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Tax Lottery

Lottery prize indexed by income taxes payed ensures compliance.
  [vote for,

A problem with income tax is ensuring compliance. In countries with self-assessment, (like the US and Canada) off-the-books income, phantom deductions, creative bookkeeping and plain fraud all contribute to underpayment of income taxes, which the government is mostly powerless to stop, because stricter enforcement usually costs more than the revenue it adds.

So let's have a tax lottery. On April 15 (in the US, April 1 in Canada) pick an income tax return at random, the prize being 1000 times the tax paid and a guarantee of immunity in return for a full and accurate assessment. When it comes out that the winner shaded his medical expenses a little and inflated his charitable deductions a bit, saving $1500 or so, and thereby costing himself $1.5M, the compliance rate will approach 100%.

We may even find the sort of people that normally play the lottery over-paying...

td, Dec 01 2000

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       Except that a lot of tax work is done by people who can actually make a cost-benefit analysis...
bookworm, Dec 01 2000

       It's an orginal idea but the people who play the lottery are probably not the people who ensure they pay as little income tax as possible. Besides if such a person was to play this lottery they probably would seek to maximise (or avoid reducing) their income tax as the expense of avoiding other taxes. Maybe methods would be found to pay a high income tax but revoke or reduce it matter if no lottery win is forthcoming.
Aristotle, Mar 02 2001

       Why not just increase the random checks and triple the fines and prison sentences?
CasaLoco, May 10 2001


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