Thursday, April 18, 2019

Should We Make Everyone's Tax Returns Public???

How much money do you make? How many tax loopholes do you use? Do you have a bunch of medical deductions?  Are you or your dependents suffering from some expensive and possibly embarrassing medical condition that you would rather not discuss with most people? Did you properly report all of your income, investment income and capital gains for the past year? 

What has been your rate of income growth over your lifetime? Are you well paid at your job?  Are you a lagging performer? Are you only hanging on to your job because your bosses don't think you're worth the trouble to fire because you earn so little? Do you have a job or do you instead survive on some combination of disability, savings, capital gains, and family or spousal support?  Did you retire early thanks to wise investments, business ownership and inheritances? Well if you're like most Americans I know you probably think that information and data like it is strictly between you, the IRS and any really close friends, family or intimates that you decide have a pressing need to know that information. It's not for public consumption. It's private.

Well at least one person on the NYT editorial board thinks that information should all be public for everyone.

In October 1924, the federal government threw open for public inspection the files that recorded the incomes of American taxpayers, and the amounts they had paid in taxes. Almost a century later, it’s time to revisit the merits of universal public disclosure. Democrats in Congress are fighting to obtain President Trump’s tax returns under a separate 1924 law, written in response to related concerns about public corruption. That issue could be resolved, at least in part, if Congress embraced the broader case for publishing everyone’s tax bill.
Now as then, disclosure could help to ensure that people pay a fair share of taxes. Americans underpay their taxes by more than $450 billion each year, more than 10 percent of total federal revenue. Publishing a list of millionaires who paid little or no taxes this year could significantly reduce the number of millionaires who pay little or no taxes next year.

In Norway, where tax records have been public since the founding of the modern state in 1814, a newspaper put the records online in 2001. One study estimated that the records’ greater availability caused a 3.1 percent increase in the reported incomes of self-employed Norwegians over the next three years, perhaps because they feared exposure.

Disclosure also could help to reduce disparities in income, as well as disparities in tax payments. Inequality is easier to ignore in the absence of evidence.


Another benefit would be identifying patterns of illegal discrimination against women or minorities. Lilly Ledbetter, for whom the 2009 fair pay law is named, would have learned a lot sooner that she was making less than her male colleagues at a Goodyear plant in Alabama if she could have looked up their annual incomes on a government website.

Transparency could even help to increase economic growth. People who know how much their co-workers are paid — and how much people are paid at other companies, and in other industries — can make better career decisions.

LINK

It police could enter our homes or cars whenever they felt like it instead of having to come up with warrants or claim emergency circumstances, we might reduce crime. The state could eliminate a lot of domestic violence if every residence was permanently wired for sound and video that was recorded and transmitted in real time to the appropriate law enforcement authorities. 

People could make better romantic or sexual decisions if each of us was implanted with devices that recorded the number of partners, pregnancies, and any diseases we might have. Possible partners could scan each other and then make informed decisions. Of course employers could do the same to would be employees.

We might improve many societal issues by removing people's privacy. But I don't think we should. I think that privacy--medical, sexual, and financial-- has its own value. I don't think it's anybody else's business how much money I earned or did not earn in the past year. You don't need to know which charities or non-profits I support. I don't think we better society by arbitrarily eliminating large portions of financial privacy for everyone to satisfy nosy people. I thought that this was a remarkably bad, even stupid editorial.

Rather than reduce income inequality publicizing everyone's tax returns would benefit identity thieves, grifters, kidnappers, extortionists, con men and people feuding with their neighbors or families. It might even make inequality worse because disclosure works both ways. Most professional positions have a salary range that is based in part on things like education, relevant previous experience and salary, and how badly the company needs to fill the position. If an employer knows exactly what you made in a previous job you have lost some of your leverage for negotiation. We don't need to share every fact about ourselves with everyone. The world would be a better place if more people minded their own business. Whether it's the entire tax return or just the income made public,I don't see how that is public information.


What's your take?

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