Posted On: Thursday - April 21st 2022 7:27PM MST
In Topics: US Feral Government Taxes
Federal Gov't politicians have been talking about reducing the burden of income tax filing since before I can remember. I remember old Ronnie talking about it, and then his quip about how the forms would end up simplified:
In our Part 3 of our "Morning Constitutional" series rant about Amendment XVI, Peak Stupidity listed 5 evils of the Income Tax* in Dave Letterman-style order, least to most evil. The regulatory burden comes in at only number 5, but that's what I was dealing with a few days back. Let me paste some of what I wrote 2 years ago in:IRS FORM 1040 EZ - PZ:
1] How much money did you earn this year? ________
2] Send it in!
It's become an "industry" of its own. This whole income tax withholding*** thing, the saving of receipts for itemization, the gathering of forms together, the ritual of filling out the forms at the bar during SuperBowl half-time (at least for near a decade, as mentioned here) are pretty much a part of Americana now. No, don't take that the wrong way, as it is absolutely NOT just like baseball, hot dogs, apple pies, and 1970s Chevrolets!Well, see, that's the other guy. I just plain don't care enough anymore, or maybe never did. I was surprised that the deadline is now April 18th rather than the old cruelest day, 4/15. How long has that been going on?
It's just that the whole thing has been part of life for so long, that many wouldn't know what to do without it. "What, you mean I just keep my money? All of it? I don't get it."
The amount of labor involved in not just the tax calculations and submission of forms, but the continual planning and document collecting throughout the whole year is staggering. It is not wealth creation and is not productive time spent in any sense of the word.
Why the bad attitude? I take it very personally that besides paying these big sums of money to the Feral Government to screw me with, the complexity of it would force me to spend time and/or more of my money to tell the IRS how much I owe! I say "would" because I just don't let it. I refuse to pay anyone, first of all, and I refuse to spend more than a couple of hours on it. If that means skipping a form here and there that's too convoluted, so be it. These people have computers. I paid for those computers too. Let 'em use 'em to help ME out.
Admittedly, my family's deal is very straightforward, and nothing has changed in a good while from year to year beside the raw numbers. The previous year's form is my guide. As with last year's taxes, I was supposed to fill out this one form for a credit. For some reason, I didn't do that last year, so I had no guide. I looked at the convoluted path on that form that was to give me the same round number as last year. Fuck it. Enough was enough. There were blog posts to write.
Yes, I AM proud of my attitude about the IRS.
Well, you've got to take a break or two during this form-filling process, so I made comments on The Unz Review and looked at Instapundit who steered me to this Washington Examiner page, from where I got the above graphic.
So, let's see. There were the stamps, the envelope, and the check, at most $1.50. Well that beats that $800.55 average. I got it done in about and hour and a half, including making copies**, and then there was at most 1/2 hour spent since January taking pieces of mail and putting them in the file. Say 2 hr vs. that 24.9 hr average. That's a savings of 99.8% and 92% on time and money, respectively.
Come on, America! You can do better!
* For commenter Adam Smith, I do remember your corrections on the actual implementation of the income tax, so please bear with me on my lame simplification.
** Cause, you know, they are prone to losing them after they unstaple my checks and deposit them - see Me and the IRS
Comments:
Moderator
Tuesday - April 26th 2022 1:37AM MST
PS: True, Mr. Corrupt. I personally have never even heard of this holiday, but then I try to avoid hearing of stuff that irks the crap out of me ..
Corrupt
Monday - April 25th 2022 4:13PM MST
PS
M. Moderator, I find it ridiculous that emancipation day is celebrated, as it was only for slaves in the confederation.
M. Moderator, I find it ridiculous that emancipation day is celebrated, as it was only for slaves in the confederation.
Adam Smith
Sunday - April 24th 2022 10:43AM MST
PS: Good afternoon, y'all...
Thank you Mr. Krug. I never noticed Missouri v. Holland before.
Kinda reminds me of what happened to Gibson guitars about a decade ago.
https://www.justice.gov/opa/pr/gibson-guitar-corp-agrees-resolve-investigation-lacey-act-violations
https://www.motherjones.com/politics/2012/08/gibson-and-feds-settle-illegal-wood-case/
https://forestlegality.org/policy-law/us-lacey-act
“Lazy simplification” works well enough, Mr. Moderator...
“I don't even make much effort anymore...”
You made more of an effort than I did. 😉
Agreed, Mr. Alarmist, but Marbury v. Madison isn't so bad compared to so many other bad decisions. Grutter v. Bollinger, Kelo v. City of New London, the Slaughter House cases and Brown v. Board of Education quickly come to mind. Hell, seems the last time the Supremes made the right decision was in Dred Scott v Sandford.
I hope you all have a great Sunday!
☮
Thank you Mr. Krug. I never noticed Missouri v. Holland before.
Kinda reminds me of what happened to Gibson guitars about a decade ago.
https://www.justice.gov/opa/pr/gibson-guitar-corp-agrees-resolve-investigation-lacey-act-violations
https://www.motherjones.com/politics/2012/08/gibson-and-feds-settle-illegal-wood-case/
https://forestlegality.org/policy-law/us-lacey-act
“Lazy simplification” works well enough, Mr. Moderator...
“I don't even make much effort anymore...”
You made more of an effort than I did. 😉
Agreed, Mr. Alarmist, but Marbury v. Madison isn't so bad compared to so many other bad decisions. Grutter v. Bollinger, Kelo v. City of New London, the Slaughter House cases and Brown v. Board of Education quickly come to mind. Hell, seems the last time the Supremes made the right decision was in Dred Scott v Sandford.
I hope you all have a great Sunday!
☮
The Alarmist
Sunday - April 24th 2022 5:24AM MST
PS
My ire was raised at Marbury v. Madison ... all that follow are but more icing on that half-baked cake.
My ire was raised at Marbury v. Madison ... all that follow are but more icing on that half-baked cake.
Robert
Saturday - April 23rd 2022 6:43PM MST
PS: Thank you Mr. Smith, for your mention of:
Wickard v. Filburn
That one always pissed me off. Another one, that really gets my goat:
Missouri v. Holland
Wickard v. Filburn
That one always pissed me off. Another one, that really gets my goat:
Missouri v. Holland
Moderator
Saturday - April 23rd 2022 6:22PM MST
PS: Mr. Smith, I should have been honest and called it a "lazy simplification", haha.
OK, got the April 18th thing, but, wait a minute, is Good Friday now Emancipation Day? WTH? And yes, that is ironic. The schools had off on Monday the 18th for their Easter holiday. You'd think the Feds would get that too, but then it takes a couple of days for my forms to get there in the mail ... and be lost ... Ahh well, I don't even make much effort anymore, as explained here in the post.
Have a good weekend Adam and all readers!
OK, got the April 18th thing, but, wait a minute, is Good Friday now Emancipation Day? WTH? And yes, that is ironic. The schools had off on Monday the 18th for their Easter holiday. You'd think the Feds would get that too, but then it takes a couple of days for my forms to get there in the mail ... and be lost ... Ahh well, I don't even make much effort anymore, as explained here in the post.
Have a good weekend Adam and all readers!
Adam Smith
Saturday - April 23rd 2022 2:31PM MST
PS: Good afternoon, everyone,
“I do remember your corrections on the actual implementation of the income tax, so please bear with me on my lame simplification.”
I wouldn't call it a “lame simplification”. Perhaps we can call it a “mainstream” or “commonly accepted” explanation.
Lame is not the right word here.
“I was surprised that the deadline is now April 18th rather than the old cruelest day, 4/15. How long has that been going on?”
The deadline to file federal taxes is on Monday, April 18, this year because the Internal Revenue Service's District of Columbia offices were closed on Friday, April 15, in observance of the locally recognized Emancipation Day.
Which is pretty ironic (or something). Don't ya think?
Mr. Alarmist wrote:
“The Code in general isn’t about raising revenue; it is about conditioning.”
There is a lot of truth in this statement.
Unfortunately, the people masquerading as “government” are conditioning people to accept their servitude.
More unfortunately, most people accept their servitude with a smile.
The people masquerading as “government” fancy themselves “masters” in a “master/slave relationship”.
Whether it's “government” skool, mask mandates, mandatory vaccination or the so called driver's license...
It's all the same conditioning for the same reasons.
It's all an infringement on our rights, sovereignty and freedom.
I blame Wickard v. Filburn and the insouciance of the American people for the predicament we currently find ourselves in.
So buy police brutality bonds and pay your Victory Tax comrades!
Your work will set you free!
☮
“I do remember your corrections on the actual implementation of the income tax, so please bear with me on my lame simplification.”
I wouldn't call it a “lame simplification”. Perhaps we can call it a “mainstream” or “commonly accepted” explanation.
Lame is not the right word here.
“I was surprised that the deadline is now April 18th rather than the old cruelest day, 4/15. How long has that been going on?”
The deadline to file federal taxes is on Monday, April 18, this year because the Internal Revenue Service's District of Columbia offices were closed on Friday, April 15, in observance of the locally recognized Emancipation Day.
Which is pretty ironic (or something). Don't ya think?
Mr. Alarmist wrote:
“The Code in general isn’t about raising revenue; it is about conditioning.”
There is a lot of truth in this statement.
Unfortunately, the people masquerading as “government” are conditioning people to accept their servitude.
More unfortunately, most people accept their servitude with a smile.
The people masquerading as “government” fancy themselves “masters” in a “master/slave relationship”.
Whether it's “government” skool, mask mandates, mandatory vaccination or the so called driver's license...
It's all the same conditioning for the same reasons.
It's all an infringement on our rights, sovereignty and freedom.
I blame Wickard v. Filburn and the insouciance of the American people for the predicament we currently find ourselves in.
So buy police brutality bonds and pay your Victory Tax comrades!
Your work will set you free!
☮
Moderator
Saturday - April 23rd 2022 7:44AM MST
PS: Thanks for that info on FATCA, Alarmist. It sounds like your taxes are pretty complicated. Yeah, you may be right per treaty or some regulations, but if you end up spending many hours over some years explaining or worrying about it, it might not be worth it.
Your AMT foreign tax credit thing reminded me of the AMT that (I think?) may be a thing of the past now. I think I was supposed to have done that for at least one tax year. I got the form, back when you went to the Federal Bldg. It was too nice a weekend to waste on that crap though. F__ that s__t! I went outside hiking and have been none the worse for it - thank you, Statue of Limitations, with the nice plaque on the base: "Give me your poor, huddled masses, your shysters, your Guatemalan illegals, all yearning for that early refund check" - H & R Lazarus
Your AMT foreign tax credit thing reminded me of the AMT that (I think?) may be a thing of the past now. I think I was supposed to have done that for at least one tax year. I got the form, back when you went to the Federal Bldg. It was too nice a weekend to waste on that crap though. F__ that s__t! I went outside hiking and have been none the worse for it - thank you, Statue of Limitations, with the nice plaque on the base: "Give me your poor, huddled masses, your shysters, your Guatemalan illegals, all yearning for that early refund check" - H & R Lazarus
The Alarmist
Saturday - April 23rd 2022 6:04AM MST
PS
The investment bank that first brought me over paid for my tax prep, which was pretty much a part of most expat packages in the finance biz. When I “localised” I took on the burden of doing my own taxes, but it’s not as hard as one might think, and I actually learned my former Big 6 preparer left a lot of money on the table. I found ways to legally claw back money and simplify things, e.g. when they eased up on the Alternative Minimum Tax Foreign Tax Credit limitation, there was no incentive to shielding a chunk of my income by using the Foreign Earned Income Exclusion, which is great for those who earn less than its limit, but impose a number of burdens on those who earn more that make it worthwhile to now simply use entirely the Foreign Tax Credit for any given year. What FTC you don’t use in one year simply gets carried forward up to ten years, which ultimately would be useless, so why bother “conserving” FTC by using FEI?
I mis-spoke earlier, there are a few lines of instruction to use the cryptic and un-numbered form I mentioned below. You have to dig deep into the Treasury Regs to figure out how to take a treaty-based position that isn’t already ruled out in the Treasury Regs. For someone at my size of liability, there are few tax preparers who dive that deep. You need to be a far bigger fish or a major corporation to get the necessary expertise. I’ve waded into waters way over my head, but as of yet haven’t drowned. You’ve no doubt heard stories that the same taxpayer could file three different returns and have any one of them be accepted because all three followed valid regs that might blissfully exist in juxtaposition to one another. If you cite a valid authority and have valid facts and followed required formalities, you will likely make your case.
FATCA became a big issue ten years ago, when the IRS insisted on banks around the world reporting details of US Persons’ accounts to the US, either directly or via the foreign government. This was in addition to all persons with foreign financial accounts totalling more than $10k already for years being required to file FBARs with Treasury’s FINCEN annually. IOW, double reporting.
That’s all fine and good, but for a while, many Americans were unbankable in their host country. because local banks didn’t want the additional administrative burden snd potential legal risks of violating local banking laws. I was fortunate to have already been established abroad, though for a couple years I couldn’t open any new accounts.
The net effect of this was a marked decline of American expats in a number of places. Yes, London is still crawling with Americans, but couple FATCA with language requirements, and there are far fewer Americans in any significant executive poitions abroad, which has only served to weaken the US’s soft power abroad. The UK was always much more enlightened about this, which is one reason one always found more UK expats in positions of influence in many of the world’s major markets and cities, though BREXIT is huting them in the EU, which doesn’t really matter as the EU continues to regulate and “green” itself into extinction.
US policy makers seem to think they can sit in DC and snap their fingers and tell the world to jump, and the world will only ask, “How high?” I used to be highly sceptical of that approach, but given all this COVID and Ukraine nonesense, I’m somewhat surprised by the extent to which the EU and the Five-Eyes have complied, even to the severe detriment of their own citizens. But as some have noted, at least half the world’s population live in countries with governments that don’t even bother to inquire about the height, much less actually jump.
The investment bank that first brought me over paid for my tax prep, which was pretty much a part of most expat packages in the finance biz. When I “localised” I took on the burden of doing my own taxes, but it’s not as hard as one might think, and I actually learned my former Big 6 preparer left a lot of money on the table. I found ways to legally claw back money and simplify things, e.g. when they eased up on the Alternative Minimum Tax Foreign Tax Credit limitation, there was no incentive to shielding a chunk of my income by using the Foreign Earned Income Exclusion, which is great for those who earn less than its limit, but impose a number of burdens on those who earn more that make it worthwhile to now simply use entirely the Foreign Tax Credit for any given year. What FTC you don’t use in one year simply gets carried forward up to ten years, which ultimately would be useless, so why bother “conserving” FTC by using FEI?
I mis-spoke earlier, there are a few lines of instruction to use the cryptic and un-numbered form I mentioned below. You have to dig deep into the Treasury Regs to figure out how to take a treaty-based position that isn’t already ruled out in the Treasury Regs. For someone at my size of liability, there are few tax preparers who dive that deep. You need to be a far bigger fish or a major corporation to get the necessary expertise. I’ve waded into waters way over my head, but as of yet haven’t drowned. You’ve no doubt heard stories that the same taxpayer could file three different returns and have any one of them be accepted because all three followed valid regs that might blissfully exist in juxtaposition to one another. If you cite a valid authority and have valid facts and followed required formalities, you will likely make your case.
FATCA became a big issue ten years ago, when the IRS insisted on banks around the world reporting details of US Persons’ accounts to the US, either directly or via the foreign government. This was in addition to all persons with foreign financial accounts totalling more than $10k already for years being required to file FBARs with Treasury’s FINCEN annually. IOW, double reporting.
That’s all fine and good, but for a while, many Americans were unbankable in their host country. because local banks didn’t want the additional administrative burden snd potential legal risks of violating local banking laws. I was fortunate to have already been established abroad, though for a couple years I couldn’t open any new accounts.
The net effect of this was a marked decline of American expats in a number of places. Yes, London is still crawling with Americans, but couple FATCA with language requirements, and there are far fewer Americans in any significant executive poitions abroad, which has only served to weaken the US’s soft power abroad. The UK was always much more enlightened about this, which is one reason one always found more UK expats in positions of influence in many of the world’s major markets and cities, though BREXIT is huting them in the EU, which doesn’t really matter as the EU continues to regulate and “green” itself into extinction.
US policy makers seem to think they can sit in DC and snap their fingers and tell the world to jump, and the world will only ask, “How high?” I used to be highly sceptical of that approach, but given all this COVID and Ukraine nonesense, I’m somewhat surprised by the extent to which the EU and the Five-Eyes have complied, even to the severe detriment of their own citizens. But as some have noted, at least half the world’s population live in countries with governments that don’t even bother to inquire about the height, much less actually jump.
Moderator
Saturday - April 23rd 2022 3:47AM MST
PS: We do sometimes post about the small incidents of stupidity, SafeNow. I consider Mike Tyson a celebrity rather than a sports figure at this point, and I hate following celebrities. However, that's a pretty good candidate for the site.
SafeNow
Saturday - April 23rd 2022 1:50AM MST
PS
O/T, but I must say, how can a Peak Stupidity website not at least mention the fellow who thought it would be a good idea to basically get into a fist fight with Mike Tyson? I guess because it’s not something institutional, it’s just one guy. But then again, a lot of people see something like this, and at some level, are emboldened to take stupid risks.
O/T, but I must say, how can a Peak Stupidity website not at least mention the fellow who thought it would be a good idea to basically get into a fist fight with Mike Tyson? I guess because it’s not something institutional, it’s just one guy. But then again, a lot of people see something like this, and at some level, are emboldened to take stupid risks.
Moderator
Friday - April 22nd 2022 5:16PM MST
PS: "The date tax is due should coincide with tax freedom day (the day you have to work until to cover tax liabilities)."
That might just push it into July for some poor bastards, Mr. Corrupt. ;-}
That might just push it into July for some poor bastards, Mr. Corrupt. ;-}
Al Corrupt
Friday - April 22nd 2022 10:27AM MST
PS
The date tax is due should coincide with tax freedom day (the day you have to work until to cover tax liabilities).
The date tax is due should coincide with tax freedom day (the day you have to work until to cover tax liabilities).
Moderator
Friday - April 22nd 2022 9:07AM MST
PS: Bill, first of all, mine IS pretty simple, but with the calculations, looking up payment options, getting the paperwork together (W-2s, stuff from the bank - interest is PEANUTS, but I still include it), writing the check, etc, it still took me that hour and half.
Secondly, I don't itemize, and if won't help most taxpayers now, as the standard deduction is $25,100 (married, jointly) if I'm remembering right from a few days ago. How do you get that high without a hell of a mortgage payment, other loans, and business stuff? As you wrote, maybe that's only 1% of individual taxpayers.
Would those 1% be the only ones bringing that average up to 24.9 hours? I know people whose taxes are as simple as mine who still gather up stuff and go to the tax preparer, so maybe not too much more time spent, but money.
As fo your point about the people with complicated taxes, I don't see a difference though between your "reducing" one's taxes and paying them. I mean, if you are due all that legally, then you damn sure ought to make sure you get it. I have been slack enough myself to probably have missed a few breaks back when I did itemize, but why pay them more? So it's either got to be done (by somebody) or you pay the US Gov't even more of your hard-earned money.
You could say that all the BS itemizing, deductions, credits, and other complications should be eliminated, and I would agree with you completely. Better yet, scrap the whole idea of personal income tax.
You did bring up something in my mind - why not the EZ for mine? I can't remember, but at some point a few years back, I noticed it was missing something we needed to fill in for credit.
Secondly, I don't itemize, and if won't help most taxpayers now, as the standard deduction is $25,100 (married, jointly) if I'm remembering right from a few days ago. How do you get that high without a hell of a mortgage payment, other loans, and business stuff? As you wrote, maybe that's only 1% of individual taxpayers.
Would those 1% be the only ones bringing that average up to 24.9 hours? I know people whose taxes are as simple as mine who still gather up stuff and go to the tax preparer, so maybe not too much more time spent, but money.
As fo your point about the people with complicated taxes, I don't see a difference though between your "reducing" one's taxes and paying them. I mean, if you are due all that legally, then you damn sure ought to make sure you get it. I have been slack enough myself to probably have missed a few breaks back when I did itemize, but why pay them more? So it's either got to be done (by somebody) or you pay the US Gov't even more of your hard-earned money.
You could say that all the BS itemizing, deductions, credits, and other complications should be eliminated, and I would agree with you completely. Better yet, scrap the whole idea of personal income tax.
You did bring up something in my mind - why not the EZ for mine? I can't remember, but at some point a few years back, I noticed it was missing something we needed to fill in for credit.
Bill H
Friday - April 22nd 2022 7:28AM MST
PS Well, actually, the tax payment form itself is extremely simple and takes less than 10 minutes to fill out. Form 1040EX is simplicity itself. Fill out half a dozen boxes with numbers that are right there on your W2. Boom. Done.
All of the complexity, form filling and receipt keeping is for the purpose of NOT PAYING taxes. You fill out a form for ITEMIZED DEDUCTIONS and provide documentation, but that is optional and is for the purpose of REDUCING the tax you pay. You don't have to fill it out and don't have to keep any receipts. In fact, only about 1% of taxpayers do save any money by filling it out.
So, of all those onerous hours, labor and accountancy costs, the vast majority are optional and are not for the purpose of paying taxes but are for the purpose of AVOIDING paying taxes.
Sorry to be contrary here, I'm usually 100% on board with you in this forum.
All of the complexity, form filling and receipt keeping is for the purpose of NOT PAYING taxes. You fill out a form for ITEMIZED DEDUCTIONS and provide documentation, but that is optional and is for the purpose of REDUCING the tax you pay. You don't have to fill it out and don't have to keep any receipts. In fact, only about 1% of taxpayers do save any money by filling it out.
So, of all those onerous hours, labor and accountancy costs, the vast majority are optional and are not for the purpose of paying taxes but are for the purpose of AVOIDING paying taxes.
Sorry to be contrary here, I'm usually 100% on board with you in this forum.
Moderator
Friday - April 22nd 2022 3:24AM MST
PS: Yes, Alarmist, Uncle Sam is a real stand-out in the world in how he, via the IRS, treats his citizens abroad. I'm curious how you have handled it. Would going and hiring the preparer the one time, under duress, mean that you can use the information learned for subsequent years?
This FATCA stuff may have been implemented 20 years back or so, as I seem to remember that the Wall Street Journal wrote a whole lot about it. It was (a little over) 20 years ago when I used to read that - only for a couple of years, so I'm going by that memory. As I recall, this is about keeping track of Americans' money too, right? No privacy, no shelter from Uncle Sam. (Even the Swiss caved, from what I read.)
The conditioning, or Social Programming aspect of the income tax law is #3 on the list of evils in that other post.
This FATCA stuff may have been implemented 20 years back or so, as I seem to remember that the Wall Street Journal wrote a whole lot about it. It was (a little over) 20 years ago when I used to read that - only for a couple of years, so I'm going by that memory. As I recall, this is about keeping track of Americans' money too, right? No privacy, no shelter from Uncle Sam. (Even the Swiss caved, from what I read.)
The conditioning, or Social Programming aspect of the income tax law is #3 on the list of evils in that other post.
The Alarmist
Friday - April 22nd 2022 12:45AM MST
PS
If you’re an expat, you can count on some degree of double taxation, with Uncle Sugar winning out in any case; but there is a mysterious form referred to in one of the relevant pubs that you can use to further reduce Ucle’s take if your host country won’t give on the take it is assured by treaty with Uncle. However hard you look, however, there are no instructions on how to use the form to calculate the additional credit. You either hire an expensive preparer to figure it out, figure it out for yourself, or simply give up and pay twice. I will tell you that the treaty provision treatment of citizens abroad is a disincentive for them to invest or save in the US, which is a shame.
The Code in general isn’t about raising revenue; it is about conditioning.
If you’re an expat, you can count on some degree of double taxation, with Uncle Sugar winning out in any case; but there is a mysterious form referred to in one of the relevant pubs that you can use to further reduce Ucle’s take if your host country won’t give on the take it is assured by treaty with Uncle. However hard you look, however, there are no instructions on how to use the form to calculate the additional credit. You either hire an expensive preparer to figure it out, figure it out for yourself, or simply give up and pay twice. I will tell you that the treaty provision treatment of citizens abroad is a disincentive for them to invest or save in the US, which is a shame.
The Code in general isn’t about raising revenue; it is about conditioning.