Discussion:Taxation of Illegals
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Discussion Forum Index --> General Chat --> Taxation of Illegals
| 27 September 2009 | |
| I guess everyone has an idea on this, but I had a thought that I wanted to get others opinions on. What if there were a national sales tax on everything that we purchased in the market. Then when we filed our regular income taxes we each received a credit for the sales taxes paid during the calendar year. The sales taxes we paid would be used to offset the income taxes owed. This would prevent people from not paying throughout the year and prevent illegals from not paying anything at all. Does this make sense as a way to bring illegals into the tax system? The taxpayer could track their actual sales taxes paid by keeping receipts or use a standard amount provided, whichever is higher. When it comes to the earned income credit and the child tax credit, which causes many to not owe any income tax and even get FICA taxes refunded, there can be a similar form W-5 to get the sales taxes refunded through their employer or directly from the government. Has this idea been considered by anyone in Congress yet? | |
Actionbsns (talk|edits) said: | 27 September 2009 |
| There used to be a credit on Schedule A for sales tax paid. There was a schedule to use based on income and the number of exemptions claimed. It went south along with the loan interest deduction. I'm not sure how your suggestion would work, sounds like a lot more bureaucratic paperwork. | |
| 27 September 2009 | |
| Instead of a deduction for the national sales tax on Schedule A, there would be a credit on the 1040 in the federal tax payments section for the "National" sales taxes paid for the year. The taxpayer would get the credit for what he/she paid and could offset that against the income taxes due. The illegals who don't have TINs would not file income tax returns to get money back. | |
Harry Boscoe (talk|edits) said: | 27 September 2009 |
| This would *instantly* create a black market bigger than Cabbage Patch Dolls. | |
| 28 September 2009 | |
| You are probably right. There would need to be tigher controls than exist now. | |
| 28 September 2009 | |
| And how do you expect everyone to keep all the receipts for the year? It's hard enough to get people to give you the correct info for the deductibles as it is. | |
| 29 September 2009 | |
| I guess there could a standard credit amount for the national sales tax that would apply based on the income level, (i.e. like the state and local sales tax is on Schedule A now), then individual taxpayers could add the sales taxes for major purchases like cars and boats to this total. You are right.....keeping up with individual receipts would probably be too much. I guess you could have it optional like Schedule A is now for the state and local. You need to do what you can to simplify it though. | |
| 29 September 2009 | |
| This sounds like a tax preparers teenage fantasy come true. A national sales tax, PLUS an income tax, but the income tax configured so you are guaranteed a refund (preserve those RALs). You might have something that can pass the Senate there. | |
| 29 September 2009 | |
| Well, I don't think the National Sales Tax will ever pass, because it has the smell of a regressive tax system, but if used to help illegals be brought into the system and as a way to get current taxpayers to pay throughout the year, then there might be some interest. | |
| 29 September 2009 | |
| I don't know? This sounds like a VAT idea.
My cousin Ralph sells used books out of the trunk of his car at flea markets. He can provide me (and for a small fee, you) all the sales tax receipts needed. Now, Ralph don't pay no taxes, no how, so it ain't no skin off his butt. Butt, if you ask me in the back of the shop, I'd say the IRS would close the tax gap faster by hiring more auditors to look at these small business deductions and those big corp maneuvers that let CEO's pick shareholder's pockets faster than you can hit that here spittoon. Butt, if ya really want to stop eeleegals, why not fine those that hire them. It's just like I'm of the inclination that we should publish the names of those employers of ladies of the night in the local newspaper. Of course, that might raise the prices of tomatoes and grapes and cabbages and honey rolls. | |
| 29 September 2009 | |
| Butt, if ya really want to stop eeleegals, why not fine those that hire them....
Exactly, these people are not coming here for vacations, they are coming here because WE hire them. But, according to Ronnie Redneck down where I live, WE gotta get rid of these illegals! lol. | |
| 29 September 2009 | |
| I don't think illegals can be stopped by anyone at this point, but they should pay taxes. I think you are right. There is sooooooo much room for fraud with this idea that it probably wouldn't work, unless you made everyone use established tables based on income. Keep in mind, with our current system, people fudge on deductions and leave off income. I think the potential could be a little greater with this if taxpayers can save a dollar for every extra dollar they claim in national sales tax. I think the answer to this is to use standard tables like the existing ones on Schedule A instructions or auditing taxpayers who claim sales taxes paid significantly greater than what the tables claim. | |
| 29 September 2009 | |
| I had a client last year who had a beautifully printed color receipt off his church's ink jet printer. It said he and his wife donated $8000 cash to the church and it was signed by a church official (probably). Clients only made $40,000 last year and had two kids and had just bought a house. Did they or didn't they? To cover my butt, I included every detail of the receipt in my tax notes.
I think churches should be required to have an EINs at the very least. Then the IRS could correlate donation receipts to a given church. So when "Our Church of the Strip Mall" gives out a million dollars of receipts we'd know where to attend. | |
| 29 September 2009 | |
| Crow,
My wife's cousin does grow cabbages, but he cannot get any of the locals to spend the day hunched over cutting cabbage in the broiling sun. He's lucky to get $3 per 100 lb bag. The locals are red-necked no more. | |
