What is financially worse for the US, poor people taking advantage of the government or wealthy people finding loop holes to avoid paying taxes?

If the poor people get a better deal, the savvy wealthy will become poor.

Any takers? Mitt Romney? Koch bros.? Waltons?

Let us know when you smarten up and get on that sweet poor-people gravy train!

Wealthy people finding loopholes.

There are indeed poor people who game the system. There is a concerted effort to convince those who are not yet poor that as your question suggests it is the scammers who DEFINE the poor, It’s bullshit of course. But conservatives, and particularly dull witted conservatives gobble this nonsense up. But why is there this constant droning on how the poor are ripping the rest of us off? It’s simple. The rich WANT THAT MONEY. There’s never enough for them, and why not pick on those who literally are in no position to fight back. I know everyone here is tired of me harping on this, but I’m going to repeat my favorite little joke on the way things work in America. A CEO, a union shop steward, and a tpr. are sitting at a table. In the middle of the table are a dozen donuts. The CEO reaches over, picks up the plate and dumps 11 donuts into his briefcase. He then snaps the case shut gets up from the table and heads to the door. Before leaving the room, he turns and addresses the tpr. “Look out for that union guy. He’s after your donut!”

Both are equally as bad. Poor people gaming the system leaves little for those that are honest and need it most. The rich using their lawyers to gain tax loopholes are just acting in unethical business behavior.

I say the rich simply because one rich person gaming the system hurts the economy more than any ten poor people gaming the system ever could. And the rich people gaming the system are why many of the poor are poor.

Of course, both groups suffer from a few bad apples giving their entire demographic a bad rep.

It’s all bad. The difference is taking advantage of a loophole is legal. Not that it matters. The rich and powerful vote in the laws for the loopholes to make them legal. What a racket system.

It’s hard to evaluate all the loopholes, because the tax system is so complex. I wonder what the actual statistics show? I wonder how much money is spent on fraudulent claims for Medicaid and other social services and people simply happy to live off the system and how much money is lost in tax money because of loopholes and write-offs? My guess is the tax amount is higher, but I really don’t know. If we take away write-offs and loopholes willit discourage charitable contributions? Will it discourage investing long term? Some could argue some of the loopholes help the marketplace and economy. I don’t necessarily agree with that, but the tax game does create incentives for some things.

Whatever money is spent on fraudulent claims for Medicaid or the Welfare system in general, it is money far better spent than the trillions of dollars the US spends yearly waging war globally to keep us stockpiled in opiates (why do you think we were in Vietnam? Why do you think we are in Afghanistan?) and oil and to continue to enrich the rat bastard war profiteers who could care less that they and the banking community have forced a global depression on us all.
End the warring and spend those trillions of dollars on human beings (Americans) who have been made homeless needlessly.

You do know that America has created its own terrorists against America, don’t you? We are fighting terrorism, yet we caused the terrorists to hate us by killing off their women and children, brothers and sisters, mothers and fathers. Of course so many hate us. We create the hatred against us, and we do it on purpose.

I want to add that people with money rob the Medicare and Medicare system. Doctors all too often have patients return for test results when it is completely unnecessary and bill when they shouldn’t.

Both are bad, but the worst part is that our government has been talking about ways to “fix it” for almost 30 years (according to my economy book) and they still havent even tried any of the “solutions.” My opinion is that the laws meant to help the poor should not be so generalized.

America’s social contract is to help those who truly need help. Those who game the system and take freebies they do not need or deserve puts added strain on the system which then consumes tax funds that could be used elsewhere or not be needed in the first place and create the opportunity to offer reductions in taxes that everyone can enjoy. Plus, those who take advantage of the system are doubly hurting the economy by not being out in the workforce and contributing and adding to the coffers instead of being a leech.

This is a great question and seems to be at the heart of the divide between Republicans and Democrats. What’s more important, what takes more money? The poor and working poor or the rich and corporations who utilize legal loopholes to hide their money?

Look at how Warren Buffet said his secretary pays a higher tax percentage than he does.

Rich people hide their money legally and get Medicaid and food stamps. They use estate tax laws to game the system. Some large corporations pay zero taxes (yes, it’s true – google it). Amazing. Corporations not paying taxes and rich hiding their money are using the laws already in place, laws set up by other rich people to help themselves and their friends hide their money. The laws have to be changed in order for this practice to stop.

I see public assistance recipients out in front of Social Services with their nails done, gold jewelry, cars that are registered in other states, and they’re in the bodega with their food stamps buying chips and soda. There are disabled getting SSD who are not disabled, or who could work if they wanted to, or they work off the books while receiving disability, or the work on their houses which shows that they could do something if they wanted to. I am not saying all disabled, but everyone knows a few who do that. Still, those people, to me, are not as bad as the rich hiding their money.

The impact of the wealthy taking advantage of tax loopholes and corporate advantages is far larger than all the social programs put together.
If you tax the uber-wealthy more, none of them will be desperate as a result, and when they dodge taxes and externalize their corporate costs onto the public their lives do not change all that much for the better. Their huge government handouts don’t really impact their day-to-day experience.

When poor folks take advantage of government programs that often means they can suddenly become productive citizens and pay taxes. Government assistance is an enabler for the poor.
Yes, there are some parasites on the government dole, I don’t care. There is no system in our modern lives that is 100% efficient. As long as the people who need help get that help then I’m satisfied with government assistance. It is short-sighted to think that because there are some welfare cheats out there that the solution is to shut down welfare. The same idiotic logic would force a person to avoid cars because they’re at best 50% efficient at turning their fuel into locomotion. Idiots want to shut down medicaid or food stamps or social security because somewhere out there is somebody who got more than they should have. Stupid fucking morons.

On the other hand there is typically NO provable benefit to most of the government subsidies and tax breaks to corporations, unless you consider campaign contributions and lucrative consulting contracts for former politicians a benefit. Talk about inefficient.

@dabbler You wrote, “When poor folks take advantage of government programs that often means they can suddenly become productive citizens and pay taxes.” Pay taxes? Do you mean sales tax? I would think most poor people utilizing social programs are not earning enough to pay income taxes. I know my aunt gets Medicaid and Medicare and a small amount of food stamps and she does not pay income tax. I think she actually gets $50 back at the end of the year. My sister does her taxes, so I am not sure of all the numbers, but I can’t think of any account that she is paying taxes into the federal tax system. She is getting back EIC money I assume.

I fear most people don’t understand what a loophole is or why they are there. Unless you understand what they are and why they’re created, it is difficult to know if they are good or bad. For instance the subsidy that we hear the oil companies get is not really a subsidy but rather an accelerated depreciation for the capital cost of drilling new wells. And the oil companies don’t get it, the drillers do. It allows them to recoup the cost of drilling faster which provides the capital for the next well. Is this a loophole or just an investment strategy that provides jobs and growth?

How about solar? If you put solar panels on your roof, you get a tax break. Of course if you don’t pay taxes, it’s not very lucrative. So is this a loophole for the rich? The one I like the best is the trillions held over seas to avoid US taxes. Does anybody understand where this money came from? It is money from products made overseas, sold over seas, and taxed over seas. It has never been in the US and if it is brought back to the US would then be taxed over and above the taxes already paid over seas. The only connection to the US is the parent company is a US company but the money never saw our shores and we have no jurisdiction over it.

Those, boys and girls are the loop holes we all complain about. Nobody wants to fix the tax law because we’re all so afraid that some body might benefit. We talk about the fair tax or the flat tax but we’ll never get their because it wouldn’t allow us to punish those we dislike with higher taxes.

Currently the top 10% of income earners pay 70% of the taxes. The tax base is too narrow and way too dependent on the top earners doing well. If their income drops even slightly, our tax revenue declines and we can’t pay the bills run up by government.

Welfare fraud on the other hand provides no benefit to the country. No products are produced, taxes paid, nor services rendered. But it is small change on an individual basis. Of course all those individuals add up. With half the country receiving some kind of federal assistance, it becomes the responsibility of the other half to support them. With the median salary actually declining, how many other families can you support because it is your job to support at least one.

To answer the question or at least address it, we are all in this together. Continuing to try and divide us along economic lines, won’t solve our problems. Yes, we need tax reform. Yes, we need welfare reform. But mainly we need jobs and people willing to work them. Instead we have a whole passel of people that that just want to find someone else to blame.

@Jaxk: The examples you gave were not even examples I was thinking of when I thought of loopholes. I was thinking more of rich people hiding their money legally in order to obtain Medicaid and Food Stamps. I work for a public agency that deals with people who enjoy these benefits and I have personally been to mansions owned by people who are Medicaid recipients. They obtain the services of estate planning lawyers and on paper, in a few months, they have very little to report.

Believe me, I can tell you stories.

@Jaxk gets it.

Your examples, @jca, are not “loopholes” but are examples of fraud. That’s a different thing entirely.

What is worst for us – all of us collectively and “financially worse for the US”, to respond directly to the question – is that government continues to grow. Period. THAT is what is most injurious to us.

What does tend to worsen that is that many politically connected people, who generally do happen to be rich – often because of those connections – steer the government to grow in particular ways that suit them directly, even as their PR flacks crow about how “it’s best for you” that some policy or program or department be more heavily funded and grow more. That means that government is going to cost more, and that means that through whatever means, we all pay more.

“Taxing rich people” sounds great, until you realize, as most here never seem to, that those taxes are paid by whoever pays ‘the rich’ for whatever goods and services they provide. “The rich” seldom pay tax out of their own pockets, and not because they are all in cahoots with government – though too many of them are. That is, the taxes that will be paid as income taxes, excise taxes, tariff or whatever other levy is made, are figured into the cost of goods sold. The consumer pays the tax. Always.

In addition to this, since the federal government always operates at a deficit, the closer we approach a point where the government isn’t crying “we’re broke!” means the faster we’ll increase the deficit “because we need to”. “Need” is a bottomless pit. When you put people in charge of spending to fill that pit – and whose jobs more or less depend on them spending the money, and with little accountability for it – there will always be money for them to spend, even if they don’t have it.

To top it all off, with “money” having no real value, policies that lead to increased debt with less and less likelihood of real payment, and which therefore result in further currency degradation and increasing inflation, also steal silently from all of us.

If we “tax the rich” by taking everything that they have from them, every dollar, then it would fund our government for how long, do you suppose? A few months? Maybe a year or two?

@Jaxk I always wonder if the tax breaks for things like solar and hybrid cars are a way for solar companies and car manufacturers to charge higher prices. I have my doubts the tax breaks actually save the end consumer money. I don’t know the honest answer about it though, I am just very suspicious. Loopholes and write offs definitely favor the rich, or people with discretionary income anyway.

@jca

It doesn’t sound like you’re talking about tax loopholes but rather welfare fraud.

@jca Just because one lives in a mansion does not mean they are rich especially the elderly ones. I know lots of old folk living in paid for mansions. The problem they are facing is they lived too long and money has run out. The only expense they have is taxes and utilities and with only SS to lean on and no real income they qualify for these social services. And yes some have sheltered monies in trust funds for their children but it is now out of their reach. Plus these people paid into the system their whole lives and should be able to receive these benefits.

@JLeslie

You may be over thinking this. If the car makers or solar panel makers could make those products more competitive, the market for them would be huge. Much more money to be made through volume than by the niche markets they have today.

@Jaxk It isn’t fraud. In NY you can give away something like $100k and receive disability Medicaid, if you are disabled of course. It’s all legal. Then you pay money into a pooled trust every month and pay rent and other expenses that are approved. The pooled trust for whatever reason makes the person able to maintain their benefits.

The estate lawyers know the laws. I manage it all for my aunt. The lawyer wanted to charge us something like $15k to take care of it all. My sister happens to work for a company that schedules at home nurse care, and the company fills in parts of what is required by law, basically the lawyers forward the forms to the company and of course the individual themselves need to answer a lot of the questions too. My sister flipped out and we got our retainer back from the lawyer and did it all ourselves. It was a little bot of a nerve racking experience, but in the end my aunt has her benefits, she is not close to rich, but the fish do have these things at their disposal more readily than those without money.

@JLeslie

I’m not sure about your NY example. Personally I don’t see why we need to strip people of all their assets to get disability so I don’t see much of a problem with your example. I am much more concerned with people collecting disability fraudulently. Such as these people working for the federal government while claiming to be totally disabled. It seems like a simple process to compare disability records with federal employment and even federal tax returns to flush out the cheaters. But if there is no incentive to do so, it simply continues ad infinitum.

@jleslie’s answer is for @cwotus too. It’s not fraudulent if it’s legal.

@Jaxk Collecting disability when you are not disabled is certainly fraud, I agree. Although, I think our social services make it difficult to work part time or go back to work once we are on the system. The risk of not getting disability awarded again, or having to go through the mo ths and month of battle to get it if the person slides in their health again isn’t worth the risk to most people, so once in the system they stay on it. I’m not exactly sure how to fix that.

So, you are ok with someone receiving disability and Medicaid and food stamps if they have a pot full of money in the bank?.

And a mansion?

@jca I never know how I feel about the mansion. I hate when people are kicked out of their residence. They can put it in their child’s name (although they need to do it several years in advance of the application to Medicaid. A large house in NY would probably have considerable property taxes levied. It seems like it would be hard to keep the mansion unless there was a very substantial pot of money somewhere. My aunt rents, so I am not sure about the home ownership laws. My sister and I have considered trying to get her cheaper housing. It would suck to have to move her though. She is rent stabilized where she is. I guess the cheaper housing is probably government subsidized.

@JLeslie

I guess my problem is that I don’t consider $100K a pot full of money. there has to be a line somewhere and I don’t have a problem with that one. Seems like $100K for lifetime of savings for retirement is not all that unreasonable. I’m not heartless, just a little heart challenged.

@Jaxk As usual, the devil is in the details. Things that are exploited by some are essential lifesavers for others. Too much is context-sensitive.

But $100k is about 2 years gross income for the median household. Now, if your business spent >95% of it’s revenue on overhead costs, how long would it take to amass profits equal to 2 years revenue? Ignore the absolute numbers, look at it in percentages, and you’ll see that $100k is a lot of money for most people.

Also, when you’re 35 years old and faced with the choice between having $100k for retirement, or paying basic living expenses (including a few thousand in medical bills because insurance doesn’t cover 100% of everything), which would you choose?

@Jaxk I agree $100k is not a ton of money for retirement. The amount might be a little more than that, but even if it is, it is not much more. Maybe $150 at most. Still, some people might prefer the person spend down more before they collect. If you are fine with it, that’s fine with me. I’m glad for the policy, it helps my family. My aunt worked most of her adult life and she truly is disabled.

@jerv “basic living expenses” puts you in that low hanging fruit category that people face every day. Do they/I pick up the phone to call the state benefits office or the local temporary employment agency. Sadly the government has made it all too tempting for heads of households to dial the state unemployment agency.

@Crazydawg It’s not nearly that easy. I won’t get too much into it, but I’ve been unemployed for months despite having my name in at every agency in town and spending money I didn’t have on gas to run around filling out applications even for jobs that many would consider beneath them. The vast majority of the unemployed are nowhere near as lazy as RNC propagandists portray them to be.

And @JLeslie is correct that you’re kind of punished for getting off the dole and back on your feet unless you’re damn lucky. Given a choice between paying rent or rejoining the workforce, which would you choose? Would you give up your home for a job? Myself, I’m lucky that I haven’t been in that situation in my adult life, but I’ve seen it a few times, and I can’t blame them for choosing to feed their children instead of working.

Of course, that means that we need a substantial overhaul of our entire system, including the way business does business, because that’s not right. Situations like that should never arise, and the fact that they do means something is wrong. And I don’t think the solution is to throw people in the street to starve either. But since business won’t change, the current flawed system is the best we can do unless you want us to be a Third World nation. We can do better. We should do better. But that would be considered Socialism, so we won’t reform in the ways that have worked in other industrialized nations.

@Crazydawg: “Plus these people paid into the system their whole lives and should be able to receive these benefits.” You mean the benefits of hiding their money, continuing to live in mansions and receiving Medicaid and food stamps?

Then there’s the trouble with finding the line between need and abuse. A few months back there was an interesting little piece of investigative journalism to be heard on NPR. It involved this little town in rural Mississippi where an outlandish percentage of the population was on SS disability. In fact the entire economy of the place revolved around disability “check day”. Things looked suspicious when it was discovered that all of the recipients were the patients of the same doctor, who had participated in the certification of nearly every one them. But it soon became apparent that the doctor was barely scraping by. He was a dedicated and honest man. The reason that all of the check recipients were his patients was simply that he was the only physician willing to stick around. The reporter interviewed the doctor, and it was one of the most poignant and revealing discussions I’ve heard. It turned out that his patients all suffered from chronic conditions typical of poor people with no access to medical care. Diabetes and obesity were rampant, along with diseases associated with long term inadequate nutrition. Rotten teeth, with accompanying infections, even nutritionally based cognitive impairment. The doctor then went on to explain that this cavalcade of dysfunction was in a place where the only jobs available involved back breaking manual labor, and there were damned few of even those. He then went on to state that as far as he was concerned, his barely literate patients were disabled in every sense of the word, and the fact that he was good at navigating the bureaucratic rapids to qualify them as such was just fine with him.

@JLeslie & @jerv

I think we’re missing each other here. If some has a little saved up ($100K) and they become disabled, I simply don’t think we have to wait until they are completely destitute before providing help. I also don’t think this is a big problem in our system. Oh yea, occasionally you’ll here stories about the woman that won the lottery and is still collecting welfare. It looka bad but that’s not the problem.

The problems come in when people try to use disability as unemployment. Unemployment runs out so they get disability. Once on disability they stay on it even after getting a good job such as the examples I gave in my first link. I can’t believe you justify this by saying it’s hard to get disability so once you’ve got it, stay on it. No if you say you’re disabled and you’re working full time, I want you to go to jail. That’s fraud.

@jca I did not write the legislation that has demanded that ALL citizens pay into a system that purportedly will provide health care and disability benefits to ALL citizens regardless of financial capacity. Deal with this reality as most rational people do!

@jerv I could easily use your talking point of view to say the vast majority of liberals sponging off the Gov are far more industrious than the Tea Party makes them out to be. Which is the truer truth?

@Jaxk Actually, we are pretty much agreeing.

@Jaxk Ah. Well, I think disability should be reserved for those that cannot work. I know a few people that periodically can/can’t work, but such a transient status is a special case. But yes, I agree that disability checks and paychecks are either/or; you can’t get both.

@Crazydawg If the working poor want to make a living and they can’t get that from a hijacked party who favor policies that give all economic gains to the executives and shareholders instead of rewarding them fairly for their labors, and the unemployed can’t get a living wage because the Walton’s want a new mansion, can you really fault them for leaning to the Left? And looking at where public assistance is greatest and comparing it to the electoral map, I find a disconnect there. At best, it seems to transcend political leanings, if not actually make it look like Conservative ideology is wrong. But I’m leaning towards it transcending left/right except insofar as the Far Right is better at fear-mongering than facts. Sadly, that makes non-extremist Conservatives look bad.
Regardless, the current system is flawed, and most proposed changes (from either side) are either worse, or would be filibustered to death, so I don’t see things improving anytime soon.

The wealthy avoiding taxes.
Seriously, this whole poor people bilking the system crap has got to stop. NOBODY has ever gotten rich on welfare and food stamps, and it is a complete myth to think otherwise.
It is also not easy to defraud disability.

I know someone with MS and it still took her over 2 years to get benefits for a well documented and progressive, serious condition.These outdated ideas may have held some truth decades ago, but not anymore. People are SOL in this economy right now if they are poor.

@jerv I can’t think of one job where people not incarcerated are forced to work for low wages. Low wage jobs are spring boards for low skilled workers to get better paying jobs. Problem is welfare benefits are so robust now that people can almost do better on welfare than working minimum wage. Where is the incentive for them to work? Plus the Feds have screwed things up so bad for small businesses that they cannot afford to hire more workers and thanks to Obama care big corporations will hire more part time over full time. Stop blaming the rich and start pointing fingers at the true villains. Congress.

@Crazydawg Robust?
In CA. here unless you are a mother with dependent children there are no “robust” welfare benefits. 11 years ago after a mid-life divorce where I was barely hanging on with my part time work while seeking full time employment and waiting for the divorce settlement to come through, well… I was only eligible, as a single woman, with a take home income of a little over $600 a month, for a whopping $38 a month in food stamps and medical benefits, which I did not need as I was still on my soon to be ex husbands health insurance.

Nobody was offering me cash assistence of any kind.
As I mentioned above, I do not know HOW these welfare myths come to be, because I will tell you what, they could take their $38 a month in food stamps and shove them up their you know what.
My ex husband was making almost 100k a year and there was NO help for me at that time. Where are all these mysterious welfare kings and queens? Pffft!

@Crazydawg Congress and the corrupt rich that pull their strings, along with the unscrupulous employers that circumvent regulations anyways. No, the ENTIRE system, with a bit of blame left over for the bobbleheads that elected the worst Congress-critters into office.

And do you want to know why things are messed up for small businesses? Look at how well the business world really regulates itself. Those who cannot see that have too loose a grasp on the concept of “cause and effect” for me to consider functional adults, but then again, the military got me used to entire groups being punished because one guy fucked up.

As for “robust” benefits, all I have to say there is “fact-checking adds credibility”.

I can’t think of one job where people not incarcerated are forced to work for low wages

The sex and agriculture industries in the US are well known for near-slavery conditions.

@jaytkay It could also be argued that fast food and retail are not much better. For instance, Walmart’s policy of requiring their 20 hr/wk employees to have enough flexibility in their schedule to preclude the possibility of a second job isn’t exactly nice, nor conducive to working your way out of minimum wage, part-time work.

But I suppose that under Conservative ideology, that isn’t “forced” because there is no literal gun to the head; merely a lack of alternatives. If those are the only jobs hiring, then one could still choose to remain unemployed, live entirely without income, and die in poverty. Government assistance is evil, and therefore not an option, or rather, an option they seek to eliminate.

Then again, there are some ethical employers in those fields that behave far better, whether it be living wages, tuition reimbursement, or just offering full-time employment with benefits. So, again, we have a few bad apples ruining things for everyone. But since, whether due to lack of will or lack of power, those ethical businesses aren’t punishing the unethical ones themselves, government is stepping in because of the actions of those that those who hate government the most support. You can’t bitch about businesses bearing the cost of insurance then bitch about taxes going up because more people are forced to rely on the government to pay what employers won’t.

I know everybody hates Walmart but just like graveyards, people are dying to get in. Walmart receives about 39 applications for every job opening it has. When a new Walmart opened in Atlanta, they received 7,500 appl8cations for 350 jobs. It turns out to be harder to get a job at Walmart than to get into Harvard. For each opening at Harvard they receive 17 applications, at Walmart they receive 39.

If Walmart is the enemy, what we should be doing is creating better jobs as an alternative. But in true liberal fashion their focus in on destroying Walmart. If the Liberals get their way and raise the minimum wage to $10 or $15 an hour, imagine how lucrative those jobs become. Riots in the streets to get a Walmart job. I can foresee auctioning these jobs to the highest bidder ( for $1,000 I’ll get you a job at Walmart)

There are lots of things we can do to reduce the unemployment, we’ve done it before. Business creates jobs, encourage it. Low skill, low education immigration floods the market with minimum wage workers. The barrage of nonsensical regulation costs us Billions with little to show for it. What Washington has been doing isn’t working. Merely doing more of it won’t fix any problems.

@Jaxk It sounds like you want drastic reform as well. As for doing more of what Washington has been doing not solving anything, true; that’s why you and I disagree so often. It seems like you endorse the failures of the last couple of decades while I want what worked in the middle of the 20th century when we were prosperous.