<p>kluge- you are correct many do not see it for what is actually is.</p>
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<p>I don’t think that many businesses would have to be closed, especially after the first month or two. As soon as businesses realize the government is serious about enforcing the law, compliance will improve. Aren’t you less likely to speed on roads with lots of cops?</p>
<p>stevensmama- the problem is many of these businesses can not survive and pay the tax they collect. They use it to operate- before they pay the tax they have to pay the landlord, the utilities, their suppliers, their employees etc. The government is so far from an immediate bill that when we require the bill be paid each month they can not do it. I would bet it will be at least 100 businesses a month for a significant period of time.</p>
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When you don’t pay your cell phone bill your service is cut off. If you don’t pay for your food you starve, if you don’t pay for gas you can’t drive, if you don’t pay your rent you get evicted, etc. These are all bills that have immediate negative consequences for not paying.</p>
<p>What immediate consequence would there be for an individual who doesn’t pay their withholding? These days it takes the IRS 2 to 3 years to figure out that something is wrong.</p>
<p>Apparently if your business doesn’t pay its taxes, little or nothing happens.</p>
<p>Shut these businesses down, publish their owners’ names in the paper, go after their personal assets, ding their credit rating, seize their accounts receivable, etc. If you don’t apply a big stick, nothing will change.</p>
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<p>After how many months of dunning notices?</p>
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<p>Really? We have a lot of starving people?</p>
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<p>You pay on your gas card or your credit card. How long do the credit card companies give you before they shut you down?</p>
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<p>I take it that you don’t live in MA.</p>
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<p>No. They are not immediate.</p>
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<p>You don’t believe that people will do the right thing?</p>
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<p>This is happening in MA in some areas too. Things like liquor license fees or liquor taxes. The state is trying to figure out what to do about it. Shutting down liquor stores isn’t a popular thing to do and it will just push people to buy their alcohol in New Hampshire.</p>
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<p>How do you justify doing this when we bail out so many other industries and now, countries?</p>
<p>notrichenough- actually there is some built in time frames set by legislation that delays enforcement action. It is not that we do not know who they are (although there is some of that) but before we can even start doing something to enforce collection we are about 6 months behind.
Also we have been doing all of this and more for years-Shut these businesses down, publish their owners’ names in the paper, go after their personal assets, ding their credit rating, seize their accounts receivable, etc. If you don’t apply a big stick, nothing will change. </p>
<p>BC- in NJ you can not renew your liquor license unless your taxes are paid up to a certain date. There is an exception if you are on an approved payment plan and of course if you are in bankruptcy.</p>
<p>I agree with your premise that we should really work with these businesses but I think we differ in that I really believe that there has to be a requirement that going forward all taxes get paid on time. We can work with them on the back stuff but to me there has to be that requirement.</p>
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<p>What if you just operate with an expired license?</p>
<p>You can’t operate a motor vehicle without a valid registration and license but I see arrest records of motorists without one, the other or both all the time in the local police logs.</p>
<p>You can do that but the local towns will have the police close you down.</p>
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<p>What if the owner of the liquor store is politically connected?</p>
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I don’t really know, I pay my cell phone bill on time. I doubt it is years though.
Perhaps hyperbole on my part, but if you walk out of the grocery store without paying for the food, you get arrested.
So you are arguing that people won’t pay their bills but will shift them to someone else for as long as you can? I thought you were arguing that people will pay their bills.
I do live in MA, and as a landlord I have a lot of familiarity with the eviction process. In most cases it takes less than 2 months. Are there motivated deadbeats who figure out how to milk the system for more than that? Sure, but that is the rare case. And I, and many other landlords I know, won’t rent to people who have been evicted before. So there are consequences.
I believe many would. But there are too many who would decide paying other bills, or taking a vacation, or whatever, are more important at that moment than paying their taxes.
There are plenty of liquor stores.</p>
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If your state truly considers this to be an important problem they should give you better tools to fight the problem. Like starting an action after one missed payment.</p>
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<p>You said immediately.</p>
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<p>Only if you get caught.</p>
<p>Of course if you use a credit card, you may be able to milk it for a
few months or longer.</p>
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<p>No. You made a point that people get shut down immediately. I am
refuting that point. The other matter is separate.</p>
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<p>Okay - so does 2 months = immediate?</p>
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<p>They can do this today through withholding changes.</p>
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<p>Not near the NH border.</p>
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<p>Do you operate in the real world?</p>
<p>tom-
How much money in arrears to the government are you talking about?
Is this a growing problem due to the great recession?</p>
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It’s a heck of a lot quicker than waiting 6 months before even starting. And the notice gets delivered after 7 days. That seems pretty immediate to me. The courts being slow is a different issue.
The world is a lot bigger than the MA/NH border.
You are the one claiming compliance will be at least as high if people handle their own withholding. This doesn’t seem very real-world to me. </p>
<p>And what would be so hard or not-real-world for the state to drop a business a letter saying “we see you didn’t file this month’s tax collections, please do this immediately or we will take further action?” Maybe knowing they can’t go for months without the state or fed doing anything would lead to higher compliance.</p>
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<p>The issue of liquor stores is in the Merrimack Valley which is close to the border.</p>
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<p>If I did, then you should be easily able to reproduce such a quotation.</p>
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<p>You can’t get blood from a stone. Said employer could just write a letter back asking the state if they want to lose 30 or 40 jobs.</p>
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Wait - so I can get away with stealing people’s money as long as I own a business and can extort the government by threatening to fire employees if they want me to pay it back? Cool!</p>
<p>I guess I’d be a little less cynical if I didn’t have first-hand awareness of the difference between how the government deals with A. Welfare fraud, B. Unemployment Insurance Fraud and C. Business Fraud (i.e. stealing money collected from employees and customers.)</p>
<p>Welfare fraud - which is generally single Moms who get a brief stint working to augment their welfare check and fail to report their income - typically a few hundred dollars - is prosecuted criminally as a felony, with the Moms made to pay back every penny of overpayment of welfare or food stamps plus penalties. The same thing done by a person collecting unemployment insurance will result in administrative action, deducting the overpayment from future UI checks, but no prosecution.</p>
<p>A business owner doing the exact same thing, but on a much larger scale, gets to threaten the government if it tries to collect? And will be hailed as a hero by sewhappy et al? Seems to me that by that standard the business owner should be allowed to stiff his landlord, electric company, suppliers, etc. At least they didn’t hand him money on the understanding that he wouldn’t steal it.</p>
<p>The moral standard is clear, if irrational. Fewer business owners would steal this money if they didn’t have the moral support of sewhappy, et al.</p>
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<p>That may very well be the case.</p>
<p>BTW, why do we keep sending FNM and FRE billions of dollars?</p>
<p>Why did we just bail out Europe [I’m sure that we’re going to get to do this over and over and over again]?</p>
<p>Government seems to be frequently more about “let’s make a deal”
than treating everyone equally. Those with political access get
the better deal.</p>
<p>Sorry, I’m going back to some earlier posts today. BC–banks don’t collect federal withholding anymore. Everything has to be paid via federal EFTPS. My state is also moving towards this.</p>
<p>I live in a small, rural locality. When the IRS files a lien, the name is published. Everyone sees it. I’m not sure this actually has any effect. Both my state and the IRS file erroneous liens a lot. I don’t think anything when I see it in the paper because of this.</p>
<p>My state and the IRS require individuals/businesses to be current on current taxes before they will accept a payment plan. I think this is a good idea. Why should they be throwing good money after bad? </p>
<p>No one will ever, ever convince me that more would be collected if paying withholding were left up to individuals. It wouldn’t. If any gov’t thought this were true, they would have tried it. Then, we’d just be wasting more taxpayer money on collection efforts.</p>
<p>In my state, the sales tax efforts have been gung-ho that last 5-7 years. Don’t file a report one month, and you will receive a notice. They pick a very large number and assess the sales tax, interest, and a 10% penalty. They really pick this number out of the sky and make it huge, so people WILL respond.</p>
<p>Tom, you asked my thoughts. My opinion–the gut of the matter is that businesses are stealing the money of their employees when they do not remit withholding. Once, shame on them–penalize and move on. Repeatedly? Then they are not in compliance, they are not making enough to remain in business, and ultimately they will go out of business anyway. I do not see anything wrong with the state shutting them down.</p>
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<p>Here it is, right here:</p>
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<p>It would make no sense to “give people a chance” if you didn’t believe they would be at least as likely to pay on their own as they do through withholding.</p>
<p>But maybe I made an assumption. So answer directly - do you believe the gov’t would collect as much if people had responsibility for remitting their own taxes as compared to withholding?</p>
<p>srystress: +1</p>
<p>Isn’t the Greek model based on this - the government is in a rut, so they raise taxes, but, wink wink, don’t do anything to collect them so that the voters don’t get mad. Then they hold their hand out to the Germans, French, ECB, and IMF with their paper plan and get rewarded till the next crisis, when their leader steps down and a new politician does this all over again?</p>
<p>performersmom- I believe we are talking enough money that it would dwarf any tax cut or increase being discussed. In my earlier example I used an estimate of a $1 billion in NJ for one year. I bet that is conservative.
BC- I think you posted about the threat of loss of jobs. I see legislators that have that fear when they contact us but in reality if you shut down businesses that are not paying the trust fund taxes that business does not dry up. Since most of them are local retail places the customers will just move to other local stores. Many of the employees will get employed locally still.
Someone asked if this is increased because of the economy- my opinion is not really. The restaurant that used to collect and remit $70,000 in tax now may be collecting and sending in $50k but they do what they are supposed to. It really is repeat chronic non-payers.
Off the top of my head the problem places are landscapers, painters, pizzerias, florists, autobody shops, other types of restaurants, bars used to be a big problem, some hotels. Some franchises are very bad but we know who they are and stay on top of them. Sorry I can not tell you which franchise.</p>
<p>The government would get way less money if there was not a requirement to withhold.</p>
<p>The reasons we do not get the money comes down to two reasons most of the time- can not afford their lifestyle if they do not keep the tax or addiction issues of some type. The lifestyle may be trying to live in a two bedroom apartment but it also may be trying to keep the $2 million dollar house.</p>