Comments on: Rich People are More Likely to Cheat on Income Tax Returns

By: fathersez

fathersez — Sat, 15 Nov 2008 08:17:12 +0000

I agree with Mark.

I think that we should also look at the aspect of allowing expenses. Businesses have a wider scope for allowing expenses as tax deductibles as opposed to the salaried guy who has so little room.

It might not be just an issue of integrity.

By: Mike

Mike — Mon, 27 Oct 2008 11:27:06 +0000

Mike (um, the other Mike) says “I thought income tax is unconstitutional, because it’s an unapportioned tax which the constitution forbids.”

Ah, but in point of fact, the constitution reads: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

That is the 16th Amendment which is, by definition, part of the constitution.

Of course, I suppose there are those who would argue that the constitution is unconstitutional. But if we assume the constitution is in fact constitutional, then the income tax is, alas, constitutional.

By: Mike

Mike — Fri, 24 Oct 2008 21:00:10 +0000

I thought income tax is unconstitutional, because it’s an unapportioned tax which the constitution forbids. Even with that, I also thought that not all the required number of States approved that amendment. Meaning, they passed it even though it’s not technically written as law. And the government is thus illegally collecting/forcing income tax from people and then jail them if they don’t pay? Quite the “democracy” I’d say.

By: Ron

Ron — Fri, 24 Oct 2008 15:00:20 +0000

I wonder what will happen when the Feds increase taxes on all these rich people? That will increase compliance I’m sure …

By: Writer's Coin

Writer's Coin — Fri, 24 Oct 2008 11:35:11 +0000

The more is at stake, the higher the probability of trying to do something about it. I’m not surprised.

By: Flexo

Flexo — Thu, 23 Oct 2008 15:49:01 +0000

Mark: “Poor” people weren’t really the focus of the study. The premise does seem obvious but the study puts numbers behind the theory to “prove” it.

By: Mark

Mark — Thu, 23 Oct 2008 15:07:13 +0000

This is kind of a pointless study since the conclusion is obvious. It’s nearly impossible for many “poor” people to cheat on their taxes since all of their income is reported on a W-2. Wealthy people have more deductions thus more opportunity to under-report income or over-report expenses.

Further, since most poor people don’t pay taxes at all, it isn’t too surprising that they have no incentive to cheat. Rich people would have far more incentive.

But, in any event, the solution is easy,–simplify the tax code so there are fewer deductions. But Congress doesn’t want to do that.

By: Kyle

Kyle — Thu, 23 Oct 2008 14:29:04 +0000

I wonder what criteria is used for “under-reporting income.” Inflating deductions or not reporting Schedule C income is obvious, but is sheltering rental income, for example, really illegal or immoral?

And what about servers/bartenders? I’ve never met a single one who reported or paid taxes on more than the bare minimum assumed on their tips. Since their tips aren’t represented on any W-2, their compliance is likely to be over-stated in this study.