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Tax gap costing all Californians

March 13, 2012

Potential tax dollars lost to the “underground economy” deprives California’s coffers of as much as $10 billion annually, a study by the state’s Franchise Tax Board suggests.

Other tax-avoiding techniques contribute to the deficit, the study notes, such as non-filing of tax returns, misstatement of deductions and simple tax evasion.

Tax agency officials said the data was derived from Internal Revenue Service records.

The so-call “tax gap” is twice the amount Gov. Jerry Brown wants to raise through his proposed tax increase ballot attempt.

According to FTB officials, the widespread practice of avoidance costs other California residents who must shoulder a larger share of the tax load, receive fewer services and benefits, and endure larger and larger budget deficits.

The report’s authors said that dealing with the so-called ”tax gap” is important “because it causes other Californians to bear the additional load of higher taxes, less services, and bigger deficits. The Tax Gap also undermines honest taxpayers’ sense of equity in our tax system and places honest businesses at a competitive disadvantage.”


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I had a 200k remodel in the works last year. Plans drawn, contractor hired, and then came the permitting process. Despite the obstacles, I plowed forward until the day a county planner, while reviewing the application, said “Oh, I see you’re covered by prop 13″. I looked at my contractor and said ‘bill me for your time invested” and ripped up the application. To loosely quote P. J. O Rourke ‘giving money to the government is like drinking whiskey with your sixteen year old, then tossing him the keys to the car’. Want a prosperous California? Slash welfare, slash the bureaucracy, including benefits and retirement, deport illegals, and lower taxes. Problem solved.


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” Slash welfare,”


Add to the homeless population.


“slash the bureaucracy,”


Agreed.


“including benefits and retirement,”


Bad for the economy.


“deport illegals,”


Not realistic.


“and lower taxes.”


Like Bush, that’s already proven to be a disaster.


“Problem solved”


Nope.


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The Bush card again. Remind me, what was the result when Reagan lowered taxes, and when Brown raised them? I’ve lived in California almost seventy years, and the results are as predictable as a sunset. The democrat has controlled the purse strings of California for 40 years and has nearly destroyed the economy and most certainly devastated the educational system. Servitude and security or freedom and risk, take your pick. Fortunately Typo Bush Derangement Syndrome is recognized as a disability, so there should be some tax dollars in it for you. I wish you a speedy recovery.


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“Bush Derangement Syndrome”, hey, you copped that from what those on MSNBC that frequently refer to ‘Obama derangement syndrome’, the birthers and the tea bags definitely epitomize ‘Obama derangement syndrome’. You guys are never original but that’s okay, wit is tough to come by for those on the right. That being said, I was simply addressing your argument against raising taxes on the wealthy. Bush’s tax reductions geared towards helping the wealthy and punishing the middle class have destroyed our economy.


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Why stop with Bush? D.C. is FULL of crooks. Obama, Clinton, Gore, and on and on and on.


When the same political crimes of crony collectivism get repeated so often, it’s hard to be “original.”


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Your confusion is beyond belief. What did Prop 13 have to do with your project? It looks like you thought you’d do your project with no increase in your tax base. And if and when regulations are relaxed almost all work will still be done by in-sourced illegal labor, cheaper, the American way, and tax free like God intended. Quoting P.J. O’Rourke is like quoting Plato, a good read if you’re into that, but otherwise irrelevant. Illegal labor is cheaper, the Republicans accept and support that. Free market baby, that means in-sourcing, you have no “right” to anything, no more than the anchor baby born today. Ya happy Tea Party? Extremism working for you?


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How intriguing, a group of people are demanding the government balance their books, and they’re “extremists”. What “extreme” act by this group can you cite?


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I think this falls under the header; “IF YOU CAN’T BEAT THEM, JOIN THEM”


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The real story above should read like this:

We, the Fed, St, Co and local employees everywhere in order to keep our now unneeded and/or obsolete jobs due to a crashed economy of which our unrealistic employment contracts contributed to disproportionately, created this false study and pushed it out to you hoping you’ll be stupid enough to buy it, thank you, and we will continue to finish off the Ca.economy thru waste as inefficiently as possible and by remaining bloated and unwilling to take the hit everyone else must. We do this because……..we can.

State agencies are moving toward becoming one powerful cooperating entity bent on survival by demanding a larger slice of a shrinking pie from the few free-enterprisers left and from where their is no business, but from whom their survival relies. Apparently that’s the path back to the good old daze.


Example: The Dept.of Insurance, (supported by Ins. Co’s.) the State Contractors Board, and the local building & Planning depts. of the state are sitting around worrying about their jobs but refuse to shrink their ranks but purely for “economical reasons” have decided (in a dead economy?) we now have a huge underground one eating us alive. Noone’s pulling permits all of a sudden and noone’s buying the insurance, bonds and workman’s Comp.the State requires. Not an issue when things were humming, big problem now that nothing’s happening? Sure, That’s…ahh…reasonable? It couldn’t be because, there’s no work?

So they want the Contr. Bd. to pull the lic.of anyone not pulling permits, having ALL the bonds, ins. and Workman’s Comp. Your local, bldg. insp. will now be the guy looking at your framing and plumbling AND your lic., bonds and ins. etc. from now on. Stop work orders right there if not in full compliance. All new actions.

There’s no biz for contractor’s to begin with, even if there was, contractor’s can’t keep up with Bond’s going from 90 to 900 bucks a yr. Permits going from say 65 bucks per improvement 4 or 5 yrs. ago to 280 now. Permits will soon be required to be filled out and paid for at the point of sale! Home Depot already will cooperate. These Dept’s. want to track down serial #’s of plumbing, HVAC, elect. equipt., etc. already installed and thru supplier’s records discover the installing contractor to verify a permit being pulled, if not a fine and pymt. due.

The future also holds new regulation requirement suprises such as requirements for having the freon in your AC unit checked for proper charge, the fans for drawing proper amperage, repairs made where problems are found. etc. to save a little energy? Work to be done by private service people charging market prices. Job creation? Environmental protection?

It goes on and on and some of these changes are yet to be passed, just proposed, but many are. It’s coming.


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“The report’s authors said that dealing with the so-called ”tax gap” is important “because it causes other Californians to bear the additional load of higher taxes, less services”

Such as public student grants to illegal aliens?


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Not to mention the free social services, education and special language classes without consideration to ones citizenship or contributions to the coffers that they’re sucking off of. That is what is really burdening us “taxpayers”.


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“State Controller John Chaing continues to uphold the California Great Seal Motto of “Eureka”, i.e., ‘I have found it’. But what Chaing is finding as Controller is that California’s economy as measured by tax revenues is still tanking. Compared to last year, State tax collections for February shriveled by $1.2 billion or 22%. The deterioration is more than double the shocking $535 million reported decline for last month. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011”


Go ahead Jerry, raise taxes again you cretin. Why would productive people want to live here? What’s next Jerry, an exodus tax on people fleeing your thievery and legal plunder?


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I am still waiting for my tax refund from the FTB for my 2007 taxes. I will feel your pain, FTB, when you feel mine.


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This is a huge problem, imagine if these dollars were spent in the U.S.A. and how many people sending money out receive government assistance ?

Remittances to Mexico are rebounding-

If you can afford to send money, you don’t need one dollar of assistance.

Finger print and ID all PEOPLE THAT SEND MONEY ANYWHERE, tax the hell out of it, period.

Analysts expect that money sent home last year by Mexicans living abroad, most of them residing in the United States, will top $23 billion when Mexico’s central bank releases annual figures this month.


http://www.remittancesgateway.org/index.php/press-clippings/flows-information/1082-remittances-to-mexico-are-rebounding


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I would apply it to the MILLIONAIRES and BILLIONAIRES and CORPORATIONS ( since they are people, too …RE Citizens United ). that ship funds to offshore tax dodges in the Cayman’s, Bermuda , Switzerland and elsewhere.


To focus only on “Mexicans” and “Mexico” makes your rant merely bigoted garbage.


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Bad day for the med’s huh???????r


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“Finger print and ID all PEOPLE THAT SEND MONEY ANYWHERE, tax the hell out of it, period.”


So should this go for everyone including the wealthy big corps, Exxon etc,,,they’re people too. This means that Romney would have to get his money back here from the Cayman Islands are or get the hell taxed out of it. Or would your thing just apply to the brown people?


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This is an interesting redefinition of “tax gap”. I bet when you ask a 1000 people to define “tax gap”, 999 of them would mention something about the difference in tax burden between the rich and the everyone else. I would guess a major cause of this new “tax gap” is the fact that so many “honest taxpayers” see that the current tax system is unfair and they are doing what they can to make it fair.


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I agree with you totally. There are many ways the taxpayer is taken advantage of and if the FTB thinks those who “avoid” their collectors are going to feel shamed and pay up or stop “avoidance”…they have another think coming. It is not right to expect others to shelter your costs but isn’t that the way our entire system is moving towards? If it isn’t taxes its contraceptives. Our state motto should be “Our taxpayers pay for YOU!”


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Could be that the same folks that are “underground’ are the ones fed up with the management of tax dollars and going “underground (bartering) is their form of protest. Fraud can be found in most giveaway programs and the PS system in California is a joke. Why are we providing food stamp beneficiaries free breakfast and lunch at school?


Could it be that the “underground” crowd is waiting for the Feds to police the immigration violators and then maybe Calif won’t need the revenue.


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