Tax Avoidance & Evasion
Tax Avoidance & Evasion |
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Message boards : Politics : Tax Avoidance & Evasion
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Presumably any loophole in the tax code is there for a public reason. C'mon!! It is almost virtually impossible to draft legislation as complex as tax laws, without some clever dick finding a discrepancy which can be exploited. Tax laws are meant to ensure that people pay their rightful dues, any loopholes are an oversight. | |
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Tell that to the lawyers & accountants! | |
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Chris, a fair proportion of those loopholes are created by those who actually write the bills. The people who write the bills are NOT the legislators. Often enough they are the lobbyists who craft the bills in draft form for the staffers to work with. | |
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Here's one loophole that needs urgent closing... | |
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One might hypothesise that the loop holes are created by one group of accountants, so that another group of accountants can earn their vastly inflated salaries finding the loopholes. Of course this is an expensive cycle, and has to be kept going, so periodically the first group has to plug a few loopholes, but in so doing create a few more in different places.... | |
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 Gary Charpentier Volunteer tester  Send message Joined: 25 Dec 00 Posts: 10320 Credit: 5,087,193 RAC: 6,400  | |
Presumably any loophole in the tax code is there for a public reason. It is trivia to craft such a law. You simply have no exceptions at all. The three line form. How much. Multiply by percent. You owe this much, send it in. Of course such taxes are called "regressive" and that is "bad" because everyone, rich and poor, has to pay the piper. Once you start putting in thousands of exceptions that is when tricky holes get into the code. ____________   | |
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Here you go -- simple and not regressive.
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Here you go -- simple and not regressive. Those numbers are pretty close to what happens on the low end of the scale. They'd work if nobody got and special treatment. But when the wealthy can deduct pretty much their entire lives we end up with a less sliding scale. Its more like a flat line. ____________ Proud member of TSWB. End terrorism by building a school  | |
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Skil, I realize that -- the trick is, as Gary suggested, the elimination of ALL special considerations (donations, home mortgage, reduced rates for dividends and capital gains and -- this one is a biggie -- health care costs. | |
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Here you go -- simple and not regressive. Barry, too simple, you know those on the low end and living at or close to the margin would be pushed over the edge with a mere 5% tax. If you are making only $1000 per month they might very well have to give up their luxuries such as electricity or medications. Oh well in the long term it could help with Social Security payments. ____________ | |
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Once you start putting in thousands of exceptions that is when tricky holes get into the code. It's got less to do with exceptions and more to do with allowances. In the UK we have certain tax deductible allowances that can reduce your tax bill. For example as an apprentice I claimed for tools and overalls, which were deemed to be a necessary expenditure relevant to my job. In later years I claimed for fees incurred as a Member of Professional Institutions, again relevant to my employment. Those were genuine expenditures. What is wrong for example, is where the rules allow a company owner to sell his own private car to their own company, which then becomes a company vehicle, and subject to all sorts of maintenance and depreciation allowances. But the person continues using it as their own private vehicle as if nothing has happened. I know people who regularly take friends out to lunch on a purely social basis, but claim the expense upon business meetings. Many people employ their wife as Company Secretary, and claim allowances on a notional paper salary that is paid. No money actually changes hands, no work is actually done, but it all helps the tax bill. How about as most people do, designate the spare bedroom as an office, and get tax relief from a proportion of the Council tax and lighting & heating costs. Good fun renting your own spare bedroom from yourself! But all perfectly legal and millions do it. It is not as simple as you owe this much, so send it in. Only wish it was. | |
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Gary Charpentier Volunteer tester Send message Joined: 25 Dec 00 Posts: 10320 Credit: 5,087,193 RAC: 6,400 | |
Here you go -- simple and not regressive. Oh so true. Even the proposed rates are still regressive. First off they don't start negative at the bottom end and they also don't go over 100% on the top end. They don't reach the Robin Hood ideal of stealing from the rich and giving to the poor. But at least we got rid of all the exemptions and deductions so no one can play games anymore. ____________ | |
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Gary Charpentier Volunteer tester Send message Joined: 25 Dec 00 Posts: 10320 Credit: 5,087,193 RAC: 6,400 | |
Once you start putting in thousands of exceptions that is when tricky holes get into the code. Exception, allowance, deduction, exemption, credit all words for some form of special treatment of some kind of funds. In the UK we have certain tax deductible allowances that can reduce your tax bill. For example as an apprentice I claimed for tools and overalls, which were deemed to be a necessary expenditure relevant to my job. In later years I claimed for fees incurred as a Member of Professional Institutions, again relevant to my employment. Those were genuine expenditures. As on this side of the pond, subject to a % limitation. However on this side of the pond the employer may elect to pay these expenses as a reimbursement to the employee. When that happens the employee can't claim them, but he also isn't taxed on the amount reimbursed. The cost is transferred to the company as their expense. What is wrong for example, is where the rules allow a company owner to sell his own private car to their own company, which then becomes a company vehicle, and subject to all sorts of maintenance and depreciation allowances. But the person continues using it as their own private vehicle as if nothing has happened. Yes. Shame the company has to pay more to keep their key employee. Oh and the IRS takes a look at that pretty hard. Seems that car is supposed to be used for business use only. When they find it isn't, taxes, interest, penalties, and maybe even custody. I know people who regularly take friends out to lunch on a purely social basis, but claim the expense upon business meetings. Don't know about HMRS, but on this side of the pond the IRS takes a very dim view of that. If you know of an event, call them on the toll free number and report it. You are eligible for a reward of 10% of what they collect and the criminal can face a custodial sentence. Many people employ their wife as Company Secretary, and claim allowances on a notional paper salary that is paid. No money actually changes hands, no work is actually done, but it all helps the tax bill. Harder to do it the USA. Can't be done for a sole proprietorship. Can't be done for a "S" Corporation. Can be done for a "C" Corporation. May be possible with an LLC. But over here money does have to change hands. The wife would have to pay social security and medicare tax. How about as most people do, designate the spare bedroom as an office, and get tax relief from a proportion of the Council tax and lighting & heating costs. Good fun renting your own spare bedroom from yourself! But all perfectly legal and millions do it. Who says it can't be? I also think we need to stay focused on legal methods, there are a whole host of criminal methods to cheat on taxes. ____________ | |
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Here's one of the criminal methods used to cheat on taxes. | |
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Yes, I know the pure cut offs involve games to get from one level to another. | |
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Yes, I know the pure cut offs involve games to get from one level to another.Barry, what do you propose to do with the people who are on the edge of the cliff, (the marginal ones), which will be kicked over? ____________ | |
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Betreger, not sure what you mean here -- in the first example I suggested, that would be an issue. The second example addresses that something like this | |
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Ex Volunteer moderator Volunteer tester  Send message Joined: 12 Mar 12 Posts: 2883 Credit: 1,158,757 RAC: 830 | |
Many people employ their wife as Company Secretary, and claim allowances on a notional paper salary that is paid. No money actually changes hands, no work is actually done, but it all helps the tax bill. I've seen this example first hand.... C.E.O's wife gets a check every week. I've never seen this woman in my life. This is "income" the C.E.O. get's a tax break on because it's being paid out as wages, instead of being taxed. Cheap scam IMO. Shouldn't be allowed. ____________ -Dave #2 | |
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Many people employ their wife as Company Secretary, and claim allowances on a notional paper salary that is paid. No money actually changes hands, no work is actually done, but it all helps the tax bill. The problem, at least on this side of the pond, is the lawmakers. First though by simple definition a company must have more than one person in it, or else that person would not have company. When I returned to the UK, I started work on a limited contract for a large organisation, as a self employed person. A self employed person is allowed to pay a lot of bills before declaring the remainder as income. Also they are allowed to pay reduced National Insurance, becuse they have to organise there own pensions etc. The Tax offices and the government assumed they were not getting their due share in taxes etc, so made a law that said if you worked as self employed for only on company for the year, then you had to be classed as an employee. As in most cases this did not suit the organisation, redundancy and penion payments etc, or the employee for the obvious. The option was for the employee to form a company, and become a sub-contractor. As that person now needs company in that company, who do they choose, the obvious choice is the spouse. And as that second employee has legal obligations it is only fair to pay them. Hence the company pays both its members. If that arrangement has tax advantages, then blame the law makers, do not try to blame the people who have to work by those rules. And don't forget the vast majority of those people are, in the greater scheme of things, not the 1%ers. | |
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Lets be quite clear here, Tax evasion is illegal, and tax avoidance isn't. I have personally never evaded or avoided any tax that should have been paid, and never will do. All the examples I gave earlier are quite properly allowed within the tax rules, but within certain caveats. The wife as the Company Secretary has a legal duty to return the company accounts each year but this is usually done by accountants on the companies behalf. However she would need to declare that income on her own tax return and pay tax on it. | |
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Message boards : Politics : Tax Avoidance & Evasion
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