A significant sum of revenues from business and income taxes are never collected from some businesses and from employees of companies who pay employees with personal checks and/or who do not utilize payroll software, or who, for whatever reasons, do not withhold taxes from employees’ pay. In many instances it’s simply that the company is a small business that, though perhaps generating of substantial revenues, has an owner or owners who are not familiar with or knowledgeable of how to use payroll and/or accounting software, and the owner(s) prefer management of their own business finances, as opposed to hiring accountants; or perhaps the owners cannot afford accountants.
Some business owners may simply be unaware of standard procedures for reporting business income, while others have unfounded fears of the Internal Revenue Service, or of paying accumulated amounts of taxes that really should be gradually collected with each sale. Some smaller companies, retailers in particular, may not have Point of Sales (POS) or other systems for tracking inventory and sales; and a lack of such records in turn makes it essentially impossible to tax the revenues of these companies, revenues that would otherwise be applied in part to services that are available and others that could be available to small businesses via relevant agencies, etc…
Payroll/accounting software and tax withholding requirements for all businesses would resolve this issue, and secure considerable funds that, again, the government very often never collects. Payroll and accounting software and training and assistance with utilization of the software could be locally offered, perhaps via the Small Business Administration, etc. to business owners and/or designated employees of companies…
All businesses should be required to render receipts to customers as a matter of professionalism and to facilitate the revenue reporting process, as with originals of receipts retained by business owners. POS systems could also potentially be linked to synonymous business bank accounts, and, accordingly, be monitored by the Internal Revenue Service, primarily for the purpose of perpetually and instantaneously determining and keeping business owners abreast of taxes owed on individual and collective sales and instantly collecting those amounts from each business bank deposit.
Insomuch as income tax withholding and returns are a popular savings mechanism for many workers/business owners, implementation of such a policy as the proposed would render its perks to those particular employees/business owners who have not traditionally had taxes withheld from their pay, those particularly with dependents; and insomuch as these particular individuals would pay their proportionate share of income/business taxes, the government would recover a share of the funds that it spends in public services (i.e. healthcare, childcare, Supplemental Nutrition Assistance, etc.) to low income workers and business owners, and have more funds available for public services.
The IRS/Bank Connection
Credit and debit card transactions are already being reported to the Internal Revenue Service, as of a couple of years ago. Personal checks and cash are not readily reported or taxed, however. And until all companies are in compliance with payroll/accounting software and tax withholding requirements, the Internal Revenue Service could establish a relationship with all banks and/or require that all banks deduct proportional income taxes from all personal checks and deposited cash.
This would shield individuals, from indigent to wealthy persons, whose employers do not at current deduct taxes from their pay. It would eliminate episodes of “tax evasion,” as taxes deducted from personal checks and cash (with the exception of cash that is demonstrably from already taxed income of account holders and/or depositors or cashers) would be instantaneously/electronically sent from banks to the Internal Revenue Service (Tax deductions and instantaneous payment to the Internal Revenue Service would also apply to all check cashing and other companies that provide check cashing services)…
Alleviation of Minimum Balance Requirements on Business Bank Accounts
…Substantial minimum balance requirements on business bank accounts perhaps significantly account for reasons that some especially smaller and/or newly beginning companies might not open business bank accounts, which help business owners to better manage their business finances, and could allow for instantaneous collection of business taxes by banks for instant remittance to the Internal Revenue Service…
Bank-Produced W-2s and Tax Filing Services
In alignment with such a system as the proposed, banks would produce printable electronic W-2 forms and offer tax filing services to account holders, for determined fees. Tax filing services, including rapid refunds, etc. and fees would be competitive with those of traditional tax companies.
Advantages of Exclusively Digital Currency
It is fathomable and there are already discussions of printed currency becoming obsolete and money interchange becoming exclusively electronic. This would yield a number of benefits. First and foremost, it would significantly secure the safety of both cash and employees; there would be no more incidences of cash robberies. Electronic currency would also eliminate black markets and massive episodes of crime affiliated with them, as all monetary transactions would be tracked.
It would be impossible to unlawfully purchase guns, which should all be registered and all owners licensed anyway. It would be impossible to unlawfully traffic drugs, people, counterfeit merchandise, etc., as, again, all financial transactions would be tracked. This would force illegitimate businesses to become legitimate. And there is a very fine line between trafficking drugs, people, and other unlawful merchandise and marketing other legitimate products that would yield comparable wealth, and without the risk of harm or incarceration. And assistance should be made available to those individuals to transition to legitimate businesses. A reformed, especially international drug dealer has transferable business skills that could be of wondrous benefit to the legitimate business world; and, upon realization of this, the government, of course, would finally be capable of taxing all revenues.
Electronic currency would also be a convenience for consumers, who would be privileged to electronically and remotely pay bills that they wouldn’t or couldn’t ordinarily pay where some companies do not presently accept electronic payments, or the consumer wouldn’t bother otherwise to open and use a checking account/bank card or utilize other means of making electronic payments. It would also save the substantial revenues that the government spends to print and recycle money.
All persons as would be eligible would be encouraged to open checking [and savings] accounts with local banks, and enroll in direct deposit with their employers; other persons would be required to acquire prepaid debit cards or similar alternatives to make purchases, etc.
…This alone would be a major boost to the economy in that the banks would be presented with substantial if not magnanimous additional funds by means of customer accounts for their investment and other purposes, and the government would acquire its rightful share of or taxes from those additional revenues from the banks (including non-traditional banks that avail prepaid debit cards) and all account holders…