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It's not a stupid question at all. In practice the U.S. tax code is not quite as simple as "Here is the tax burden for your income level; tell us if you have a
by hundt 10y ago
It's not a stupid question at all.
In practice the U.S. tax code is not quite as simple as "Here is the tax burden for your income level; tell us if you have any deductions." Right off the bat, you need to determine your "filing status" (single, married, head of household, and some less common options) from a list of five choices, each of which has different rules for all the calculations that follow. Furthermore, for a large portion of people making modest incomes, various tax credits, most notably the "Earned Income Tax Credit" but also education and child-related credits, cause enormous swings in their taxes, for example perhaps from $1,000 to -$3,000 (many people pay negative income taxes).
None of these things can be determined by information the government has. So for many people any "provisional" return that the government is likely to create will be very inaccurate.
Now, you suggest that maybe this would just be some sort of provisional return that could be adjusted to match your correct situation. That is a fine idea. But in order to make that convenient, the government would basically need to develop their own implementation of TurboTax. That has its own issues (is the government likely to do a good job? will they apply the laws in a biased way?) but even if they are resolved we are still talking about a vastly greater effort than "just give people a pre-filled return." So I would ask advocates for simplifying tax filing to either admit that they are demanding that the government author its own fully-featured tax preparation software, or explain how they will otherwise address the complexity of the U.S. tax code.
- avar 10y agoWhat you're saying makes sense, but doesn't at all jive with the reported 99% satisfaction rate in the pilot program. Wouldn't more than 1% have noticed an increased tax burden? Or perhaps the focus group wasn't diverse enough.
- hundt 10y agoIt sounds like the 99% satisfaction rate was "of the people who filed their taxes using ReadyReturn" so it presumably excludes those who observed, or suspected, that the result was not correct and made alternative arrangements. That said, I will also admit that this article is really about California state taxes, which are substantially simpler for most people than federal taxes. I got off on a bit of a tangent because Prof. Bankman seems to claim that the same approach will work for federal taxes as well, and in general most people perceive these issues as linked: automatically prepared state taxes are seen as a step towards automatically prepared federal taxes.
- gech 10y agoCan you answer the question of whether Intuit lobbying for their interest is in the interest of the public?
- hundt 10y agoI mean it might be, right? Just like when anyone else lobbies the government, Inuit might be asking for something that is good or something that is bad. In this case I think they are right.