Join 3,363 readers in helping fund MetaFilter (Hide)


January 24, 2002
12:47 PM   Subscribe

Did you know about the "African-American Slavery Reparations" tax credit? (Neither did I.)
posted by Steven Den Beste (37 comments total)

 
right, because it doesn't exist. [for those of you who don't read linked articles]

"Promoters are shamelessly preying upon people," IRS Commissioner said.... There is no law allowing the U.S. government to pay reparations or give tax refunds for slavery.
posted by jessamyn at 12:54 PM on January 24, 2002


MAN I AM SO TIRED OF ALL THIS SOCALLED AFFIRMEITIVE ACTION BULLCRAP THE COVERNMENT GIVING HANDOUTS JUST BASED ON RACE IS RACISM IT'S RACISM IN REVERSE!!!
posted by EngineBeak at 1:01 PM on January 24, 2002


whoa.
posted by o2b at 1:02 PM on January 24, 2002


Spike Lee could not be reached for comment.
posted by greensweater at 1:05 PM on January 24, 2002


Maybe we can get a collection up and buy EngineBeak a keyboard with an unstuck CapsLock. Nah, that'd just be a hand-out.
posted by BitterOldPunk at 1:05 PM on January 24, 2002


Hey! Chill, man. It's describing a scam. (Go read it.)
posted by Steven Den Beste at 1:05 PM on January 24, 2002


I'm pretty sure Enginebeak is making a little joke. Ha ha. See? Its fun to have fun.
posted by malphigian at 1:09 PM on January 24, 2002


I'm not sure I understand how these people are getting bilked.
Are they paying for the form, or are the con-artists doing their taxes for them? In which case, wouldn't that be a lot of work for a simple scam?
posted by me3dia at 1:11 PM on January 24, 2002


here's a good link on it, and apparently it's been around for a few years. the IRS site has details on how tax professionals should deal with these claims.
posted by jessamyn at 1:18 PM on January 24, 2002


They may use a fake supplemental form. One you can't find on the website or at the library, you know, nudge nudge wink wink.

Though it seems mostly they make their money holding fly-by-night "seminars" for which there is a fee.
posted by dhartung at 1:21 PM on January 24, 2002


MAN I AM SO TIRED OF ALL THIS SOCALLED SCAMPROTECTION BULLCRAP THE COVERNMENT GIVING WARNNINGS ON THE SEMINARS I GIVE NOT BEING ABLE TO RIP PEOPLE OFF JUST BASED ON RACE IS RACISM IT'S RACISM IN REVERSE!!!
posted by ColdChef at 1:33 PM on January 24, 2002


That's why I do all my banking and accounting and money management offshore, like drug dealers, terrorists and Enron.
posted by Postroad at 1:36 PM on January 24, 2002


three cheers for offshore banking...
(it's what i do for a living, but don't tell anyone...)
posted by goneill at 1:40 PM on January 24, 2002


ok, i will settle for 4 acres and a mule
posted by tsarfan at 1:51 PM on January 24, 2002


Actually, the IRS has a very nice document available as a PDF called "The truth about frivolous tax arguments." You can download it at http://www.irs.gov/ind_info/index.html
posted by ilsa at 2:27 PM on January 24, 2002


These con artists often warn clients not to contact the IRS because the government doesn't want the general public to know.

People are dumb.
posted by Optamystic at 3:25 PM on January 24, 2002


Or people who are uneducated and poor are easily convinced that the tax code has secret tricks that are not advertised to uneducated and poor people.

Now where would they ever get that idea?
posted by Mid at 3:44 PM on January 24, 2002


Good point. I didn't mean to sound uncharitable toward the victims in this case. I just can't believe how little actual artistry is demonstrated by some so-called "con artists". I think "con artist", I think of "The Sting" or "Diggstown". Not some guy saying "The government is giving away money. No, not to you directly, but to you through me. It's secret money. No, don't ask them about it. Like I said, it's a secret. But first, you have to write me a check."
posted by Optamystic at 3:58 PM on January 24, 2002


Mid, I agree with you one hundred per cent.

This is a symptom of the bureaucratic government that we have today. The tax code is so complicated that no lay person can be expected to know all the rules. Corporations fund lobbyists that encourage ambiguous laws that allow for a company to make 900 subsidiaries to avoid paying taxes.

People will tell you that regressive/flat taxes hurt the poor, but I honestly believe that's the biggest lie of all. When the poor don't have the benefit of tax shelters, off shore accounts, and professional accountants, you can be sure that progressive tax code is not their to protect them.

In fact all of these things cost money, and provide much greater benefits to those in higher tax brackets.

I have to admit that national sales tax is a pet subject of mine, and it may not be the answer to our tax problem. However, I believe scams like this truly are a symptom of our corporately controlled government.
posted by betaray at 5:11 PM on January 24, 2002


" ... That's why I do all my banking and accounting and money management offshore, like drug dealers, terrorists and Enron ..."

Er, and the 5.7 out of 6 billion on earth who live "offshore".
posted by MidasMulligan at 6:05 PM on January 24, 2002


"People will tell you that regressive/flat taxes hurt the poor, but I honestly believe that's the biggest lie of all. When the poor don't have the benefit of tax shelters, off shore accounts, and professional accountants, you can be sure that progressive tax code is not their to protect them ..."

An interesting pile of data from a 1999 study by the Congressional Budget Office basically says:

The Top 1% of taxpayers pay 29% of all taxes.
The Top 5% of taxpayers pay 50% of all taxes.

In terms of the economist's traditional quintiles, the top 20% of taxpayers pay 79% of the taxes. The second quintile pays 16%. The middle quintile pays 7%. The second from lowest pays 1%. The lowest quintile pays negative 2. This isn't just "progessive", it is massive, bald faced robbery, a huge re-distribution of wealth. One of the biggest piles of rubbish is the mistaken belief that the wealthy enjoy some sort of magical secret advising and hidden benefits that lets them escape taxes. The numbers simply don't bear this out. There certainly are all sorts of sophisticated instruments it is possible to use, and all sorts of expensive advice to buy ... and using all of them mean that if you made $1 million this year, maybe you'll "get away with" paying 300K instead of 350K in taxes.
posted by MidasMulligan at 6:30 PM on January 24, 2002


Midas, you seem to be working from the assumption that a flat tax is the way to go. If the fabulously rich are even paying the same percentage of their income in taxes like everyone else, then they would still be paying the largest part of the nation's tax bill. It's normal. It's proportionate. If it were true.
posted by Mo Nickels at 6:36 PM on January 24, 2002


Midas - according to this article the wealthiest 1% of taxpayers in 1990 owned 40% of the wealth in this country. In terms of the economist's traditional quintiles, the wealthiest 20% of taxpayers own 80% of the wealth in this country.

Do these numbers have any relevance to your "bald-faced" robbery?

***

To put it another way - say we take a flat tax approach. Call it 10% just to make it easy. Compare the person making $200,000 and the person making $20,000. One pays $20,000 in taxes, the other $2,000. Assuming all factors are equal, who feels that 10% bite more - the one with $180,000 left, or the one with $18,000?

***

I wish (but have little hope) that these items will illustrate why the tax code is progressive, and why it needs to be that way. Question - why is the redistribution of wealth a bad thing? Especially when tax rates on that top end are currently 1/3 of their rates following WWII?
posted by Irontom at 7:03 PM on January 24, 2002


COLDCHEF I AGREE WITH YOU ONE HUNDRDED PERSENT!!!
posted by EngineBeak at 7:06 PM on January 24, 2002


The article you mention looks at wealth, not income. It is a commonly used ploy to skew the statistics. People that save or invest money have wealth. Income tax is paid on income.

The Top 1% of income earners earn about 15% of the total income earned by all wage earners in the United States, and they pay almost 30% of all individual income taxes. Fully half the taxpayers contribute almost nothing in individual income taxes. The Top 1% are paying about 50% more of the overall income tax burden than they did in the 1970's.

"... Compare the person making $200,000 and the person making $20,000. One pays $20,000 in taxes, the other $2,000. Assuming all factors are equal, who feels that 10% bite more - the one with $180,000 left, or the one with $18,000? ..."

Is, however, the essence of fairness that of making certain that people feel an equal "bite"? Is that an objective standard of justice?

" ... Question - why is the redistribution of wealth a bad thing? ..."

More serious question ... how is it in any way justified? Do you believe that money, value, is a collective thing? Do you believe that if you make 30K a year it is your money, you have the right to do anything you want with it, and if you have to pay even 2K or 3K of taxes (and you probably won't even pay that much) it is unjust ... while the minute you make 300K a year, suddenly it is not your money, but "our" money and we should all decide how much of it we let you keep and if that means "we" take 100K instead of 30K so that the 30K per year folks will need to pay much less ... well hell ... you wouldn't hardly feel the "bite" at all, would you?

What I do think is wrong is the fact that the "rich" pay a huge amount of the taxes in this country, and in essence subsidize a level of public services for everyone else, and yet not only is this not appreciated, instead the wealthy are cursed daily, called greedy and selfish, face the assumption that they have all manner of secret tricks to avoid paying any taxes at all, and should they ever support conservatives in Congress who even dare suggest that maybe the top 5% should shoulder 45% instead of 50% of the total tax burden ... well then of course they are raked through the coals for wanting to escape paying their "fair share".

I'm sorry, if what "fair" really means is "if you're poor, you own your money and have the right to do anything you want with it, while if you're rich, everyone else owns your money, and you should happily pay anything we collectively decide you should (which is what, essentially, "why is the redistribution of wealth a bad thing" means) ... then I profoundly disagree with your standard of "fair".
posted by MidasMulligan at 7:50 PM on January 24, 2002


[Pardon me for going off topic for a moment]

Wow! Our "Internet wag", Steven Den Beste, has been quoted by Mark Steyn in today's Spectator!
posted by MiguelCardoso at 8:05 PM on January 24, 2002


I would like to point out that MidasMulligan's two posts in this thread are some of the best articulated, well reasoned, and extremely fair comments that I have seen on MeFi in a long time!
posted by madreblu at 8:47 PM on January 24, 2002


Midas your right. The point that I failed horribly to make was the current tax law isn't great for either the rich or the poor. However the economic arguement is about the weakest one I could have made to show how current tax law hurts the poor.

Now, since you you mentioned that you were uber-rich and power (I'm kidding read the link) and seeing your latest post, I wonder why you are against a regressive tax. You are obviously not satisfied with the current system. Do you believe it can be modified?

And on the topic of fairness: Do you think that taking a percentage of income is fair, or what do you think is fair?

(BTW, today's been a good metafilter day, I've almost double my number of posted comments, and I've been reading metafilter for going on a year now)
posted by betaray at 10:21 PM on January 24, 2002


betaray ... to be absolutely truthful, I'm not certain what is fair. I do pay a huge amount of taxes - both in absolute terms, and as a percentage of my income - but by the same token I really don't mind paying them. I love this country, flaws and all, have friends in every income range, and most definately do not want to ever see someone go hungry, or freeze in the winter. I hate what happens to a lot of our elderly.

I suppose what I don't like is the way the civic discourse has been tilted ... the common assumption that the "rich" somehow escape taxes, that cutting top rates from 39% to 36% would somehow mean I'd no longer pay "my fair share" (it is this phrase that always gets me asking "what is meant by fair?"). That whenever a proportional tax break is suggested, it is immediately claimed that those damned rich people are getting a huge break, while the poor are getting nothing - and never it's mentioned that the reason this is the case is because the rich already pay a disproportionate share of the taxes (which is, oddly enough, called "progressive"), and the poor pay none at all ... so yes, obviously, the simple math means the rich benefit more from a tax cut - not because they're rich and secretly connected to power, but because they pay so much.

I don't mind paying a lot of taxes ... in fact, don't mind paying a disproportionate share - I do mind getting continually cursed, and accused of being "selfish" by a lot of the people who get public services that they do not pay for themselves, and that are, in part, subsidized by my income taxes.

As horribly, politically incorrect as it is to say, the rich do far more for the poor in this country than the poor do for the rich.
posted by MidasMulligan at 10:52 PM on January 24, 2002


Midas, you said, "As horribly, politically incorrect as it is to say, the rich do far more for the poor in this country than the poor do for the rich.
"

Wait a minute, now. Who provides the labor that is the basis of the economy that made you, and I, and everyone reading this filthy rich compared to most of the world? It sure as hell wasn't me, and I kinda doubt it was you. Would you have had time to educate yourself, and make whatever money you have, and write posts on MeFi if you hadn't had some basic services provided for a very small amount of money? I sure wouldn't.
posted by roban at 11:33 PM on January 24, 2002


Didn't mention the rest of the world. Said "this country". Didn't say the wealthy add 100% of the value, and cheap wage labor added 0%. I do know that even those who you speak of that provide "basic services for a very small amount of money" generally have the jobs they have because some rich person created companies, took big risks, organized capital, and provided the jobs. I also know that whereas that wage laborer and I walk down the same sidewalk, I paid for a much larger percentage of it than s/he did.
posted by MidasMulligan at 7:03 AM on January 25, 2002


This is in response to the above comment by Midas:

Actually, I think the migrant farmworkers back home in North Carolina would still pretty much be engaged in backbreaking agriculture for little reward if they were subsistence farmers instead of tobacoo pickers. I don't think we need to thank Philip Morris investors for "taking big risks "to provide those jobs, I think those investors, rather, shouldn't begrude a picker his emergency room bill when he was an accident with the pesticides he was spraying of the crop that's making the investor rich.

If I built a big corporation up from the ground, I'd certainly feel proud, but I wouldn't whine about paying for the sidewalk the janitor walks down while I drive by in my lexus.
posted by roban at 5:08 PM on January 25, 2002


Midas,

The vast majority of rich people start out with significant advantages & often don't have to do much to make a lot of money - if you inherit money, or connections, it's easier to maintain wealth (see the current prez, eg). This imbalance could certainly be argued as unfair in itself. If everyone began with equal external resources, you could claim that people who made more should retain a greater percentage than they do.

The wealthy are much more dependent on the resources their taxes pay for - if you sell pancake mix across america, you depend on the interstates for your income in a way that the local short order cook does not. You therefore are responsible for a greater portion of their cost.

People seem to think the government is "taking" their money. That's not how it works. You rely on the services of the government to make your money. Without the legal system and it's enforcers (Law & Order), no one would leave their homes to buy your product. Without roads, you couldn't distribute it. Without farm subsidies, the growers of wheat would go out of business in a bad year and you'd be left without the necessary flour the next year. Without schools you wouldn't have the educated young adults ready to learn how to run the company. Etc.

You can argue over particulars of course, but the point is, all the collective programs of a society are there for the progress and success of the members of that society. Libertarians tend to forget how much they rely on society for the basic framework within which they are able to achieve individual success. You wouldn't make any money if you lived alone on an island.
posted by mdn at 6:40 PM on January 25, 2002


"... If I built a big corporation up from the ground, I'd certainly feel proud, but I wouldn't whine about paying for the sidewalk the janitor walks down while I drive by in my lexus ...".

True. You probably also wouldn't want to be cursed as "greedy" by that janitor, and told you don't pay your "fair share" while he's standing on the sidewalk you paid for.

" ... People seem to think the government is "taking" their money. That's not how it works. You rely on the services of the government to make your money ..."

Yes it is how it works. Money in itself is nothing - it represents value that someone has to create. Print all the dollar bills you want, but if no one bakes bread and makes clothes, you're still going to be naked and hungry. I certainly can create value without a government around. Government does create a monetary system that makes the exchange of value easier, but it does not create value itself. I don't need it's medium exchange to create value, but it needs the value I create to make it's medium of exchange worth anything.

" ... The wealthy are much more dependent on the resources their taxes pay for - if you sell pancake mix across america, you depend on the interstates for your income in a way that the local short order cook does not. You therefore are responsible for a greater portion of their cost ...".

Au contraire ... the wealthy make money in countries with no infrastructure, no roads, no law and order. Without that infrastructure, however, I might not be able to ship pancake mix, but in many cases the poor would not even eat.

" ... Libertarians tend to forget how much they rely on society for the basic framework within which they are able to achieve individual success. You wouldn't make any money if you lived alone on an island ...".

And Libertarians are often the only ones to remember that someone has to create value before it can be taxed. That an entrepreneur that discovers a process for more efficiently heating houses, or a company that discovers a cure for a killer disease may well get rich ... but the benefits their work delivers to everyone else are far in excess of any personal fortune they might make.
posted by MidasMulligan at 7:49 PM on January 25, 2002


I don't need it's medium exchange to create value, but it needs the value I create to make it's medium of exchange worth anything.
yeah, duh, but the point is, in order to make things of value, you rely on the services of the society as a whole. We stand on the shoulders of giants, etc - without the established framework and stability of society, you couldn't make the things that bring further value into society.

the wealthy make money in countries with no infrastructure, no roads, no law and order.
Because they're already wealthy. Where did they get that initial money from?

Without that infrastructure, however, I might not be able to ship pancake mix, but in many cases the poor would not even eat.
a) so what? you still wouldn't be making any money.
b) if you didn't have all the money to take over the economy, perhaps they would simply grow their own food in their backyard, rather than work in your factory to make enough $ to buy food from you.

but the benefits their work delivers to everyone else are far in excess of any personal fortune they might make.
That is entirely dependent on the particulars of individual cases; I don't think kraft macaroni & cheese has brought society more good than the money made off it, for instance. In fact, I would guess that most who get rich are not actually adding much of value, but simply playing off a lazy, trend-driven consumer culture. Often the most socially valuable work is funded by grants.

Those who get rich of our laziness or stupidity or simple pliability are certainly authorized to get their money, but to imagine that they did it all alone, without taking advantage of tax-funded resources, is to ignore the big picture. Society must work if people are going to buy things. Stability and infrastructure are important to profit.
posted by mdn at 12:46 PM on January 26, 2002


The vast majority of rich people start out with significant advantages & often don't have to do much to make a lot of money - if you inherit money, or connections, it's easier to maintain wealth (see the current prez, eg).

This is not statistically true. I did some studies on charitable giving for a nonprofit law class a few years ago and the one statistic I heard over and over again was that less than 5% of all wealth is inherited. Another statistic was that most millionaires are small business entrepreneurs - hardly the George Ws of the world.
posted by lizs at 1:20 PM on January 26, 2002


liz, I looked for stats online, but didn't find too much. According to this, the richest 1% inherit an average of $3.5 million each, and the next 9% receive on average almost $400,000, which seems to support the idea that wealth runs in families.

Even if people don't get direct inheritance though, I was also talking about opportunities and connections. There are more people who could do well at yale than they have space for; I'm sure no one doubts that george bush could easily have been among the rejects if not for his legacy, and that some of those who didn't make the cut were probably more deserving of his spot.

The point is, children of upper middle class parents get better educations, are more aware of their options, and commonly find opportunities thru family friends, etc. Kids who grow up with nothing have a steeper hill to climb. Whether or not there's money after the parents die, the amount of money spent on them and around them as they grow up has an impact.
posted by mdn at 5:10 PM on January 26, 2002


« Older In 1976 four ABA teams joined the NBA....  |  The "Pardon Effect" - economic... Newer »


This thread has been archived and is closed to new comments