site banner
naraburns  nihil supernum  1yr ago (text post)   34539 thread views

Culture War Roundup for the week of January 30, 2023

This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.

Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.

We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:

  • Shaming.

  • Attempting to 'build consensus' or enforce ideological conformity.

  • Making sweeping generalizations to vilify a group you dislike.

  • Recruiting for a cause.

  • Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.

In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:

  • Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.

  • Be as precise and charitable as you can. Don't paraphrase unflatteringly.

  • Don't imply that someone said something they did not say, even if you think it follows from what they said.

  • Write like everyone is reading and you want them to be included in the discussion.

On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.

13
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

New Frontiers in Algorithmic Racism - Tax Edition

The New York Times has an article out on the IRS algorithmically targeting black Americans at higher rates than other racial groups. The claim is that there's something in the algorithm that inappropriately biases it against black Americans. Summarized in the opening paragraphs:

Black taxpayers are at least three times as likely to be audited by the Internal Revenue Service as other taxpayers, even after accounting for the differences in the types of returns each group is most likely to file, a team of economists has concluded in one of the most detailed studies yet on race and the nation’s tax system.

The findings do not suggest bias from individual tax enforcement agents, who do not know the race of the people they are auditing. They also do not suggest any valid reason for the I.R.S. to target Black Americans at such high rates; there is no evidence that group engages in more tax evasion than others.

OK, so what exactly is causing them to get audited more if it's not individual bias, the machines are blinded to the race of the individual, and the rules are the same for everyone? Apparently some of it comes down to targeting EITC filings:

Black Americans are disproportionately concentrated in low-wage jobs. They are more likely than whites to claim the E.I.T.C. The authors wondered if that prevalence in claiming the credit might explain why Black taxpayers face more audits, because I.R.S. data show the agency audits people who claim the E.I.T.C. at higher rates than other taxpayers.

But as the research progressed, the authors found the share of Black Americans claiming the E.I.T.C. only explained a small part of the audit differences. Instead, more than three-quarters of the disparity stems from how much more often Black taxpayers who claim the credit are audited, compared with E.I.T.C. claimants who are not Black.

Unless I'm missing something, the article does not explicitly state what the relevant factors are that result in this targeting are. In what I see as typical NYT style, it does leave a breadcrumb that might be suggestive if you're ignoring the narrative quotes embedded in the article:

Black taxpayers appear to disproportionately file returns with the sort of potential errors that are easy for I.R.S. systems to identify, like underreporting certain income or claiming tax credits that the taxpayer does not qualify for, the authors find.

To me, this reads like the most likely explanation for black taxpayers being audited more frequently is that they report their income incorrectly in easy-to-detect ways. Since the IRS already has W-2 data for filers, it's probably not very hard for them to notice when someone reports their income wrong. There isn't really any elaboration that I find after this, so I'm unclear on how much this accounts for auditing disparities. The implication of the article and the quotes from "equity" advocates imply to me that we should figure out a way to make sure that white Americans are audited at least as much as black Americans, regardless of who is misreporting their income more frequently.

As cynical as it sounds, I'm beginning to hear the term "algorithmic bias" as nothing more than a form of projection - algorithm systems frequently detect something real about the world, people with racially motivated politics don't like that outcome, and they seek to shift the algorithm towards a bias in favor of their preferred group. If a program that is optimized for detecting incorrect tax filings works as intended to detect them, but turns up more black Americans than white Americans, the suggestion appears to be to change the weighting until it evens out the races, regardless of the impact on the efficiency of detecting lost revenue. The "algorithmic bias", from my reading of this would be injecting a deliberate racial preference to counter the program noticing actual disparities. I am reminded of the racial resentment scale, in which people who say that "blacks have gotten less than they deserve" are not racially resentful, while those who think things like "Irish, Italian, and Jewish ethnicities overcame prejudice and worked their way up, Blacks should do the same without any special favors" are racially resentful.

Anyway, I'll be curious to see if the study is released more publicly and details what exactly is causing the disparity.

Anyway, I'll be curious to see if the study is released more publicly and details what exactly is causing the disparity.

It would be interesting to learn:

  1. If these audits happen with equal imbalance when the auditee self-prepares their tax return VS. when their return is professionally prepared

  2. If the professional tax preparations for blacks are handled by accountants with less experience / lower quality education than the professionals hired by less-audited racial groups.

2 Is probably the culprit. Black people are stereotyped as being more likely to go to liberty tax and the like rather than getting hr block, and most stereotypes have some truth to them, so it’s probably just that liberty tax is more likely to mess up.

This sounds like yet another case of blacks being more likely.

Evidently the problem is not the fraud, but the detection [and corrective action] of said fraud. The implication is that blacks should be allowed to do fraud. It sounds dumb but this is the only possible conclusion I can draw from this article, which is probably why they didn't want to specify a remedy.

This seems isomorphic to other conversations about achieving social justice, where they're often spoken more explicitly. In affirmative action, for instance, one of the main pro- arguments goes that blacks/women, at the moment of applying for a job, on average are less qualified for the job than whites/men, and this lower qualification is due to the bigoted discrimination they faced in a white supremacist/patriarchal society limiting their ability to fulfill their potential. As such, it is the responsibility of the individual company to make up for the injustices perpetuated on those blacks/women by society by putting their thumb on the scale in their favor at the moment of hiring. Usually, one of the handwaving justifications for this is that by giving certain individuals within these subgroups a leg up, it will lead to those individuals having greater ability to contribute back to their communities of similarly oppressed subgroups, helping to uplift them out of the hole that the oppressive society placed them in. Perhaps the handwave for this IRS situation hasn't been developed and matured to the same extent yet, though I imagine adapting the existing one to this one shouldn't be hard.

To switch to a sort of meta-discussion of media fairness and lying: I see this genre of post a lot where someone reads an article and "debunks" the framing/implied conclusion of the article with facts from the article and whether that is an indication of honesty or not. On one hand, the piece is clearly biased and wants you to take seriously the idea that this audit rate is a problem that reflects poorly on IRS practices, but it accurately reports that the system is totally race-blind and the obvious socioeconomic factor (EITC use) doesn't explain the disparity which allows you to draw the opposite conclusion.

This sort of biased headline and framing but with enough true facts critically thinking people can draw opposite conclusions is how a lot of media bias ends up. My favorite example of this was when Fox News published "BREAKING NEWS: Roy Moore accuser admits she forged part of yearbook inscription attributed to Alabama senate candidate" based on an ABC interview where the accuser stated that the date and location underneath Roy Moore's message was something she added. To me, that seems like an irrelevant detail, it's obvious from an image of the yearbook that the handwriting is different, Moore's message also contains the year, and she never explicitly stated before that he had written that part. Though once she read his message aloud and also read the part she added which may have implied he di. The purpose of characterizing this minor clarification as an admission of partial forgery the day before the election was obviously to cast her story in doubt so as to rally Republicans to Roy Moore and seems a clear-cut instance of bias. Yet, I cannot get too frustrated with Fox because I was able to read the article and find the same set of facts that lead me to believe it was an irrelevant clarification and not blatant forgery in the body of the article.

These biased articles with accurate facts that undermine the conclusion the author is pushing with the framing and headline seem fundamentally dishonest in some way, but it's not lying or information being withheld. If you read these articles closely and critically you end up with a lot of good information about the subjects at hand, but if you just skim the headlines you end up pretty misinformed.

P.S. I really don't want to relitigate Roy Moore.

To me this sounds like the same old issue that the GOP has been complaining about for years namely that it's been de-facto IRS policy for years now to preferentially target rural/low-income individuals because they are viewed as being "easier marks". Wealthier people/businesses have the money to hire lawyers and accountants to fight you which is not what you want if you're an IRS agent trying to make a quota.

As for the accusation of racism is, impression is similar to yours, the democrats in general and the media in particular have been so thoroughly mind-killed by identity politics/intersectionality that they are simply incapable of not projecting racism, sexism, homophobia, etc... onto everything they see.

it's been de-facto IRS policy for years now to preferentially target rural/low-income individuals because they are viewed as being "easier marks"

This is, at the very least, a very misleading summary. The IRS is an order of magnitude more likely to audit people making $10m+ than those making under $1m.

what's the old saw? there are lies, damn lies, and statistics? People making $10m+ are a tiny fraction of those being audited. As such I don't think you've actually rebutted my claim

there are lies, damn lies, and statistics

To have a bit of fun with this: so are you damned lying or manipulating statistics when you trivially point out that a miniscule portion of the population has fewer audits than the vast supermajority of the population?

23,456 U.S. households reported income of $10 million or more [for the] 2018 tax year

people making $10m+ are a tiny fraction of

...people. There is nearly no system imaginable that wouldn't result in them being a tiny fraction of those being audited, unless we're willing to let large quantities of even the most obvious errors/frauds go without audit in every other income range.

Mind-killed seems strong. A sufficient explanation of their actions would be to say that they are consistent in the application of the belief that any discrepancy between groups that benefits whites or disadvantages blacks is a racism.

Considering how many people hold to that belief only when convenient I can only congratulate the democrats and media in general and the NYT in particular for their consistency.

I wouldn't even call it "mind-killing", because of the impressive mental gymnastics required to avoid ever even considering the idea that there could be meaningful group differences. The bizarre hypotheses, type errors, or misdirections that my friends and colleagues come up with when I ask if there is even in principle a possible difference in group averages is constant source of surprising creativity in my life.

The fact that the NYT article even mentions the possibility (to immediately dismiss it) already puts it in the top tier of clear thinking on the issue in my experience.

I wouldn't even call it "mind-killing", because of the impressive mental gymnastics required to avoid ever even considering the idea that there could be meaningful group differences. The bizarre hypotheses, type errors, or misdirections that my friends and colleagues come up with when I ask if there is even in principle a possible difference in group averages is constant source of surprising creativity in my life.

On the contrary, I would say that the extent of these gymnastics is strong evidence of mind-killing. After all, they already know what the cause is, they simply need to get there, whatever convoluted reasoning it takes.

The fact that the NYT article even mentions the possibility (to immediately dismiss it) already puts it in the top tier of clear thinking on the issue in my experience.

Yet the question is whether it is genuinely considered, or just 'our enemies would say it, so we have to address it.' Given the poor reasoning to dismiss it, I would argue the latter.

I think you have to be pretty "mind-killed", IE have drunk deeply from the Progressive/Marxist Kool-Aid to sincerely believe that "group differences" in genetics are not only going to outweigh individual variation, along with as other group-wide factors like culture and social policy, but outweigh them to such a degree that those factors can be safely dismissed as unmeaningful.

How do you get different species at all? Populations diverge until they are different species. It looks like most of progeny neardertal-sapiens was infertile. Where's Flores Hobbits now? They didn't die because of climate change, nor they were assimilated.

Black Americans and White Americans aren't living on different sides of Iron Curtain set by a totalitarian dictatorship(s). Same language, same religion, same currency, same sports, same worship of Kim Kardashian's rear parts.

Hmmm, I'm not sure I understand your point. To be uncharitable, this looks like exactly the sort of creative misdirection I was talking about. The NYT dismisses the possibility of different amounts of tax fraud between races for any reason. Whether or not it's genetic, or whether other factors might be more important, are separate questions, and are secondary to the question of whether the fraud detection algorithms are biased. Again, I'm saying that even acknowledging group average differences in behavior as a possible explanation for group average differences in outcome is already less mind-killed than most of my interlocutors.

Since I have you here, what do you mean when you say that a group-level difference could "outweigh" individual level variation? They're just two levels of variation, and nothing changes if one is bigger than the other - they're both still there.

He's trying to equate HBD with wokism but imo it doesn't really make any sense

I'm equating one flavor of socialist infused identity Politics to other flavors of socialist infused identity politics.

Hmmm, I'm not sure I understand your point. To be uncharitable, this looks like exactly the sort of creative misdirection I was talking about.

And to be blunt, I could say the exact same thing to you.

Charitably you're latching on to genetics because it seems easy to quantify/measure, life would be so much simpler for the budding academic if things like intelligence, virtue, and propensity to defraud the government could be determined via a simple blood-test or looking at an individual's skin color. See the old saw about the drunk looking for his keys under the street lamp.

Less charitably you seem to be tying yourself in knots to avoid considering the possibility that the IRS might be following perverse incentives. One of the reasons you might being doing this is that your ideology requires you to frame things a certain way (IE in terms of the intersectional stack) while discounting the importance of individual character/agency. You believe that group differences exist, they are meaningful, and they are wholly a product of genetics, because biological determinism, and Hegelian oppressor/oppressed dynamics say they must be so, and believing those things is what separates rational high-status human-beings from the plebs and chatbots.

Less charitably you seem to be tying yourself in knots to avoid considering the possibility that the IRS might be following perverse incentives.

I'm not OP, but would you mind clarifying whether you personally in fact believe that the racial difference in audit frequency is due to the IRS following perverse incentives, and if so which perverse incentives? And, if you do, do you believe that astrolabia does not believe that the disparate results are causally downstream of the IRS following the incentives which you believe are perverse?

Because I predict that both you and astrolabia believe that

  1. The IRS is more likely to audit tax returns where there is a high probability of a small amount of easy-to-prove fraud than tax returns where there is a small probability of a large amount of hard-to-prove fraud, even when the expected monetary value of prosecuting the rare annoying high-value fraud would be higher

  2. If you were to segment tax returns by (race of filer, was EITC claimed, had obvious inconsistencies), then audit frequency would vary based on whether there were obvious inconsistencies when holding (race of filer, was EITC claimed) constant.

  3. Audit frequency would not vary significantly based on race when holding (was EITC claimed, had obvious inconsistencies) constant.

  4. Holding (was EITC claimed) constant, (had obvious inconsistencies) would vary significantly by race.

I don't think "the IRS follows perverse incentives" and "propensity to have obvious, easily provable inconsistencies when filing taxes varies by race" are mutually exclusive hypotheses, and honestly I don't expect that either hypothesis is even particularly contentious (unless you make the stronger assertion that the rate of inconsistencies varies due to genetics rather than education quality or other environmental factors, but then you're just dealing with the standard "HBD discourse is brain poison" problem).

Yes, I agree with all 4 points. I think you're also right that HlynkaCG agrees with me on these points.

I think what happened here is that, HlynkaCG saw me defend discussion of the possibility that there might be group differences in behavior (possibly due to poverty, or whatever the palatable explanation of the month is, I didn't say), saw this (correctly) as allowing more avenues for arguments in favor of HBD, and became mind-killed.

I'm not OP, but would you mind clarifying whether you personally in fact believe that the racial difference in audit frequency is due to the IRS following perverse incentives, and if so which perverse incentives?

It's no secret that due to factors both historical and cultural, blacks are disproportionately represented in lower to middle ends of the socio-economic spectrum within the US. Likewise it's no secret that the IRS disproportionately targets the lower and middle classes for the reasons already described. The Idea that this must be about race (because how could it not be) rather than IRS agents simply following through on their instructions/incentives is where the partisanship/id-pol comes in.

When you say "about" race I'm genuinely unsure what you mean - the reading that seems most natural to me is "the difference in audit frequency by race is causally downstream of race", which seems obviously and almost tautologically true to me.

But you have a history of making insightful posts, so I'm guessing you mean something else which is not that. I'm not sure what though (again, not intended as a gotcha, I'm just not understanding how "the IRS follows incentives" is an alternative hypothesis instead of "an additional factor that is causally upstream of the observation").

Or maybe I can just read between the lines and recognize that "meaningful group differences" is a shibboleth for various flavors of HBD partisan.

I'm sorry, I never raised the issue of genetics, I was only talking about group differences in behavior in general. I also heartily agree that the IRS could easily be following perverse incentives. I have no idea what you mean about Hegelian dynamics here, nor how individual character + agency precludes discussions of average differences in behavior between groups, which the article raised as a possibility.

I would really love it if you'd read my first reply again - I wasn't claiming that group differences explain anything here. I was saying that it's astounding the variety of behaviours people will display if prompted to acknowledge, in principle, the possible existence of average group differences (genetic or otherwise). Do you think such differences are possible?

Do you really get the runaround on those sorts of questions? Because in my experience, if you give social sciences types any opportunity to talk about factors that could affect metrics of success by race / gender / immigration status / whatever, they will happily talk your ear off for hours. They are unlikely to mention genetic factors (outside of epigenetics and "did you know about DNA methylation [...] response to stress"), but that will not stop them enthusiastically brainstorming hypotheses and what studies one might run to test those hypotheses for as long as you're willing to listen.

I don't get to talk with many social scientists, but the two I've talked to about these things were so appalled by the mere suggestion that I quickly shut up. But for example, a Bayesian ecologist told me that his prior on there being differences in behavior driving differential arrest rates was 0 (I'm not even sure what that's supposed to mean). A mathematician who said epigenetic trauma was an explanation for poor black outcomes, astoundingly also suggested that Jews' excellent outcomes after the holocaust were also due to epigenetic trauma. Like, that hypothesis wouldn't have even occurred to me in a million years.

The behavior I've seen is consistent with people sensing that they are discussing something sacred and not to be questioned. I've made my peace with this - except when it comes up in relation to policy discussions. In those cases, I wish we had some galaxy-brained norm about separation of church and state that we could invoke. In fact, that might be a great contribution to diffusing the culture wars - some version of "Render unto the racists..."

More comments

As cynical as it sounds, I'm beginning to hear the term "algorithmic bias" as nothing more than a form of projection - algorithm systems frequently detect something real about the world, people with racially motivated politics don't like that outcome, and they seek to shift the algorithm towards a bias in favor of their preferred group.

I suppose "always was" is a glib response so I'll say:

This tendency is widespread and isn't even specific to algorithms: leftists always first insist that society did a wrong via its social engineering to then demand social engineering to ostensibly "correct" this.

You see this all the time with nebulous complaints about how "the media" brainwashed people into not liking everything from fat people to Africa to the WNBA and therefore have a responsibility to fix it despite very little evidence being adduced for this (and people ignoring more obvious explanations for why these things are low status)

It's just part of a fundamental, distorted Rousseauianism that has swallowed the Left: any inconvenient situation must be blamed on some sort of malignant social programming and, not just that, on the usual villains: white supremacy, Western sexism,etc. (as if minorities can't "program" themselves with awful beliefs).

This tendency is widespread and isn't even specific to algorithms: leftists always first insist that society did a wrong via its social engineering to then demand social engineering to ostensibly "correct" this.

If too many whites or "X" get ahead, the system is broken. Otherwise, the meritocracy is working (like in sports, Hollywood, etc. ) but not in STEM (in which Asians, Whites are overrepresented).

Expecting any sort of consistency is a fool's errand. The left vacillating on being pro-DHS/FBI during trump abut anti-DHS/FBI during Bush. Or pro-IRS during Obama. Both sides do it, so it's not just to pick on the left. The leopard does not care whose face it is that gets eaten. I think these organizations have too much power, and that bias is secondary to this.

As cynical as it sounds, I'm beginning to hear the term "algorithmic bias" as nothing more than a form of projection - algorithm systems frequently detect something real about the world, people with racially motivated politics don't like that outcome, and they seek to shift the algorithm towards a bias in favor of their preferred group. If a program that is optimized for detecting incorrect tax filings works as intended to detect them, but turns up more black Americans than white Americans, the suggestion appears to be to change the weighting until it evens out the races, regardless of the impact on the efficiency of detecting lost revenue. The "algorithmic bias", from my reading of this would be injecting a deliberate racial preference to counter the program noticing actual disparities. I am reminded of the racial resentment scale, in which people who say that "blacks have gotten less than they deserve" are not racially resentful, while those who think things like "Irish, Italian, and Jewish ethnicities overcame prejudice and worked their way up, Blacks should do the same without any special favors" are racially resentful.

A solution could be transparency, but if people knew how the the algorithms worked, like what triggers an audit, they would be gamed and rendered infective.

My priors are that most cases of ‘tax fraud’ are poor, low-IQ people trying to slide one over with techniques they learned by word of mouth from other poor, low-IQ people, and not from carefully designing strategies based on available algorithmic data. I know this because I hear poor, low IQ(or at least uneducated; these are not quite the same thing, but lack of education probably severely hampers the ability to understand accounting algorithms even for those with high IQ in ways that it doesn’t necessarily effect other things) people quite openly discussing this every year in February and march. I doubt that will be strongly effected by algorithms for targeting potentially fishy returns except in the form of third hand rumours that will get them to be temporarily more honest.

My priors are that most cases of ‘tax fraud’ are poor, low-IQ people trying to slide one over with techniques they learned by word of mouth from other poor, low-IQ people, and not from carefully designing strategies based on available algorithmic data.

See also: Sovereign citizens going to court and claiming it has no jurisdiction for some bizzare and inane reason.

Well yeah, but poor and not very well educated people doing things that would technically be tax fraud if they got caught is way more widespread than that, and also pays off often enough for most success stories to be true.

Yeah this pretty much torpedoes the popular media/pundit narrative of how it's just rich people who try to not pay taxes

How would they game a fraud detection algorithm? By not committing fraud?

The classic example would be the old 10,000USD deposit at a bank triggering a reporting requirement, those reports focusing attention and investigation into one's finances and also slowing things on the customers end. Depositing 5,000USD and then later depositing 5,000USD does not trigger those reports and sometime between 1970 and 1986 there may have been common advice to do just that for convenience's sake. Of course, specifically depositing money in that way with the intent to avoid that sort of detection is now a federal felony. Often times many of the detection algorithms that have to be run by people end up as straight forward rules of if-this then-that so avoiding triggering detection in the common case might not be that difficult.

"Structuring" (breaking up a deposit into smaller deposits to avoid reporting) being a crime infuriates me. This is another aspect of the war on drugs seeping into financial regulation and corrupting the rules. In another horrifying example, the IRS is trying to find someone $2.1 million for failing to file a disclosure form. https://reason.com/2023/01/23/supreme-court-declines-case-challenging-excessive-irs-penalties/ No crimes were alleged, it wasn't drug money, the IRS just wants to know if you have a foreign bank account with more than $10k in it and if you don't file the form, they can take half the money in it. It's terrible.

I'm annoyed at the reporting requirements too, but the mirror image of money laundering is tax evasion, and governments are very motivated to prevent tax evasion by any means possible, up to and including totalitarian monitoring of all money flows.

With respect to the specific requirements to report foreign accounts: the reporting requirement is clearly stated in tax instructions and up to a few years ago the IRS was remarkably lax about requiring people (with less than $50,000 in their accounts) to report on time. The form for reporting foreign accounts even included checkboxes where one could state one's "reason for reporting late": "I forgot" and "I didn't know I had to" were valid options.

Granted, I'm still a bit confused by the reporting requirements and process for large wire transfers.

governments are very motivated to prevent tax evasion by any means possible, up to and including totalitarian monitoring of all money flows

Absolutely. That motivation is why any hope of a non-totalitarian end state requires strong pushback on this kind of thing. "Money laundering" is the "think of the children" of financial regulation. If one could report drug sales as "miscellaneous goods" there would be no reason to go through all of the hoops of washing the money. If all the government cared about was tax evasion, it would allow an amnesty category to report any income one didn't want to specify. Instead, the tax department has been roped into the criminal enforcement department and it makes for ridiculous regulations that shouldn't apply to 90% of the population.

You can report drug dealing as miscellaneous income. The problem is you're not allowed to deduct the costs of doing illegal business, so it's really not practical; you'd have to pay full income tax on the gross.

governments are very motivated to prevent tax evasion

bit of a tangent, but in light of MMT is this even true anymore?

there is no evidence that group engages in more tax evasion than others

So this statement is just a lie right? Like the kind of lie Scott spent thousands of words trying to tell us that the NYT doesn't tell.

I specifically called out Scott in pointing out that the phrase "no evidence" is often a flat out lie.

Scott's response was that that can't be an example of the media lying because the example is too good and would actually prove that the media lies:

Oh god, if saying there’s “no evidence” for something counts as a lie, then every media source in the country stands hopelessly condemned.

I mean yeah. I chose a good example. Condemning the media is the whole point of using a good example.

It is a weird retort. Side A: Media sucks. Side B: No it does an okay job. Side A: Here is an example of media doing a bad job. Side B: By god, that can’t be otherwise the media sucks.

Technically, if true, all it tells you is that African Americans are more likely to make this specific kind of error. An error is not necessarily tax evasion (which at least to me implies intent), and there are probably lots of errors that are not counted. I would say more such errors is Bayesian evidence in favor of more actual evasion, but it's weak, and the error being made is this one.

Higher rates of underreporting of income is absolutely evidence of higher rates of intentional underreporting of income. It’s not proof, but it’s what you would expect to find in the case of intentional tax fraud.

I guess the question is does the IRS check for overpayment. If yes, then if blacks aren’t not generally represented on each side then it’s evidence of fraud.

Depends on the type of overpayment. There's an entire industry and retail advertisement culture built around the yearly (interest free) repayment of overpaid taxes.

I meant that this particular mistake results in overpayment and underpayment roughly equal.

It sure looks that way to me, and contradicted by their other statement:

Black taxpayers appear to disproportionately file returns with the sort of potential errors that are easy for I.R.S. systems to identify, like underreporting certain income or claiming tax credits that the taxpayer does not qualify for, the authors find.

I guess this leaves room for the idea that there is equal tax evasion between ethnic groups and that black Americans simply commit errors that are easy to spot. I don't necessarily find that entirely implausible, but I don't see any work here done to justify the assertion. Perhaps this is "no evidence" in the weasel-word usage that it's actually difficult to know what the rates of tax evasion are between groups. Personally, I would regard automated flagging of returns for misreporting income and claiming unwarranted credits as evidence of evasion.

Black taxpayers appear to disproportionately file returns with the sort of potential errors that are easy for I.R.S. systems to identify, like underreporting certain income or claiming tax credits that the taxpayer does not qualify for, the authors find.

Sure but this leads immediately to the question that are Black Americans disproportionately stupid or are they disproportionately malicious? I don't think it's something any modern day progressive wants to grapple with at all.

There's already a very well developed fully general explanation for anything of this sort, which is that Black Americans are oppressed in this white supremacist society, and as such, they have greater stress on their lives leading them to make more mistakes, or they have fewer resources to turn to, leading them to turn to crime to make ends meet. This is actually generalizable - and often generalized - to any subgroup that has been deemed to be oppressed.

Well, most Americans don’t do their taxes themselves. Blue collar Americans(a group including the overwhelming majority of blacks) either pay for a tax prep software or go to specialized tax prep businesses that pop up in strip malls around this time of year and have mascots outside waving people in with signs.

‘Black people usually choose the shittier option for some reason’ isn’t necessarily due to incompetence or maliciousness; it could just be fashionable to use a different chain or set of chains, or they could advertise to different communities.

I'm reminded of a NYT piece from a few years back (about genetics, definitely wrongthink now) that small-print warned that big data and rigorous statistics were likely to turn up results that progressives wouldn't like very much.

Will be interesting to see how long the hands-in-ears-la-la-la-I-can't-hear-you strategy will remain viable.

the suggestion appears to be to change the weighting until it evens out the races, regardless of the impact on the efficiency of detecting lost revenue.

The most obvious stuff seems like it wouldn't even require much of an algorithm. If (Times SSN Claimed As Dependent >1), Then Audit (All Taypayers Claiming SSN As Dependent). If (Claimed Income) != (Reported Income), then Audit.

If this sort of thing is really the source of the discrepancy, then it's not even some AI algorithm thing. It's just basic computerized logic checking. The sane solution is to try to teach the black community to not commit easily detectable tax fraud, and instead engage in incredibly based tax avoidance.

The sane solution here would be to simplify the tax code and automate it as much as possible. People will inevitably screw up on the taxes, and I feel bad even for folks who try to cheat it without realizing basic facts about it (your employer reports your wage income!) It takes up way too much time for everyone (why should I need to research depreciation schedules of real estate?) and creates millions of pointless make-work jobs.

Since the IRS already has W-2 data for filers, it's probably not very hard for them to notice when someone reports their income wrong.

IANAAccountant, but I have taken a tax accounting course. This is, IIRC, precisely how it works. It's called the Document Matching Program, and it dispatches notice letters to taxpayers when a discrepancy is detected between the filed return and the IRS' copies of the taxpayer's W-2s and 1099s.

https://www.irs.gov/statistics/soi-tax-stats-irs-tax-compliance-activities#Underreporter

https://www.hrblock.com/tax-center/newsroom/irs/upfront-information-statement-matching/

Is this what they are calling an audit? "Your form doesn't match what we have on file, send us the difference plus some interest." I mistyped my income and got one of those. Not exactly Will Ferrell coming to my bakery and giving me flours.

The IRS refers to those as correspondence audit, so I would think they would be tracked by the IRS as audits.

Yet another reason the FairTax would be fairer. As only businesses would pay taxes, consumer-laborers would be freed from fear of the taxman, and used goods such as thrift store clothes, used cars, and pre-owned houses would be completely tax-free.

If I'm reading this right, the FairTax is a strict 23% tax on goods and services at the point of sale. No brackets, no deductions, just any new sale getting 23% more expensive. Oh, and I guess the "prebate" basic income each month.

Interesting.

How does this interact with taxes-as-an-incentive, e.g. vice tax or tariffs? I understand there are reasons to consider those "unfair," but I'd expect to lose a lot of utility by slicing them out entirely. It sounds like this would be the biggest market-capitalist policy victory since the Gilded Age.

…just any new sale getting 23% more expensive…

That’s the easiest misunderstanding to make, and the easiest to deal with, so I’ll work on it before dealing with your main point.

The FairTax is designed to replace the “embedded” taxes hidden in the prices of market goods. First, think of the income taxes currently embedded in a Big Mac cheeseburger. The cashier and the cooks, the manager, the franchise owner, the owner’s LLC, the food truck company’s drivers, packers, owners, the farmers who grew the food, the business owner’s and manager’s investment firms’ personal and corporate income taxes, etc.

And all of these taxes are built into the existing customer cost of the hamburger. That means, on top of your own income taxes (supplied by your job’s customers), you’re also paying everyone else’s whenever you buy anything. On average, the embedded taxes in American goods and services make up about 25% of the cost. For every dollar you spend, a quarter already goes to Washington D.C. through the IRS.

The bill outlines a transition between the income tax regime and the FairTax regime where, instead of part of the gross receipts of that burger going into everyone’s paychecks only to be immediately yoinked out for withholding, the FairTax portion of 23¢ from each dollar just goes right to Washington. Prices will remain basically as-is. Paper wages will go down but take-home gross remains the same. During the first year of transition, price gouging due to greed or misunderstanding will be heavily watched and penalized. After that, markets should be adjusted to the new reality, but fraud will continue to be watched for by a much smaller tax authority.

How does this interact with taxes-as-an-incentive, e.g. vice tax or tariffs? I understand there are reasons to consider those "unfair," but I'd expect to lose a lot of utility by slicing them out entirely.

You are correct, it removes the incentive structures and turns American taxation into merely a source of government revenue, collected exactly once from each commercial activity, automatically and without loophole or bias.

If governments, federal and local, want to continue behavioral modification of the populace, they’ll have to find other ways. With all the overlapping incentives built into taxes and embedded in pricing, the market is hopelessly distorted and most people simply assume a price is a price and pay it. Keep in mind, nothing in the bill precludes laws increasing regulatory burdens which companies would predictably move into the price.

the "prebate" basic income each month

I do like that you noticed that! It would decouple revenue from labor in an increasingly automated marketplace, and it would institute the infrastructure for additional reforms such as replacing means-tested welfare (filtered through layers of salaried bureaucracy) with direct-deposit flat universal welfare.

Whether you see the FairTax “prebate” as basic income provided by the state, a tax rebate, or an “American dividend” akin to Yang’s proposal, goes back to the philosophical nature of what taxes are, and whether they’re theft or justified. I see the FairTax as a direct tax on economic activity, which income tax was always a proxy for anyway.

Is property taxed at all under this system? Wouldn't this usher in a landed gentry situation?

Property tax is one of the taxes NOT replaced by FairTax. The used house purchase itself is untaxed. There are more details on FairTax.org in their FAQs.

Suffice it to say, they already thought of most of the easy objections and worked an answer into the bill.

That sounds like a major loophole. If "used" goods aren't taxed, why would anyone ever sell "new" goods?

Because goods eventually wear out. Used clothes tear. Used cars break. Used houses subside. And only a small part of all purchased goods are on the market at a given time.

Thrift stores currently exist, many of them nonprofits. Why would anyone not buy all their clothes there at a 50-90% discount from retail?

Sorry, perhaps I was unclear. I understand why people buy actually new items instead of used items. The question is how the law defines "new" vs. "used" to avoid legal gymnastics to allow for legal tax evasion.

Thrift stores currently exist, many of them nonprofits. Why would anyone not buy all their clothes there at a 50-90% discount from retail?

This actually seems to be an interesting cultural thing. While division probably isn't actually quite so clean, I feel like a lot of people I know can be divided into "buys all clothes new, would never occur to them to shop at a thrift store" and "buys all clothes used, would never occur to them to buy new".

Ah, yes. That’s defined in the text of the bill as retail goods at point of sale: basically the point at which a finished new good is sold the first time. The FairTax is included on the receipt, and that good can never again be sold taxed.

I think the idea is that you only get to forgo paying taxes up to the amount of taxes that were paid for the new item. Usually used items cost less than new items so this is a total elimination of taxes but if you buy it "new" for $1 and sell it "used" for $1000 you still pay tax on $999

Presumably, the answer would be (I am not a Fairtax proponent but do support creating a VAT on new durable goods) to create some definition of used which precludes doing this. Eg must have been sold to an end user, must be through a specialized resale shop, etc. I would expect, like most regulations, that this would create counterintuitive scenarios and probably define different goods differently, but ‘vehicles must have at least 15,000 miles to be sold as used, while firearms can only be sold as used if through a licensed pawnbroker and not ordered from out of state(both of which are extremely plausible definitions of used for those particular goods)’ has the helpful side effect of employing the legions of CPAs that would otherwise be unemployed to fairtax.

The definition of “used” is that the FairTax has already been paid on it, or that it predates the existence of the FairTax. So not much of a loophole.

So why don't I sell all items "new" for 1 cent to myself (well, presumably a fictional legal entity so it counts as a sale) and then sell them "used" for the real price?

I guess it would be the same reason you don’t say all your employees are actually unpaid volunteers, but they have access to an off-shore account that happens to have money put into it every two week, so you don’t have to pay the payroll tax.

Because Fairtax functions similarly to a VAT and so you’d still have to pay, plus in practice it would be revised to have 10,000 pages of regulations defining what goods are new.

Presumably for the same reasons you don’t currently commit tax fraud.

The problem with FairTax, is that the United States chose to implement several of its largest federal welfare programs through the tax code. That's one of the big reasons there's very little political will on the left or right to truly rip up the tax code by the roots and replace it with something better.

Ding ding ding. FairTax is so obviously superior that this is the real answer.

Not to mention taxing consumption instead of income incentivizes people not to buy a ton of random shit which a lot of our economy is based on. The government is very happy with the moral hazard of punishing the productive more than strong consumers.

No amount of weak hole-poking can disguise that fact.

Not to mention taxing consumption instead of income incentivizes people not to buy a ton of random shit which a lot of our economy is based on.

Why do you think buying random things is a bad thing for an economy?

Is that a real question? Have you ever driven through a poor neighborhood where every front yard is stuffed with plastic crap rotting away?

It incentives low-quality, non-durable goods that don't provide value to the people purchasing them and generally require cross-planet shipping on vessels burning bunker oil. It's not efficient and that's putting it politely.

Another case of racializing a real problem thus turning it partisan. Police brutality manifests in ways that non BLM- supporters could see and even in ways that BLM would find difficult to explain (the recent incident 5 Black cops beating up a Black guy), but the topic which could previously unify disparate interests, now bitterly divides.

From my, non-American, understanding there is a corrupt relationship between TurboTax and US lawmakers which leads to this proprietery software being basicly required to file taxes. Now the topic of filing taxes is at risk of suffering the same fate where instead of the goal being to make it more intuitive and less likely likely for laymen to make mistakes, racism is blamed and nothing which solves the problem is done.

Well, no, there’s lots of alternatives to TurboTax and you could in theory do it manually if you’ve been appropriately trained(average training time is 3-6 mo, so not something most people would learn to do for themselves). It’s definitely true that tax prep companies lobby the govt heavily to avoid the tax code getting simpler, but the tax code’s complexity also works in favor of the poor(who receive large cash payments every year because of that complexity), families with children(ditto), and the wealthy(who manage to substantially reduce their taxes by taking advantage of that complexity).

Eh. IRS Free File allows anyone with an adjusted gross income under $73000 to use tax software for free.

From my, non-American, understanding there is a corrupt relationship between TurboTax and US lawmakers which leads to this proprietery software being basicly required to file taxes.

Yeah, here's the latest Propublica article on the topic with back links to their earlier reporting: https://www.propublica.org/article/what-to-know-about-turbotax-before-you-file-taxes

Like other replies, I also do my own taxes. But I'm under no illusion this is a realistic option for most people.

One issue is that the IRS very threatening about any mistakes bringing very serious consequences, including jail time. In practice, they do tend to be understanding and work with people to correct mistakes. But many people don't know that... and that might not be the experience poorer people have. Tax prep companies provide legal guarantees that mistakes are their problem not yours.

There's no reason (other than lobbying by the makers of TurboTax) for the IRS to not send you everything they know, which should cover your entire tax situation if you just have W-2 jobs, investments through a brokerage firm, and a mortgage, all of which are already reported to the IRS and if you omit or typo any of the information that was sent to both you and the IRS, then you're in trouble. In practice, this "trouble" usually means the IRS contacts you saying you made a typo, they fixed it, and here's your recomputed tax amount, but you did have to sign saying they're well within their rights to throw you in jail instead.

It's not that bad filing on paper unless you have a busines with a large number of transactions and your transaction record is a physical ledger book or something that will require a lot of calculations at year end, or you have some very odd investments (certain types of partnerships create some rather challenging tax scenarios).

Try getting company restricted stock; the brokerages are required by law to report the basis value wrong and then send a correction statement, which you have to arduously match up yourself to fix.

There are multiple software companies. It is reasonably cheap.

From my, non-American, understanding there is a corrupt relationship between TurboTax and US lawmakers which leads to this proprietery software being basicly required to file taxes.

This is not true for what it's worth. I've actually filed taxes purely by hand before. The government puts out a freely available booklet that walks you through each step of the process, and all the inputs come from the tax forms businesses are required to give you (e.g. the W2 form which reports your pay and how much tax was withheld from it). There are more complicated tax scenarios, but if your only income comes from working a regular job (which is most people) it's actually really easy to do your taxes by hand.

That said, tax software is nice and it is easier. But way too many people in the US treat filing taxes as some arcane process they could never understand, when the truth is they've just been deceived by the hype.

But way too many people in the US treat filing taxes as some arcane process they could never understand, when the truth is they've just been deceived by the hype.

They type of person who plays D&D might be slightly more capable than the median person when it comes to navigating a paperwork process or cross-referencing data. Many folks even ones who by all indication should be able to handle certain types of mental tasks when confronted with a problem shutdown and refuse to process to the point that someone else literally reading an error message to them but because the information channel is not from a stubborn impersonal piece of paper or computer lets them move forward. It's like the quote in Dune about learning to learn being something of a superpower for time sensing space Jesus.

I work in anti wire-fraud, prevention, detection, and recovery after the fact. I've worked with multiple doctors that I am confident couldn't complete a 1040ez if their life depended on it. Yes, I know their own finances are to complex for the ez form and using an accountant is probably a good thing for them. My point is most people are only competent at a small number of things they do a lot and this is very seldom one of them. On a related note doctors make fantastic scam marks. They think they are smart, they often really aren't ,they have money to take, and personality types that make them resistant to reporting it or getting help until they've lost A LOT of money.

Is MDs medical doctors or managing directors in this context?

They type of person who plays D&D might be slightly more capable than the median person when it comes to navigating a paperwork process or cross-referencing data.

Maybe back before they got rid of THAC0.

I'm kidding.

Wait, no I'm not.

Sometimes I think of the type of person who claims they "aren't a good test taker", but they believe themselves otherwise intelligent. I wonder if we are witnessing an extremely sophisticated "Clever Hans" effect. Or that they are cold reading their way through intellectual discussions. Then when alone in the room with a form and a pencil, none of their faculties that they've been told count as intelligence can be deployed.

THAC0 is an easy mode hack. Non linear-formula-based results tables are the lindy option true to the wargaming roots of the game. But today even miniature wargaming rule sets are forgoing tables in favor of simple stat value add/subtract dice roll formulae.

I don't disagree, but that's very much a character flaw of those people rather than the system actually being difficult to work with. It's very easy if you actually read the instructions and follow them instead of shutting down in some kind of learned helplessness mode.

From my, non-American, understanding there is a corrupt relationship between TurboTax and US lawmakers which leads to this proprietery software being basicly required to file taxes.

True, but somewhat exaggerated in my view. When filing without business and investment income, it's pretty easy to file taxes without going through any proprietary software. The industry is also fairly competitive rather than monopolistic. The fact that the American tax code is so complicated it's difficult for an individual with a house, business, investments, kids, and more to do without professional assistance is (in my view) a bad thing due to the deadweight loss, but it really shouldn't have much impact on low-income filers, who tend to have straightforward W-2 income to report and pay on.

I'm sure the complicated nature of the American tax filing system is exaggerated, but the comparison here would be something like the Finnish tax system, where the "filing process" for many typical employees at the tax filing date would be... doing nothing at all, since almost everything has already been calculated on your behalf in the system, or at most checking the government's site to confirm everything is correct.

If I was doing the same thing I do now as an employee, the only thing I'd need to add would be the household services tax deductions for hiring a cleaner and using renovation services a couple of times - the standard housing credit deductions, child deductions etc. would already be on file. Since I'm a sole proprietor my tax stuff is somewhat more complicated, but my accountant takes care of it and her standard hours for doing all my accounting are one hour per month, one extra hour if there's some particular thing to take care of and one hour annually for annual tax stuff, so it's fairly limited on that end, too, and (AFAIK) since all my business and invoicing etc. happens online all the tax stuff can be done online, too, without a need for any physical receipts or filings.

I worked in a central government agency and sometimes dabbled in AI policy. When race is blinded, sometimes the computer will still disproportionately target certain races because of correlated factors.

As long as the algorithm is detecting actual errors, it's okay for it to disproportionately impact certain races (although it will still make the news and people will complain). What's more controversial is when the computer is copying existing human behaviour. If human behaviour can be truly racist (e.g. in an irrational way), the computer can inherit that irrationality, even if blinded.

Right, this is the steelman of the ai bias argument, along with other training data bias like those facial recognition algos that couldn't' detect black faces. But as far as I know they aren't even using an ai. Just a system that looks for potentially suspicious filings to have someone take a look at. Like if your w2 doesn't match the one your employer sent in or in this case the eitc seems to be wildly off.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats