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Andrew Yang, who was the 1st declared Democratic presidential candidate for 2020, has a whole policy around the strange aspects of US taxation, including automa

Andrew Yang, who was the 1st declared Democratic presidential candidate for 2020, has a whole policy around the strange aspects of US taxation, including automatic filing and getting a breakdown of where your money went. >> Instruct the IRS to implement a system whereby any American can opt into a program to have their taxes filed automatically. >> Instruct the IRS to coordinate with the Treasury to prepare a report on federal spending, and send each taxpayer a rundown of the actual amount of their taxes that went to each major spending area (e.g., domestic programs, foreign aid, military, etc). >> Increase the budget of the IRS by 50% to $16.2 billion and modernize it with the latest technology. Money spent on the IRS will almost certainly pay for itself many times over via better tax compliance and less wasted time of citizens. Running the country like a business means both taking care of constituents and collecting revenue as seamlessly and efficiently as possible. https://www.yang2020.com/policies/filing-income-taxes/ https://www.yang2020.com/policies/filing-income-taxes/

TheHypnotist 8y ago
I'm not sure many people even think about how possible this is. What are the drawbacks? Aside from funding, what's stopping this from happening? I can already automatically import most forms from banks/financials/payroll companies into TurboTax. Why not skip the middle man?
- JeremyBanks 8y ago
  FYI the UK is taking steps in this direction: https://en.wikipedia.org/wiki/Making_Tax_Digital https://en.wikipedia.org/wiki/Making_Tax_Digital
  - OJFord 8y ago
    That's quite an understatement - a vast majority of _employees_ don't need tax to be digital or not because it's all done for them through PAYE (Pay As You Earn, i.e. deducted on your payslip before you see it) and other mechanisms anyway.
  - rlpb 8y ago
    For UK employees without complex affairs, it's already done: my tax happens without any interaction, no digital conversion required. I spend £0 and about 60 seconds on my taxes every year. It's all arranged automatically between my employer and the tax authority. I just get a letter in the post every year telling me the calculation that I check is sane. My tax payments are deducted by my employer from my monthly pay.
- dragonwriter 8y ago
  > I'm not sure many people even think about how possible this is. Lots of people do, it gets lots of talk every few years, and nothing happens because the people that don't want it to happen do so a lot more intensely than the people that do want it to happen want it (because the former literally have major businesses that depend on it not happening.)
  - TheHypnotist 8y ago
    True - many people do - but there isn't enough clamor to make this a major issue. Yes, "Tax Reform" get's thrown about, but no one ever seems to elaborate. I don't recall too many candidates debating "automating" income taxes.
- paulgb 8y ago
  > Aside from funding, what's stopping this from happening? The Tax Prep lobby. The middle man gets to collect a nice rent from you for being the middle man and they don't want that to end. https://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing https://www.propublica.org/article/how-the-maker-of-turbotax...
  - TheHypnotist 8y ago
    That should have been obvious to me. Of course they have a lobby.
- guelo 8y ago
  Many Republicans don't want filing taxes to be easy so that they can continue to use it as an attack on taxes in general.
  - WhompingWindows 8y ago
    What is your evidence for that claim? As I recall, it was Ted Cruz who wanted taxes so easy they'd fit on a postcard.
    - dragonwriter 8y ago
      Right, but that actually is part of what GP is describing. They want tax filing under the status quo tax calculation system to be as difficult as possible so that they can use simplification of filing as the sales pitch for changes to the calculation method which decrease nominal, and even moreso effective, progressivity.
      - bunderbunder 8y ago
        This. As long as most people have to grind out their own calculations, you can't have both easy taxes and progressive taxation. It's all the bits and bobs that have been done to maintain and (over, arguably) refine the regime of progressive taxation that make the math complicated. The math is only truly easy under a flat tax.
        dragonwriter 8y ago
        > The math is only truly easy under a flat tax. The actual calculation of the amount due from the taxable income uses a lookup, which is equivalent difficulty under any scheme other than a flat capitation, where the table reduces to a single value, and even the GOP hasn't proposed a capitation. Getting from a collection of other information to the final taxable income is most of the complexity, as are things like credits that apply after the initial application of the rate. But there is nothing inherent about the flat vs. progressive rate distinction which drives practical calculation complexity, they are just orthogonal concerns where the popular one (simplification of calculation) is used as a tool to sell the one that is less compelling to the broad public on its own.
- jandrese 8y ago
  Virginia had basically this system until about a decade ago. The tax lobby managed to kill it off under the argument that $40k/year to maintain it was too much for the state budget. The new e-file system costs a family $40 or so for in-state taxes if you don't want to mail in paper or make less than $66k. H&R Block, Intuit, etc... made huge bank off of killing the state e-file system. There is zero chance they're going to let the feds implement something similar without an enormous fight.
orthecreedence 8y ago
> Instruct the IRS to coordinate with the Treasury to prepare a report on federal spending, and send each taxpayer a rundown of the actual amount of their taxes that went to each major spending area (e.g., domestic programs, foreign aid, military, etc). I think this is outstanding. I'd love to know how my tax dollars are spent, and I think once people see this they can begin to push for meaningful reforms that they feel spends they money more effectively.

TheHypnotist 8y ago

I'm not sure many people even think about how possible this is. What are the drawbacks? Aside from funding, what's stopping this from happening? I can already automatically import most forms from banks/financials/payroll companies into TurboTax. Why not skip the middle man?

JeremyBanks 8y ago
FYI the UK is taking steps in this direction: https://en.wikipedia.org/wiki/Making_Tax_Digital https://en.wikipedia.org/wiki/Making_Tax_Digital
- OJFord 8y ago
  That's quite an understatement - a vast majority of _employees_ don't need tax to be digital or not because it's all done for them through PAYE (Pay As You Earn, i.e. deducted on your payslip before you see it) and other mechanisms anyway.
- rlpb 8y ago
  For UK employees without complex affairs, it's already done: my tax happens without any interaction, no digital conversion required. I spend £0 and about 60 seconds on my taxes every year. It's all arranged automatically between my employer and the tax authority. I just get a letter in the post every year telling me the calculation that I check is sane. My tax payments are deducted by my employer from my monthly pay.
dragonwriter 8y ago
> I'm not sure many people even think about how possible this is. Lots of people do, it gets lots of talk every few years, and nothing happens because the people that don't want it to happen do so a lot more intensely than the people that do want it to happen want it (because the former literally have major businesses that depend on it not happening.)
- TheHypnotist 8y ago
  True - many people do - but there isn't enough clamor to make this a major issue. Yes, "Tax Reform" get's thrown about, but no one ever seems to elaborate. I don't recall too many candidates debating "automating" income taxes.
paulgb 8y ago
> Aside from funding, what's stopping this from happening? The Tax Prep lobby. The middle man gets to collect a nice rent from you for being the middle man and they don't want that to end. https://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing https://www.propublica.org/article/how-the-maker-of-turbotax...
- TheHypnotist 8y ago
  That should have been obvious to me. Of course they have a lobby.
guelo 8y ago
Many Republicans don't want filing taxes to be easy so that they can continue to use it as an attack on taxes in general.
- WhompingWindows 8y ago
  What is your evidence for that claim? As I recall, it was Ted Cruz who wanted taxes so easy they'd fit on a postcard.
  - dragonwriter 8y ago
    Right, but that actually is part of what GP is describing. They want tax filing under the status quo tax calculation system to be as difficult as possible so that they can use simplification of filing as the sales pitch for changes to the calculation method which decrease nominal, and even moreso effective, progressivity.
    - bunderbunder 8y ago
      This. As long as most people have to grind out their own calculations, you can't have both easy taxes and progressive taxation. It's all the bits and bobs that have been done to maintain and (over, arguably) refine the regime of progressive taxation that make the math complicated. The math is only truly easy under a flat tax.
      - dragonwriter 8y ago
        > The math is only truly easy under a flat tax. The actual calculation of the amount due from the taxable income uses a lookup, which is equivalent difficulty under any scheme other than a flat capitation, where the table reduces to a single value, and even the GOP hasn't proposed a capitation. Getting from a collection of other information to the final taxable income is most of the complexity, as are things like credits that apply after the initial application of the rate. But there is nothing inherent about the flat vs. progressive rate distinction which drives practical calculation complexity, they are just orthogonal concerns where the popular one (simplification of calculation) is used as a tool to sell the one that is less compelling to the broad public on its own.
jandrese 8y ago
Virginia had basically this system until about a decade ago. The tax lobby managed to kill it off under the argument that $40k/year to maintain it was too much for the state budget. The new e-file system costs a family $40 or so for in-state taxes if you don't want to mail in paper or make less than $66k. H&R Block, Intuit, etc... made huge bank off of killing the state e-file system. There is zero chance they're going to let the feds implement something similar without an enormous fight.

orthecreedence 8y ago

> Instruct the IRS to coordinate with the Treasury to prepare a report on federal spending, and send each taxpayer a rundown of the actual amount of their taxes that went to each major spending area (e.g., domestic programs, foreign aid, military, etc). I think this is outstanding. I'd love to know how my tax dollars are spent, and I think once people see this they can begin to push for meaningful reforms that they feel spends they money more effectively.