4 ms·

If you have a W-2 and no other income/expenses they can get pretty close. The idea of simple taxes almost always includes the ability to still do them in detail

If you have a W-2 and no other income/expenses they can get pretty close. The idea of simple taxes almost always includes the ability to still do them in detail if you'd like. The idea is that the government would send you a bill (or a refund) and you can pay it (or accept it) and be done or reject it and do your own taxes like you currently do.

rayiner 8y ago
30% of people choose to itemize, mainly people who own real property. And out of those who don’t, many still can claim credits for child care expenses, health care expenses, and education expenses. If the default bill sent by the IRS wouldn’t include all those things, then the result would be exactly what the Norquists of the world fear: a de facto tax increase. Note also that the H&R Block/Intuit software are free for 70% households. The remaining households are the higher income ones that would most likely itemize anyway.
- tdb7893 8y ago
  Most of the large deductions the government already knows about. If all taxes were was itemizing the deductions they missed that would be great.
- xivzgrev 8y ago
  This is going to go way down this year with higher standard deduction.
- kerng 8y ago
  If you think you pay to much, file your own return. For majority of people it's just a waste of time, and I think IRS would nail the numbers pretty accurately for at least 60-80% of folks.
  - rayiner 8y ago
    I think your assumption just isn’t true. About 20% of filers use the mortgage interest deduction, which the IRS has no idea about. Then there is a ton of other stuff. For example, the IRS doesn’t even automatically know how many dependents you have. If you get divorced and one parent gets custody, the IRS has no idea. There is no federal tracking of who lives with who. The IRS also has no idea whether it should apply married rates or single rates. Again, there is no tracking of marriages at the federal level. If you only have W-2 income, are single, have no children, and aren’t eligible for any education credits, then the IRS can probably do a good job estimating your taxes. But that probably describes 20% of folks. If the IRS sent a bill to the other 80% without those deductions, it would be an overestimate. And sure, those folks could file their own returns, but many would not. That would result in a de facto tax increase, which is exactly what Norquist doesn’t want.
    - OrwellianChild 8y ago
      Doesn't this imply that simplifying/automating the return harms no one (folks can still file individually if they choose), while helping those who would otherwise have to take time or invest money in tax prep? How is this not an un-alloyed good?
      - rayiner 8y ago
        It would hurt a lot of people if they end up paying more taxes than they owe because they don't realize they can pay less by filing their own return. It can be scary receiving a "bill" from the government, and many people might not try to contest the IRS's calculation. For automated tax filing to be workable, it has to at least be accurate for nearly everyone. If it overstates taxes for most people, I think that's a big problem. In the U.S., I don't think you can achieve that level of accuracy without either changing the tax code, or having the federal government track a lot more information about people than it currently does. I owe the IRS money every year because my wife and I are subject to the marriage penalty. You can't calculate our correct taxes without knowing we are married to each other. And the IRS doesn't know that unless I put it on my returns. Note that many countries track their citizens much more closely than does the U.S. For example, in Germany, you have to register with a Registration Office within one week whenever you move between cities.
        OrwellianChild 8y ago
        Thanks for the dialogue! Just to try to simplify things, it sounds like you are worried about tax filing being regressive - causing under-privileged, low-income, and other disadvantaged people to pay more taxes than they owe. Isn't it true, though, that tax filings typically increase in complexity alongside income? Things like marriage records and children aren't currently kept private such that the Child Tax Credit and Joint Filing rules couldn't be automatically applied. It's not immediately apparent to me that vulnerable populations would necessarily be at a disadvantage. (Basically, I figure that if I'm high-income, it's my problem to sort out my taxes to my greatest advantage, but it should be easy for folks who don't have the luxury of time or money.)
- MrMorden 8y ago
  That would be reason #122132098 to get rid of the mortgage interest deduction.
- pcwalton 8y ago
  Not anymore. The primary effect of the Trump tax bill was in fact to massively increase the number of people who will claim the standard deduction, due in part to a large increase in the deduction itself as well as the introduction of the SALT deduction cap.
pfisch 8y ago
How would you even know if it is right? This is such an obvious fox guarding the henhouse situation. The government would have a clear incentive to not offer you the deductions you are eligible for, and taxes are complex, so it would be easy to hide the deductions. It would only be a matter of time before the perverse incentives of the government would take over the process. The main result of this would be the government stealing from poor and middle class people who should've spent less than $100 on a 3rd party tax preparer that is incentivized to act in the interest of the taxee.
- Duckeh 8y ago
  The whole idea of the government stealing from people makes no sense to me. You live in a democracy, the people choose their government and it does what it's elected to do. If the government starts actively stealing money from its people, the problem isn't the way in which you file your taxes. The problem is that the government brought by your democracy isn't working as intended. For what it's worth, in the Netherlands it takes most people 5 to 10 minutes to flip through an app that has all your tax info filled in already. If you need to add anything that isn't already filled in, you get every chance to do so. It doesn't stop you from getting an accountant to do it for you either, if you'd prefer. > How would you even know if it is right? Because it's still the same tax system you had before they made it easier by filling it out for you already. It doesn't get automatically filed, you still have to check it yourself and approve it.
  - pfisch 8y ago
    It doesn't make any sense to compare the Netherlands to the US on any metric. The Netherlands doesn't have the population or gdp of just Texas or California by themselves. The sheer magnitude of the difference between the US and the Netherlands is crazy, and it is like comparing a house to a town. Communism works on a small scale, the bigger the scale, the less you can just trust everyone is doing the right thing. The bureaucracy of the IRS has every incentive to maximize tax revenue, and that is what they will eventually do.
    - 8y ago

rayiner 8y ago

30% of people choose to itemize, mainly people who own real property. And out of those who don’t, many still can claim credits for child care expenses, health care expenses, and education expenses. If the default bill sent by the IRS wouldn’t include all those things, then the result would be exactly what the Norquists of the world fear: a de facto tax increase. Note also that the H&R Block/Intuit software are free for 70% households. The remaining households are the higher income ones that would most likely itemize anyway.

tdb7893 8y ago
Most of the large deductions the government already knows about. If all taxes were was itemizing the deductions they missed that would be great.
xivzgrev 8y ago
This is going to go way down this year with higher standard deduction.
kerng 8y ago
If you think you pay to much, file your own return. For majority of people it's just a waste of time, and I think IRS would nail the numbers pretty accurately for at least 60-80% of folks.
- rayiner 8y ago
  I think your assumption just isn’t true. About 20% of filers use the mortgage interest deduction, which the IRS has no idea about. Then there is a ton of other stuff. For example, the IRS doesn’t even automatically know how many dependents you have. If you get divorced and one parent gets custody, the IRS has no idea. There is no federal tracking of who lives with who. The IRS also has no idea whether it should apply married rates or single rates. Again, there is no tracking of marriages at the federal level. If you only have W-2 income, are single, have no children, and aren’t eligible for any education credits, then the IRS can probably do a good job estimating your taxes. But that probably describes 20% of folks. If the IRS sent a bill to the other 80% without those deductions, it would be an overestimate. And sure, those folks could file their own returns, but many would not. That would result in a de facto tax increase, which is exactly what Norquist doesn’t want.
  - OrwellianChild 8y ago
    Doesn't this imply that simplifying/automating the return harms no one (folks can still file individually if they choose), while helping those who would otherwise have to take time or invest money in tax prep? How is this not an un-alloyed good?
    - rayiner 8y ago
      It would hurt a lot of people if they end up paying more taxes than they owe because they don't realize they can pay less by filing their own return. It can be scary receiving a "bill" from the government, and many people might not try to contest the IRS's calculation. For automated tax filing to be workable, it has to at least be accurate for nearly everyone. If it overstates taxes for most people, I think that's a big problem. In the U.S., I don't think you can achieve that level of accuracy without either changing the tax code, or having the federal government track a lot more information about people than it currently does. I owe the IRS money every year because my wife and I are subject to the marriage penalty. You can't calculate our correct taxes without knowing we are married to each other. And the IRS doesn't know that unless I put it on my returns. Note that many countries track their citizens much more closely than does the U.S. For example, in Germany, you have to register with a Registration Office within one week whenever you move between cities.
      - OrwellianChild 8y ago
        Thanks for the dialogue! Just to try to simplify things, it sounds like you are worried about tax filing being regressive - causing under-privileged, low-income, and other disadvantaged people to pay more taxes than they owe. Isn't it true, though, that tax filings typically increase in complexity alongside income? Things like marriage records and children aren't currently kept private such that the Child Tax Credit and Joint Filing rules couldn't be automatically applied. It's not immediately apparent to me that vulnerable populations would necessarily be at a disadvantage. (Basically, I figure that if I'm high-income, it's my problem to sort out my taxes to my greatest advantage, but it should be easy for folks who don't have the luxury of time or money.)
MrMorden 8y ago
That would be reason #122132098 to get rid of the mortgage interest deduction.
pcwalton 8y ago
Not anymore. The primary effect of the Trump tax bill was in fact to massively increase the number of people who will claim the standard deduction, due in part to a large increase in the deduction itself as well as the introduction of the SALT deduction cap.

pfisch 8y ago

How would you even know if it is right? This is such an obvious fox guarding the henhouse situation. The government would have a clear incentive to not offer you the deductions you are eligible for, and taxes are complex, so it would be easy to hide the deductions. It would only be a matter of time before the perverse incentives of the government would take over the process. The main result of this would be the government stealing from poor and middle class people who should've spent less than $100 on a 3rd party tax preparer that is incentivized to act in the interest of the taxee.

Duckeh 8y ago
The whole idea of the government stealing from people makes no sense to me. You live in a democracy, the people choose their government and it does what it's elected to do. If the government starts actively stealing money from its people, the problem isn't the way in which you file your taxes. The problem is that the government brought by your democracy isn't working as intended. For what it's worth, in the Netherlands it takes most people 5 to 10 minutes to flip through an app that has all your tax info filled in already. If you need to add anything that isn't already filled in, you get every chance to do so. It doesn't stop you from getting an accountant to do it for you either, if you'd prefer. > How would you even know if it is right? Because it's still the same tax system you had before they made it easier by filling it out for you already. It doesn't get automatically filed, you still have to check it yourself and approve it.
- pfisch 8y ago
  It doesn't make any sense to compare the Netherlands to the US on any metric. The Netherlands doesn't have the population or gdp of just Texas or California by themselves. The sheer magnitude of the difference between the US and the Netherlands is crazy, and it is like comparing a house to a town. Communism works on a small scale, the bigger the scale, the less you can just trust everyone is doing the right thing. The bureaucracy of the IRS has every incentive to maximize tax revenue, and that is what they will eventually do.
  - 8y ago