h a l f b a k e r yWhy not imagine it in a way that works?
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Tax Lottery
Lottery prize indexed by income taxes payed ensures compliance. | |
A problem with income tax is ensuring
compliance. In countries with self-assessment,
(like the US and Canada) off-the-books income,
phantom deductions, creative bookkeeping
and plain fraud all contribute to underpayment
of income taxes, which the government is
mostly powerless to stop, because
stricter
enforcement usually costs more than the
revenue it adds.
So let's have a tax lottery. On April 15 (in the US,
April 1 in Canada) pick an income tax return
at random, the prize being 1000 times the
tax paid and a guarantee of immunity in
return for a full and accurate assessment.
When it comes out that the winner shaded
his medical expenses a little and inflated
his charitable deductions a bit, saving
$1500 or so, and thereby costing himself
$1.5M, the compliance rate will approach 100%.
We may even find the sort of people that
normally play the lottery over-paying...
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Annotation:
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Except that a lot of tax work is done by people who can actually make a cost-benefit analysis... |
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It's an orginal idea but the people who play the lottery are probably not the people who ensure they pay as little income tax as possible. Besides if such a person was to play this lottery they probably would seek to maximise (or avoid reducing) their income tax as the expense of avoiding other taxes. Maybe methods would be found to pay a high income tax but revoke or reduce it matter if no lottery win is forthcoming. |
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Why not just increase the random checks and triple the fines and prison sentences? |
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