Senator Recommends That UBS Be Shut Down For Helping Thousands Of U.S. Citizens Cheat On Their Taxes

Another update to the disgruntled computer technician story: Sen. Carl Levin told ABC News that Swiss banking giant UBS’s banking license should be revoked until the bank “cleans up its act.” The bank is accused of arranging “undeclared” accounts for an estimated 19,000 US citizens, effectively “hiding” $18 billion from the IRS.

“I don’t think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act,” Levin said.

The Senator also revealed a list of “sneaky tricks” that the bank was using to skirt U.S. laws and provide services that it was not licensed to offer. Here’s the list:

Tax Haven Bank Secrecy Tricks

  • Code Names for Clients
  • Pay Phones, not Business Phones
  • Foreign Area Codes
  • Undeclared Accounts
  • Encrypted Computers
  • Transfer Companies to Cover Tracks
  • Foreign Shell Companies
  • Fake Charitable Trusts
  • Straw Man Settlors
  • Captive Trustees
  • Anonymous Wire Transfers
  • Disguised Business Trips
  • Counter-Surveillance Training
  • Foreign Credit Cards
  • Hold Mail
  • Shred Files

Prepared by the U.S. Senate Permanent Subcommittee on Investigations, July 2008.

One UBS banker has already plead guilty and admitted to (among other things) smuggling diamonds purchased using a US client’s Swiss bank account into the country by hiding them inside tubes of toothpaste. Classy!

Sen. Levin: Shut Down Giant Swiss Bank UBS
Investigation Reveals Secrecy Tricks Allegedly Used by Swiss Bankers
[ABC News]

Comments

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  1. snoop-blog says:

    Are there any, honest rich people? Or are they all greedy scum?

  2. jst07 says:

    I completely agree with him that UBS should not be allowed to conduct any more business.

  3. snoop-blog says:

    So when is somone going to suggest charges and jail time? If we’re going to do this, lets do this for real. I want accountability, and a full investigation.

  4. darundal says:

    Wow, smuggling diamonds in. Just wow.

  5. dtmoore says:

    Well if you ask me the IRS are the criminals so these guys are really heroes, now if only they would help me figure out a way to not pay taxes…

  6. snoop-blog says:

    @dtmoore: As someone who pays taxes so you and your kids can use our schools and hospitals, and police and fire dept, I don’t take to kindly to tax evasion. If you don’t want to pay taxes to the U.S., get the hell out, and good luck making your money in someone else’s country.

  7. FilthyHarry says:

    Good thing the rich got that bush tax break. It would have been a tragedy if they had to pay more tax on the money they allowed the gov’t to know they had.

  8. FilthyHarry says:

    @dtmoore:

    I agree this whole tax this is BS but why are these people heroes? Who are they helping besides themselves? Who are they hurting besides everyone else who has to pay?

  9. dtmoore says:

    @snoop-blog: Which is why I am a firm supporter of consumption based taxes rather than a blanket income tax. Roads should be paid for with gas taxes, if you don’t have kids, you shouldn’t be paying for schools, you get the idea.

    And as long as we’re talking about this great country, we revolted from england for taxation that was extremely minuscule compared to what we are paying today, not to mention the fact that the taxes we do pay go to programs which the federal government has absolutely no constitutional authority to run in the first place.

    If you don’t want to understand your rights and duties as a citizen granted by the constitution and instead follow a unconstitutional government blindly, then seriously get the hell out of my country. You are just part of the problem.

  10. dtmoore says:

    @FilthyHarry: i was being facetious.

  11. FilthyHarry says:

    @dtmoore: We revolted because of taxation WITHOUT REPRESENTATION. Not just cause of taxes.

  12. FilthyHarry says:

    @dtmoore: Well I was being an ass :)

  13. spikespeigel says:

    Re: Smuggling diamonds.

    I wonder if that one dude from The Usual Suspects thought of the tube of toothpaste method instead of the velvet bag? Could have saved him some grief. Oh, and his diamonds.

  14. snoop-blog says:

    @dtmoore: No I don’t get the idea. Just because you don’t have children, you don’t want to support our school system? That’s pretty selfish thinking there.

  15. Tmoney02 says:

    @FilthyHarry: The interesting thing is, Tax revenues from this group of wealthy people actually go up when there are tax breaks, meaning more revenue collected than the IRS collected with the higher tax rate.

    The reason is that it becomes less worth the risk, hassle, and cost to hide assets so as the rate goes down more money is declared and taxed and collected. As rates go up the money just “disappears” leading to the IRS actually losing money rather than gaining on the increase.

  16. snoop-blog says:

    @dtmoore: Some people actually came to america to avoid religious persecution.

  17. Tmoney02 says:

    @FilthyHarry: So when does D.C. Get to revolt? I have no representation.

  18. theblackdog says:

    Encrypted Computers is on this list?

    Yeah, because I really want my personal information on a hard drive where someone can come in and steal the drive and read my information.

    Senator…your own employer (Federal Govt) is putting rules into place requiring all govt computers are encrypted…

  19. snoop-blog says:

    And just because we did something 100 years ago doesn’t mean it’s okay by today’s standards. Back then we owned slaves, is that American to you? Back then we killed the indians, so is that also acceptable to you? Give me a break, Justifying what these greedy bastards are doing by citing history that’s decades old? Who do you think you are fooling? Yourself that’s all.

  20. snoop-blog says:

    If this was Best Buy or Circut City, Or boa, Or wal-mart etc. on here being accused of dodgeing taxes we’d all be in an uproar. Well this should be no different when it’s an individual evading taxes. I can tell you that if everybody quit paying taxes, there wouldn’t be anyone there to stop me from taking your money and beating your ass up.

  21. Tmoney02 says:

    @dtmoore: Roads should be paid for with gas taxes, if you don’t have kids, you shouldn’t be paying for schools, you get the idea.

    Only problem with that thinking is that you indirectly benefit from these things in your community even if you don’t use them yourself. The road is a necessary infrastructure allowing you to have a fire department and police respond, allowing things to be delivered to you so you don’t personally have to use the road, etc. Same with the school. You benefit by having the kid at mcdonalds being able to add 2+2 even if it isn’t your kid, and you benefit by having informed people in the community making good decisions as an indirect benefit that is in your interest.

  22. Angryrider says:

    Pshh… UBS should be shutdown? Why are they being treated like the Umbrella Corporation? They didn’t cause a biohazard or anything. They helped thousands of Americans save money that would be otherwise wasted on pork politics… Wait this money is being wasted on pork, who do you think is pocketing lobbyist money?

  23. snoop-blog says:

    @Tmoney02: Well he’d have to understand how a society works to get all that. He’s too selfish to think that far outside the box.

    And Roz, I’m attacking his ideas, not him personally…

  24. dopplerd says:

    And this isn’t the first shady thing in recent years UBS got caught in. Remember the ol’ axis of evil?

    [www.telegraph.co.uk]

    Here is the gist:
    “UBS has admitted supplying Iran, Cuba, Libya and Saddam Hussein’s Iraq with dollars obtained through a US Federal Reserve scheme.”

    What a bunch of ASSHOLES!

    Side issue: If they go out of business how will I plug in keyboard and mouse to my computer?

  25. incognit000 says:

    The only thing more amazing than the trouble rich people go to in order to avoid paying taxes is the amount of tax dollars their companies take away from the rest of us.

    Not only do we pay more, we get less. Did the Grocery Shrink Ray miss it’s target and strike the national budget?

  26. Average_Joe says:

    It seems like there is a lot they should be doing before they even get to the criminal charges or fines.
    They shoud start off by making UBS pay taxes on 18 billion at the highest rate, then track down the source of funds in these “undeclared” accounts and make those people pay the equivalent taxes at the highest rate, and possibly even confiscate all the “undeclared” money. After that they can dish out appropriate fines, jail time, or other punishments.

  27. bigduke says:

    Bah, just build more prisons and put EVERYONE in jail.

    Seriously though, we need to get back to a healthy 90% tax rate for the richest 1% of this country. All of you saps that think that is so unfair because you have this pipe dream that you someday will be in that 1% need a heavy dose of reality. The 1% lives and feeds off of our labors every single day. Its time to make them pay!

  28. SkokieGuy says:

    @snoop-blog: Snoop, what makes you think BB, CC or BOA pays taxes? Many companies incorporate offshore or use a variety of shell companies to avoid taxes.

    U.S. corporations shifted $75 billion of their profits into tax havens in 2003, depriving the IRS of between $10 billion and $20 billion in expected tax revenue, according to a study in Tax Notes, a tax trade journal [www.commondreams.org]

  29. dequeued says:

    Don’t people understand, you can’t tax the superrich.
    It just isn’t practical, they can, with very little overhead, afford to hire armies of lawyers and accountants to hid their assets.
    They can afford to match the IRS toe to toe.

    Which is why it’s absurd when people say we should “just tax the top 1% more”.
    And if we enact really strict tax laws and do everything we can to seize the assets of the super rich, do you know what they will do?
    They will just move their assets to Dubai, or Hong Kong.

  30. snoop-blog says:

    @SkokieGuy: You know what I meant… Lets not derail this topic. Skokie you are number one threadjacker. Just playin.

  31. JustThatGuy3 says:

    @dtmoore:

    Unconstitutional? Well, hate to break it to you, but the Supreme Court (you know, the organization whose job it is to determine these things) has found them Constitutional. You may not like that interpretation of the Commerce Clause. If you don’t, your options are:

    1. deal with it
    2. leave
    3. get an amendment passed to clarify that your reading of the Commerce Clause is the one that should be used by the courts

  32. dahlberg123 says:

    This will most likely go nowhere fast. It would probably be a safe bet to assume that there are numerous senators, congressmen, judges, etc on that list that will make sure this doesn’t have legs to stand on.

  33. JaguarChick says:

    @Tmoney02:

    I’m still for a consumption tax to replace the current income tax scheme. We would save plenty of money just on cutting out the IRS. (not sure what the current IRS budget is, but it is huge). We would have less incentive for people to try to hide money, cheat on their taxes, and more economic stimulation (take more money home, spend more money). It would encourage entreprenurial spirit (try to do small business taxes…the depreciation charts alone will make you cry). And people would be taxed based on consumption, which means if you want to buy a 2000 handbag, you’ll be taxed/punished accordingly. But if you want to save that money and invest it, you’ll be rewarded accordingly, which is currently NOT the case.

  34. SkokieGuy says:

    This will likely go nowhere fast because certainly a significant number of the 19,000 people who USB helped hide funds includes members of Congress, major political donors and more.

  35. tgpt says:

    How exactly does an American senator plan to shut down a Swiss company? Sure they could shutter their US operations, but the money is all actually in Switzerland, and shutting down their American arm would seem to me to relieve them of any obligation to comply with US banking laws. Also, wouldn’t a Swiss bank tend to have a foreign area code anyway? (I’m guessing “+41″.)

    I also wish I could have faith that all of my American bank’s computers used some sort of strong encryption, but I’m afraid I’m not that naive.

    In fact, I used to live in Switzerland and I’ve still got CHF 34 in my UBS account. Excuse me while I go turn myself in. (I figure I’d better do it while Bush is still in office and high rollers like me can count on the support of the justice department.)

  36. ARP says:

    @dtmoore: I find it strange that Republicans are the first to talk about the Constitution when it comes to government programs and guns. Anything else (rights of privacy, warrants, trial by jury, civil rights, separation of church an state, etc.), suddenly, the Constitution is meaningless.

    @Tmoney02: Ah, a loyal Bushie. Bush said that rich people would just find loopholes, so why tax them? By that logic, why prosecute fraud, people will still commit it. The key isn’t to throw your arms up and give up. Its to have laws, enforce those laws, and have penalties that strongly discourage this behaviour. With the current administration, criminality is essentially ignored when they don’t agree with the policy (see environmental prosecutions, civil rights prosecutions, etc.). So, while they didn’t cause this, they created an legal environment where the risk of getting caught is low and the penalties compared to the savings are even lower.

  37. Aesteval says:

    @theblackdog: Yeah, you know I have to kind
    of agree. Personally, I would like to think that encrypted computers
    and some form of file shredding (for old files/documents/etc.) would be
    standard practice in general in the banking industry and not some form
    of “secrecy trick.”

  38. ARP says:

    @JaguarChick: Amendment XVI of the Constitution allows the government to collect income taxes. While you may be in favor of it, it is not unconstitutional.

    The budget of the IRS is 11.6 Billion. For comparison:

    The Iraq war is 5 years and 500 Billion. So roughly 100 Billion per year. So the Iraq war is 10x more expensive than the IRS.

    Oil companies will get around 5-8 Billion in tax breaks.

    Where’s your outrage there?

    How do we pay for Police, fire, infrastructure, etc.?

    If they eliminated income tax and put in a VAT, poor people loose big time: 1) since they spend more of their money on necessities and it will be taxed at a higher rate, far outweighing any benefit from the elimination of the income tax burden. Most federal programs would be eliminated: No school, no health care, no scholarship, no training programs, nothing.

  39. chrisjames says:

    @Tmoney02: Do you have a source for that information? To me, the proposition of tax evasion wouldn’t be because I’m being taxed too much, but because I’m being taxed at all. If suddenly I only had to pay half my taxes, I still don’t think I’d say “that sounds okay. Here, this is some of the money I was keeping for myself. You can have it now.”

    @Tmoney02: You also benefit from the moochers that sit on the welfare and don’t provide back to the community. What social benefit is there in blatantly telling the underprivileged that they can get something for free? A consumption tax at least recycles the responsibility, instead of putting it all on the shoulders of working people, as is the case with income tax. Of course, I can’t argue whether each is an “efficient” tax, only if it’s a “fair” tax.

    I don’t like being taxed at all, but I doubt zero tax could even be realized. That puts the tax evaders on my naughty list. It’s just impossible to morally shrug this off as an okay thing to do, no matter how unfair it is.

  40. Tmoney02 says:

    @JaguarChick: I’m still for a consumption tax to replace the current income tax scheme.

    I actually agree with the consumption tax replacing the income tax, at least in theory.

    The question for me becomes how will revenues compare to income taxes? The real money comes from big ticket items, so will people buy their yachts from Canada rather than America and avoid the taxes? I guess the import taxes could go up but that would anger all our trading partners and destroy all the work the G-8 Summits and such have been working towards, open trading with no import taxes, allowing the world economy to be the most efficient it can be.
    Also how would it affect the American market. Wall street is surviving by getting people to consume products they don’t need. By putting a big penalty on frivolous consumption how will the market cope? Of course considering the negative savings rate America has it seems like this problem is coming one way or another.

  41. vildechaia says:

    UBS’ misdeeds go back, at least, to WWII.

  42. @dtmoore: Consumption based disproportionally targets low income people.

    It is not a good idea. If you went that route, the rich would get even richer, and the poor even poorer.

  43. SkokieGuy says:

    How timely! I just received an email from Ravinia, (a Chicago suburban music venue located in a rather upscale area)- sponsored by USB.

    Perhaps we shouldn’t bash them, because clearly they contribute back to the community.

    / sarcasm off

  44. Tmoney02 says:

    @ARP: Ah, a loyal Bushie.

    I am hereby stating a new law called “Tmoney’s law”
    As a Usenet discussion grows longer, the probability of a comparison involving “Bushie(s)” or Bush approaches one.

    Now hopefully you have thought about this law and said you know, perhaps calling a person a “Bushie” based on one policy opinion is pretty stupid. I should cool my jets.

    Moving on to your point I actually gasp agree with you! We should do more to catch tax evasion and do everything we can, but on the other side we should recognize 1) enforcement can be very expensive and very difficult, especially in areas such as tax evasion.
    2) It might be more cost effective by lowering the tax than spending tens of millions of man hours and dollars to only catch a fraction of the evaders.

  45. Ubik2501 says:

    @chrisjames: Nobody likes being taxed. Most of us are just smart enough to realize that it’s necessary to make any government and society actually work.

    Plus, the “welfare queen” stereotype is pretty much just a strawman argument these days. No matter what kind of tax system you have, somebody is going to take unfair advantage of it, and people on every point of the economic spectrum will find their own ways to do so. This argument just distracts from discussing the actual purpose and necessity of taxation. The idea is to maximize benefit to everybody, while minimizing that kind of wrongdoing. Give me a system that works at 100% efficiency and I’ll give you a Nobel Prize.

  46. dtmoore says:

    @ARP: I’m not a republican.

  47. dtmoore says:

    @Pixelantes Anonymous: No it targets people that use the services to the degree of which they use the services. What you are talking about is graduated socialism (what we have now).

  48. dtmoore says:

    @JustThatGuy3: I’m talking about little things like oh I dunno, going to war without a declaration of war from congress. Apparently if we don’t call it a war then all is good.

  49. Tmoney02 says:

    @ARP: since they spend more of their money on necessities and it will be taxed at a higher rate, far outweighing any benefit from the elimination of the income tax burden. Most federal programs would be eliminated: No school, no health care, no scholarship, no training programs, nothing.

    Two questions, Couldn’t we still have W-2’s and if your income is under a certain amount have some sort of general rebate?
    Second wouldn’t the money collected in this consumption tax go to the federal government replacing the income tax money and thus allowing all those federal programs.

  50. firmshipper says:

    what a disgusting example of the government arbitrarily and selectively enforcing its rules. Also goes to show that the Swiss are too cowardly to fight back, the neutral bastards. People who chose UBS for the simple convenience of having numerous offices in the States are now being persecuted. And let’s not forget the proven thievery of LGT bank’s documents that is now used by the fascists in charge to file cases against people. Better move your assets to Panama.

  51. Tmoney02 says:

    @chrisjames: To your first point that may be true, except your ignoring the cost, convenience, and peace of mind factors. All the lawyers and Accountants and Banks you need to pay to make sure you don’t get caught add up in a hurry, especially since you only want to pay for the best of the best so you don’t get caught and go to jail. Also you lose money because it becomes harder to invest and if your lucky the money might get an interest rate to match inflation at best.

    Then there is the convenience factor. You can’t just go to the ATM to get your money. You have to initiate a wire transfer and have your experts run it through your shell company’s and so you have more transaction fees and a wait.

    So knowing that you have these issues avoiding the taxes when you see that instead of losing 90% of your money to taxes (as someone above proposed) you would only lose 50% it begins to look real appealing. You are already losing probably 25% or more to costs and not earning any money with that money. Plus you don’t have to live in fear of going to jail and can enjoy your money guilt free.

    As for your second point, well i’m not sure where you were going with it. It kind of rambled so sum it up if you want.

  52. Peeved Guy says:

    Hey! Imagine that! The good senator is up for re-election this year. How interesting that his decision to “stand up for the little guy and stick it to the rich folk” coincides with an election cycle.

  53. chrisjames says:

    @Ubik2501: The context of my response had little to do with any of that.

  54. failurate says:

    @dtmoore: Try doing business with a bunch of illiterate folk… might change your mind on the importance of taxing everyone to support public schools

  55. trogam says:

    @Peeved Guy: Wow! Thats amazing! So when he doesn’t come through, does that mean we can get rid of him?
    Oh right…we’d have to wait six years…

  56. Orv says:

    @Tmoney02: Switching to a consumption tax instead of an income tax would also screw over everyone who invested in a Roth IRA. People who invested in traditional IRAs would look pretty smart, though. ;)

  57. dtmoore says:

    @failurate: Because our public school system is working so well? Honestly, ask any teacher and they will tell you to get the federal government uninvolved with the school systems. But how does the federal government have such influence you might ask? They take our tax dollars and proportion them out through the DoE, thus if local schools do not comply, they don’t get funding. If all school taxes were local (which I wouldn’t mind paying even though I don’t have kids, well less so than federal taxes) we would not have this issue.

    p.s. my sister, mother, and quite a few friends are all teachers so I have a pretty good perspective on the whole thing.

  58. snoop-blog says:

    Since when has consumption tax even been an option/issue. I don’t think the people in power are giving it any thought at all, and would make all this talk seem moot…

    If there really was a better system, I’m sure we’d be using it by now.

    Point of this thread is what ubs has done is ILLEGAL, no matter what your opinion is. I personally feel like weed should be legal, but that doesn’t make it so.

  59. Orv says:

    @snoop-blog: Some of the Republican primary candidates were in favor of a version called the “FairTax.” That got people discussing it again.

  60. ModernDayGilligan says:

    …why is nobody paying attention to one very important relationship here?

    Former Sen. Phil Gramm (made ‘mental recession’ comments last week) was on the board of directors of UBS until April 18, 2008, while simultaneously serving as a senior economic adviser to John McCain!!!

    Did you know that Phil Gramm’s wife Wendy was a director at Enron — and was responsible for overseeing “audits,” while there?

    McCain’s campaign is directly linked to this UBS fiasco.

  61. snoop-blog says:

    @Orv: You mean the people who lost by a huge margin? The one who were considered to be a little too radical or extreme? Those candidates never stood a snowballs chance in hell.

  62. Wally East says:

    @tgpt: RTFA. They want to take away UBS’s license to do business in the U.S.

    Consumption tax. Bah. How oh-so-lovingly regressive.

  63. snoop-blog says:

    @Orv: sorry for the ‘tude. I just got too worked up and drank too much caffeine today.

  64. xsmasher says:

    @dtmoore: Yes! Parks can be paid for by charging admission, unemployment can be paid for by taxing unemployment checks, and prisons can be paid for by the prisoners… wait… or the victims? The victims! They’re the ones benefiting.

    And soup kitchens can be paid for by cooking every 10th man in line.

    Your taxes are insurance – they pay for many services you use , and some that (god willing) you’ll never need. You *are* your brother’s keeper, unless you want to live in a city of shantytowns, cardboard overpass villages, and untested and unsafe products with 0 liability for the makers.

    For me, I don’t need that Mad Max bullshit.

  65. ARP says:

    @Tmoney02: You’re right, I jumped to the Bush comparison too fast. I apologize for that. However, your initial argument was almost exactly what he said and that’s why we should raise taxes on the wealthy. I agree, there is law of diminishing returns when it comes to law enforcement activities. However, I think we’re very far from it when it comes to creating a tax enforcement system. This would also apply to the war on drugs.

    @Tmoney02:I’m OK with your proposal as long as there is a rebate at the bottom and a true income tax at the top with zero deductions, exemptions, etc., if you make more than X, every dollar over X is taxed at X rate. Oh, and bring back the inheritance tax (watches heads explode).

  66. ELC says:

    @snoop-blog: There are a LOT more rich people than these 19000. And yes there are some. My aunt and uncle come to mind as well as several I’ve been in business with over the years.

    They just don’t make the news b/c they aren’t doing anything wrong. Usually, they are doing something good – which will RARELY make the news.

    Sad, isn’t it?

  67. cordeliapotter says:

    @dtmoore: If all schools were local, half the country wouldn’t know what evolution is. Just because the federal system is poorly run, doesn’t mean it can’t be fixed.

    Don’t federal taxes fund the CDC, which prevents people infecting you with TB and other diseases?

    The only people who can argue against federal taxes are DC residents who lack congressional representation.

  68. dtmoore says:

    No, the only people who can argue with federal taxes on the basis of taxation without representation are DC residents. Although if I wanted to stretch it i could say our political system is so corrupt that even though I technically have an elected official, they are already bought and paid for by someone else thus not truly representing my best interests.

    And I’m not saying that the federal government serves no purpose, they have just grown grossly bloated with programs and subsidies and the costs are just insane. Our military is obviously the worst offender, but there are many many others. We spend more on our military every year than the next 10 highest spending countries combined.

  69. SadSam says:

    I’m not for the consumption tax but I have pondered how it might work. One pro of the consumption tax is you get rid of the IRS but wouldn’t you have to replace the IRS with a similar agency to collect all the consumption tax? And if you were going to try and make the consumption tax less regressive by giving poor people a rebate of some sort wouldn’t you need to also have an agency similar to the IRS to figure out who qualifies for a rebate, as someone suggested the gov would still need a copy of your W-2. A pro of consumption tax would be to reward frugal/green behavior. A possible con of such a tax is that it probably would encourage a heck of a lot of off the books transactions (maybe you would need to get rid of cash and move to a form of currancy – i.e. debit – that the gov. could track). Would you have to pay consumption tax on necessities (i.e. food, health care, etc.)?

  70. sleze69 says:

    Someone needs to post a list of the evaders on Wikileaks.

  71. snoop-blog says:

    @sleze69: Reminds me of last nights Criminal Minds…

  72. GearheadGeek says:

    @Orv: The “Fair Tax” is much like “cheese food”, if you have to put it in the name to convince people, it’s probably not altogether true.

  73. xkevin108x says:

    robbery (n): the act or practice of robbing; larceny from the person or presence of another by violence or threat

    UBS is not the problem. It’s the federal government and the IRS. I am all for anybody who can hide income from them.

  74. LouDobbsChivasJersey says:

    @Tmoney02:

    The Fair Tax that most experts talk about would include some sort of “prebate” that would ease the burden on low-income consumers. Not sure exactly how it would work, but they would somehow get their relief up front, rather than having to save receipts on everything and file a return.

    The thing I haven’t seen mentioned here would be that consumption taxes are a boon for bootleggers, i.e. organized crime. People will be looking for stolen, untaxed merchandise in order to save themselves paying the 25% VAT.

  75. rellog says:

    @dequeued: So then I guess you might as well just give your money away to some thug in your closest ghetto. I mean, if they do rob you, you’ll have no chance of stopping them anyway, right?

    @dtmoore: While I agree that our government needs some serious tune-ups (Ted Stevens that a-hole and his bridge to nowhere… ) to imply that you get nothing because you don’t need to use public schools is ridiculous. Maybe you went to a private school your entire life, but if you didn’t, then you still owe the system for educating you. Additionally, where do you think this country would head if only people WITH kids paid for the education system? Our country would go third world in a heart beat. What you seem to lack, is a “big picture” mindset…

  76. rellog says:

    @LouDobbsChivasJersey: And the “Fair Tax” (a load of crap name if there ever was one…) wouldn’t bring in enough money to sustain the nation. We in the middle would end up shouldering the burden while the poor and rich got off easy.

  77. rellog says:

    @ARP: I love to see people go berserk when say I think the “inheritance tax” is a good thing. Technically, it’s an “Estate Tax” since the estate is taxed prior to being given to the beneficiaries…

    Look at the real facts about the tax-
    -you didn’t earn the money you’re receiving, it was a gift. It belonged to your parents (or whomever) and you did NOTHING to earn it. And even if you did, you’d still owe income tax on it…
    -It only kicks in after $2 million. Most of us will NEVER see that… and it goes up to $3.5 million in ’09

  78. SAGoon987 says:

    @dtmoore: That whole “me me me” attitude can only get you so far. Please take your education above an undergraduate level and understand why that would be a bad idea on most fronts.

  79. Orv says:

    @snoop-blog: Oh, no offense taken. You’re right, of course. I’ve said before that the “FairTax” is about as likely to happen as porcine aviation.

  80. TechnoDestructo says:

    You, and us. Hiding 18 billion dollars. UBS.

  81. TechnoDestructo says:

    @dtmoore:

    Even if you don’t have kids, you’re personally benefiting from schools. You’re benefiting from an economy which depends on having them. Every time you get correct change you’re benefiting. You’re benefiting from having fewer kids idle during the day and vandalizing your car.

  82. cyberscribe says:

    “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”

    John Kenneth Galbraith

  83. corbyz says:

    @dtmoore: “we revolted from england for taxation…”

    You must be a very old person. Heck, even my ancestors all came to this country after the revolters were long dead.

  84. FCAlive says:

    “we revolted from england for taxation…”

    Why does it matter why people who have been dead 200 years, had no electricity and shat in pots, did?

  85. rellog says:

    @dtmoore: While you may KNOW people that teach…. I am one. And I can say that federal funding is necessary. It isn’t the funding that we teachers complain about, it’s the bullshit rules enacted by Bush that we object to. Schools fail- cut off their money. Teach anything but abstinence… cut off the money. Not allow recruiters carte blanche… lose your funding.
    Oh yeah, and NCLB… the biggest load of crap (which the dems sold us out on) you must comply, but we won’t fund you. It isn’t that the feds are funding schools… it’s who’s running the country right now.

    If it weren’t for federal funding, plenty of poor counties and states would even worse off than they are now.

  86. rellog says:

    @cyberscribe: Excellent quote!

  87. varro says:

    @dtmoore: Thank you, Mr. Libertarian. Let’s see what’s wrong with your argument:

    I have to pay fees for use of the roads, but wealthy people don’t have to pay for the regulation of their stock market. Businesses aren’t taxed to protect them from crime. Public schools are abolished, so we have to pay for our children’s education, but businesses don’t have to pay for having trained workers.

    Gotcha.

  88. SOhp101 says:

    @dtmoore: I consider myself a libertarian, but I have to disagree with your ideas. Consumption based taxes are a regressive form of tax no matter what way you cut it.

    At least in CA, all state revenue earned from gas tax is used only for road construction and traffic reduction.

    Parents aren’t the only ones who benefit from a public education system–those schools are great for keeping kids out of trouble until they’re eighteen (i hope) and maybe even turn them into mindless patriotic zombies that will positively contribute to the economy and not commit crimes.

    Should we minimize government intervention? Of course, but not in the areas you list.

  89. P_Smith says:

    @dtmoore: Which is why I am a firm supporter of consumption based taxes rather than a blanket income tax. Roads should be paid for with gas taxes, if you don’t have kids, you shouldn’t be paying for schools, you get the idea.

    So your attitude is, only those who obtain benefits from the service should pay taxes? Okay:

    Employers need educated employees, so all businesses should pay taxes for schools, not individuals. The less educated are more likely to commit crime, so anyone who wants a safe country should pay taxes for schools.

    Those who use buses should pay a tax, as well as those who consume products transported by road at any time, i.e. everything.

    You blather about personal responsibility yet what you are really attempting to obviate yours to society. Collective benefit is not collectivism.

  90. bwcbwc says:

    @dtmoore: The problem with this user fee/consumption scheme is that it doesn’t quantify the indirect benefits and costs of government services. For example, having all people (even those who don’t have kids) pay for schools is cheaper than having them pay for jails instead. Parks and load-balanced and maintained roads contribute to cleaner air for everyone.

    Yes, there is an element of unfair “redistribution of wealth” in the nation’s tax scheme, but there are many more tools that the wealthy use to redistribute wealth from the poor and middle clasee to them (three quick examples: payday loan financing terms, executive compensation in large corporations, UBS-style tax evasion).

    @xkevin108x: If UBS had made their special services available to middle-class investors, maybe I would be considering them a hero. As it stands, the clients of these guys are profiting from (apart from things like diamond smuggling) government contracts for war materials and so on, loans to the government to pay for the contracts and leaving it to the rest of society to pick up the tab that the government leaves behind.

  91. @xkevin108x: You and the other libertarians are more than welcome to move somewhere with no functional government. Of course, most of them look like something out of the “Road Warrior” without the glam makeup or infrastructure, but you can be free of the “nanny state” to go practise your “enlightened self interest” on each other.

    With machetes.

    Have fun.

  92. Ilikenumbers says:

    As a person who gets paid to do people’s taxes, umm…don’t ditch the IRS, it’d KILL my income!

    Seriously though, all this boo-hooing over the “death tax” (actually the Unified Transfer Tax) is something rather easily avoided and will only cost you approximately $2,000 of my time to do the estate planning and trust origination.

    On the issue of income taxation as a whole, we kind of have to realize the cat is out of the proverbial bag. Half the reason why Guliani looked like such a tool (other than his inability to utter a sentence without including 9/11) is his desire to eliminate the IRS and other “unecesarry” federal agencies.

    Um, the fed is responsible for employing nearly 25% of this country (be it through actual FIRS employees, contractors, and sub-contractors) and see how much President NY enjoys a budget without any real system to collect revenues other than the shoddy system of sales taxes, which are already easy to dodge if you deal primarily in cash.

  93. Jmatthew says:

    In David Brin’s “Earth” the third world war was everyone vs the Swiss to stop criminal banking practices like this.

  94. edrebber says:

    Talk about the pot calling the kettle black. Where was Mr. Levin when the cronies at Fannie Mae and Freddy Mac were fleecing the tax payers. UBS doesn’t require a bailout from the US Taxpayers.

  95. xkevin108x says:

    @FCAlive:
    Because they did it for us. So that we, their lineage, would not have to live the type of life they did, burdened by government oppression. And we’ve lost it. We had a free country and we gave it away. Laziness, wealth envy, and utter stupidity have cost us almost everything we have.

    @Glamourdammerung:
    While you may enjoy being a subject, many do not. The bigger the government here gets, the stronger the movement against it. I do not long for a country without a functional government. I long for a country with a functioning populous, absent of submissives like you.