Adonis Diaries

Are you sure that paying taxes is an American civic duty?

Posted on: November 24, 2011

Are you sure that paying taxes is an American civic duty?

Surveys would show that over 90% of US citizens claim that paying taxes is a civic duty, and that they do pay taxes out of civic duty…Is that claim true in reality?

Beside the salaried and wage workers who have no choice in paying taxes according to Congress tax laws, since their taxes are automatically withheld from every pay check, almost all “non-farm proprietor income”, meaning the self-employed in liberal jobs, small owners of enterprises, owner of restaurants… under report their real income by 60%, an amount estimated to generate over $70 billion in unpaid taxes.

The tax gap (difference between tax owed and tax actually paid) is about $350 billion, or one-fifth of all taxes collected by the IRS, or $1,000 for every man, woman, and child…

The IRS job is executing Congress tax laws, requiring tax payers to comply.  The IRS role is to “help the large majority of compliant taxpayers with tax law, while ensuring that the minority who are not unwilling to comply, pay their fair share…”

The IRS barely audit 20 out of 1,000 taxpayers per year: Congress is not about to fund this institution in order to investigate and target the big fishes. Consequently, chances is that you may not be audited in decades if the tax gap is not outrageously obvious or your business is not classified as Red for potentially prone to tax cheating and evasion.

The IRS should be investing most of its efforts on the big fishes that can afford to hire teams of tax lawyers and “tax experts” in locating loopholes as large as Oregon.  However, the IRS claim not to have the means to confront legal and protracted tax battle with the big fishes, who are generally backed by powerful politicians….

Actually, the big fishes are the ones sustaining the budgets allocated to State and Federal institutions, meant to be squandered for self-interest and self-serving objectives… For example, in 1986, Congress passed the tax law, which was instigated and suggested by tax employee John Szilagyi six years earlier, that required to list children’s Social Security numbers.  In that year, 7 million children vanished from the tax rolls, saving $3 billion a year in tax revenue.

The gist of the matter is that any government, if it will to be serious in considering citizens at equal footing in rights and responsibility, can collect every dime it owes and block any loopholes for cheating opportunities. For example, forcing the employed people to automatically pay every month…Tax laws are political in nature, and if you think that not every one is paying his fair share in taxes, how national civic duty stand?

Conversely, educated and engaged citizens who reclaim fair and equitable election laws and tax laws, can defeat any powerful governmental institution.

Note: Inspired from Freakonomics by Levitt and Dubner

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November 2011

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