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A Completely Screwed Up System
The following chart from the Congressional Budget Office (CBO) shows who pays federal income taxes in America.
It should come as no surprise that individuals with the highest incomes pay the most in taxes. The top 20% pay 94% of all income taxes according to the CBO. It should also be no surprise that the bottom two rungs (40%) of the income groups pay very little taxes. But it was surprising to me that the bottom 40% actually pay a negative income tax.
How does one pay negative taxes? Tax transfers to low income groups exceed their tax liabilities. Two examples of these transfers are the EITC (Earned Income Tax Credit) and ACTC (Additional Child Tax Credit). The following chart from the Congressional Research Service (CRS) describes the effective negative tax rate phenomenon.
For those earning up to $26,000, there are no income taxes levied, but those individuals pay FICA (Social Security taxes). The value of the tax credits available to those individuals is greater than their SS taxes. Therefore, the group, ends up with a negative tax rate.
I favor this type of income redistribution. I think high-income groups should end up supporting lower income groups. I have no problem with negative effective tax rates for individuals and households that are at, or below, the poverty line.
But….
The CRS reported:
individuals who were not authorized to work in the United States received $4.2 billion by claiming the refundable portion of the child tax credit—the additional child tax credit (ACTC).
“How is this possible?” How could illegal workers end up receiving federal tax credits? The IRS is encouraging the process.
The IRS issues two kinds of tax identification numbers. A traditional SS# is available for all legal residents. Illegal residents can obtain an ITIN (Individual Tax Identification Number). The use of ITIN has exploded 10-fold over the past decade. In 2010 3.2m people used these numbers to file tax returns and obtain refunds.
The use of ITINs is just one component of the problem. The Social Security Actuary estimated that 75% of illegal workers are using a fraudulently obtained SS# to get work. The IRS/SS knowingly collects this tainted money.
Combining the ITIN data with the 75% estimate by SSA leads to an estimate of 12m taxpayers contributing (and getting refunds) who shouldn’t be in the system at all. (Note: the Census Bureau put the number of unauthorized aliens at 11.2m in 2010.)
What happens when a cash incentive to have children is made available to people who live in the country? They have babies, of course. From the CRS:
Do existing laws permit illegal workers to get tax rebates and benefits?
For refundable tax credits like the EITC and ACTA, the answer is a very clear “No!” But that hasn’t stopped the IRS from allowing this to happen.
However, it is completely legal for an illegal worker to obtain Social Security benefits. Illegal workers who have contributed to SS (FICA taxes) for a minimum of 10 years are illegible to receive retirement benefits on the same schedule and terms as an individual who works legally. (Note: I was shocked when I first learned this, but it is true {Link}).
How many undocumented workers are there that might be eligible to get Social Security benefits? Pew answers that:
35% of unauthorized adults have resided in the United States for 15 years or more and that 28% have resided for 10 to 14 years. The report also found that the proportion of unauthorized aliens who have been in the country at least 15 years has more than doubled since 2000.
Based on the Pew numbers, 62% of the 12m unauthorized aliens will be eligible to receive benefits in their lifetimes. These workers have contributed to SS, so the law says they can get monthly checks. But the reality is that a significant percentage in this group is paying negative effective tax rates after taking into consideration the refundable tax credits described above. In the end, the lower 30% of income groups (including undocumented workers) end up “paying” for SS out of one pocket, while getting a similar sized refund check in the other pocket.
What are my points/objectives in writing about this?
- Our immigration laws (and how they are applied) are completely idiotic.
- The IRS is facilitating the problem by allowing refunds to be paid to those filing with illegal SS#s (or legally obtained, but fraudulently used ITINs).
- Stirring the pot on the issue of illegal workers and their rights to receive Social Security benefits. It is now more than two years since the Chief Actuary of the SSN, Stephen Goss, spoke about this matter (Link). This is a political issue. The country deserves an update on how big this problem is before November. The candidates should be asked what they plan to do about it. Illegal workers have contributed as much as $240Bn to SS (10% of all assets).
- Stimulate a discussion on a very complex and emotive topic.
Notes:
In my heart I have a soft spot for illegal immigrants. My father came from Europe in 1939.
I know many illegal families. I like them. They are good parents. They are hard workers. They would be happy to pay taxes as regular citizens do. They want to own property, cars and have their children get an education.
But the numbers are too large, and the consequences too significant. In the end, this about the law.
So I don’t know what to do.
.
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The IRS is gladly taking the $ paid in under fake SSN's as well as STOLEN SSN's. And a lot of illegals don't do tax returns under either their bad ssn or itin because they are afraid of getting busted. I know several people who have had nightmare experiences because someone else has earned income under their SSN. I don't do taxes anymore but have done so a lot in the past - I have worked with people that the state/feds say they owe for income they have on record but they never worked for (cause some illegal has their ssn). One guy had collected unemployment for about 8 mos. and then they wanted some of that back because they had income on record that they based his bene's on that wasn't his. The whole ITIN system is b.s. - I'm just rambling now - FUBAR.
Ok, more coherently now, I'd like to know the % of illegal workers that really file returns. I'm willing to bet it's low as the net paycheck is still good $ to them that a lot of them are sending home - but they have withholdings under a fake/stolen ssn that the IRS keeps. And lets be clear - we're talking about Mexicans predominantly. Illegals aren't sneaking in from Laos or Nigeria undocumented. From what I understand, some or many are leaving - you got 15 guys in a house and now 6-7 aren't working, the model's not so great any more. Main point is TPTB (at least the taxing authorities) obviously want them here. When they go in to file and get an ITIN with a fistful of W2's with a bogus SSN, it's announcing "hey - I been working here illegally" - documented. So if they were taking a loss overall the IRS would be handing info over to the INS and they'd be gone. Totally fucked up situation. Wonder why SSA doesn't send out benefit statements anymore. . . hmmmmm. And just to be clear, I have nothing against Mexicans, legal or not. I know too many American citizens of Mexican descent (like I'm a mick/dago) that routinely get pulled over for driving-while-Mexican - totally FUBAR.
This won't be popular here but ole Pat is looking more and more right, about most things every year:
"The majority of Latinos, African-Americans, immigrants and young people 18 to 25 pay no income taxes yet enjoy a panoply of government benefits. Does not self-interest dictate a vote for the party that will let them keep what they have and perhaps give them more, rather than the party that will pare back what they now receive?"
Now I have no use for either major political party, but Bruce is correct: "...the numbers are too large, and the consequences too significant. In the end, this about the law."
http://www.humanevents.com/2012/07/27/in-the-long-run-is-the-gop-dead/
HELP!
In the end, this about the law.
The law?
Like the 4th amendment, which is publicly trashed EVERY DAY, and no one gives a damn?
Like a dozen or so wars with no declaration?
Like supereme court justices inventing reasons to uphold unconstitutional legislation?
Like assasinating citizens without a trial?
We live under tyranny; the law stopped mattering a long time ago.
I know you hate all things government, but think about why these laws are ignored.
The 4th is violated mostly due to drug offenses. The drug war is a giveaway to the prison industrial complex and the pharmaceutical industry.
Wars are fought because large corporations make zillions.
Justice Roberts is a corporatist, so he upheld the health care law that benefits hospitals and insurance companies.
The tyranny you detest is funded, dictated and controlled by private wealthy individuals who control cartels that exist outside of government. Wake up and get mad at the disease rather than the symptom ape.
There were wars long before there were corporations. Let's not waste our time on diversions that make us sound like crackpots. Our problem is that we have too much democracy, and not enough constitutional republic. It's obvious from looking at the tax distribution - clearly progressive tax is a vote buying mechanism, along with bloated government spending, and the endless proliferation of new laws and regulations. Laws are too easy to institute - simple majority rules, with no restraint, but no one sees that we're all in the minority on something. The mistake the founders made is that they did not limit the ability of congress to pass laws strongly or explicitly enough. What we need is a constitutional amendment - or a new constitution - that makes it much, much harder to pass laws. That is the source of all tyranny in a democratic (i.e., elected, majority vote based) system - the endless proliferation of laws and regulations that expand the power of the state, all with the approval of 'the public'.
I don't know 'changing the constitution' would help when we have these assclowns in office. They cannot follow the one we have. They cannot even pass laws that abide by the preamble of the Constitution much less the various articles.
So long as a system for controlling everyone exists, it will be gamed by someone.
The only way to eliminate corruption in high places, is to eliminate high places.
Do you really think that's possible? Most people are sheep even in the information age. Hitler, Stalin, Mao, Castro, Ceaser et al all came to power because the average person wants daddy to tell them what to do. Take away our current government, and one of those fucks will spring up and take its place. Your proposed solution requires that humanity as a whole change. My proposed solution which requires major change to the current system but not outright gutting of it works within the reality that most people are sheeple. They would rather watch footlball or track than engage in political debate or pay attention. They join tribes of Red and Blue. In my view, the Founding Fathers knew this and developed the best system they could devise to avoid a return to a King-based system.
The only societies that have ever defended freedom were agrarian ones in which the land was divided into small freeholdings. Oh, and Athens.
A system composed of vast industrial cities and corporate/feudal landholdings in the countryside can be nothing but authoritarian.
"Do you really think that's possible?"
Oh most definitely. The slave-driving elites can bend over and kiss it goodbye. Almost anyone with a pulse senses that something is about to break.
Anyway big-guy-in-the-sky will not let this wild party continue much longer... "believe me!"
Do you really think that's possible?
I really do.
There's nothing government does by monopoly that can't be done in open markets, subject to the corrective mechanism of competition. (Law is a prime example of this.) Policemen, road-builders and firemen are just guys who show up to do a job; find a different way to pay them and the same things will get done.
My solution doesn't require humanity to change - it will merely leave them all responsible for themselves, which is how they grow.
Remember, we're already in a situation where the strongest group of thugs controls everyone else.
And FWIW, I'm certain as I can be that Jefferson would be an anarchist if he were here today. He wasn't far from it in his time.
"My solution doesn't require humanity to change--it will merely leave them all responsible for themselves, which is how they grow."
Who's "they"? Some humans can grow, but some can't. THAT'S the reality of the world that utopian Randians are unable or unwilling to grasp. Human beings aren't a cookie-cutter species of supermen who simply need to throw off the evil shackles of government to reach Nirvana--we're highly developed, highly intelligent ANIMALS who are subject to the same rules of nature that apply to every other species of animal. WE'RE NOT SPECIAL. We're imperfect and prone to bad judgment, weakness and death, and no unfettered free-market fairyland is going to change that. However, if you don't believe me, you can start killing the handicapped and other "subhumans" in an effort to bring about your cherished master race, but I should warn you: Some German guy tried that about 70 years ago, and it didn't work out too well for him...
My concern -- supported by millenia of history -- is that people don't learn. They support the daddy figure who won't make them think for themselves and who promises them whatever they want. Jefferson was a great man who wrote much of the Declaration of Independence and who participated in our government as its leader. I suspect if he believed anarchy was the answer he would have said so then. He had a vision. We've fucked it up for sure, but the answer is not to open the doors to tyranny in the truest sense.
You can take comfort in the fact that REALITY ultimately cannot be prevented by opinions, hopes and dreams----however well-intentioned or passionately they are held. Those egalitarians and other wishful thinkers get to reap what they sow. Look at any major inner city. Look at society in general. If anyone says we are "evolving", they are naive and a fool. Clearly it's the reverse.
Look, I don't want to argue for the sake of arguing.
My point is this: We ALREADY have tyranny. We ALREADY have the "nightmare of anarchy" scenarios where the strong enslave the week. We just call it government, and pay a class of professionals to teach everyone that it is a righteous thing, and that anything else (if, god forbid, you talk about it) would be a bloody apocalypse.
It's all bullshit, all conditioning, all fear. Individuals are BETTER than rulers.
It's all but insane that we just line up and obey people who we know to be liars and thieves, and systems that kill by the tens of millions. It is a thoroughly barbaric condition. We can do better... easily and by a wide margin.
I agree about the problem. I really wish the solution were so easy. Humans have been trying it for thousands of years and until recently we weren't even close. Perhaps it is like 12 monkeys.
We are bound to keep repeating the same mistakes.
Over and Over.
and Over.
That's you repeating the same mistakes.
Some of us are trying to stop that, it's time to give government back to the animal world.
infra-red night vision scopes on large caliber rifles solves any governments problems. Thats how I interpret the Constitution, Bill of Rights and Declaration of Independance
Really? How about they just plug in your address on Google Maps and drop a smart bomb on your rebel ass? Or they send in a drone with satellite tracking your latest gunfire. How's your night vision scope going to fight that? You know all the flag waving assholes that have been cheering on the MIC for the last 40 years to fight the commies and terr'ists while liberals and hippies cried foul? Reagan's ghost thanks you for your support of star wars. Feel safer now?
Fuck you Troll
Thanks. And sorry that your entire belief system is a fucking joke on you.
You're the one that supports government, the sandbox for sociopaths to play in.
Do you understand that the system by which you wish people to interact originated in the non-technological animal world. It worked in a world of picking berries, it doesn't work now.
Giving government to the sociopaths is an example of giving a loaded gun to a chimp.
This is all about the law. But then the first thing you need to do is fix the law. If the law is a very bad and stupid one, as is the case currently with immigration law, then breaking it is not morally reprehensible. As Aquinas or some ancient said "Lex mala, lex nulla". A bad law is not law, or bad laws do not carry the force of law or however you want to translate it.
Immigration is on balance a very positive force economically and is especially desirable for historical reasons in a country such as this that was founded by immigrants looking for a place they could work and live free from the arbitrary legal caprice of others. My own formulation on immigration is that we should accept exactly as many immigranst as can be properly acculturated every year, and I do not just mean skilled or rich ones. That number is MUCH higher than the current legal limits. You can obviously put in thresholds so that all immigrants do not come from one geographical location (fraught with potential I realize for shenanigans). Make sure they are acculturated. Then deal with nonsense such as Bruce has pointed out. And then you can also talk about enforcing the law, because the law will be good law.
Will any of this happen as it should? Will the right things ever be done? Well we are talking about the government right? 200+ years revmoved from the ethos in which the ideas that animated its founding flourished. There is your answer.
Ron "spics are the new whites" Unz told me he didn't read this site. Looks like he lied.
Don't worry Bruce this whole fkin thing is going to break apart soon enough. All you can do is hope when they rebuild it they find a better way.
In the meantime, why not just forget about the Visa process which can take MONTHS for genuine folks who just want to spend money in the US? Its easier for the bad guys just to walk over from Mexico or drive down from Canada. But, of course, tourists are not around long enough to vote??
LOL. Unless WE rebuild it - by first tearing down the Federal Central Planning Apparatus - you can be damned sure they will build an even worse replacement.
In fact, if you look at what parts they've recently constructed (DHS, TSA, FEMA, MERS, MFG, Patriot Act, NDAA, 30,000 drones, Utah data centre, eminent domain, closed-down cities, talk of cashless society, etc), you'll see where they are heading.
December 21st, 2012. Place the entire government under citizens arrest. We'll call it "citizens arrest day"
Where is Gomer when we need him?????
i hope it's a different they
Home of the brave and land of the El Stupido
Nothing a failed massive tax increase can't cause. Europe is in the midst of a massive tax revolt. One would have to be delusional to think "it can't happen here" with deficits and corruption such as it is.
I disagree. There are isolated protests against "austerity" -- but even those protests are promoted behind the scenes to keep governments insanely spending on the track of self-destruction, rather then actually "doing an Iceland".
One cannot bring in more centralisation to the Politburo as a "solution", unless one has first completely destroyed the credibility of the current national governments. The European national governments, including Germany, are being "guided" to self-destruct with unrepayable debt.
+ 100 i-dog!
look there is a chikafil or some other nonsense
Bruce, good research, "comme d'habitude". and thank you.
And you are talking yourself out of your New York social liberal mindset. Please continue, and look esp. at the vinyards to the west of Ithaca. (no advert at this time, but the Dr. thingie is quite good)
This is not to diss anything wrt actual charity. However, charity through the .gov (that oh by the way, keeps the polz in charge) isn't charity. It is confication.
Good people are good. Their claim on a kids work? Depends on where they came from. I grew up in eastern MA, before the "welfare reform" went through. Back then, each town/city took care of its own. Those that took care of their locals, why, the kids were taken care of. Those that were "liberal" with the entrance criteria, bought more than their share of supplicants.
Adam Smith was right. Economics is what it is, it just works its ways according to the au courant rules.
- Ned
I vote that we get rid of Goverment entirely, and forget about this nonsense
hey asshole, there are countries in africa with little to no functioning govt. Have at it hoss, move there and see how you like it you fucking idiot.
Please check out Rousseau and figger out how that'd work. You could found another school at NYU with your results. Go for it!!!
- Ned
Rousseau wrote fantasy, Hobbes a dark tale of fears.
If you want to recommend a political theorist, make it John Locke.
I would reccommend Alfred E. Nueman over both Locke and Hobbes
CH1, why a greenie on you Sir or Madame. However, Rousseau wrote about what eventuated as the Frog "revolution" and Hobbes told the dark tale of "if we go down these paths, here are the results."
And I commend Locke to all and sundry; just that this crowd in power is on a coordinated assault v. personal property results, rule of law, ...
good on ya
- Ned
this crowd in power is on a coordinated assault v. personal property results, rule of law, ...
Sure can't argue with that.
Peace.
If Governments mined Gold instead of printing paper money, are you going to tell me we would still have a debt?
Anyone that seriously believes that money is created as Debt needs professional help. Money is created as credit. The "Debt" is a scam used to trick you in to paying taxes. The government is double dipping.
Still don't get it?
JESUS FORFEND! It isn't about debt. Its about creating as many parasites as possible whose vote can be bought with a few bucks, a 40 and some blow. Then, the purchaser of same can steal millions while handing out this pitance to cretins who really should all be(and eventually will be) victims of Darwin. Ignorance and willful stupidity has a steep price.
FORWARD SOVIET!
"...so I don't know what to do."
Anyone knows, what to do?
Come CivilWar II, the wetbacks will be leaving. Some vertical, some horizontal. Mudsharks will also be dealt with harshly. This Jew-mongrelized country is in need of serious racial rectification.
America to the Americans.
Europe to the Europeans.
Asia to the Asians.
Maybe time for Indo Europeans to packed up from the places they are occupying to go back where they belong: Asia.
Would bring fresh air to the world.
Would bring fresh citizenism to the world...?