Can it save you money?
Yes, you could lose a lot of money on IRS debt. Let’s say that you owe $100,000 for four years, and you only pay $10,000 per year for your taxes.
If you owed $100,000, you might lose a lot of interest on that amount, as the time frame is very long.
Your lender will gain interest on the loan
The lender may gain interest on the loan. If your credit score is below 600, that means they have a lower risk of default.
You might also end up paying late penalties and higher interest
As of 2015, the rate of interest will be 1.24% for any loan more than a year in the future. This means that you will be liable for 1.24% of the loan amount each year for the life of the loan. If you miss a payment, the rate can increase to 1.41% (2.8% APR).
If your credit score is below 600, you can lose 1.45% of the loan amount (or the loan can have a variable rate).
You might also pay higher interest rates
The rate you pay may also increase. Your credit score can have a large impact on what you pay, and if your score is lower than 600, you may pay more than the quoted rate.
The IRS has the right to go after your possessions
You will lose a lot of money on your car, home, boat, etc. If they seize your vehicle, they will probably get you to pay them the car in full, and not take you to court. Your home will likely be a foreclosure sale, and you will lose your boat and anything else of value.
The federal government has a limited budget and it has to pay for various debts to fund various activities, with much of the money needed being provided by income tax revenue. To say that the US government can just spend some money on such matters is like saying that the US government is a bank and it is good if it banks our money.
The US government is indeed backed by money; it is backed by people and corporations making promises to pay a certain amount of money in return for a government guarantee that the value of the currency they hold will not go down below a certain amount.
The US government does not have enough tax revenue to meet all of its expenses. For example, consider the fact that there are only about 200 people working in Congress (and for less than $10,000/year). It is not a big number. There are 535 million US citizens and only 100 people in Congress (and each of those people gets a $174,000/year salary). Even if all of them gave half of their income to the government it would not be enough. Also consider that the top 25% of the population (according to some criteria) pay more than 50% of the income tax.
There are two types of spending:
the normal spending money for things, like food, shelter, rent, etc. These things the government charges money to buy. The amount of money charged for this is called the “price level.”
“Transfer spending,” where the government transfers money to someone else.
So the “price level” is a measure of how much money the government charges to buy things.
In contrast, “transfer spending” is what happens when the government gives a check or welfare payment to a person in exchange for that person’s money, which is then spent on things.
So this is not a reason to be against all forms of welfare spending, or even against transfer spending. This is just a reason to oppose Welfare Part B and BACS.
Call (888)489-4889 for a free tax consultation.