There's a lot of big holes in the tax code.
Here's something I was surprised to see happen to me back in 1996. In 1996, after 15 years working for the same employer, I felt I had enough and
needed some time off, a sabbatical. I wanted to enjoy a little of my retirement now while I was still relatively young. I was 39 then. So I quit
and said I may or may not be back in a year or two or more or never.
Then a few months later, I received a 6 figure beneficiary check in the mail. Whoa, now I can retire for a while longer than I had expected. So
anyhow, here comes 1997. I had a good year doing NOTHING except travel around the states in an RV. I had a year long vacation! I did do some work
during that year, but it only amounted to a few thousand dollars for a couple weeks work. There was also a little income related to what I had
sitting in a bank savings account too. My income for 1997 was pitiful, below the poverty level, but hey, I didn't care, I had more than enough net
worth/investments to live on for the next 6 year or better. I was also part owner of a business that I inherited that is held in a trust for my
Then, 1998 came alone and it was time to file my 1997 taxes. And was I surprised to realize that, because my income was way low, I got damn near all
my income tax paid in 1997 back on those few thousands dollars of income and interest ... .. and get this: they also sent me around $1200 EXTRA
because of something called earned income credit. WHAT? You see, I also had a minor daughter still living at home, and they felt I was poor and
deserve a bonus in my tax return. How nice, ha, thank you, all you other tax payers, ha. I used that for more gas for my RV while I spent the next
3.5 years just screwing around, ha.
Now, ha, was that something I should have sent back to the IRS because I didn't really need it? The IRS said I was entitled to it, but what is the
purpose of that earned income credit when I had lots of net worth and simply had little income because I chose not to work? I mean, yeah, I didn't
make jack in 1997 in so far as income, but I had a nice 6 figure net worth of investments, and I wasn't working only because I didn't need to.
So, was that earned income credit a present from all the other tax payers for me being in a position to not have to work for a few years?
There's a bunch of other silly loopholes too, such as you could have all your assets a trust fund and even if you owed uncle sham a million dollars
in back taxes, they can't touch your trust fund. And, you can also receive up to $32,000 from your trust fund of which the IRS can't levy to pay
your back taxes. In other words, if you have a lot of assets, and you owe the IRS a lot of money, you can flip them the bird if you don't mind
living on $32k a year, ha.
There are a dozen more loopholes I've discovered that I won't waste time mentioning here, but you know how we can put an end to this nonsense and
all these loopholes? ELIMINATE INCOME TAX and tax everyone on the front end instead .. I.E., a high VAT TAX instead of a high income tax! In this
way you will also be able to collect tax revenue on all those people earning illegal unreported incomes, unless they don't spend any of their illicit
income, which is highly unlikely.
What a messed up economy, huh?
[edit on 30-3-2010 by Divinorumus]