6 ms·

Lower income people with cash business are far more likely to cheat than wealthy people. (Of course the return for the IRS going after the small player may not

Lower income people with cash business are far more likely to cheat than wealthy people. (Of course the return for the IRS going after the small player may not be worth it.)

learc83 7y ago
Do you have any evidence to support this? It could be true, but any cash business owner (low income or not) is likely to cheat precisely because it's not feasible for the IRS to prove exactly how much cash income you made.
- MagicPropmaker 7y ago
  Here's one data point. 24% of the people who claimed the "EITC" did so fraudulently (or, at best "in error") No high earner can claim this. https://taxfoundation.org/earned-income-tax-credit-still-faces-high-error-rate/ https://taxfoundation.org/earned-income-tax-credit-still-fac...
JohnFen 7y ago
> Lower income people with cash business are far more likely to cheat than wealthy people. The statistics I've seen indicate the opposite. But I suppose it depends on how you measure. Perhaps on a per-incident basis, you may be correct. But I don't think you're correct if you measure by the amount of money.
- notriddle 7y ago
  "Likely to cheat" usually means something like "the probability of a person cheating is higher," meaning it would be based on the number of incidents, not on the amount of money. If the poster has meant the amount, they might have said "Lower income people with cash businesses cheat more than wealthy people" (which is ambiguous) or "The IRS loses more money to low income cheaters with cash businesses" (which is unambiguous, and, when you phrase it that way, truly sounds ridiculous given the high level of wealth inequality I would expect one wealthy cheater to cheat the IRS out of more money than all of the other cheaters in the world)
  - JohnFen 7y ago
    Yes, your interpretation is likely the correct one. In terms of societal impact, I don't think it's the important one.
    - MagicPropmaker 7y ago
      Maybe it is the important one. There's a culture of cheating among many lower-income self-employed workers, and they feel they're "entitled" to it.
      - JohnFen 7y ago
        That may depend on what your goals are. To put myself in the IRS' shoes, their goal is to minimize the amount of revenue lost due to fraud. In that view, the important thing to do is to go after the people who are cheating them out of the most money. If the goal is culture change, that may be different -- but the IRS is probably the wrong entity to address it. I will say that I have not noticed that lower-income people have any greater sense of "cheating is OK" than higher-income people. My observations are not necessarily representative of the wider culture, but it looks to me like the percentage of people who think cheating is OK doesn't change based on income.
- MagicPropmaker 7y ago
  That's exactly why I said "(Of course the return for the IRS going after the small player may not be worth it.)"

Lower income people with cash business are far more likely to cheat than wealthy people. (Of course the return for the IRS going after the small player may not be worth it.)

learc83 7y ago

Do you have any evidence to support this? It could be true, but any cash business owner (low income or not) is likely to cheat precisely because it's not feasible for the IRS to prove exactly how much cash income you made.

MagicPropmaker 7y ago
Here's one data point. 24% of the people who claimed the "EITC" did so fraudulently (or, at best "in error") No high earner can claim this. https://taxfoundation.org/earned-income-tax-credit-still-faces-high-error-rate/ https://taxfoundation.org/earned-income-tax-credit-still-fac...

JohnFen 7y ago

> Lower income people with cash business are far more likely to cheat than wealthy people. The statistics I've seen indicate the opposite. But I suppose it depends on how you measure. Perhaps on a per-incident basis, you may be correct. But I don't think you're correct if you measure by the amount of money.

notriddle 7y ago
"Likely to cheat" usually means something like "the probability of a person cheating is higher," meaning it would be based on the number of incidents, not on the amount of money. If the poster has meant the amount, they might have said "Lower income people with cash businesses cheat more than wealthy people" (which is ambiguous) or "The IRS loses more money to low income cheaters with cash businesses" (which is unambiguous, and, when you phrase it that way, truly sounds ridiculous given the high level of wealth inequality I would expect one wealthy cheater to cheat the IRS out of more money than all of the other cheaters in the world)
- JohnFen 7y ago
  Yes, your interpretation is likely the correct one. In terms of societal impact, I don't think it's the important one.
  - MagicPropmaker 7y ago
    Maybe it is the important one. There's a culture of cheating among many lower-income self-employed workers, and they feel they're "entitled" to it.
    - JohnFen 7y ago
      That may depend on what your goals are. To put myself in the IRS' shoes, their goal is to minimize the amount of revenue lost due to fraud. In that view, the important thing to do is to go after the people who are cheating them out of the most money. If the goal is culture change, that may be different -- but the IRS is probably the wrong entity to address it. I will say that I have not noticed that lower-income people have any greater sense of "cheating is OK" than higher-income people. My observations are not necessarily representative of the wider culture, but it looks to me like the percentage of people who think cheating is OK doesn't change based on income.
MagicPropmaker 7y ago
That's exactly why I said "(Of course the return for the IRS going after the small player may not be worth it.)"