[Winstonm]

 blackshoe, on 2014-February-17, 22:15, said:

H. R. Block has an ad going now about "a billion dollars" people have overpaid in their taxes. Seems to me the government ought to give that back. Why don't they? Because they're not about doing the right thing. They're about taking as much money from folks as they can, so they can spend it on things like wars, and propping up despotic regimes that we like this week, and outfitting cops as if they were the military and bailing out companies that "cannot be allowed to fail" and a whole lot of other really bad ideas.

Rather odd to take a paid television spot that promotes one service over others services as a source for facts.

[billw55]

 Winstonm, on 2014-February-17, 20:43, said:

All I am saying is that war (and warring) is much more costly than check-cashing yet I hear no objections to our tax money being used in that fashion. I just would like to know from where the tax objections stems.

If you are saying you don't care if this plan is used provided it does not raise your personal taxes, well, that is much different than saying it should not be done unless taxes are not raised, and different still than it should not be done using publicly supplied funding.

Military is a valid and necessary use of public funds. The proper quantity so spent is debatable. In fact, in other threads I have stated that I would favor deep cuts to our military budget.

Check-cashing service is debatable as to whether government should do it at all. That's a different question.

[kenberg]

I was re-reading the inspector general's report. I found:

Quote

According to Federal Reserve research, 59 percent of the unbanked and 90 percent of the underbanked have a mobile
phone, roughly half of which are smartphones. Moreover, 49 percent of underbanked consumers reported using mobile banking in the past 12 months.

I know, I know, i sound like an old fart. But if these folks are having to borrow money at 300% interest/annum to make ends meet, I think I see a place where they could cut back on expenses. I don't have a smartphone (we looked into it but it was too expensive), I have a cell phone but I rarely use it, and I don't even know exactly what mobile banking is. As I understand the hacking danger from smartphones, it sounds ominous.

I do not wish to be a fuddy-duddy, but I just have trouble reconciling the desperate need for payday loans at 300% interest rates with the ownership of a smartphone. Someone needs to wise up, and in this case I don't think that it is me.

[awm]

While there are a wide range of situations, its important to remember that:

1. Cell phones are effectively free. This includes smart phones which are more than a couple years old.
2. Phone access is a virtual necessity for modern life.
3. For many young people (regardless of income) a cell phone is their only phone. The monthly cost is not much more than a landline.
4. Mobile phone is much more convenient when "work" is not a fixed desk with a land line phone.
5. While smartphone data plans ARE expensive, you can use a smartphone without one and still benefit from internet connectivity if free WiFi is available (which is increasingly common). Also you can have music, videos, games etc. This is pretty useful for a free gadget!
6. There have been federal programs to get free phones to low income people.

[billw55]

 awm, on 2014-February-18, 14:48, said:

While there are a wide range of situations, its important to remember that:

1. Cell phones are effectively free. This includes smart phones which are more than a couple years old.
2. Phone access is a virtual necessity for modern life.
3. For many young people (regardless of income) a cell phone is their only phone. The monthly cost is not much more than a landline.
4. Mobile phone is much more convenient when "work" is not a fixed desk with a land line phone.
5. While smartphone data plans ARE expensive, you can use a smartphone without one and still benefit from internet connectivity if free WiFi is available (which is increasingly common). Also you can have music, videos, games etc. This is pretty useful for a free gadget!
6. There have been federal programs to get free phones to low income people.

Mostly agree, but why do you say the smartphones are free? The cost is always built in to the monthly service charge. Usually, "free" phone deals require a contract. If you add up the cost of the service over the life of the contract, it is often more than the cost of buying the phone up front and using a cheaper, non-contract service. So actually, they are paying extra for those "free" phones (except as noted in your point 6).

[mycroft]

7. Pawnshop unlocked Smartphones on a PAYG plan are likely much *cheaper* than a landline, especially if you are in the group that will need to pony up $400 "security deposit" - because you don't have a bank.
8. Smartphones have several features that if you don't have a home office (or maybe even a home) come really handy and free - calendar, contact list, notebook, history...

*I* don't have a smartphone. I don't have a home phone, either. I'm in the lucky position that everyone who I need to reach me can reach me via email (or SMS->email), and if I need a phone, I can access one. I do have a tablet that does all the "smartphone" things (including, in extremis, acting as a VOIP phone) and a $10/month data plan. I have paid for it (and I bought it new) in 6 months with the landline charges I don't have. And I don't have to worry about all those things above.

Being poor is expensive. The costs are (relatively) very high, and those of us with enough money to not be poor don't see those costs, because society doesn't think they need to protect their income stream from our money instability. And by and large, society is right - but that doesn't mean that the costs aren't there for the poor.

[kenberg]

The report cites large Smartphone usage among the unbanked and what they term the underbanked. I am skeptical of any suggestion that a large portion of these smartphone were purchased at a pawnshop but I acknowledge that I have no way of knowing. I guess it really leads nowhere, they have smartphones, it's not my business how they got them.

As I think I mentioned before, the Inspector General's report looks, to me, far more like a sales pitch than a serious attempt to present the pros and cons. I hope it is looked at with caution. Not search and destroy, but caution. Perhaps it will all be fine.

[blackshoe]

Phones: I have 3: a "land line" (actually, it's provided by the cable company, not the phone company), a cell phone (yes, it's a smart phone), and a another cell phone which is built into my car (it came with the car, not a third party addon). I don't use the car phone much. OTOH, it doesn't cost me much - a few dollars a month. Actually, I don't use any phone much, but... there are times when you need a phone, and usually you need it right now. So I bought a cell phone. That's the most expensive, because it's a smart phone. I don't have to use those features, but they're handy once in a while. So's the land line. If I had to get rid of two, I'd keep the cell phone, and maybe go to a "not smart" one. But at the moment I can afford all three, so why not?

I'd be very surprised to find that the IRS is prohibited from helping taxpayers, and only slightly less surprised to find they're prohibited from filling out returns for people. In fact, at one time that's how it was supposed to work - the IRS was supposed to be telling us what we owed. There was a court case for "failure to file" or some such, the defense was "the IRS didn't do its job, didn't tell me what I owed". He won the case - and the law was changed. It's a long way from that to "the big tax preparers have lobbied and got Congress to prohibit the IRS from filling out peoples' tax returns" though.

[awm]

Turbotax did actually lobby to prevent the IRS from filling out tax forms. Yes they really did. In case those sources are too liberal, here's a more mainstream one. And the tech sector agrees. And an organization against lobbying money in politics.

For mobile phones, it's pretty easy to get a give away, because there are lots of people who upgrade their phone every year or two and have spares just lying around. Barring this, Best Buy is advertising smartphones with no contract for $30, which is pretty affordable for something that gives games, music, video, internet access, camera, and phone all in one gadget. And those are NEW phones (very low-end ones of course); used phones are available on Ebay and elsewhere for substantially cheaper prices.

[blackshoe]

Okay, Turbotax lobbied. Doesn't mean they were successful. Doesn't mean they weren't. I looked at a couple of those refs. They just say "there's lobbying going on". Again, don't know whether the lobbying was successful. Maybe you can post a link to an actual law change?

[hrothgar]

 blackshoe, on 2014-February-19, 01:23, said:

Okay, Turbotax lobbied. Doesn't mean they were successful. Doesn't mean they weren't. I looked at a couple of those refs. They just say "there's lobbying going on". Again, don't know whether the lobbying was successful. Maybe you can post a link to an actual law change?

If this is the example that I am thinking of, there is no law change because Turbotax et. al. blocked a law that would have allowed the IRS to complete a basic tax form for filers.

[kenberg]

As mentioned, I have found the IRS to be pretty helpful with questions. I of course don't know exactly what rules they operate under. Here is one possible issue:

Suppose a person works at a regular job and gets a weekly paycheck with taxes deducted. He needs to file. If he doesn't have a mortgage and doesn't have significant medical expenses, this is very easy for most of us. but suppose he can't read. Now it is harder unless he has assistance.
Question: Does the IRS provide enough help so that this person can cope? Buying TurboTax probably would not help him. I would be surprised and dismayed if the IRS could not help him through this, although I imagine there are volunteer organizations that would do so. A Friend, ow deceased, used to do this every year for people for free. I think he worked through his church and they coped with protecting him from nuisance lawsuits in some way.

The people that work at the IRS have no interest in screwing the taxpayer, they don't get a cut. Of course in items where there is dispute about how tax laws are to be applied (see my comments about support when I was a grad student) the IRS would go with the IRS view, and other opinions may be useful. So there couold be problems.

[blackshoe]

 kenberg, on 2014-February-19, 08:08, said:

The people that work at the IRS have no interest in screwing the taxpayer, they don't get a cut.

Oh, I don't know. For some people the power trip alone would be enough. I suppose it's possible nobody like that works for the IRS, but that seems unlikely.

[barmar]

 kenberg, on 2014-February-19, 08:08, said:

As mentioned, I have found the IRS to be pretty helpful with questions. I of course don't know exactly what rules they operate under. Here is one possible issue:

The IRS has a help line that you can call, but as I understand it they make no guarantee of the accuracy of the help provided. If you get bad advice from them and underpay as a result, you may still owe penalties. The same is true of companies like H&R Block, although they may offer a warrantee that they'll pay the penalty (I wonder if you have to pay extra for this insurance). I think tax preparation software like TurboTax says they'll pay the penalty if they calculate the tax incorrectly, but they're not guaranteeing any advice the program offers.

I don't believe tax help service is what the lobbying was about. It's about the IRS providing a service where they will calculate the taxes for you, and just send you a bill. Even if you call the IRS for help, you still have to fill out the forms yourself, and that's where Intuit and Block get into the process. They don't want this revenue stream to go away.

[blackshoe]

When even the IRS can't figure out the tax code, it's too damn complicated.

[ArtK78]

 barmar, on 2014-February-19, 10:47, said:

The IRS has a help line that you can call, but as I understand it they make no guarantee of the accuracy of the help provided. If you get bad advice from them and underpay as a result, you may still owe penalties.

Not necessarily.

There are reasonable cause provisions in the Internal Revenue Code (for example, Sec. 6664(c ) and Sec. 6724(a)) which provide that no penalty will be imposed if there is reasonable cause for the underpayment of tax rather than willful neglect. Advice from an employee of the IRS acting in the employee's official capacity should constitute reasonable cause.

[mike777]

Given the post office does not need to make money and it can never fail:


1) negative interest rates on loans
2) negative fees on checking

given 90% of usa live on paycheck to paycheck

Keep in mind negative IRS income rates.

ONce you accept negative IRS income rates...all else makes sense.

[Cthulhu D]

 billw55, on 2014-February-17, 08:09, said:

Short term lending is not a poverty tax. If you don't want to pay absurd interest and fees, then don't borrow. Nobody is forcing them.

I think you misunderstand what poverty means - it's worth considering for a moment the hardship definitions of poverty. If you are in poverty, you have to choose between feeding your kids, having necessary medical treatment, paying your power bill or using a money lender.

Your pick!

Now, something like 10% of Australians live in circumstances that meet this definition of poverty - considerably less than the US because we'll pay for healthcare and education. How is that person not 'forced'

[billw55]

 Cthulhu D, on 2014-February-24, 19:04, said:

Now, something like 10% of Australians live in circumstances that meet this definition of poverty - considerably less than the US because we'll pay for healthcare and education. How is that person not 'forced'

The point is, that such people are almost always worse off after using these financial "services" (I prefer the term "scams"). It is a huge net loser of future dollars. As Ken analyzed earlier, if they could just suck it up and go without that first loan, they would come out vastly ahead by the end of the year. The whole industry is just a trap for the uneducated and undisciplined. It's kind of sad really.

[Winstonm]

 billw55, on 2014-February-25, 13:18, said:

The point is, that such people are almost always worse off after using these financial "services" (I prefer the term "scams"). It is a huge net loser of future dollars. As Ken analyzed earlier, if they could just suck it up and go without that first loan, they would come out vastly ahead by the end of the year. The whole industry is just a trap for the uneducated and undisciplined. It's kind of sad really.

Sorry, but it is not poor judgement or lack of discipline but cost of accessing cash that hurts the poor.

This explains.