patrick.net

"An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork."

Overlooked My ASS!!!

Everyone was Dared to read the Frucking thing!

Time to move to China. No tickee, no problem.

I'm thinking that it's gonna be amendment time.

E-man says

But then again, I will figure out a way to profit from these bills instead of whining and bitching about it.

Agreed. Unfortunately, that is all a business can do. This sort of nonsense forces a small business to become skillful at working the system, rather than providing real value to the world.

After hearing about this latest wave of totalitarianism, I hired a research team. I have asked them to look into how I can move my company offshore and whether it would make sense for me to drop my US citizenship. We have collectively lost our ideals of liberty. The effect: noone wants to deal with the US government anymore.

Our government is chasing away investment capital and jobs from the US faster than they can print money. It is a sad state of affairs indeed.

That link gives new meaning to "Don't 1099 Me, Bro".
Looks like we should be getting an injection of healthy bodies into the insurance pool thanks to Mom, Dad (and businesses, large and small). Some 1.2 million young adults are expected to sign up, more than half of whom would have been uninsured.
I am so idealistic I'm convinced this will slow the growth of health insurance premiums. Maybe I should just buy healthcare stocks instead. Help me Henry J. Kaiser, you're my only hope...

300B in "lost" revenue. PIA, but people will get used to decently quickly I'm betting. It will take some time for everyone to understand and process these things, but in the end it'll probably bring a little more honesty to the system. Make it a little more troubling to hide income, etc.

If your competition is getting 1 up on you because they're under reporting taxes, this should help you.

Of course, if you're getting 1 up on them by avoiding the taxes.. well this could be a problem.

Lots of extra paperwork all around, hopefully it'll become more streamlined before it gets fully instated.

SF ace says

You want to enforce the tax laws but unwilling to give the IRS the tools to do it. Can’t have it both ways as we know people will not self comply if they know they will not get caught.

That's not what I want at all.

The income tax was once, and should still be unconstitutional. It is a bad idea on so many levels.

As you already pointed out, the only way to enforce an income tax is to strip citizens of some of their most basic liberties, such as personal privacy from the government. Not to mention the inpractibility and inefficiency of making sure everyone complies with these rediculous rules. This 1099 crap is merely the newest of what will certainly be more unnecessary regulatory burdens and invasions into our financial privacy.

Furthermore, is is a natural law of economics that a tax results in less of something, whereas a subsidy results in more. We are taxing labor, which naturally equals less employment.

Therefore, what I want is a tax system that doesn't force people or companies to show every transaction to the government. I want a system that doesn't waste such vast human capital in enforcement. I want a tax system that doesn't limit employment opportunities.

Ya know, I hear the Greek Isles are nice this time of year...

CBOEtrader says

Therefore, what I want is a tax system that doesn’t force people or companies to show every transaction to the government. I want a system that doesn’t waste such vast human capital in enforcement. I want a tax system that doesn’t limit employment opportunities.

Do you have an example of a tax structure you'd like?

tatupu70 says

Do you have an example of a tax structure you’d like?

Sure. A consumption tax would work wonderfully. Of course we would have to cut our military budget to defense only, amongst a lot of other waste.

http://www.youtube.com/watch?v=v4KfVM5Ed3c

Peter schiff discusses income tax vs consumption tax in this video. He presents the tax system in Hong Kong as the closest real world example of his ideal.

SF ace says

ok, a national consumption tax, but at what rate ?? Will it be revenue neutral, 20%, 30%, added on top that states leverage off of federal income tax system, so another 5-10% for state on top of existing 6-9% state sales tax, so really we are looking at combined 40-50% consumption tax rate to get rid of the income tax system. Not possible.

Actually the income tax gives the Federal government only about 45% of its revenue. Cut government spending back to where it was during the big government Clinton years and we could eliminate the income tax and still have a government Clinton would be proud of. Lets start by closing down our foreign military bases and wars of occupation.

if this goes into effect i will have to pack up and move my business to another country.. thanks to the internet it will be more than possible, but this isn't looking good for America and i really don;t want to leave

CBOEtrader says

Therefore, what I want is a tax system that doesn’t force people or companies to show every transaction to the government. I want a system that doesn’t waste such vast human capital in enforcement. I want a tax system that doesn’t limit employment opportunities.

How does a consumption tax achieve any of these goals? Don't you anticipate black markets popping up with a 20 or 30% consumption tax? And that would mean wasted capital in enforcement? Seems like this would limit emplyment opportunities as well. Besides being horribly regressive...

tatupu70 says

And that would mean wasted capital in enforcement?

The problem is in the level of waste and intrusion needed to enforce an income tax. By comparison, the consumption tax is much more simple. I suggest you go read some case studies about Hong Kong.

tatupu70 says

Seems like this would limit emplyment opportunities as well.

Any tax takes capital from the productive to feed the government. Every tax is social engineering at some level. By taxing income we increase the cost of employment, thus lowering the number of employees that can be hired for the same amount of capital. By taxing consumption, we are encouraging savings rather than consumption, which is exactly the type of social engineering our backwards consumer economy needs.

tatupu70 says

Besides being horribly regressive…

Not true. We can easily get around this problem by changing the tax rates based on a need hierarchy. Basic needs like food, cheap clothing, and low income housing could go untaxed, while $100k cars could be taxed to cost $150k.

CBOEtrader says

By taxing consumption, we are encouraging savings rather than consumption, which is exactly the type of social engineering our backwards consumer economy needs.

But, if you lower consumption you are going to lower employment as well. It's really 6 of one, half dozen of another.

CBOEtrader says

The problem is in the level of waste and intrusion needed to enforce an income tax. By comparison, the consumption tax is much more simple.

OK--we'lll have to agree to disagree on this one. I think you'd have a hell of a time stopping black market transactions with a 20 or 30% consumption tax.

CBOEtrader says

Not true. We can easily get around this problem by changing the tax rates based on a need hierarchy. Basic needs like food, cheap clothing, and low income housing could go untaxed, while $100k cars could be taxed to cost $150k.

The last problem I see is that your revenues are going to be very up and down. During a recession, your tax receipts will go down to almost nothing. It would make it difficult to run a government...

tatupu70 says

But, if you lower consumption you are going to lower employment as well. It’s really 6 of one, half dozen of another.

Consumption doesn't happen in a vacuum. Consumption comes as a direct consequence of less savings. Savings results in capital, which results in more jobs as well as higher production and wealth creation per job. Therefore a decrease in consumption, resulting in an increase of savings will, over the long run, result in more jobs, higher wages per job, and a stronger middle class.

tatupu70 says

OK–we’lll have to agree to disagree on this one. I think you’d have a hell of a time stopping black market transactions with a 20 or 30% consumption tax.

Absolutely. However, nothing could be as hard as making sure that every one of our 300 million citizens keeps an honest balance sheet. To be fair, a lot of the red tape is due to the rediculous complexities of the income tax code, as opposed to the simple fact that we are taxing income. If we simply took a limited tax from everyones' salaries, without any loopholes, without tax breaks of any kind, without forcing anyone to file a tax return--we would immediately have a much more efficient system.

tatupu70 says

The last problem I see is that your revenues are going to be very up and down. During a recession, your tax receipts will go down to almost nothing.

The government should operate at a slight budget surplus as the norm to prepare for the lean years. This can happen only if we greatly restric what our elected officials are able to do. This is the purpose of the constitution.

tatupu70 says

It would make it difficult to run a government…

I don't see this as a bad thing. I am not happy with results of governments that do whatever they feel is best. A government should have a specific defined purpose, a la the constitution.

CBOEtrader says

Savings results in capital, which results in more jobs as well as higher production and wealth creation per job.

No it doesn't. Savings results in savings. In order to create more jobs, you need people who are buying things. An increase in savings by itself will not result in any of the things you claim...

CBOEtrader says

To be fair, a lot of the red tape is due to the rediculous complexities of the income tax code, as opposed to the simple fact that we are taxing income. If we simply took a limited tax from everyones’ salaries, without any loopholes, without tax breaks of any kind, without forcing anyone to file a tax return–we would immediately have a much more efficient system.

I agree 100%. Filing your return should take 5 minutes--get rid of all the crap loopholes.

CBOEtrader says

The government should operate at a slight budget surplus as the norm to prepare for the lean years. This can happen only if we greatly restric what our elected officials are able to do. This is the purpose of the constitution.

Again--I agree completely. I just think it would be difficult when revenues vary so wildly from year to year.

E-man says

Also, none of you guys responded to my question above. About 1/2 of the country still vote for Republican. One would think that 90% of the people would be voting for Democrats because 90% of the population is at the bottom of the barrel. Why is this not the case?

I think it's the social issues: religion, second amendment, abortion, etc.

E-man says

I used to work for a publicly traded company. I remember we had to comply with SOXX when the rules/regulations changed (in 2005?), and the additional amount of administrative and accounting work that we had to do was insane. Basically, we became less productive because we had to spend more time on paperwork.

Well, there's the rub. It's similar to health care in my mind. Many on here complain endlessly about fraud in Medicare and how much it costs, but when a law is passed to combat it, everyone complains about that too. Unfortunately, there is no way around it--fighting fraud costs money. What no one talks about when comparing insurance companies to Medicare is that they spend huge sums of money investigating and fighting fraud. It's worth it for them, but it's very costly. So you can thank the tax cheats for this law...

CBOEtrader says

Fuck that. I will vote with my tax dollars and citizenship. I’m dropping US, and gaining a German citizenship. Then I’ll move to Hong Kong/Latin America.

Interesting country choice. You are aware you have to be a permanent resident of Germany 8 years before you can apply for citizenship there don't you? Although that will give you plenty of time to move your assets out of country to avoid the exit tax.

bob2356 says

Interesting country choice. You are aware you have to be a permanent resident of Germany 8 years before you can apply for citizenship there don’t you? Although that will give you plenty of time to move your assets out of country to avoid the exit tax.

Way to burst my bubble, bob. No, I had no idea. All I've done towards this goal so far is to call my great aunt, who's family still lives in Aschaffenburg. She told me she would go speak with some government officials for me, and I have yet to hear back. I also have some extended family in Scotland and England. Do you know if they would allow me to be a UK citizen?

My absolute fallback would be Mexico, or Panama, where I have close living relatives. Somehow I don't think a Panamanian citizenship would allow for easy travel or international business.

Germany has roughly 50% taxes on employees, paid for by the employer.

Most countries have far stricter immigration laws. I believe italy is 18 years before you can apply.

bob2356 says

move your assets out of country to avoid the exit tax.

I just noticed this comment and decided to start a thread on it. Just a disgusting disregard for liberty!

CBOEtrader says

bob2356 says

Interesting country choice. You are aware you have to be a permanent resident of Germany 8 years before you can apply for citizenship there don’t you? Although that will give you plenty of time to move your assets out of country to avoid the exit tax.

Way to burst my bubble, bob. No, I had no idea. All I’ve done towards this goal so far is to call my great aunt, who’s family still lives in Aschaffenburg. She told me she would go speak with some government officials for me, and I have yet to hear back. I also have some extended family in Scotland and England. Do you know if they would allow me to be a UK citizen?
My absolute fallback would be Mexico, or Panama, where I have close living relatives. Somehow I don’t think a Panamanian citizenship would allow for easy travel or international business.

There's a book called how to take your assets and disappear that's still in print that is probably worth your time. It's somewhat out of date but a lot is still relevant. It has a lot of information about expat citizenships. I believe but don't know that the UK will take back if your grandparent was a citizen. Why you would trade US taxes for UK taxes is a mystery.

There's a new program here in NZ for economic relocation that is pretty liberal. Of course traveling anywhere from NZ is just a total pain in the ass. Plus the taxes here are as high as the states and the cost of living is much higher. I live here for lifestyle reasons. I got my citizenship as a hedge against things blowing completely up in the US. I also have citizenship in central america for the same reason. International travel from central america except from Mexico City is pretty poor. Based on my time in both countries I would lean toward Costa Rica over Panama. The trouble is things can change so fast in any of these countries.

Oh, please don't cash out your assets and go away. I don't know how the economy will survive without you and the wealth-creation you accomplish.

After much hunting through my books I found the other book I meant to recomend on the subject of citizenships. It's called "The Passport Report" by W.G. Hill. It's very comprehensive. I just couldn't remember the name earlier.

I don't mean to burst your bubble but being an expat is a very tricky business from a financial/tax perspective. It's really easy to get into trouble without even knowing it and there are legions of people out there who profess to be "experts" that are willing to charge for advice that may or may not be valid. I know people who have really gotten burned.