Trying hard to rile up Pat today. According to yesterday's USA Today taxpayers with adjusted gross incomes of $500,000 to a million bucks under report their income by 21%, the highest under reporting of any segment of taxpayers. The ones with the lowest score of under reporting? Those with adjust gross incomes of between $20,000 and $25,000 who under report their income by 5%. $25,000-$30,000? 6%. $200,000-$500,000? 20%. What makes this even more interesing is the chances of someone earning over $500,000 had their chances of being audited fall by 36% in the last year. Yup, the taxpayers with the highest cheating rate had their chances of being audited reduced by the greatest margin of any segment of the population. By the way the overall chances of a taxpayer making over $250,000 being audited is 3.1%. The chances of someone making less than 50K being audited 2%. Boggles the mind.
Also in yesterday's USA Today was a survery to determine how free you are if you live in certain states. The survey measured lax drug laws, when you can and can't buy booze (Sundays?), how much the tax is on booze and cigarettes, how lax are the gun laws, seat belt laws, helmet laws, insurance requirements and so on. This was called The Freedom Index developed by the Mercatus Center of George Mason University, in Arlington, Virginia. I live in Oregon and I'm not that free because we rank 27th on the list. We have a lot more freedom than California as they came in at 47th, just three points above the least free state, New York. Texas was way up there at 5th. Mary Z will feel better about her state, Tennessee, number 7 ranking. Indiana is the 13th most free state. Wisconsin is at 37. Washington comes in at 44. South Carolina is at 30th. The top 10: New Hampshire, Colorado, South Dakota, Idaho, Texas, Missouri, Tennessee, Arizona, Virginia, and North Dakota. The bottom ten from 41-50, Connecticut, Illinois, Massachusetts, Washington, Hawaii, Maryland, California, Rhode Island, New Jersey, and New York.
The questions for the day. Are you free enough to cheat on your taxes? Seriously, does anything about either of these stories suprise you?
May you be free today and free from IRS audits forever.
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11 comments:
Yep, we're free. The legislature is trying to pass legislation so we can carry concealed weapons into bars and state parks. Doesn't that make you feel good?
Also we're free enough that we don't have a graduated state income tax. Instead, we have one of the highest sales taxes in the country on almost everything, including groceries.
Keep smiling!
Well, you did it, Bill. Consider me riled! I saw the thing about the chance for audit being reduced on the highest incomes, and that riled me in advance of your post. I've been astounded by the number of people disqualified for high-ranking gov't positions because of tax problems. How on earth do these people get away with cheating on their taxes for years when the rest of us just state our income (which the IRS pretty much knows already) and pony up?
I'm not surprised that CA is way low on the freedom list. And now they're raising all kinds of taxes on us as well as keeping a Big Brother eye on our lives.
Riled? You betcha.
The stories don't surprise me, but they do disturb me. Like Pat, I was aware that the guys earning the big bucks were/are the ones getting away with cheating, using loopholes in inventive manners, basically not paying their fair share, while the rest of us, as she says, list our income and pony up the money. Back to those who can least afford it end up paying the most, whether percentage of income in taxes or for health care and the like. It makes me angry and sooner or later I hoep the American people will rebel.
I hadn't expected us to be quite so far down on the "freedom" list, but it makes sense. AFter all, SC is predominantly a fundamentalist Baptist state, with a lot of blue laws on the books for some issues. Can't buy booze on Sunday, yet our cigarette taxes are among the lowest in the nation. Gun control laws are fairly loose, as a lot of the population is still rural and there's a great deal of subsistance hunting done -- not for sport, but to feed the family. I'd be curious to see how the Freedom Index ratings compare to the populations of the states and whether they were weighted by the number of big cities in those states.
I remember when Himself was working in Africa and several of the Europeans he worked with took "holiday" in the US. And they came to him and said, in so many words, "You claim you're the land of the free, yet in no other country I've visited have there been so many rules and so many signs that say you can't do this or that, from smoking to parking to walking your dog to drinking to driving instructions." This from individuals who'd visited countries in Europe, Asia and the Near and Far East. And this was ten years ago.
We have a lot more "don'ts" than "dos" it sometime seems. I won't say none are needed, but I do think we've reached a point where laws and precedents have taken precedent over common sense. When will we learn that one cannot legislate morality and, often, cannot legislate behavior?
I forgot. We can't buy booze on Sunday either. Liquor and wine can ONLY be sold in liquor stores (not state stores, privately owned). And ONLY liquor and wine can be sold in these stores - not ice or chips or even a corkscrew. After all, some innocent soul might go in a liquor store by mistake to buy ice and wind up buy something with an alcoholic content. Sighhhhhhhh
Hi Mary Z
I was surprised what things were in the freedom index because they all seemed things that were dangerous. Like seat belts. States got points for not having a seat belt law. That is just stupid. As would be a law allowing concealed weapons into bars and state parks, especially the state parks where kids might be playing.
Bill
On our news tonight, one story was about the fact that our neighboring state's, Georgia's, legislature rejected a bill that would mandate seat belt use in pick-up trucks. Now there's some more "freedom" for us.
Hi Pat
One of the many things I like about you, is your passion.
I promise the next post I do will be to calm you down!
Bill
Hi Dr
I was kind of surprised that S.C, was that far down also.
Very interesting story about Himself in Africa and how the locals view America. A real eye opener.
Bill
Hi Mary Z.
Utah you can't even buy booze in bars. You have to become a member of a "private club" then you can buy booze but you have to pour your own booze. The bar tenders set you up with a mix.
Their legislature is trying to change it because tourism is such a big thing in Utah and they don't want to discourage visitors from coming to their state.
Funny story about the seat belt and trucks!
Bill
In Utah you can't buy booze in bars, and in Wyoming they have drive through liquor stores. In Kansas, you can't buy cold beer, you have to get it warm, and heaven forbid you only want one can. Six packs only. I'll never figure that out.
I don't see audits on clients with $500K plus income. I do see audits on Earned Income Credit clients, with income under $40,000 a year. Those are up exponentially this year. And they're hard to prove, because those taxpayers pay cash for everything and don't keep receipts. I have contested a number of those audits, and lose on most of them, even though I truly believe those taxpayers deserved the money. Meanwhile the members of the government are blowing off their taxes. Stinks, it does.
Hi Mary
Six packs only? Kansas must want to make money from DUI tickets.
I seldmon get anyone audited but when I do it is mid income range certainly not low income range. Then there are the waitressess that get letter audits about tips.
I've never understood the IRS philosophy of audite those that can least afford to pay an adjustment.
Bill
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