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Stanford Professor Loses Political Battle To Simplify Tax Filing Process
- tedunangst 10y agoWould it have killed them to at least mention his name is Joseph Bankman in the summary?
- javajosh 10y agoGood point. I wonder if the omission was an oversight or intentional (his name would make finding an alternative source trivial).
- danso 10y agoThe currently posted link doesn't have the audio/transcript, but here's a few relevant links from last week: http://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero http://www.npr.org/sections/money/2017/03/22/521132960/episo... https://priceonomics.com/the-stanford-professor-who-fought-the-tax-lobby/ https://priceonomics.com/the-stanford-professor-who-fought-t...
- deleted 10y ago[deleted]
- arikr 10y agoSeems like a good opportunity for a crowdfunding campaign.
- nullnilvoid 10y agoI am not surprised at all. Intuit, H&R Block etc. spend much money in D.C. just to keep tax codes complex so that they can sell more copies of tax filing software, at the cost of all tax payers.
- oDot 10y agoI've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!
- smt88 10y agoWealthy people are against that. They prefer regressive taxes, like sales tax, that will be shift much more of the burden to the poor. In fact, there's a whole batshit-crazy tax plan called FairTax that proposes changing all taxes to a simple sales tax.
- lsaferite 10y agoHonest question, why is it batshit-crazy?
- nicwolff 10y agoBecause rich people spend a much smaller percentage of their income on taxable goods, so to be revenue-neutral the "fair" sales tax would have to be at least 30% (if you believe the FairTax fans) or over 50% (if you believe other economists).
- smt88 10y agoOne reason is that it's impossible to enforce. If sales tax were that high, it would give retailers a huge incentive to under-report sales on the billions (trillions?) of transactions in the US each year. The same way it's hard to catch drug dealers for tax evasion, it's hard to catch retailers who want to avoid charging/paying sales tax. With the income tax, you have employers reporting and a far small surface area of cheaters to police. It's still a massive effort to police it, but not nearly as large as FairTax would be. FairTax is essentially a scheme to eliminate enforceable taxes, although I'm not sure its creators intended it that way.
- lsaferite 10y agoYou think it's harder to enforce tax collection on businesses than individuals? With a significantly lower number of business you can audit their books more often. Additionally you can more easily monitor their bank account activity to detect tax evasion. Sure, cash-only businesses could try and avoid taxes, but they have a lot more to lose than a single individual that under-reports their income. Not sure how you think individuals are the easy ones to enforce. Also, in this world the tax code is tiny in comparison and loopholes are removed (mostly?).
- shmerl 10y agoI can't see the article, but I suppose it mentions, that Intuit and Co. bribed officials to oppose this idea.
- DiffEq 10y agoIt does becasue they did; well in a lobby sort of way so it is legal.
- Y_Y 10y agoI wonder if it would be ok for the IRS to charge for this service. Maybe then it would be justifiable to the Republicans who oppose on the basis that it would make raising takes easier.
- hnal943 10y agoYou think it would be more palatable to Republicans if more money went to the government for the privilege of making taxes less transparent?
- thebrettd 10y agoI love this idea in theory, and basically revisit it every year during tax season. The tax/tax prep lobby is strong, and perhaps needfully so, as a whole bunch of people have their livelihoods wrapped up in it, but I often wonder if that whole industry is not actually a net negative for the economy. edit: How do we help this idea take flight?
- magic5227 10y agoWhat about: 1. California ballot initiative 2. Free software (start a TurboTax 100% free alternative) to reduce incentives to have laws like this
- fattire 10y agoRemember that every dollar spent on intuit, and every hour wasted struggling with bullshit tax forms (deliberately the status quo because of Intuit) means Americans can afford less time and money using your product and buying your services. That is, these billions of dollars and incaculable frustrations wasted by Americans to line Intuits' pockets are a drag on the overall economic activity-- less money circulating in the economy, less ability to buy from each other. Fuck Intuit. They exist to make everyone's lives worse. But don't forget, the government forces them them to offer their software free for certain lower-income Americans: https://www.irs.gov/uac/free-file-do-your-federal-taxes-for-free https://www.irs.gov/uac/free-file-do-your-federal-taxes-for-... No idea how much longer this will exist. I'm guessing it will soon quietly go away or be marginalized even more than it was in GWB's adminstration (when the income minimum was reduced significantly).
- gamblor956 10y agoCorrection: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source. Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite the tax code.
- thebrettd 10y agoThis is a good point. I think a real solution to the 'tax problem' requires both a) having the gubment send us an itemized invoice instead of making us file and b) having a transparent, simple to grok code so that we can validate the bill. edit: this is obviously a huge huge problem to tackle, but dont we all feel a lot of energy around this during tax season? :)
- cestith 10y agoI disagree on one point. Block and Intuit are also lobbyists against all sorts of code simplification programs. Anything that makes the filing process easier, and having fewer deductions and penalties available makes it easer, they are against.
- ams6110 10y agoThe business of H&R Block and Intuit came about in response to tax code complexity, they did not create it.
- noobermin 10y agoI'm going to say this until I'm blue in the face: fix money in politics, and half of these issues will no longer be intractable.
- gnopgnip 10y agoHow can you fix money in politics without making the whole system worse?
- raarts 10y agoDo you think making politicians dependant on funding makes politics better?
- smt88 10y ago1) Campaigning is restricted to a short time period, perhaps 6 months. 2) Every candidate gets a (small) fixed budget, paid for by tax-payers. (This is already the practice in some countries.) 3) Ads are subject to the same laws that govern ads for products: say whatever you want, but you can be sued for lying. Any of those ideas sound good?
- sjwright 10y agoThat's pretty much what we have in Australia — except the campaign period is much shorter still, around 6-8 weeks.
- mullen 10y ago> 1) Campaigning is restricted to a short time period, perhaps 6 months. You can't do this without limiting Free Speech. > 2) Every candidate gets a (small) fixed budget, paid for by tax-payers. (This is already the practice in some countries.) Might be possible. > 3) Ads are subject to the same laws that govern ads for products: say whatever you want, but you can be sued for lying. Lying is Free Speech.
- Frondo 10y ago
- chiefofgxbxl 10y agoJust for thought: suppose the tax system became so simplified that only goods X, Y,and Z were taxed at rates a,b,c. You pay aX+bY+cZ in taxes per year. It would be easy for voters to campaign their politicians to lower tax rates and easily verify. Obviously in the real world there aren't 3 levers to adjust: there are probably thousands or tens of thousands. Apart from the lobbying, politicians may themselves desire this, because it would allow them to lower those 3 very-public levers to claim they lowered taxes, while at the end of the day maintaining the same level of spending because they just offset those losses over thousands of other levers. After all, things have to get paid for. Then at least they can tell the public: "Hey, I lowered tax rates." And when the public's wallet doesn't feel the savings, the politician still wins votes because as far as the public can see, they lowered those tax rate levers. Compare that to a politician under the 3-lever system. Either they lowered taxes or they didn't. What I'm suggesting is that a complex tax system allows politicians to take the heat off themselves when the public demands lowered taxes, while still maintaining the amount of money the government takes in to cover the budget.
- betenoire 10y agoYou desire a system that encourages and facilitates blatant deceit?
- nameone888 10y agoOur system now is full of deceit and every system prior has been full of deceit. It rather comes with the territory of humans. Why not then be honest about how we're "cheating things" from a human perspective, so long as the outcomes are agreeable.
- bunderbunder 10y agoSeems more like the parent is pointing out that a simple, manageable tax system isn't politically tenable in a representative democracy. Certainly not one as madcap as the USA's.
- rayiner 10y agoThat's exactly why we have a proliferation of taxes and tax breaks instead of a simple tax system. Perform a thought experiment. Say we just have a straight 35% income tax. Now, say you need to raise additional revenues. Do you (1) raise the single tax; or (2) impose a new tax on some specific part of the economy? Option (1) gets everybody mad at you. Option (2) gets only a tiny number of people mad at you. Same thing for tax breaks. Say you want to cut taxes. Do you cut the marginal rate, which helps everyone (even non-voters), or do you target cuts in a way that helps people who are likely to vote (homeowners, people with employer-paid health insurance, old people, etc.)? Same thing with business tax breaks. Do you cut rates for all businesses, or do you target them for businesses that are big employers in your state/district?
- bmajz 10y agoI was pretty surprised to see Zoe Lofgren's name pop up as an anti tax filing simplification advocate. She's the rep from CA's 19th District which covers San Jose (but not the rest of Silicon Valley) and generally a straight down the line liberal. This is not even Intuit's core district -- that would Anna Eshoo's 17th (previously 14th) district which covers Mountain View and Palo Alto. As a resident of this district, I guess I have something to write in about.
- undersuit 10y agoAccording to open data[1] the largest contributor to her campaign is Intuit and it's employees. [1] https://www.opensecrets.org/politicians/summary.php?cid=N00007479 https://www.opensecrets.org/politicians/summary.php?cid=N000...
- bmajz 10y agoWell, would you look at that? Poking around this site will be fun.
- damon_c 10y agoWow I can't believe it. /s
- damon_c 10y agoWow I can't believe it. /s
- rsync 10y ago"According to open data[1] the largest contributor to her campaign is Intuit and it's employees." And without even looking, I am going to guess it's some shockingly low number ... let's take a look ... Ding! $30k. That's all it took. Should we have some fun and see if $31k is enough for (whoever this lady is that nobody has ever heard of) to tattoo "rsync.net" on her forearm ? $32k ? What should our offer be ? Maybe she can help councilman Ben Kallos pull the rickshaw.[1] [1] https://news.ycombinator.com/item?id=13972360 https://news.ycombinator.com/item?id=13972360
- 10y ago
- thinkloop 10y agoIt would be nice to know each legislator's reasoning. Maybe there's something real in the againsts, or at least makes it more difficult to take a flakey position. Statements should have to come with votes.
- riemannzeta 10y agoI wish there were more information about what, specifically, the pilot program included. The main detail I got from the story is that the tax returns were pre-filled with income information. I think that's useful, but I see no reason to expect a priori that the government would end up doing a better job with that than the private companies (like Intuit and H&R Block) whose revenue depends on doing that well. The comments that suggest that Intuit and H&R Block were lobbying to keep the tax code complex don't make sense to me. Maybe they are, but that's not what they were lobbying for in lobbying to defeat this particular, reform is it? Rather, they were lobbying to keep the pre-filling process private. Or did I miss something important?
- albinofrenchy 10y agoIntuit and HR block are a bunch of crooks. They have lobbied for a variety of anti-tax payer causes. Namely stuff like: https://psmag.com/h-r-block-and-intuit-are-still-lobbying-to-make-filing-taxes-harder-b94a0f41ffa1 https://psmag.com/h-r-block-and-intuit-are-still-lobbying-to.... There is a really good reason to think that the government would do a better job -- most peoples tax situation is dead simple. Even if H&R block found deductions every once and a while that the IRS didn't -- which I doubt would happen realistically -- H&R block charges something like 200 dollars. It seems incredibly unlikely that they would save more than 200 dollars on average. And if that was the case, let the market sort it. H&R block could say bring in the returns, and if the IRS messed up we'll find it and split it with you in some fashion.
- riemannzeta 10y agoI don't have a strong feeling about the statistics here. But I guess a $1,000 mistake on 1 in 5 of all returns does a little unlikely. Bigger mistakes on fewer returns also seems unlikely since the higher the bracket, the less likely you're relying on any default or software. But I take the point that H&R Block and Intuit could simply start from the filled out returns provided by the gov't. Harder to understand their objections given that.
- CogitoCogito 10y ago> I think that's useful, but I see no reason to expect a priori that the government would end up doing a better job with that than the private companies (like Intuit and H&R Block) whose revenue depends on doing that well. Intuit and H&R Block could of course _still_ provide their services if they happen to be so accurate. In the past, I've used Turbotax only to receive corrections from the IRS (and by the way, the IRS was right). Certainly would have saved me time to have access to that info from the beginning. > The comments that suggest that Intuit and H&R Block were lobbying to keep the tax code complex don't make sense to me. Maybe they are, but that's not what they were lobbying for in lobbying to defeat this particular, reform is it? Rather, they were lobbying to keep the pre-filling process private. Of course that keeps it more complex. It means that it's harder for your average tax payer to input information (starting from scratch is always harder than starting from some partially filled point). It unquestionably increases the amount of work required since tax payers have to do work the government has already done (at a much more efficient scale). So yeah basically by lobbying against this, those companies are essentially economic parasites.
- whyenot 10y agoCalifornia has the initiative system that means ultimately the voters can make changes to the system without involving a recalcitrant or corrupt legislature. For better or worse, many of the big changes in government in the state were enacted through this process. For example, proposition 13, which drastically changed property taxes, proposition 14, which moved the state to a "top two" primary system, proposition 11 and 20, which changed redistricting and made it less partisan. etc. etc. Moreover the side with more money for advertising doesn't always win these proposition elections.
- Aloha 10y agoThe initiative system is both what makes the state innovative, and makes it incredibly hard to govern.
- CogitoCogito 10y agoI'm pretty sure the problem would be that the second someone like Grover Norquist came out against it, you'd lose a huge amount of support. The fact that those very same people would love the system if they tried it (as the 99% approval of the system attests) is irrelevant. That said, it would be interesting to see it put to a vote.
- dragonwriter 10y agoCalifornia passes ballot propositions all the time that Norquist (and the often more relevant in California, similarly aligned Howard Jarvis Taxpayers Association) oppose.
- ryandrake 10y agoThe problem I have with the popular "simplify" US tax proposals is that they mostly do it by repealing whole sections of the tax code, ending up super regressive and/or hurting the poor and middle class and helping the already rich. Flat tax @ a high rate: Neutral or slightly helpful to the rich, crushing to the poor and middle class Flat tax @ a low rate: Windfall to the rich, the resulting gutting of government programs hurt the poor and middle class Eliminate taxes on dividends: Windfall to the rich, neutral to the poor and middle class who don't benefit from dividends Eliminate many deductions and loopholes and reduce top tax rate (one of Trump's proposals): Rich are likely better off, no help to the poor and middle class Reform AMT: Helpful to the rich and people with stock options, no effect for the poor and middle class Eliminate income phaseouts: Helpful to the rich, no help to the poor and middle class Eliminate estate or gift taxes: Helpful to the rich, no help to the poor and middle class Eliminate income tax in favor of sales tax or VAT: Windfall to the rich, crushing to the poor, probably negative for the middle class The ability to file your taxes on a postcard isn't worth it if it means advantaging the already advantaged.
- ghouse 10y agoBut this isn't that. The government already has enough information for the majority of US taxpayers to complete their tax return. W-2 income only? Or other income that's already reported to the government? Government sends you a tax return to sign. If you have more complicated taxes or don't fall into the 1040EZ, then do continue to do as you do today.
- Aloha 10y agoHave you considered that the tax system shouldnt /help/ anyone? Trying to further social policy via taxation is about the least efficient way to do it. Treat all income the same, do not allow deductions, charge a medium rate (10-25%), exempt the first 35-50k a year - no special rates for married filers (everyone files single), no deductions for dependents. Eliminate corporate income tax entirely, replace with a VAT and a financial transactions tax (.25% of any transaction).
- ryandrake 10y ago
- hundt 10y agoFWIW, here's an email I sent to Prof. Bankman last April: --- I read with interest your letter about the Tax Filing Simplification Act of 2016, and your article "Simple Filing for Average Citizens: The California ReadyReturn." I agree that the tax filing burden on taxpayers is far too high, and I am encouraged that legislators are trying to do something about it. But I am concerned about the details of actually accomplishing this given the complexity of the federal tax code, even for what appear to be "simple" situations. For the past five years I have volunteered with the IRS's Volunteer Income Tax Assistance program and helped low-to-moderate income taxpayers file their taxes. One of the first things I learned was how frequently a taxpayer's total tax is affected by factors other than what is on their W-2 or otherwise reported to the IRS. Examples include: - complex calculations of "support" to determine whether a live-in relative is a dependent - exact payments, and nature of payments, made to schools (generally not accurately reported on the 1098-T) - business expenses - which months the taxpayer had health insurance (often not reported correctly, or reported to a different person) and, if no insurance, whether an exception to the penalty applies - what portion of the property taxes paid by the mortgage company on behalf of the taxpayer was for ad valorem taxes (the only kind that is deductible) - what gambling losses are there to offset the gain reported on a W-2G? - [litany of qualification questions for various education benefits] - which exceptions apply to an early distribution from a 401(k) Although each of these individually sounds like a corner case, my experience is that in aggregate a large percentage (perhaps more than half?) of the tax returns involved information that the IRS has no way of knowing. So for advocates of IRS-prepared returns, of which I understand you to be one, I wonder what the response to these issues is? I can think of three: 1. The IRS should assume whatever results in the maximum tax liability, and it is up to the taxpayer to determine whether they can reduce their liability further. 2. The IRS should guess based on some combination of factors, and the taxpayer is responsible for verifying the guess (and is assessed penalties if they don't fix an incorrect guess?). 3. We should drastically simplify the tax code so these issues go away. Each response has some obvious problems. Anyway, this is just something that has been on my mind, so I hope you don't mind this email out of the blue to try to solicit feedback from someone who might have given the issue some thought. --- He never responded, so I am still left wondering the same questions.
- avar 10y ago
- avar 10y agoThis whole thread is full of comments from people who obviously haven't read the article / listened to the podcast in question[1]. Joseph Bankman proposed ReadyReturn in California, which is the kind of tax return pretty much the entirety of the rest of the western world uses. I.e. instead of an empty return, it's pre-filled in with the details the government knows anyway. This vastly simplifies things for most people, especially those whose main income comes from working one job. This was in no way a change to the tax system, or what taxes people had to pay. The government would just hand you a filled-in form instead of an empty one, so you could make corrections instead of filling it in from scratch. It had north of 99% approval ratings by the people in the test groups for it, something unheard of when it comes to government programs. As a parlor trick Bankman would carry around a thick binder with the feedback the program had received from taxpayers. When he wanted to convince someone he'd start paging through it and ask the person he was talking to to say "stop", to ensure he wasn't cherry-picking. He'd then start reading raving reviews of the program starting at that page, some in all-caps from people who couldn't contain their excitement. It didn't make it into law, partly due to lobbying by the likes of Intuit, but more interestingly, I thought, because Grover Norquist, the well known promoter of the "Taxpayer Protection Pledge" took the counterintuitive view that just making the process easier equated to a new tax, since taxpayers might end up paying taxes already on the books that they might have previously unintentionally evaded. That to me is the most bizarre detail about this entire story. It's likely that it would have passed if not for the strange interpretation of one man to this not-a-new-tax of it effectively being a new tax, and his ability to sway the Republicans due to the political power his "Taxpayer Protection Pledge" holds over Republicans. 1. http://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero http://www.npr.org/sections/money/2017/03/22/521132960/episo...
- jkaptur 10y agoI think that a major component of Norquist's thinking is that the more painful people find taxes (including the process of calculating them) the more they'll support his agenda of "a government so small you could drown it in a bathtub".
- deleted 10y ago[deleted]
- justabystander 10y agoHonestly, I think it'd be better to start a non-profit that releases tax software, first. It could compete with tax software, like from Intuit & H&R Block, as most of the needed services are rather simple. It would either charge just enough to cover costs, or be completely free, if donations for the year was sufficient. The tax software support could be done on a contract basis, where people certified people could login and handle queries on an hourly rate. The work from home crowd would love it. Build it out enough, and then push a few legislative mandates: 1. All taxes have to be easily payable in tax software. 2. All taxes have to be payable online. 3. Every tax jurisdiction has to offer a tax estimation service, where they can download pre-calculated data to use in tax software. Should make predatory companies like Intuit disappear in less than a decade.
- GauntletWizard 10y agoAbsolutely. But don't think that you'll have an easy time of it. Expect that 501c(3) status won't come, because ultimately it's the IRS that makes that call, and they've already been suborned or cowed to the pressure of the tax preparers. Expect your credentials to be challenged. You need a license to prepare taxes for other people - And I expect they'll try to say every developer who touches a line of code must have one. Expect character assasination, and every mistake to be amplified. Buzzfeed will run "10 dangers of using open source software to do your taxes". The forms will become even more of a moving target than they are now, and APIs will absolutely not be public. But it's a fight that should be fought. This is the kind of thing that makes better government, kicking and screaming.
- dhimes 10y agoTrump promised to make taxes much simpler. Let's see if he keeps his promise.
- Akujin 10y agoThis is why I pirate Turbotax every year. Fuck Intuit. Fuck H&R Block. I'll give them money over my dead body.
- doubleplusgood 10y agoWhy would you need a new version every year? Does the tax code change that frequently?
- JDiculous 10y agoThis is infuriating because the simplified tax system is objectively superior. Any Congressperson who voted against this was either 1. stupid or misinformed 2. bought out by Intuit. It seems to me that the only way to mitigate the effect of lobbying, aka legalized bribery, is to publicly call out the politicians who sell out. Is there a list of representatives who voted against this bill?
- partycoder 10y agoIf you are a foreigner, you are most likely not complying with the tax code unless you hired a competent CPA. TurboTax won't do.
- deleted 10y ago[deleted]
- mtgx 10y ago> Joe, though, discovered that Intuit had been very busy lobbying against ReadyReturn - meeting with lawmakers, giving money. How the hell do Americans not think that this is BRIBERY? Are you kidding me? It's one thing to "talk" to politicians, it's another to tell them to vote a certain way and then giving them money". For crying out loud. Sometimes the U.S. can be really backwards* compared to other modern societies.
- mtgx 10y ago> Joe, though, discovered that Intuit had been very busy lobbying against ReadyReturn - meeting with lawmakers, giving money. How the hell do Americans not think that this is BRIBERY? Are you kidding me? It's one thing to "talk" to politicians, it's another to tell them to vote a certain way and then giving them money". For crying out loud. Sometimes the U.S. can be really backwards* compared to other modern societies.
- koliber 10y agoI am impressed that it only took $35,000 to get lobbyist help to get this law proposal that far. There's a lot of talk here about efficiency and many efforts to strive for it. What would it take to raise 10x that much and provide Prof. Bankman with a war chest that stands a good chance of succeeding?
- lend000 10y agoI find it troubling how many commenters here are so passive to automatic, mandatory payroll tax deductions, that they overlook how effective those payroll tax deductions actually are (and how Norquist is right, if for the wrong reasons). Yes, government payroll deductions are convenient. Yes, all other things being the same, they make your average salaried worker's life easier. And yes, they absolutely mask how much you are paying in taxes, by softening the psychological impact of making an annual tax payment with money you earned, instead slowly pilfering the money from each paycheck. Most importantly, it ensures you never get to see that portion of the money you earned in the first place -- it doesn't hurt as bad to lose something you never really had. I personally think this should have passed -- if nothing else, to force the IRS to reveal all the information it really has on you. However, the opposing argument has a point that shouldn't be dismissed as completely ridiculous, because a pretty indisputable side effect would be more apathy regarding taxes, which is not a good thing.
- rb666 10y agoThe US oligarchy strikes again, even in California, crazy. It works in almost all Western countries. Filing my taxes takes about 15mins each year.
- wkz 10y agoI live in Sweden. Just a few days ago I audited and filed my returns for 2016, it took me about 2 minutes. 1. Go to skatteverket.se (IRS), enter your "personnummer" (SSN). 2. Open the BankID app on my phone, which contains an X509 certificate identifing me, issued by my bank. Enter my password to decrypt the cert's private key and sign the authetication ticket from skatteverket.se. 3. Audit my pre-filled returns. Contains all information about income tax, captial gains tax and so on. 4. Press "Sign", enter password in BankID again to sign the returns. 5. Smell the roses.
- kbart 10y agoSimilarly in Lithuania, it takes me few minutes as well: 1) Login to e.bank (I use mobile signature attached to a SIM card) 2) press link to a local "IRS" equivalent 3) check and confirm the prepared tax declaration (usually everything is already there) During the whole process I have to enter my bank ID and PIN code once.
- aldanor 10y agoI live in Ireland. I don't file any returns since I have a single source of income, my company/government figure it out for me => 0 time wasted.
- wkz 10y agoInteresting. I would think that they at least would want a signature from you. Seems harder to argue cases of tax evasion if you as an individual have not officially stated that you have no additional incomes other than the ones your gov knows about.
- lagadu 10y agoSame thing in Denmark, except using nemID for logging in. The whole process barely takes longer than the kettle takes to heat up my tea.
- basseq 10y agoI did some work for the IRS several years ago to explore the same idea. There are many benefits, including simplicity and accuracy of filing (closing the $500B tax gap), as well as better fraud protection (another $25B). Protectionism of the tax return industry is common, but not the primary reason. Instead, the biggest pushback is from taxpayer advocacy groups. The issue is this: for many Americans, particularly low income Americans, their tax refund is the largest check they receive all year. Delaying that refund in order to receive all tax information (e.g., from banks and employers) and pre-populate a tax return would push back initial refund checks by 1-2 months. This is tantamount to political suicide.
- zebrafish 10y agoRepublicans as well are claiming that an automated tax return creates a passive tax payer, thus lessening the tax payers hatred of taxes and, in turn, the government.
- antisthenes 10y agoIf you receive a huge tax refund from the IRS, that means you set up your initial deductions improperly. If your sole income is 1 main full time job, it's really not hard to estimate your taxes to the point of having a refund under $500. That way you don't government use you as a bank for 0% interest and have more money throughout the year. To preempt some of the responses - no, let's not denigrate poor people for their spending habits and pretend like somehow getting the refund is better than having that money during the year.
- basseq 10y agoYou're not wrong, but we're leaving the world of "logic" here and moving into "politics and optics". Most people can't wrap their heads around, "What do you mean I won't be getting $1,200 in March!? $100 per month? Who wants that!"
- officelineback 10y agoIf it makes filing easier and automatic, wouldn't the returns be submitted earlier, thus negating part of that 1-2 month delay?
- lazyant 10y agoSending taxes in the US by mail was unnerving for me, I don't know if things have changed but basically you put the envelope in the mail box and then .. you don't know, no receipt from the IRS, nothing. What happens if the envelope is lost? In all the countries I've lived you submit your taxes and you get and instant receipt or acknowledgement.
- kwoff 10y agoI'm an American working in the Netherlands. Filing US taxes has improved, a lot last year in my opinion, since it got easier to file electronically for free... But compare: I got a letter from the Dutch government a few weeks ago saying I don't need to do anything since as far as they can tell my situation hasn't changed since last year. In the US, some people believe that the tax return that they get every year is some kind of bonus. Here, my employer withholds the correct amount. Why is that so hard?