What federal investment will bring us a 150% return?

probinson · Mar 27, 2023

iluvatar5150 said:
Then how do you know that it’s shorter and less complicated than the federal code?

I don't know, but I'm pretty darn sure that the PA tax code isn't 70,000 pages long.

probinson · Mar 27, 2023

iluvatar5150 said:
Then how do you know that it’s shorter and less complicated than the federal code?

The current Tax Compendium for PA, dated April 2021, is 123 pages long.

Tax Compendium

There may be additional documentation beyond that, but unless there are 69,877 pages of supplements, I think it's safe to say the PA tax code is substantially less complex than the federal tax code.

Arcangl86 · Mar 27, 2023

iluvatar5150 said:
How long is the PA tax code?

Based just on the statutory language, about 100k words. So about a tenth of the size of the Internal Revenue Code. Can't find any numbers about regulations and common law decisions.

iluvatar5150 · Mar 27, 2023

probinson said:
Fair enough. Do you think the US tax code is good the way it is, or could it benefit from some reform and simplification?

I think most processes in life could be tightened up. I don’t see taxes as particularly onerous- or rather, I see the difficulty as scaling with the payoff, so the more you suffer, the more you get back.

There's an entire $14.4 BILLION industry dedicated to tax preparation.

Because they lobby for rules that keep themselves in business. Anti-tax Republicans work to keep things onerous because it fosters a negative sentiment towards paying taxes.

Personal taxes could be made easier by making the filing process easier, with things like online filing that’s automatically populated with information from your employer and financial institutions. That would make the process easier, but it wouldn’t make the code itself any simpler.

iluvatar5150 · Mar 27, 2023

probinson said:
The current Tax Compendium for PA, dated April 2021, is 123 pages long.

Tax Compendium

There may be additional documentation beyond that, but unless there are 69,877 pages of supplements, I think it's safe to say the PA tax code is substantially less complex than the federal tax code.

Arcangl86 said:
Based just on the statutory language, about 100k words. So about a tenth of the size of the Internal Revenue Code. Can't find any numbers about regulations and common law decisions.

The compendium is not the code. The compendium is, essentially, a layman’s description of things.

From page 2 of the PA compendium:

This tax is levied on federal taxable income, without the federal net operating loss deduction and special deductions, and modified by certain additions and subtractions:

That means that they’re adopting much of the complexity of the federal code, and adding their own spin on top. That doesn’t mean theirs is less complex; it just means they didn’t write it all out a second time.

USincognito · Mar 27, 2023

probinson said:
When you say "supposed complications", you undermine your credibility. There's no doubt that any tax code that is over 70,000 pages (in 2010!) is incredibly complex.

View attachment 329464

Source: How Many Words are in the Tax Code?

95% of which doesn't apply to the average taxpayer. Additionally the tax code includes tax tables, citations of previous law, actuarial data that most citizens don't even contemplate, much less have to understand and superfluous legal jargon not found on the average 1040 or the accompanying instruction booklet. That's a disingenuous comparison.

probinson · Mar 28, 2023

iluvatar5150 said:
The compendium is not the code. The compendium is, essentially, a layman’s description of things.

Fair enough. As I said, I am no tax accountant, but I don't think you are either. To wit:

iluvatar5150 said:
That means that they’re adopting much of the complexity of the federal code, and adding their own spin on top. That doesn’t mean theirs is less complex; it just means they didn’t write it all out a second time.

Having paid income taxes in PA for the last 27 years, I can assure you that PA taxes don't even compare with the complexity of federal taxes.

iluvatar5150 · Mar 28, 2023

probinson said:
Having paid income taxes in PA for the last 27 years, I can assure you that PA taxes don't even compare with the complexity of federal taxes.

The passage I quoted was from the section pertaining to business taxes, so it's likely you never even encounter that. But what it means is that PA is saying to the taxpayer: "you figure out your income numbers for the federal taxes and just plug them into PA Box 123XYZ". Superficially, that makes the PA code appear more simple when, in reality, it's just as complicated as the federal code, because it requires the same accounting to be performed. They just don't require you to do it twice.

I'm trying to think of a good analogy - maybe building a bridge (not a perfect analogy, I concede). Designing and building a bridge is complicated. If the feds need a bridge and the state needs a bridge, it's not any less complicated to design the bridge for the state if the state allows you to make a carbon copy of the federal bridge. The state just offloads the rule making to the feds and allows you to go through those complicated processes once and reuse the results. But if the feds suddenly didn't need a bridge, the state would have to adopt for itself a bunch of those complicated rules that you used to design the bridge.

Belk · Mar 28, 2023

probinson said:
Fair enough. Do you think the US tax code is good the way it is, or could it benefit from some reform and simplification?

There's an entire $14.4 BILLION industry dedicated to tax preparation.

So it makes sense to fund the department dedicated to ensuring the industry is on the up and up, yes?

Always in His Presence · Mar 28, 2023

Fantine said:
Yes, the $80 million invested in amping up the IRS (which is currently staffed at 1954 levels--when the U.S. population was half its current size) would result in $200 million more in taxes (both figures are calculated over 10 year periods.)

The Effects of Increased Funding for the IRS

CBO estimates that portions of the Administration’s proposal to increase funding for the IRS by $80 billion over the 2022–2031 period would increase revenues by approximately $200 billion over those 10 years.

www.cbo.gov

First, 200 Billion (not million) over 10 years compared to joe's budget increases resulting in 30 trillion over ten years is not what we need. We need to cut spending. It's like saying congrats we are saving 20 a year, but spending an additional 30,000. Doesn't mean anything.

Second, in 247 years there has NEVER been an instance of the Federal Government increasing in size and it resulting in more net revenue.

We need to first balance our budget - something that the Democrats seem to run in terror from.

iluvatar5150 · Mar 28, 2023

hislegacy said:
Second, in 247 years there has NEVER been an instance of the Federal Government increasing in size and it resulting in more net revenue.

lol wut? Off the top of my head: the TVA is self-funded (i.e. it generates profit); DARPA research has resulted in trillions (maybe more?) of dollars worth of economic activity, far in excess of what it’s cost to operate; and the FDIC has provided a backstop to bank deposits that over the last 90 years have prevented bank runs and recessions that could easily have cost us trillions of dollars.

I’m not going to even ask you to support that statement because it’s obviously wrong.

hislegacy said:
We need to first balance our budget - something that the Democrats seem to run in terror from.

because it’s anachronistic and unnecessary. Republicans run from it, too - they just pay it lip service because their voters don’t understand that it’s a bad idea.

Always in His Presence · Mar 28, 2023

iluvatar5150 said:
because it’s anachronistic and unnecessary. Republicans run from it, too - they just pay it lip service because their voters don’t understand that it’s a bad idea.

I feel that is absolutely insane to say it is not necessary to spend no more that you bring in (balanced budget).

What are the benefits of not spending more than your revenue?

Deficit spending - NONE
Borrowing from foreign nations - NONE
$31,000,000,000,000 National debt - getting smaller instead of consistently growing
Borrowing from the Social Security Trust fund - ENDED securing SS from deficits
Overspending impact on inflation - NONE
Strength of the US dollar - UP

Which one of those is unnecessary or anachronistic?

Answer - NONE

Always in His Presence · Mar 28, 2023

iluvatar5150 said:
lol wut? Off the top of my head: the TVA is self-funded (i.e. it generates profit);

The Tennessee Valley Authority while owned by the Government is NOT a Federal Agency, nor is it run by the Federal Government, IOW - it was not an expansion of the Federal Government which is probably why it produces.

iluvatar5150 said:
DARPA research has resulted in trillions (maybe more?) of dollars worth of economic activity, far in excess of what it’s cost to operate; and the

Funny that the Defense Department is perhaps the only one - I stand corrected on that.

iluvatar5150 said:
FDIC has provided a backstop to bank deposits that over the last 90 years have prevented bank runs and recessions that could easily have cost us trillions of dollars.

FDIC is basically an insurance company - one that makes it's monies from the depositors of banking institutions. That is not federal revenue.

iluvatar5150 said:
I’m not going to even ask you to support that statement because it’s obviously wrong.

Even though you didn't ask - it was my pleasure to respond.

iluvatar5150 · Mar 28, 2023

hislegacy said:
I feel that is absolutely insane to say it is not necessary to spend no more that you bring in (balanced budget).

What are the benefits of not spending more than your revenue?

Deficit spending - NONE

Borrowing from foreign nations - NONE

$31,000,000,000,000 National debt - getting smaller instead of consistently growing

Borrowing from the Social Security Trust fund - ENDED securing SS from deficits

Overspending impact on inflation - NONE

Strength of the US dollar - UP

Which one of those is unnecessary or anachronistic?

Answer - NONE

You forgot the part where cutting back on federal spending enough to balance the budget shrinks the economy enough to throw us into a deep recession. The deficit in FY22 was about $1.3 trillion while the economy itself was about $23.3 trillion. Eliminating the deficit would shrink the economy by at least 5.5% (which ignores any multiplier effects from that spending). As a point of comparison, we haven't had a one-year reduction in economic growth that large since 1974. It's bigger than the contractions from either covid or the financial crisis.

U.S. GDP Growth Rate | Historical Chart & Data

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2010 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the...

www.macrotrends.net

What's anachronistic are your claims that there are no benefits to deficit spending, to debt in general, or to foreign ownership of that debt. Too much of anything is bad, but debt allows us to invest in things now that can pay returns now rather than waiting. Nations holding each others' debt creates a sort of financial MAD situation where each is invested in maintaining the stability of the other.

iluvatar5150 · Mar 28, 2023

hislegacy said:
The Tennessee Valley Authority while owned by the Government is NOT a Federal Agency, nor is it run by the Federal Government, IOW - it was not an expansion of the Federal Government which is probably why it produces.

It was founded by the government; it's owned by the government; and it's board is appointed by the President and confirmed by the Senate. It's part of the federal government. That it's not a traditional taxpayer-funded agency wasn't part of your claim, which was, "Second, in 247 years there has NEVER been an instance of the Federal Government increasing in size and it resulting in more net revenue."

hislegacy said:
FDIC is basically an insurance company - one that makes it's monies from the depositors of banking institutions. That is not federal revenue.

Again, your claim was "Second, in 247 years there has NEVER been an instance of the Federal Government increasing in size and it resulting in more net revenue." The FDIC is part of the federal government.

Let's also add the federal highway system, which cost the equivalent of about $560 billion to build and has unlocked all manner of commerce and development.

But to your original point about the IRS - their budget is about $13.7 billion, while their annual receipts are about $1.7 trillion. Did funding the IRS not enable this collection of revenues?

hislegacy said:
Even though you didn't ask - it was my pleasure to respond.

You responded, but you didn't back up your claim.

Always in His Presence · Mar 28, 2023

iluvatar5150 said:
You forgot the part where cutting back on federal spending enough to balance the budget shrinks the economy enough to throw us into a deep recession.

No, I did not - because it is not true. Government receives revenue from businesses, not the other way around. Businesses fund the Government - not the government funding businesses. We are not a socialist nation.

iluvatar5150 said:
The deficit in FY22 was about $1.3 trillion while the economy itself was about $23.3 trillion. Eliminating the deficit would shrink the economy by at least 5.5% (which ignores any multiplier effects from that spending). As a point of comparison, we haven't had a one-year reduction in economic growth that large since 1974. It's bigger than the contractions from either covid or the financial crisis.

U.S. GDP Growth Rate | Historical Chart & Data

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2010 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the...

www.macrotrends.net

From your own link:

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2010 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.

The Federal Government is not a resident producer.

A balanced budget does NOT call for lowering taxes - it calls for lowering expenses.

iluvatar5150 said:
What's anachronistic are your claims that there are no benefits to deficit spending,

nonsense - that is like saying if you run your credit card to it's limit, just increase the limit.

Families go bankrupt by doing so
Business go bankrupt by doing so

But you think the government is better off for the practice? Really?

iluvatar5150 · Mar 28, 2023

hislegacy said:
No, I did not - because it is not true. Government receives revenue from businesses, not the other way around. Businesses fund the Government - not the government funding businesses. We are not a socialist nation.

We were talking about deficits, which is government spending that's not funded with taxes. If the expenditures were paid for, there would be no debt/deficit.

hislegacy said:
From your own link:

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2010 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.

The Federal Government is not a resident producer.

The people/firms to whom government pays money are producers. Paying them money to do things adds to the GDP. Ceasing those purchases will cut GDP.

hislegacy said:
A balanced budget does NOT call for lowering taxes - it calls for lowering expenses.

No kidding. That's why I was talking about "federal spending" and why your opening comment about taxes doesn't make any sense.

hislegacy said:
nonsense - that is like saying if you run your credit card to it's limit, just increase the limit.

Families go bankrupt by doing so
Business go bankrupt by doing so

But you think the government is better off for the practice? Really?

Families and businesses take on debt all the time and do it in perfectly healthy ways. It's often more responsible to take on a mortgage than it is to continue paying rent until you have the cash to buy. It's often more responsible to take out school loans than it is to work a low-paid job until you've got enough cash saved to pay for tuition.

But the government is not a business. While it can responsibly assume debt in some of the same ways as a person or a business, it can also devalue its currency and manipulate interest rates in ways that make its debt less expensive. One of the facts that seems to go underappreciated by the "balanced budget" crowd is that inflation causes debt to get cheaper over time. My mortgage is literally worth less to the bank now than it was when I bought my house.

essentialsaltes · Jul 15, 2023

In addition, the Administration’s policies would focus additional IRS resources on enforcement activity aimed at high-wealth taxpayers, large corporations, and partnerships.

Fantine said:
Yes, the $80 million invested in amping up the IRS (which is currently staffed at 1954 levels--when the U.S. population was half its current size) would result in $200 million more in taxes (both figures are calculated over 10 year periods.)

IRS says it collected $38 million from more than 175 high-income tax delinquents in the past few months

In one case, an individual had used money owed to the government to buy a Maserati and a Bentley, and roughly 100 high-income people tried to get favorable tax treatment through Puerto Rico without meeting certain tax requirements.

But don't worry, millionaires, the Republicans have already enacted reductions in IRS funding.

NxNW · Jul 15, 2023

disciple Clint said:
Wow! Imagine if taxes were 100% the Dems would still not be happy

Taxes are the lowest they've been since Truman.

essentialsaltes · Oct 21, 2023

essentialsaltes said:
IRS says it collected $38 million from more than 175 high-income tax delinquents in the past few months
In one case, an individual had used money owed to the government to buy a Maserati and a Bentley, and roughly 100 high-income people tried to get favorable tax treatment through Puerto Rico without meeting certain tax requirements.

IRS has collected $160 million in back taxes by cracking down on millionaires

The recent effort to target high-income individuals has been boosted by an increase in federal funding provided by Democrats last year through the Inflation Reduction Act. Republicans have criticized the amount of money the IRS is getting, and future funding is uncertain.

In one successful case, an individual was ordered to pay more than $15 million in restitution last month for falsifying personal expenses as deductible business expenses, including the construction of a 51,000-square-foot mansion complete with an outdoor pool and pool house, as well as tennis, basketball and bocce courts, according to an IRS press release. The person also falsified expenses for luxury vehicles, artwork, country club memberships and homes for his children.

What federal investment will bring us a 150% return?

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IRS says it collected $38 million from more than 175 high-income tax delinquents in the past few months​

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IRS says it collected $38 million from more than 175 high-income tax delinquents in the past few months​

IRS has collected $160 million in back taxes by cracking down on millionaires​

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IRS says it collected $38 million from more than 175 high-income tax delinquents in the past few months

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