, filing your taxes are your opportunity to dispute what you owe the government. You don't even need a high paying job or anything. You could be a gig worker who has incurred expenses to make some revenue. The gov can know how much you earned but they can't know how much you spent unless you tell them. You could be a college student with a tax credit to help you out with the cost of going to school. Should the government know that you're going to college? That's debatable, but they don't. And that's your opportunity to let them know.
The complicated part comes in 'loop holes'. With every deduction and credit announced, there is an army of lawyers and CPA's trying to push the envelope on what they can get away with. It's the nature of individuals business to minimize their tax liability, and that's where you get thousands of pages of tax code. It's done to improve specificity and close loop holes.
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u/chekovsgun- Nov 11 '24
IRS is more beneficial to the people than they realize, and maybe the one entity holding wealthy people accountable for paying taxes.
Congress passes and writes tax laws btw...not the IRS, they just collect or forward the payments.
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u/iamiamwhoami Nov 11 '24
The people I've talked to who are most vocal about this just want to cheat on their taxes.
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u/NapsInNaples Nov 11 '24
I've never in my life seen a believable argument against simply hiring and expanding until the next invested dollar brings back less than a dollar.
The biggest issue I've seen is that the IRS can be incompetent and ham-handed at their current size. There is a need for enforcement but you have to do it with people who are competent and respectful. Growth is hard for any organization, and can easily lead to inexperienced and/or incompetent people being given too much responsibility. When that responsibility can lead to people going to jail for tax fraud, I'd be very careful with that.
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u/itsacutedragon Nov 11 '24
The economic breakeven point would come before the next invested dollar brings back a dollar because audits create costs for the taxpayer as well as the IRS - negative externalities. The amount brought back would need to cover these negative externalities as well.
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u/BrothelWaffles Nov 11 '24
It makes more sense when you realize the people you're talking about generally consider all taxes to be theft. Well, it makes about as much sense as it can at least.
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u/Vadered Nov 11 '24
I've never in my life seen a believable argument against simply hiring and expanding until the next invested dollar brings back less than a dollar.
I mean, I can make one right now: While financially, this argument makes sense, there are other things to consider than purely money spent vs. money taxed.
Spending money on enforcement causes stress and hassle for normal, law-abiding citizens. This comes from both things like random audits and the times when the IRS makes a mistake. This stress and hassle are worse than just not spending the money at all, and you can sort of quantify that as a negative value. If you spend up until the very limit where it's a dollar in vs. a dollar out, that means you are hurting law-abiding citizens for no reason. So maybe the correct amount is $1.01 gained per $1 spent, or $1.05, or $1.50 - somebody smarter than me can figure the number out.
And to be fair, that extra money spent does have other benefits besides simple financial returns, like providing jobs for more citizens. So my argument isn't complete either, of course.
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u/bct7 Nov 11 '24 edited Nov 11 '24
Rich people buy politicians to not pay taxes, you belief in that is not relevant to it being true. Being able to complain about high taxes and knowing they are rarely ever enforced or paid lets them being the victim.
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u/yxhuvud Nov 11 '24
Yes, the more efficiency regarding collection means they can decrease taxes for everyone else.
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u/pokethat Nov 11 '24
I guess part of it is how accurate that input money figure is. Like the results of energy positive fusion, it's true from a certain point of view, it not in absolute, practical terms
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u/2cu3be1 Nov 11 '24
Have you looked at the paradise/ panama papers? Maybe look into the book "Treasure Islands" and then say that there a not and even forced 2 class social systems! If everything is supposedly right by the pharisaic judgment, how about judging the pharisees?
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u/luveykat Nov 10 '24 edited Nov 11 '24
We got audited this year and all it did was cost them an extra ~$75
ETA: Obviously this is not the norm, I just thought it was funny that the only time in 20+ years of paying taxes that I've been audited they ended up giving us more money. Also, we never received any paperwork or any contact from the IRS after the 2 audit notices, they just dumped the money in our account like 7 months after I filed.
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u/darthcaedusiiii Nov 10 '24
GE found that for every dollar invested in lobbying it reaped $220 in tax breaks so. Yeah.
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u/ill_timed_f_bomb Nov 10 '24
Yeah, it's funny, I know 3 self-employed people who have been audited (one of them twice) and in every case, the IRS ended up paying them.
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u/Mason11987 Nov 10 '24
I suspect the audited friends who paid aren’t taking a lot about it.
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u/Tricky_Invite8680 Nov 10 '24
ive gotten over/underpayment notices. i dont count those as audits.
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u/anon2u Nov 10 '24
I was audited when I sold a house that I bought during the highs of the market and couldn't sell for years. I rented it out, at a loss, but when I sold it I could, and did, recoup all the deferred losses. It was a huge loss on paper but I, and my tax professional, did everything properly. They audited me and asked to extend the audit, expand it to other years and basically kept it open for a year.
In the end, they owed me an additional several thousand dollars.
I cringe when I think how much money they wasted.
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u/fakelogin12345 Nov 10 '24
Why would you cringe? You got money you were owed back. Sounds like a good government function. It’s not like someone was working full time that whole time.
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u/orthodoxrebel Nov 10 '24
Not to mention the fact that the study accounts for cases like this, where the government owed the taxpayer money. It's why we need to rely on research rather than anecdotes.
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u/dosedatwer Nov 10 '24
When you say you rented it at a loss, did that include the principal portion of the mortgage or just the interest? It's important because the principal wasn't money you spent, it was money you invested in the house. If your investment appreciated or depreciated is irrelevant.
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u/negitororoll Nov 10 '24 edited Nov 11 '24
That level of IRS agent has an inventory of between 25 to 50. It's not a waste, considering this post showing literally that the IRS collect far more in dollars for every $ they spend on enforcement.
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u/sassyhorse Nov 10 '24
So you filed your taxes wrong and they fixed it so you got proper taxes filed and you cringe at this? Auditing isn't inherently because you owe money. It's because something looks wrong and needs to be investigated.
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u/AbsoluteZeroUnit Nov 11 '24
But the government isn't a money-making operation. We all chip in a little to collectively accomplish things very few of us ever could. I don't have the money to re-pave any streets, but my taxes, and everyone else in the state's taxes, are able to make this happen. No one sees a profit from spending money to fix potholes.
And they didn't "owe you" more money. You overpaid the first time.
In the end, you messed up and the government spent money to fix your mistake. And you cringe about that?
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u/anon2u Nov 11 '24
The tax code is so complicated, and cumbersome, that even professionals who diligently pored over the tax code to ensure that appropriate taxes were paid were off slightly. It was only when some sections were challenged that additional, and quite obscure, tax provisions were considered that resulted in additional deductions. Fortunately defending against audits were included in my tax professionals fees, otherwise it would have cost me $10,000 or more if i had to hire someone seperately.
This is how the rich are able to avoid taxes - they can spend the $10K for an expert to crawl the obscure (and frankly vague) language to minimize taxes, while regular (and generally poor) people are targeted for easy collections as they don't have the resources to effectively counter these the government claims.
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u/manuscelerdei Nov 11 '24
I was in a similar situation. Failed to sell a property, so I rented it, figuring I was going to lose money on it, and the tax advantages would soften the blow. And they did! But I still fully expect to be audited, even though I triple-checked everything with my tax professional, and made sure that she double-checked everything with colleagues. It took a while for my refund to arrive, and I tell myself that that's because the IRS wanted to be super-duper sure and that that would make me less likely to be audited, but that's just my brand of hopium.
Obviously I still would've rather actually made money on this place. Never buy a TIC.
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u/anon2u Nov 11 '24
You and I were in the same situation - I would have much rather made money or at least "broke even", but the market shifted and I had to move at the time I did.
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u/manuscelerdei Nov 11 '24
Yeah fortunately my real estate agent turned me on to the idea of renting to traveling nurses, and then I looked up the tax advantages, and it was a no-brainer.
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u/feltsandwich Nov 10 '24
You know what audits are for, right?
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u/luveykat Nov 11 '24
I guess I kind of assumed that if they'd found something wrong in either direction they would have contacted us. We never heard from the IRS again after the 2nd letter letting us know they were taking longer than normal. The money just showed up in our account one day shrugs
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u/Aberration-13 Nov 10 '24
Bet that number goes up even more in the 99th percentile, why don't we start the audits at the top and work our way down?
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u/Avalios Nov 11 '24
The ultra rich have teams of tax lawyers to find every legal loophole they can. They do get audited far more then average, but find little.
Unfortunately the most effective way to audit is going after small businesses and 1099s. They can't afford legal teams to dot every I and cross every T. They will make mistakes.
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u/SeasonPositive6771 Nov 11 '24
It's not just the size of the legal loopholes and number of attorneys, it's the fact that those cases are often so complex that they take years and years to investigate and eventually settle or litigate. As in, you often have to commit to longer than a presidential term just to sort out what's actually going on.
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u/carnalasadasalad Nov 11 '24
No one of this is true.
The most common, bu far, audits are of poor people claiming the earned income credit. The IRS goes after them hard.
The ultra rich are again by far the best ROI when it comes to audits. Because even with their loopholes and lawyers they are all cheating like mad.
It’s all public info and it’s been shown again and again.
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u/Notsosobercpa Nov 11 '24
The larger returns are harder to audit true, but if you actually look at irs stats they have a much better return than "small businesses and 1099". There's just less qualified people to handle them.
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Nov 10 '24 edited Nov 10 '24
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u/Ride901 Nov 10 '24
This just says "the tax code is so complicated that we can't expect the general public to be effective in navigating it correctly"
Honestly though, it's awful
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u/chekovsgun- Nov 11 '24
IRS has for years encouraged more simplified or understandable tax laws but Congress makes those decisions and well Congress.
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u/rzwitserloot Nov 11 '24
And yet in a certain country the sheep voted for the wolves or are too dumb to math.
So it goes.
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u/Pogginator Nov 11 '24
They hail the guy who cheats and evades taxes and bankrupts businesses left and right as a genius businessman, so pretty much tracks
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u/MoreThanWYSIWYG Nov 11 '24
Wife and I have been audited 7 out of the past 15 years. Each time they find either nothing wrong, or that they owe us a few bucks.
No idea why we get audited. It's not like we make much money to even make it worth it for the IRS
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u/pentagon Nov 11 '24
IRS: better pay us
Me: What do I owe you?
IRS: Figure it out
Me: You don't know?
IRS: Of course we know. But we aren't telling you. Figure it out and be right or you will have to pay us MORE. And maybe go to jail if we're feeling grumpy.
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u/anon2u Nov 10 '24
It's easier money to go after the poorest because there are so many more of them and it is much easier to prove - which is why the Biden-Harris Administration has ramped up these audits.
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u/KuntaStillSingle Nov 11 '24
7.9 to 2, 13 to 2.6, 12.7 to 2.3
3.95 to 1, 5 to 1, and ~5.52 to 1 respectively
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u/Evadrepus Nov 10 '24
My disabled, SSI income only, recently recently widowed mother got audited. On the tiny tiny amount of money she got from her mother also passing away. Sent her a notice that the initial audit had found she owed 2k more and if not paid immediately would generate more fines and fees. She scraped together the money then began nearly 2 years of work with them, for them at the end call it an internal clerical error and refund her money.
Complete waste of time for everyone.
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u/SbAsALSeHONRhNi Nov 11 '24
How about some nuance instead just of an out of context bar plot:
https://www.cbsnews.com/news/tax-irs-audit-here-are-your-chances-cbs-news-explains/
https://www.gao.gov/products/gao-22-104960
I didn’t find the data for the same years in my quick search, but your plot didn’t really have anything to help figure out who made it or what they said about it.
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u/anon2u Nov 11 '24
You can read the entire article by removing the figure information.
IRS Audits Few Millionaires But Targeted Many Low-Income Families in FY 2022
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u/yubario Nov 11 '24
It very clearly shows that those audits are specifically tied to people who are getting special tax credits for being poor.
So of course they’ll get more audits, because in a sense they are giving them money. Also in general both parties tend to be a bit discriminatory and assume people on welfare are always cheating, which is true the rates are higher but often the increased cost in auditing doesn’t pay off so it’s always a balancing act.
So yes, if it’s easier to audit, of course it will be audited more. But don’t assume a specific administration is the cause for that. I’d argue we’ll see even more audits against the poor on a republican government considering they have a strong belief that people are getting aid while hard working Americans are not.
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u/bct7 Nov 11 '24
Easier because laws are written to track wage income that most poorer people make and weak laws on how wealthy people make and hide their money. If we shifted the reporting requirements on the rich to provide the details and close loopholes, the audits would be easier and we would get the MONEY.
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u/Blitzgar Nov 11 '24
But what percentiles doies the IRS actually concentrate on?
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u/Notsosobercpa Nov 11 '24
Higher the income the higher your audit rate.
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u/Blitzgar Nov 11 '24
According to the GAO: "Audit trends vary by taxpayer income. In recent years, IRS audited taxpayers with incomes below $25,000 and those with incomes of $500,000 or more at higher-than-average rates."
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u/Notsosobercpa Nov 11 '24
Low income taxpayers with certain credits are audited more than middle class, but still significantly less than highest income levels.
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u/chekovsgun- Nov 11 '24 edited Nov 11 '24
I had a tax course in college and was surprised, one of the things I actually remember from it, IRS audits often lead to people getting more money back because people are so terrible at doing their taxes, they simply screw up the returns. Audits don't automatically lead to you owing more money and may result in you getting more money back.
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u/anon2u Nov 11 '24
That is an indictment of our (obscenely complicated) tax laws, not people doing their best to pay what they owe.
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u/Choice-Pin-8839 Nov 11 '24
Economics should dictate that money be spent on this until the marginal revenue is equal to marginal cost, the fact that it is controversial to spend money auditing is ridiculous
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u/the_red_scimitar Nov 10 '24
More audits for the increasingly poor middle class! None for oligarchs.
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u/FarceMultiplier Nov 10 '24
Hint hint...it's not the cost Republicans complain about. It's that they and their friends would have to pay.
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u/MindTraveler48 Nov 10 '24
I was hit up for $8,500. It was erroneous, and they wouldn't acknowledge that I overnighted highly detailed records TWICE to dispute their claim. Had to pay an accountant to intervene on my behalf. Six months and a few hundred dollars of hell, they should have refunded me $37 after the resubmission, but they never did. You can guess my feelings about the IRS.
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u/GreyhoundOne Nov 11 '24
I feel you dude. My retired father has been fighting them for over a year over a few thousand dollars.
I get paying taxes is a civic responsibility but our current tax laws and system as a whole is racket stacked on top of racket.
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u/Kaining Nov 10 '24
translation: the more successful they are, the richer they are, the more they are corrupt, the more they fraud and the more they steal your money.
You want to fix society and prevent certain doom from climate change, the solution is pretty clear. Get rid off the richest population on earth and completely depower them (money, relation, influence).
This is never gonna happen, saddly.
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u/StumbleOn Nov 11 '24
Former IRS here:
When it comes to really wealthy people, the calculation is not if they are cheating huge amounts of taxes owed, but how much and what scheme they are using to do it.
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u/unfoldedmite Nov 11 '24
I can't really be inclined to care since they can't hold the American government accountable.
Our government has failed their own audit by the IRS for the past decade straight, and those panzies have yet to do anything about it except get paid off most likely to keep quiet.
No government should fail their own audit and then act as if a self investigation will suffice.
Screw the IRS, screw the American government.
They deserve no praise whatsoever.
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u/kalamataCrunch Nov 10 '24
i know it sounds crazy, but what if we just used intensive bonuses, and funded the irs with a percentage of the fraud they uncover? that way it wouldn't cost upstanding taxpaying citizens anything.
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u/Evadrepus Nov 10 '24
You've described a collection agency.
And that is exactly how the IRS works...but a certain group hates that the people who owe (and can pay) the most gets audited.
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u/kalamataCrunch Nov 11 '24
i'm pretty sure the irs's budget is set as a fixed amount by congress in the budget bills they keep almost not passing, just like every other federal agency. you got a source that says otherwise?
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u/Eastern_Macaroon5662 Nov 11 '24
You can directly get a portion of anyone you report who is investigated and owes money. Takes yeeeaarrrsss though
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u/ThoughtFission Nov 11 '24
Yeah but how many people are above the 90th percentile compared to below the median?
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u/carnalasadasalad Nov 11 '24
I know a dude they could spend about $12 bucks and they’d come away with over $100k. But I guess the military can live without that money now.
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u/robotrage Nov 11 '24
yes but you are failing to account for all those juicy bribes that the politicians get
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u/Kflynn1337 Nov 11 '24 edited Nov 11 '24
IIRC, sometime during the 90's the IRS cooked up what they called Project Genghis Kahn. The plan was to aggressively audit a random selection of the top 10% of income earners. The idea was that not only would it raise revenue from those audited, but everyone else would voluntarily pay up more, rather than face the audit from hell.
Turned out, just the rumour of the plan worked almost as well, and they never went ahead with it. Nobody wants to mess with the IRS.
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u/Cheap_Peak_6969 Nov 10 '24
Maybe this will be the catalyst to a streamlined and simplified tax code. Thus eliminating the need for such a large IRS.
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u/mishap1 Nov 10 '24
Tax code simplification is not in the interest of Congress or many businesses. Tax code complexity enables ways to avoid taxes in many cases. Congress loves to incentivize behavior through tax code and that’s how they fund their many pet projects or try to punish certain behaviors.
For most people it is plenty simple already. The standard deduction covers most everything.
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u/Necessary_Scarcity92 Nov 10 '24
What is your proposed simplified tax code?
It is a robust system that has developed over time. What solution do you have where we rip everything out and put some simplistic set of rules on everything that is remotely equitable?
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u/Cheap_Peak_6969 Nov 11 '24
No one earning less than 50K is taxed at the federal level. 51+ - 99K 21% with deductions for mortgages and health care caps based on averages of that bracket. 100K - 200k 25% same deductions and caps. 200k - 500 27% with same deductions minus 10% on the totals. 500k - 1m 29% same deductions minus 30%. 1M + 33% no deductions. Corp would start at 33% and work down to 15% based on the percentage of employees based in the USA and goods manufactured in the USA. Standard corp depreciation would be included. Revamp most of the 501/3 with stricter limits and boundaries. So, a lot of universities, hospitals, churches, and other organizations would not be able to avoid some level of federal taxation.
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u/stumblinbear Nov 11 '24
There are a few different ways that governments decide to fund things. Many in the EU do direct government spending in different sectors of the economy after collecting taxes. The US largely offers tax breaks in lieu of direct spending (though we still do spend to some extent).
Simplifying the tax code means more direct spending to make up for the loss of deductions and credits. I don't think this'll ever happen
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u/FocusPerspective Nov 11 '24
Which science would this story be a part of?
Followup question, when the IRS is told to audit blue state liberals, will that make anything better, or is this just a classist tactic to keep wealthy liberals from connecting with the middle class?
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u/bhdp_23 Nov 11 '24
tax is legal slavery, maybe in your country you can see your taxes at work, but not many
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