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Welfare should be taxed as income

Khaos_Mage
Posts: 23,214
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5/31/2014 1:00:16 PM
Posted: 2 years ago
Why not?
The government is not a charity, and many other payments made by the government are taxed, so why not welfare.

Government workers' salaries are taxed
Contracts paid are taxed
Medicare payments are taxed
SS benefits can be taxed
Scholarships can be taxed
Grants are taxed
Interest on US bonds are taxed
Taxes can be owed before transfers are made (inheritance tax or estate tax)
Taxes can be owed on gifts

So, why isn't welfare taxed?
Chances are, those on welfare have a negative tax liability anyway, so they are likely to still not pay taxes.

As mentioned, the government is not a charity, therefore, it ought to pay gift taxes to those being given gifts.
If I, as an individual, were to give someone $15,000 to help them, I'd have to pay the gift tax, IN ADDITION to being taxed on said donation.

Thoughts?

And, even if you disagree with me, do you at least agree that welfare should be reported on tax returns, even if not taxed?
You report non-taxable dividends, social security, and interest. Why not report non-taxed aid?
My work here is, finally, done.
zoinks
Posts: 1,988
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5/31/2014 3:42:16 PM
Posted: 2 years ago
At 5/31/2014 1:00:16 PM, Khaos_Mage wrote:
Why not?

It is paying taxes on taxes, that's why. Next you'll suggest the government should pay taxes to itself whenever it spends money.

The government is not a charity, and many other payments made by the government are taxed, so why not welfare.

The government doesn't tax itself, at least not in most cases. In fact, it goes out of its way to ensure every level of government doesn't tax each other.

Chances are, those on welfare have a negative tax liability anyway, so they are likely to still not pay taxes.

Whether someone would or would not pay taxes isn't the determinant as to whether a tax should exist.

If I, as an individual, were to give someone $15,000 to help them, I'd have to pay the gift tax, IN ADDITION to being taxed on said donation.

Why? Just give the person the $15,000 in cash. No one else knows unless one of you tells them, so end of story.

And, even if you disagree with me, do you at least agree that welfare should be reported on tax returns, even if not taxed?

No. Why report something that doesn't affect anything? That's like saying you should report every time you go to the bathroom.

You report non-taxable dividends, social security, and interest. Why not report non-taxed aid?

Perhaps dividends and interest should be taxable. Social security is another story and more complex to analyze.

Maybe an easier solution is to tax people based upon their net worth. Then the rich pay more, the middle class pays less, and those who have nothing pay nothing.
Khaos_Mage
Posts: 23,214
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5/31/2014 3:53:49 PM
Posted: 2 years ago
At 5/31/2014 3:42:16 PM, zoinks wrote:
At 5/31/2014 1:00:16 PM, Khaos_Mage wrote:
Why not?

It is paying taxes on taxes, that's why. Next you'll suggest the government should pay taxes to itself whenever it spends money.
Did you read my list?
Why is welfare considered "paying taxes on taxes" but not any of those other taxable incomes?


The government is not a charity, and many other payments made by the government are taxed, so why not welfare.

The government doesn't tax itself, at least not in most cases. In fact, it goes out of its way to ensure every level of government doesn't tax each other.
See my list. It collects taxes on payments made by the government.


Chances are, those on welfare have a negative tax liability anyway, so they are likely to still not pay taxes.

Whether someone would or would not pay taxes isn't the determinant as to whether a tax should exist.
Clearly, you don't understand this point.


If I, as an individual, were to give someone $15,000 to help them, I'd have to pay the gift tax, IN ADDITION to being taxed on said donation.

Why? Just give the person the $15,000 in cash. No one else knows unless one of you tells them, so end of story.

First, I am being taxed on said income I donate to you. If you were a charity, then I could deduct it.
Second, that is illegal, and as such, not an answer for a legal consideration.

And, even if you disagree with me, do you at least agree that welfare should be reported on tax returns, even if not taxed?

No. Why report something that doesn't affect anything? That's like saying you should report every time you go to the bathroom.

Do you know how taxes work?
You report ALL income.


You report non-taxable dividends, social security, and interest. Why not report non-taxed aid?

Perhaps dividends and interest should be taxable. Social security is another story and more complex to analyze.

You don't read well.
They are often taxed, but not always.
For example, the federal government does not tax interest on state bonds. But, you still report them.

Maybe an easier solution is to tax people based upon their net worth. Then the rich pay more, the middle class pays less, and those who have nothing pay nothing.

So, tax the elderly heftily? Sounds good.
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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5/31/2014 4:05:28 PM
Posted: 2 years ago
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.
My work here is, finally, done.
dylancatlow
Posts: 12,242
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5/31/2014 4:06:35 PM
Posted: 2 years ago
At 5/31/2014 4:05:28 PM, Khaos_Mage wrote:
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.

It would only add to the cost of the government.
Khaos_Mage
Posts: 23,214
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5/31/2014 4:17:04 PM
Posted: 2 years ago
At 5/31/2014 4:06:35 PM, dylancatlow wrote:
At 5/31/2014 4:05:28 PM, Khaos_Mage wrote:
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.

It would only add to the cost of the government.

It would likely be a zero sum.
Why would it add anything?
My work here is, finally, done.
dylancatlow
Posts: 12,242
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5/31/2014 4:17:40 PM
Posted: 2 years ago
At 5/31/2014 4:17:04 PM, Khaos_Mage wrote:
At 5/31/2014 4:06:35 PM, dylancatlow wrote:
At 5/31/2014 4:05:28 PM, Khaos_Mage wrote:
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.

It would only add to the cost of the government.

It would likely be a zero sum.
Why would it add anything?

The IRS costs money.
Khaos_Mage
Posts: 23,214
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5/31/2014 4:19:59 PM
Posted: 2 years ago
At 5/31/2014 4:17:40 PM, dylancatlow wrote:
At 5/31/2014 4:17:04 PM, Khaos_Mage wrote:
At 5/31/2014 4:06:35 PM, dylancatlow wrote:
At 5/31/2014 4:05:28 PM, Khaos_Mage wrote:
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.

It would only add to the cost of the government.

It would likely be a zero sum.
Why would it add anything?

The IRS costs money.
So?
Why would reporting income that is not taxed cost anymore?
Why would taxing income that previously wasn't taxed cost more?
My work here is, finally, done.
dylancatlow
Posts: 12,242
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5/31/2014 4:23:04 PM
Posted: 2 years ago
At 5/31/2014 4:19:59 PM, Khaos_Mage wrote:
At 5/31/2014 4:17:40 PM, dylancatlow wrote:
At 5/31/2014 4:17:04 PM, Khaos_Mage wrote:
At 5/31/2014 4:06:35 PM, dylancatlow wrote:
At 5/31/2014 4:05:28 PM, Khaos_Mage wrote:
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.

It would only add to the cost of the government.

It would likely be a zero sum.
Why would it add anything?

The IRS costs money.
So?
Why would reporting income that is not taxed cost anymore?
Why would taxing income that previously wasn't taxed cost more?

The more taxes the IRS has to keep track of, the more its operating costs. What's the point of the government collecting the money it hands out? Why not just "tax" it up front, but not call it a tax?
Khaos_Mage
Posts: 23,214
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5/31/2014 4:30:03 PM
Posted: 2 years ago
At 5/31/2014 4:23:04 PM, dylancatlow wrote:


The more taxes the IRS has to keep track of, the more its operating costs. What's the point of the government collecting the money it hands out? Why not just "tax" it up front, but not call it a tax?

So, why does the government collect taxes on almost every other type of money it hands out by other departments/entities, and why is welfare excused?
Don't give me this cost BS?
The necessary documents would be entered via computer, and the computer would check for discrepancies. The vast vast majority of filers on welfare likely do not itemize, nor have any odd credits.
If a discrepency occurred, it would send a letter stating "this is what's going to happen unless you appeal".

This would be the first step to minimizing negative tax liabilities, and/or having the tax code also be welfare. Also, the money would be tracked. If it is tracked, fraud may be more easily detected.
My work here is, finally, done.
dylancatlow
Posts: 12,242
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5/31/2014 4:34:16 PM
Posted: 2 years ago
At 5/31/2014 4:30:03 PM, Khaos_Mage wrote:
At 5/31/2014 4:23:04 PM, dylancatlow wrote:


The more taxes the IRS has to keep track of, the more its operating costs. What's the point of the government collecting the money it hands out? Why not just "tax" it up front, but not call it a tax?

So, why does the government collect taxes on almost every other type of money it hands out by other departments/entities, and why is welfare excused?

Because it's more efficient to exclude it. Do you not see how they are different?

Don't give me this cost BS?
The necessary documents would be entered via computer, and the computer would check for discrepancies. The vast vast majority of filers on welfare likely do not itemize, nor have any odd credits.
If a discrepency occurred, it would send a letter stating "this is what's going to happen unless you appeal".

This would be the first step to minimizing negative tax liabilities, and/or having the tax code also be welfare. Also, the money would be tracked. If it is tracked, fraud may be more easily detected.

If someone is paying taxes on their welfare, they should just get less welfare. There's no reason to go through all this trouble when
you don't have to. How would welfare fraud be detected more easily if it were taxed? If anything, it would open the door for tax evasion.
dylancatlow
Posts: 12,242
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5/31/2014 4:36:43 PM
Posted: 2 years ago
At 5/31/2014 4:30:03 PM, Khaos_Mage wrote:
At 5/31/2014 4:23:04 PM, dylancatlow wrote:


The more taxes the IRS has to keep track of, the more its operating costs. What's the point of the government collecting the money it hands out? Why not just "tax" it up front, but not call it a tax?

So, why does the government collect taxes on almost every other type of money it hands out by other departments/entities, and why is welfare excused?

Oh, I see what you mean. It's different because those people may have other sources of income, while welfare wouldn't be given if someone had other sources of income.
Khaos_Mage
Posts: 23,214
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5/31/2014 7:31:03 PM
Posted: 2 years ago
At 5/31/2014 4:36:43 PM, dylancatlow wrote:
At 5/31/2014 4:30:03 PM, Khaos_Mage wrote:
At 5/31/2014 4:23:04 PM, dylancatlow wrote:


The more taxes the IRS has to keep track of, the more its operating costs. What's the point of the government collecting the money it hands out? Why not just "tax" it up front, but not call it a tax?

So, why does the government collect taxes on almost every other type of money it hands out by other departments/entities, and why is welfare excused?

Oh, I see what you mean. It's different because those people may have other sources of income, while welfare wouldn't be given if someone had other sources of income.

This is not true.
Also, keep in mind, unemployment is taxed.

I get what you are saying, and on some level I agree there is no point.
But, I am disgusted that there are those who are literally paid money by the IRS. It is not a refund, but "welfare" beyond any aid given to them. It needs to stop, and taxing welfare would be the first step.

Keeping in mind, that even if welfare was just reported, it would allow the IRS to see abuses of tax credits. For example, is the EIC credit (up to over $5K in free money) being given to someone on welfare, when their name is tied to another?

I know someone IRL who gets a free $5K or so because of this.
For welfare, he and his girl are combined for their four kids, but on tax reports, he claims two, and his girl claims two. This is illegal, but hard to disprove for the IRS.
My work here is, finally, done.
neutral
Posts: 4,478
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6/1/2014 3:52:59 AM
Posted: 2 years ago
At 5/31/2014 1:00:16 PM, Khaos_Mage wrote:
Why not?
The government is not a charity, and many other payments made by the government are taxed, so why not welfare.

Government workers' salaries are taxed
Contracts paid are taxed
Medicare payments are taxed
SS benefits can be taxed
Scholarships can be taxed
Grants are taxed
Interest on US bonds are taxed
Taxes can be owed before transfers are made (inheritance tax or estate tax)
Taxes can be owed on gifts

So, why isn't welfare taxed?
Chances are, those on welfare have a negative tax liability anyway, so they are likely to still not pay taxes.

As mentioned, the government is not a charity, therefore, it ought to pay gift taxes to those being given gifts.
If I, as an individual, were to give someone $15,000 to help them, I'd have to pay the gift tax, IN ADDITION to being taxed on said donation.

Thoughts?

And, even if you disagree with me, do you at least agree that welfare should be reported on tax returns, even if not taxed?
You report non-taxable dividends, social security, and interest. Why not report non-taxed aid?

Why should it be taxed? Why, for example, are government salaries taxed rather than simply paid at a reduced rate that balances the tax rate difference?

If you start taxing welfare, you introduce complications. Things like food stamps already have a bureaucracy for oversight that tightly matches amounts based on what is needed. It you add taxes to it? Now we have to spend more to essentially pay someone else to collect it. You gain zero dollars in return, but spend more on the collection of taxes.

Kicking the most needy hardly seems good tax policy. Why tax welfare recipients when giant corporations and rich people are getting tax breaks? Seems there are far easier ways to actually raise tax revenue.
Ore_Ele
Posts: 25,980
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6/1/2014 12:14:19 PM
Posted: 2 years ago
At 5/31/2014 4:19:59 PM, Khaos_Mage wrote:
At 5/31/2014 4:17:40 PM, dylancatlow wrote:
At 5/31/2014 4:17:04 PM, Khaos_Mage wrote:
At 5/31/2014 4:06:35 PM, dylancatlow wrote:
At 5/31/2014 4:05:28 PM, Khaos_Mage wrote:
At 5/31/2014 3:59:34 PM, dylancatlow wrote:
What would be the point? If we taxed welfare, we would simply increase welfare spending to compensate.

So we could analyze its effectiveness, crunch numbers, etc.
Plus, I don't like negative tax liabilities, and want them eradicated.

It would only add to the cost of the government.

It would likely be a zero sum.
Why would it add anything?

The IRS costs money.
So?
Why would reporting income that is not taxed cost anymore?
Why would taxing income that previously wasn't taxed cost more?

It would take more many hours to check and confirm, as a result, it would cost more money.
"Wanting Red Rhino Pill to have gender"
Khaos_Mage
Posts: 23,214
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6/1/2014 12:41:27 PM
Posted: 2 years ago
At 6/1/2014 12:14:19 PM, Ore_Ele wrote:

It would take more many hours to check and confirm, as a result, it would cost more money.
But the tax revenue would also go up (or rather, the IRS "payments" would go down).

I am pretty sure welfare is not dependent upon tax refunds, so there is no reason for welfare payments to go up.

Welfare is "means-tested", which a one-time "refund" would not alter the amount given.
We tax lottery and unemployment and social security (in some cases), why not government aid?
Or, in the very least, track it?

Wouldn't it be nice to see exactly how much money people are living on so we can examine the numbers?

Do you think that someone who makes $20K and receives $15K in welfare is in the same tax situation as someone who makes $20K and receives zero.

The earned income tax credit is designed to help poor families. If families are poor and getting assistance, should they still be getting the same tax credit as a family who doesn't get welfare?
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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6/1/2014 12:51:30 PM
Posted: 2 years ago
At 6/1/2014 3:52:59 AM, neutral wrote:

Why should it be taxed? Why, for example, are government salaries taxed rather than simply paid at a reduced rate that balances the tax rate difference?
Clearly, you do not know much about income tax laws.
First, they do withhold taxes, that is called your withholdings.
Second, the following situations have different tax consequences, so why would the government, or any employer, be aware of them:
Single woman makes $30K
Single mother makes $30K
Wedded single-income mother makes $30K


If you start taxing welfare, you introduce complications. Things like food stamps already have a bureaucracy for oversight that tightly matches amounts based on what is needed. It you add taxes to it? Now we have to spend more to essentially pay someone else to collect it. You gain zero dollars in return, but spend more on the collection of taxes.
Why?
Tax consequences are not factors in welfare payments, and, in most cases of welfare IMO, they won't actually be taxed, but their refund will be less.
Their refund is not their money to begin with.

Kicking the most needy hardly seems good tax policy. Why tax welfare recipients when giant corporations and rich people are getting tax breaks? Seems there are far easier ways to actually raise tax revenue.

Again, you don't know much about taxation laws.
I'll defend most tax laws, so list the ones you have a problem with.

In the mean time, you can tell me why a rich man's son is worth less of a deduction than a poor man's son, and why they also don't get a tax credit.

And, this is likely not to raise tax revenue, but decrease spending.
My work here is, finally, done.
Ore_Ele
Posts: 25,980
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6/1/2014 1:01:02 PM
Posted: 2 years ago
At 6/1/2014 12:41:27 PM, Khaos_Mage wrote:
At 6/1/2014 12:14:19 PM, Ore_Ele wrote:

It would take more many hours to check and confirm, as a result, it would cost more money.
But the tax revenue would also go up (or rather, the IRS "payments" would go down).

I am pretty sure welfare is not dependent upon tax refunds, so there is no reason for welfare payments to go up.

Yes they would. You don't live on gross income, you live on take home pay. So if a tax is applied, the take home pay drops. This is de facto the same to the end user as a cut in welfare. The only offset to make it de facto the same would be to raise the welfare output and then just charging the tax to bring the take home down to the same.

However, now there are additional steps with taxing the income, making sure the tax is correctly calculated and submitted. This will raise the cost of the IRS. Of course, this also gives greater flexibility with a progressive style tax rate so that we can better prevent manipulation with welfare.


Welfare is "means-tested", which a one-time "refund" would not alter the amount given.
We tax lottery and unemployment and social security (in some cases), why not government aid?
Or, in the very least, track it?

Wouldn't it be nice to see exactly how much money people are living on so we can examine the numbers?

It would. It just needs to be understood that it will cause an increase in work for the government and so an increase in cost.


Do you think that someone who makes $20K and receives $15K in welfare is in the same tax situation as someone who makes $20K and receives zero.

If the one is recieving $15k in welfare that the other is not, I would presume they are in a different situation that merited the welfare that the other did not qualify for. If the welfare was not justified, that is an issue with the approval process, not the tax/no-tax choice.


The earned income tax credit is designed to help poor families. If families are poor and getting assistance, should they still be getting the same tax credit as a family who doesn't get welfare?

Not all poor families are identical, so I would say that far more info would be needed.
"Wanting Red Rhino Pill to have gender"
Khaos_Mage
Posts: 23,214
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6/1/2014 1:13:08 PM
Posted: 2 years ago
At 6/1/2014 1:01:02 PM, Ore_Ele wrote:
At 6/1/2014 12:41:27 PM, Khaos_Mage wrote:
At 6/1/2014 12:14:19 PM, Ore_Ele wrote:

It would take more many hours to check and confirm, as a result, it would cost more money.
But the tax revenue would also go up (or rather, the IRS "payments" would go down).

I am pretty sure welfare is not dependent upon tax refunds, so there is no reason for welfare payments to go up.

Yes they would. You don't live on gross income, you live on take home pay. So if a tax is applied, the take home pay drops. This is de facto the same to the end user as a cut in welfare. The only offset to make it de facto the same would be to raise the welfare output and then just charging the tax to bring the take home down to the same.
When filing for unemployment, you can choose to not have any withholdings.
Further, welfare is based on GROSS income, because net income varies wildly, depending on circumstances. I see no reason to assume an increase.

However, now there are additional steps with taxing the income, making sure the tax is correctly calculated and submitted. This will raise the cost of the IRS. Of course, this also gives greater flexibility with a progressive style tax rate so that we can better prevent manipulation with welfare.
Perhaps it's different where you live, but the IRS already knows some who are on welfare, due to "evil tax loopholes". Also, my state already submits welfare 1099s for property tax refunds - because certain welfare is taxable for property tax purposes.

I don't think it will add much.
It is a form that is submitted to the IRS, which would look if you claimed the correct amount. They do not require field audits to catch.

Taxing welfare would be no more difficult than taxing state income refunds under current rules.


Welfare is "means-tested", which a one-time "refund" would not alter the amount given.
We tax lottery and unemployment and social security (in some cases), why not government aid?
Or, in the very least, track it?

Wouldn't it be nice to see exactly how much money people are living on so we can examine the numbers?

It would. It just needs to be understood that it will cause an increase in work for the government and so an increase in cost.
Yes, but "revenue" would go up.
I still maintain it is likely zero sum.


Do you think that someone who makes $20K and receives $15K in welfare is in the same tax situation as someone who makes $20K and receives zero.

If the one is recieving $15k in welfare that the other is not, I would presume they are in a different situation that merited the welfare that the other did not qualify for. If the welfare was not justified, that is an issue with the approval process, not the tax/no-tax choice.
The difference could be living in NYC vs. Texas.
Cost of living and whatnot.


The earned income tax credit is designed to help poor families. If families are poor and getting assistance, should they still be getting the same tax credit as a family who doesn't get welfare?

Not all poor families are identical, so I would say that far more info would be needed.
Info we don't have :/
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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6/1/2014 1:48:48 PM
Posted: 2 years ago
At 6/1/2014 1:01:02 PM, Ore_Ele wrote:
It's hard to get answers from the welfare offices, but one thing I recall is that an elderly person with no income (SS may be immune) would get $200/month.

So, SS for this person is not going to be taxed.
And, the $2400 in welfare is not going to create a taxable income, either.
So, no increase in taxes.

A single mother making $30K who gets $10K in welfare.
She would still recieve a check from the IRS for over $1K
http://www.debate.org...
So, no increase in taxes.
My work here is, finally, done.
Ore_Ele
Posts: 25,980
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6/1/2014 5:45:56 PM
Posted: 2 years ago
At 6/1/2014 1:13:08 PM, Khaos_Mage wrote:
At 6/1/2014 1:01:02 PM, Ore_Ele wrote:
At 6/1/2014 12:41:27 PM, Khaos_Mage wrote:
At 6/1/2014 12:14:19 PM, Ore_Ele wrote:

It would take more many hours to check and confirm, as a result, it would cost more money.
But the tax revenue would also go up (or rather, the IRS "payments" would go down).

I am pretty sure welfare is not dependent upon tax refunds, so there is no reason for welfare payments to go up.

Yes they would. You don't live on gross income, you live on take home pay. So if a tax is applied, the take home pay drops. This is de facto the same to the end user as a cut in welfare. The only offset to make it de facto the same would be to raise the welfare output and then just charging the tax to bring the take home down to the same.
When filing for unemployment, you can choose to not have any withholdings.

Yes, you can do the same for your job. The withholdings have nothing to do with what your taxes really are, they are just a way to help pay for them over the course of the year, rather than all at once.

Further, welfare is based on GROSS income, because net income varies wildly, depending on circumstances.

True, because net income (after taxes) is already reflecting various factors (marriage, kids, etc). If welfare was based on net, it would be easier to scam because you could claim lower, have more taxes taken out, get more welfare, then get a huge refund check because you over-withheld.

I see no reason to assume an increase.

Of course there is. If someone is currently getting $500 a month with no taxes, then it is taxed, they are essentially being cut to $425 a month (presuming a 15% tax). That is a cut to what the recipient will receive as their "take home." Basic market forces tell us what happens when a tax is applied to anything, be it goods or income (the goods of labor).

http://www.investopedia.com...

There will be a natural rise by some factor (depending on the elasticity of the market). That elasticity will be heavily dependent on what political powers are in office.

However, now there are additional steps with taxing the income, making sure the tax is correctly calculated and submitted. This will raise the cost of the IRS. Of course, this also gives greater flexibility with a progressive style tax rate so that we can better prevent manipulation with welfare.
Perhaps it's different where you live, but the IRS already knows some who are on welfare, due to "evil tax loopholes". Also, my state already submits welfare 1099s for property tax refunds - because certain welfare is taxable for property tax purposes.

There is a difference between being aware and collecting. Once actual dollar signs begin to get involved, that info (and the accuracy of it) suddenly becomes more important. Kind of like when you do your own taxes on turbo tax and it asks you what type of work you do ("but don't worry, this does not effect your taxes at all"). If that suddenly did have an impact on your taxes, it would be a much more serious and indepth (and potentially auditable) field (or likely entire page).

I don't think it will add much.

Probably not, but it will add more than $0.

It is a form that is submitted to the IRS, which would look if you claimed the correct amount. They do not require field audits to catch.

Taxing welfare would be no more difficult than taxing state income refunds under current rules.

Additional forms require additional eyes to go over it. There is a reason that a single page tax form would save the government millions every year in labor costs.



Welfare is "means-tested", which a one-time "refund" would not alter the amount given.
We tax lottery and unemployment and social security (in some cases), why not government aid?
Or, in the very least, track it?

Wouldn't it be nice to see exactly how much money people are living on so we can examine the numbers?

It would. It just needs to be understood that it will cause an increase in work for the government and so an increase in cost.
Yes, but "revenue" would go up.
I still maintain it is likely zero sum.

Why would revenue go up? Because you are essentially just cutting welfare, but doing it in a backwards way. Look at it this way, we'll keep with the example of $500 a month.

Option A) Apply a 15% tax to the $500 a month, so their take home spending pay is only $425 a month. This creates a $75 a month revenue minus whatever cost it takes to collect that additional revenue.

Option B) Cut the welfare by 15% so the $500 a month is now just $425 a month with no tax. This has the exact same effect to the end user. But rather than "raising revenue" you are "cutting costs." That makes the only differences semantics. However, now, you don't have the additional costs to collect that revenue and so Option B will always be more cost efficient than Option A.



Do you think that someone who makes $20K and receives $15K in welfare is in the same tax situation as someone who makes $20K and receives zero.

If the one is recieving $15k in welfare that the other is not, I would presume they are in a different situation that merited the welfare that the other did not qualify for. If the welfare was not justified, that is an issue with the approval process, not the tax/no-tax choice.
The difference could be living in NYC vs. Texas.
Cost of living and whatnot.

I don't think federal welfare looks at the cost of living in your area. I think that is only state welfare that does.



The earned income tax credit is designed to help poor families. If families are poor and getting assistance, should they still be getting the same tax credit as a family who doesn't get welfare?

Not all poor families are identical, so I would say that far more info would be needed.
Info we don't have :/

Don't get me wrong. I think it would be better the raise the welfare and tax it so that it could be better control and recorded. However, I fully expect that to have a net cost that would need to be offset by cuts elsewhere.
"Wanting Red Rhino Pill to have gender"
neutral
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6/2/2014 12:52:20 PM
Posted: 2 years ago
At 6/1/2014 12:51:30 PM, Khaos_Mage wrote:
At 6/1/2014 3:52:59 AM, neutral wrote:

Why should it be taxed? Why, for example, are government salaries taxed rather than simply paid at a reduced rate that balances the tax rate difference?
Clearly, you do not know much about income tax laws.
First, they do withhold taxes, that is called your withholdings.
Second, the following situations have different tax consequences, so why would the government, or any employer, be aware of them:
Single woman makes $30K
Single mother makes $30K
Wedded single-income mother makes $30K


If you start taxing welfare, you introduce complications. Things like food stamps already have a bureaucracy for oversight that tightly matches amounts based on what is needed. It you add taxes to it? Now we have to spend more to essentially pay someone else to collect it. You gain zero dollars in return, but spend more on the collection of taxes.
Why?
Tax consequences are not factors in welfare payments, and, in most cases of welfare IMO, they won't actually be taxed, but their refund will be less.
Their refund is not their money to begin with.

Kicking the most needy hardly seems good tax policy. Why tax welfare recipients when giant corporations and rich people are getting tax breaks? Seems there are far easier ways to actually raise tax revenue.

Again, you don't know much about taxation laws.
I'll defend most tax laws, so list the ones you have a problem with.

In the mean time, you can tell me why a rich man's son is worth less of a deduction than a poor man's son, and why they also don't get a tax credit.

And, this is likely not to raise tax revenue, but decrease spending.

So, your argument is that I am unaware of income taxes despite paying it and that because we pay income taxes we should tax welfare ... despite already having a bureaucracy that dispenses money and monitors its flow.

And income taxes make what justification to giving poor people EVEN more money just so we can take a portion back?

You do realize, that with your expertise on income taxes, many people on welfare actually have an earned income tax credit? As in they are so poor, even with jobs, that we give them money to stay alive .... rather than tax it?

Maybe you should be more concerned about providing honest people with a livable wage, which you could subsequently tax, rather than attempting to tax the poorest and most needy ...

... or ignoring the hundreds of millions, indeed BILLIONS of dollars in tax credits we gee corporations and banks, who, in many cases, make billions in profit, and yet can't seem to pay a livable wage ... which means the government gets to fork over welfare ...

And you think the problem is that everyone but you doesn't understand taxes, and that the solution is ... taxing the poorest of the poor.

Well, that may very well be the worst, and most fundamentally regressive, tax argument I have ever seen.
Khaos_Mage
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6/2/2014 1:06:19 PM
Posted: 2 years ago
At 6/2/2014 12:52:20 PM, neutral wrote:
At 6/1/2014 12:51:30 PM, Khaos_Mage wrote:
At 6/1/2014 3:52:59 AM, neutral wrote:

Why should it be taxed? Why, for example, are government salaries taxed rather than simply paid at a reduced rate that balances the tax rate difference?
Clearly, you do not know much about income tax laws.
First, they do withhold taxes, that is called your withholdings.
Second, the following situations have different tax consequences, so why would the government, or any employer, be aware of them:
Single woman makes $30K
Single mother makes $30K
Wedded single-income mother makes $30K


If you start taxing welfare, you introduce complications. Things like food stamps already have a bureaucracy for oversight that tightly matches amounts based on what is needed. It you add taxes to it? Now we have to spend more to essentially pay someone else to collect it. You gain zero dollars in return, but spend more on the collection of taxes.
Why?
Tax consequences are not factors in welfare payments, and, in most cases of welfare IMO, they won't actually be taxed, but their refund will be less.
Their refund is not their money to begin with.

Kicking the most needy hardly seems good tax policy. Why tax welfare recipients when giant corporations and rich people are getting tax breaks? Seems there are far easier ways to actually raise tax revenue.

Again, you don't know much about taxation laws.
I'll defend most tax laws, so list the ones you have a problem with.

In the mean time, you can tell me why a rich man's son is worth less of a deduction than a poor man's son, and why they also don't get a tax credit.

And, this is likely not to raise tax revenue, but decrease spending.

So, your argument is that I am unaware of income taxes despite paying it and that because we pay income taxes we should tax welfare ... despite already having a bureaucracy that dispenses money and monitors its flow.
Is that what I did?
Hmmm, I thought I explained how taxes work, and showed why you were wrong.
But, if you think I just said "you're ignorant" and left it at that, you are wrong.

And income taxes make what justification to giving poor people EVEN more money just so we can take a portion back?
You are aware that treating something as taxable income =/= paying taxes, right?

You do realize, that with your expertise on income taxes, many people on welfare actually have an earned income tax credit? As in they are so poor, even with jobs, that we give them money to stay alive .... rather than tax it?
You are aware that treating something as taxable income =/= paying taxes, right?
Tell me, why is the earned income tax credit even there? It is free money.
Why not eliminate it, and increase welfare (assuming it stays untaxed)?
The fact that the EIC creates negative tax liabilities, in which, taxing the income would reduce, not the credit, but the amount that is "paid" to them.
Thus, they still pay no tax, they still get something at tax time, and their welfare is unaffected.

Maybe you should be more concerned about providing honest people with a livable wage, which you could subsequently tax, rather than attempting to tax the poorest and most needy ...
Not the purpose of the thread, is it?

... or ignoring the hundreds of millions, indeed BILLIONS of dollars in tax credits we gee corporations and banks, who, in many cases, make billions in profit, and yet can't seem to pay a livable wage ... which means the government gets to fork over welfare ...
Not the purpose of the thread, is it?
Ironic, you claim I dismissed your arguments by saying you are ignorant, but here you bring up things that are not relevant to the issue, and things of which you have no knowledge of my opinion.

And you think the problem is that everyone but you doesn't understand taxes, and that the solution is ... taxing the poorest of the poor.
You are aware that treating something as taxable income =/= paying taxes, right?

Well, that may very well be the worst, and most fundamentally regressive, tax argument I have ever seen.
You are aware that treating something as taxable income =/= paying taxes, right?
My work here is, finally, done.
Greyparrot
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6/2/2014 1:20:04 PM
Posted: 2 years ago
Perhaps you should instead ask why this list-

Government workers' salaries are taxed
Contracts paid are taxed
Medicare payments are taxed
SS benefits can be taxed
Scholarships can be taxed
Grants are taxed
Interest on US bonds are taxed
Taxes can be owed before transfers are made (inheritance tax or estate tax)
Taxes can be owed on gifts

Should be considered unreportable income for the purposes of taxation just as welfare currently is.

I think once people demonstrate a hard time defending that list, it makes your argument for reporting welfare income.
neutral
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6/2/2014 2:04:20 PM
Posted: 2 years ago
At 6/2/2014 1:06:19 PM, Khaos_Mage wrote:

Is that what I did?
Hmmm, I thought I explained how taxes work, and showed why you were wrong.
But, if you think I just said "you're ignorant" and left it at that, you are wrong.

Generally, we attempt to make arguments to convince others, not ourselves - at least on a debate forum anyway.

And yes, when you say, "Gosh golly gosh, you ... as an American adult, whose wife worked as a tax consultant, don't know anything about taxes ... gosh golly darn," you are pretty much saying you think people are ignorant.

That imagine is made especially poignant when you systematically ignore countering parts to make the above claim instead.



You are aware that treating something as taxable income =/= paying taxes, right?

Are you aware of the difference between progressive and regressive tax policy? Because the difference speaks directly to your point here.

Fair is not handing out money to corporations and getting money from the poor. Fair has absolutely NOTHING to do with that - nor indeed does the concept of 'fairness' seem to matter one whit in your tax analysis.

You are aware that treating something as taxable income =/= paying taxes, right?

See above.

Tell me, why is the earned income tax credit even there? It is free money.

See above.

Why not eliminate it, and increase welfare (assuming it stays untaxed)?

Why spend even more money and create an additional bureaucratic burden ... while letting corporation run away with tax dollars and buy themselves a few senators?

Maybe, if we start with fair, we should start with the MOST unfair? Perhaps?

And last I checked, government was supposed to ease poverty ... not take advantage of it. Its easy to kick the poor. Are you into class warfare?

The fact that the EIC creates negative tax liabilities, in which, taxing the income would reduce, not the credit, but the amount that is "paid" to them.

So we are giving those with the least even less ... seems 'fair'.

Thus, they still pay no tax, they still get something at tax time, and their welfare is unaffected.

Right - we are taking from the poor in the name of fairness. Gotcha. Not corporations though.

Not the purpose of the thread, is it?

I thought fairness in fiscal policy was the point? And ... gosh golly gosh ... there are OTHER and BETTER ways to make sure the fudicary credit and fairness of your economic system is maintained ... other than kicking the poor.

As in, not only is that a really crappy idea, but here are SEVERAL much better ideas too boot.

Obviously, if you policy guidance is to beat the poor while they are down, we would generally WANT to minimize otter solutions to 'fairness'. Doesn't mean the minimization is valid.

Not the purpose of the thread, is it?

See above.

Ironic, you claim I dismissed your arguments by saying you are ignorant, but here you bring up things that are not relevant to the issue, and things of which you have no knowledge of my opinion.

Now that is irony, anything but my own opinion is off topic ... interesting.

You are aware that treating something as taxable income =/= paying taxes, right?

You are aware of the difference between a regressive tax system and progressive one?

You are aware that ignoring billions in tax credits to corporations who are pushing people ONTO welfare through unfair wage practices will not be solved or made fair by ignoring that reality ... to collect 'income' from the poor ... but not corporations.

You are aware that TRILLIONS in profits are taxable income, correct?

You are aware that treating something as taxable income =/= paying taxes, right?

You are aware that you seem oblivious to financial and tax policy correct? Its a good thing you think so poorly of any opinion on taxes save your own. Cause your opinion is unsound, to say the least.
Khaos_Mage
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6/2/2014 2:15:59 PM
Posted: 2 years ago
At 6/2/2014 2:04:20 PM, neutral wrote:
At 6/2/2014 1:06:19 PM, Khaos_Mage wrote:
Such anger....

Tell me how a man who gets $15K in social security and $200/month, is taxed more due to this? The SS is still not taxed, and the taxable income of $2,400 is well below the deduction.

Tell me how a single mother with two kids and makes $30K and gets $15K in welfare, who would STILL not pay any taxes, raises taxes?

You cannot tell me it raises taxes when the net result is still negative.
Explain why it does.

As to the corporate welfare? Why not do both? That is not the issue of the thread.
The thread is asking why welfare is not taxed as income.
If you want to start a thread about corporate welfare, send me a link, I'll post it there.

But, this is the third response from you, and you have yet told me one single loophole.
Is the loophole you are describing Form 3800? Odd, you'd bring that up, since it specifically helps those on welfare...
So, yes, on a debate website, I'd appreciate your not derailing my thread with rhetoric and nothing else.

Tell me, is taxing welfare better or worse than taxing social security?
My work here is, finally, done.
Such
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6/2/2014 3:59:30 PM
Posted: 2 years ago
The answer is simple.

Welfare isn't taxable, because it's bare-minimum. The bare minimum is never taxed, whether it's pay from the government, or from private employers. This is why some people get tax returns.

You mentioned that gifts can be taxed. They cannot. Dividends earned resulting from gifts can be, such as a matured bond or a profitable stock. But, the gifts themselves aren't taxable.

Similarly, inheritances can't be taxed, except to the extent that they become taxable income. In other words, if you inherit an account, like an IRA, then the money itself goes to you in full, but if you withdraw distributions, it becomes taxable income, as it would have been for the original owner of the IRA, and as it goes in general for IRAs.

Scholarships and grants aren't taxed. Foster care payments aren't taxed. Accidents, disability, personal injury awards... there are several things that aren't taxed.

Welfare is one of them, and largely because welfare is given as a bare minimum to help a family survive (welfare isn't livable on its own). Taxing that amount would make welfare useless.

Also -- you claim that pay from government jobs are taxed. Whereas that may be true, those jobs also generate income, which is filtered back to employees. So, it's not as though tax money is given to them, then some is taken back.
Greyparrot
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6/2/2014 5:34:44 PM
Posted: 2 years ago
Everyone's response is so off.

The question isn't "why is welfare taxed", the question is why welfare is not considered income.

Focus people focus!