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The real question is why we have a tax system that would need 10,000 additional customer support reps. The problem isn’t a lack of reps, it’s a system that requ

The real question is why we have a tax system that would need 10,000 additional customer support reps. The problem isn’t a lack of reps, it’s a system that requires that many reps. The flat tax, file-on-a-postcard system proposed by 2016 presidential candidate Ted Cruz was mocked by the establishment because it seemed tha politicians on both sides have a vested interest in a complex tax code — it is the means by which politicians derive their power. See Milton Freidman on the subject: https://youtu.be/TruCIPy79w8 https://youtu.be/TruCIPy79w8

hcknwscommenter 9y ago
File on a postcard. Sure. This year, I could have used the 1040EZ (the entirety of which could fit on a post card if you removed the embedded instructions), and left some money on the table, so I chose the more complicated route. Last year, I just used the 1040EZ. Flat tax is a completely different issue.
SiempreViernes 9y ago
It is weird to see the argument that making tax filingd hard builds power, for it to work you have to dismiss the inuitive idead that making tax filing simpler will make citizens happy and less likely to complain since they have beens spared from some hassle.
monocasa 9y ago
You can stay away from regressive schemes like a flat tax, and have a tax system with a rubberstamp level of UX. That's how it works in most of Europe and could work here. The IRS already has all of the information needed outside of gambling and stocks, and could simply send you forms already filled out for you to sign. H&R Block and TurboTax simply heavily lobby to keep this from happening to keep their business model around.
- conanbatt 9y ago
  Whats interesting about the flat taxes is that it makes it hard to avoid at the highest levels, where complex tax structures end up having a very variant level of taxation. Much like corporate taxation is 35%, but google or facebook pay only 11%. Milton Friedman used to say that a flat tax of 15% would be enough to replace the entire scheme of income tax. There is also one major boon: lots of capital is spent on taxes, from accountants to lawyers to gubernamental organizations, etc etc. An effective 15% rate without exemptions would fly very well with the right (simple flat taxes) an the left (no exemptions) but as MF said, the political stances on this topic dont trust each other and they are both right: even if we moved to such a system, the right would still advocate for exemptions and the left for increases in taxation. Its a noticeable deadlock. I also want to mention that flat taxes are not regressive by definition. The progressiveness or regressiveness in that case requires to see where the taxes are spent.
  - monocasa 9y ago
    First off, the difference between regressive and progressive says nothing about how the taxes are spent. A flat tax is regressive by definition. Secondly, I'm not a big fan of how you (and quite a few economists) conflate personal and corporate income taxes. It really muddies the water as even questions like "what even is income" is different between the two. Additionally, flat tax doesn't go well with the left. On the corporate end, exemptions in a lot of ways are the carrot to the sticks of fines and penalties that we use to regulate business (encouraging positive behavior). On the personal end, you greatly increase the tax burden on those least able to bear it, with an increase in benefits being totally orthogonal (most flat tax proposals intend to be revenue neutral). Someone making $25k nearly doubles their tax burden with a 15% flat tax.
    - RightMillennial 9y ago
      Technically, a flat tax by definition is neither regressive nor progressive, it is proportional. Federal income taxes and I presume corporate taxes are currently progressive (with a million and one deductions). Moving to a flat tax for either of those would be a move in the regressive direction, but it's still not technically regressive. Personally, I'm fine with taxes having progressive rates but not the countless deductions.
      - bitwize 9y ago
        Flat taxes are regressive. Period. The reason why is because a bigger proportion of the income of the poor must be spent on necessities, so a flat tax rate is going to impact their ability to pay for necessities much more than the same tax rate paid by a rich person.
        conanbatt 9y ago
        You are confusing flat taxes to sales taxes. A flat income tax would not have that effect.
      - monocasa 9y ago
- pwg 9y ago
  > The IRS already has all of the information needed outside of gambling and stocks, With the reporting changes of a few years back, for any stocks acquired after the changes took effect, they also already have all the information needed for the stocks as well. All that is missing is the type of sale you wished to make (FIFO, LIFO, average cost, etc.) when you sell the stock if you don't sell all of it off at once.

hcknwscommenter 9y ago

File on a postcard. Sure. This year, I could have used the 1040EZ (the entirety of which could fit on a post card if you removed the embedded instructions), and left some money on the table, so I chose the more complicated route. Last year, I just used the 1040EZ. Flat tax is a completely different issue.

SiempreViernes 9y ago

It is weird to see the argument that making tax filingd hard builds power, for it to work you have to dismiss the inuitive idead that making tax filing simpler will make citizens happy and less likely to complain since they have beens spared from some hassle.

monocasa 9y ago

You can stay away from regressive schemes like a flat tax, and have a tax system with a rubberstamp level of UX. That's how it works in most of Europe and could work here. The IRS already has all of the information needed outside of gambling and stocks, and could simply send you forms already filled out for you to sign. H&R Block and TurboTax simply heavily lobby to keep this from happening to keep their business model around.

conanbatt 9y ago
Whats interesting about the flat taxes is that it makes it hard to avoid at the highest levels, where complex tax structures end up having a very variant level of taxation. Much like corporate taxation is 35%, but google or facebook pay only 11%. Milton Friedman used to say that a flat tax of 15% would be enough to replace the entire scheme of income tax. There is also one major boon: lots of capital is spent on taxes, from accountants to lawyers to gubernamental organizations, etc etc. An effective 15% rate without exemptions would fly very well with the right (simple flat taxes) an the left (no exemptions) but as MF said, the political stances on this topic dont trust each other and they are both right: even if we moved to such a system, the right would still advocate for exemptions and the left for increases in taxation. Its a noticeable deadlock. I also want to mention that flat taxes are not regressive by definition. The progressiveness or regressiveness in that case requires to see where the taxes are spent.
- monocasa 9y ago
  First off, the difference between regressive and progressive says nothing about how the taxes are spent. A flat tax is regressive by definition. Secondly, I'm not a big fan of how you (and quite a few economists) conflate personal and corporate income taxes. It really muddies the water as even questions like "what even is income" is different between the two. Additionally, flat tax doesn't go well with the left. On the corporate end, exemptions in a lot of ways are the carrot to the sticks of fines and penalties that we use to regulate business (encouraging positive behavior). On the personal end, you greatly increase the tax burden on those least able to bear it, with an increase in benefits being totally orthogonal (most flat tax proposals intend to be revenue neutral). Someone making $25k nearly doubles their tax burden with a 15% flat tax.
  - RightMillennial 9y ago
    Technically, a flat tax by definition is neither regressive nor progressive, it is proportional. Federal income taxes and I presume corporate taxes are currently progressive (with a million and one deductions). Moving to a flat tax for either of those would be a move in the regressive direction, but it's still not technically regressive. Personally, I'm fine with taxes having progressive rates but not the countless deductions.
    - bitwize 9y ago
      Flat taxes are regressive. Period. The reason why is because a bigger proportion of the income of the poor must be spent on necessities, so a flat tax rate is going to impact their ability to pay for necessities much more than the same tax rate paid by a rich person.
      - conanbatt 9y ago
        You are confusing flat taxes to sales taxes. A flat income tax would not have that effect.
    - monocasa 9y ago
pwg 9y ago
> The IRS already has all of the information needed outside of gambling and stocks, With the reporting changes of a few years back, for any stocks acquired after the changes took effect, they also already have all the information needed for the stocks as well. All that is missing is the type of sale you wished to make (FIFO, LIFO, average cost, etc.) when you sell the stock if you don't sell all of it off at once.