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Home Publications Blogs Beat the Press Income Tax Payments Rely to a Substantial Extent on Self Reporting

Income Tax Payments Rely to a Substantial Extent on Self Reporting

Tuesday, 09 July 2013 20:17

It might have been worth reminding readers of this fact since it seemed that Speaker John Boehner had forgotten it. A NYT article on the Obama administration's decision to rely largely on individual's self-reporting of their eligibility for employer provided insurance when awarding subsidies through the health care exchanges includes a quote from Boehner:

“The president’s decision to use the honor system to hand out subsidies, I think, exposes taxpayers to massive fraud and abuse.”

The government relies on small business owners to truthfully report their income for tax purposes. There is vastly more money at stake in the taxes owed by small businesses than the subsidies for people who lack insurance. If Speaker Boehner believes that many people would lie to get an insurance subsidy then he must believe that small businesses cheat the government out of hundreds of billions of dollars a year in taxes.

Comments (6)Add Comment
written by Last Mover, July 09, 2013 8:44
Any other time Boehner would be cheerleading those who manage to avoid taxes by hook, crook or otherwise a la the Norquist mantra of not just no new taxes, but avoiding existing taxes as well.
Boehn$r = Take At All Cost
written by James, July 10, 2013 1:03
Subsidies could lead to massive fraud? Only subsidies to the poor would do that, not subsidies or tax credits (aka hand out but called differently by the lobbists) to the big ag firms, oil, or any businesses that receive those benefits.

Of course Boehn$r would villify the former one while defending the latter one. Simply bc the latter one goes to his benefactors.

Let's face it: more money goes to his benefactors = potentially more year-end bonus to him or his coffer, exotic trips, etc.

It's as simple as accounting, as you often said.
Bone Head.
written by Ralph Musgrave, July 10, 2013 4:23

Bone Head thinks small business owners are dishonest? A classic case of what Sigmund Freud called “projection”: i.e. seeing your own sins in other people.
I'm pretty sure he does believe that.
written by Procopius, July 10, 2013 4:40
The thing is, if the "small business" is owned by a white guy he considers it resisting government oppression of the real job providers, and a good thing.
Who would be called upon to correct this straw man problem?
written by Michiganmitch, July 10, 2013 6:05
The same outfit that hunts down tax cheats today,the IRS. The more you cut funding and maligns this agency, the more all are left to their own devices when it comes to paying up. Sound like Greece?
thats why 1099s were required for a bunch of transactions
written by pete, July 10, 2013 8:06
This was anticipated, Dean. Bacchus/Pelosi care (Obama hated it in 2008!) calls for increased use of 1099s, effectively eliminating the ability to "self report".

Thus, to really circumvent the rule, the black market for labor, already about what, 10 to 20% of total labor, including the "undocumented", will increase. People who don't anticipate that are really naive.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.