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Oh man, I've had government provided automatic filings for ages now (Finland). US is really odd how it emphasizes the benefit of the middleman over the benefit

by fsloth 8y ago

Oh man, I've had government provided automatic filings for ages now (Finland). US is really odd how it emphasizes the benefit of the middleman over the benefit of the individual citizen (it seems). Or have I completely misunderstood what's going on here?

tarabanga 8y ago
More like, corporate interest > citizen interest
- Symmetry 8y ago
  Corporate pressure is important but the fact that people in the tax preparation industry form a decently sized and committed voting block is even more important.
random42_ 8y ago
You are correct. US Congress (most of the time) legislate in favor of whoever pays more.
linuxftw 8y ago
(in the US) I would trust the government provided tax-return software to provide the smallest refund possible. It will also take $50 billion and 3-4 years to develop, and it will be down from April 1st to May 7th due to overload on the system. Your confirmation emails won't come through, and the database will be hacked and all records leaked within the first 18 months of operation.
- maxwell 8y ago
  https://designsystem.digital.gov/ https://designsystem.digital.gov/ https://federalist.18f.gov/ https://federalist.18f.gov/ https://www.opensecrets.org/orgs/lobby.php?id=D000026667 https://www.opensecrets.org/orgs/lobby.php?id=D000026667
  - linuxftw 8y ago
    Some flash website sites from the government don't do much to address actual concerns. Weak security: [1] Cost overrun: [2] Inability to design a highly available website From [3]: > The basic architecture of the site, built by federal contractors overseen by the Department of Health and Human Services, was flawed in design, poorly tested and ultimately not functional. [1] https://arstechnica.com/information-technology/2015/06/epic-fail-how-opm-hackers-tapped-the-mother-lode-of-espionage-data/ https://arstechnica.com/information-technology/2015/06/epic-... [2] https://www.theatlantic.com/politics/archive/2014/07/obamacare-website-has-cost-840-million/440478/ https://www.theatlantic.com/politics/archive/2014/07/obamaca... [3] http://swampland.time.com/2013/10/24/traffic-didnt-crash-the-obamacare-site-alone-bad-coding-did-too/ http://swampland.time.com/2013/10/24/traffic-didnt-crash-the...
- Broken_Hippo 8y ago
  Then you can go ahead and use the option to check them for things they forgot. You can also probably use an option to file yourself, which might be the case if you have complicated taxes. The great majority of Americans, however, are pretty poor and qualify for few tax breaks that cannot be done automatically. All they need to do to encourage the automatic filing would be to consistently prove to be accurate. The database will be hacked and all records leaked within the fist 18 months of operation You know, the same information they need for most people's taxes is already in the IRS database. I'd also like to say that I've had automatic filing for my Norwegian taxes since moving here to Norway, and always have to file American taxes manually. The emails get sent to a secure email system which you can check. Letters get lost and stolen as well, by the way. The system doesn't have to go down either - I don't even have to interact. I just get the email telling me I can check taxes, but it is not required that I do. (Safer to do so in case of owing). They tell me I'll get my money in a 3-month timeframe. It goes to the same place paychecks go to, though I imagine if anyone gets checks they take longer, as do the people that manually file. I'm also pretty sure that the reason it would be expensive is that the government isn't exactly known to keep the IRS fairly current and the government isn't really set up to handle the digital age well. But then again, the records are already there. They already plan on getting refunds. And easier filing means more people do tax returns... and it catches more people that owe. Oh, and you won't need as many people working at the call centers because fewer people will need to actually calculate their taxes. I'm gonna guess it would be a net benefit and profit within a very short amount of time. The main people that do badly with this sort of system are the tax filing companies along with, I'm guessing, some accountants.
- kej 8y ago
  We used to have a telefile option where you spent ten minutes on the phone punching in numbers off your W-2 forms and then you wrote down a confirmation number. It only worked if you had a really simple tax situation, but it was so easy. I assume it was killed by the same lobbyists.
- otikik 8y ago
  Then vote a better government.
  - linuxftw 8y ago
    Why do you believe voting works? Remember when people voted for BRexit?
    - otikik 8y ago
      I believe "Voting doesn't work" works very well for preserving the status quo. Don't you agree?
      - linuxftw 8y ago
        If voting is shown to not work, I'm not sure how you would peaceably replace such a system, but that doesn't mean it shouldn't be replaced.
        otikik 8y ago
        > voting is shown to not work I'll grant that voting works only sometimes. And when it does change things, it's often not everything we want changed, and definitively not fast enough. But it can change things. If it didn't, voter suppression would not exist[1]. (One of the ways of suppressing vote is promoting voter apathy, by the way). The only sure guarantee is that not voting doesn't work. > peaceably Even something as seemingly mundane as voting carries a lot of risk of physical violence in some places. That's how voting was in the US in the 1870s[2], if you were black. It might sound like a far away past for certain US citizen, but I (an European) own a house older than that. [1] https://en.wikipedia.org/wiki/Voter_suppression_in_the_United_States https://en.wikipedia.org/wiki/Voter_suppression_in_the_Unite... [2] https://en.wikipedia.org/wiki/Disenfranchisement_after_the_Reconstruction_Era https://en.wikipedia.org/wiki/Disenfranchisement_after_the_R...
EGreg 8y ago
Yes, the US really values the middleman. There is something to be said for it, since middlemen can compete and innovate. In computer science, this is called indirection — it provides more flexibility and without it, you have one-size-fits-all solutions. In the real world, you have for example Uber/Amazon/Apple /Google/Facebook squeezing providers, due to their monopoly powers. What happens in the real world is that the doctors aggregate (AMA, ADA) and then the patients aggregate (insurance companies) but it never quite gets to a complete single buyer/payer on both sides without government action. There is also the argument for how many jobs will be lost in X industry if we replace it with a more efficient solution. Here is a recent video of a famous paleoconservative debating it with a famous neoconservative in the US: https://m.youtube.com/watch?v=YFMcq0Vzsb4 https://m.youtube.com/watch?v=YFMcq0Vzsb4 Usually the solution is social democracy - letting the private markets operate but having the government run a single payer system for the basic level of service so sellers compete and buyer’s don’t, and everyone is entitled to the basic level. Single payer can achieve far lower prices, as can eliminating IP protection. But after a while this may have a deleterious effect on R&D (unless you eliminate the IP protection).
SkyBelow 8y ago
>US is really odd how it emphasizes the benefit of the middleman over the benefit of the individual citizen (it seems). I wonder what extent this is decided by how we vote. As long as voters pick the politician who prioritizes the middle man and gets their campaign contribution is selected over the politician who prioritizes the public but whose opponent gets the middleman's campaign contribution we will continue to see this behavior. The moral of the story is to look at the voters' actions and not their words. They select candidates based on oftentimes harmful criteria.
- SilasX 8y ago
  Is the public really to blame for this? Is there an actual broad constituency that doesn't want this, or at least who trusts an interest group to represent them and who doesn't want this?
  - rayiner 8y ago
    I don’t want this? We are very bad in America about hiding taxes, e.g. through unfunded mandates and mandatory cross subsidies. We don’t need to do anything more for people to have even less insight into what the government actually collects from their paycheck.
    - SilasX 8y ago
      That seems more like an argument for a different interface than against the service entirely -- that would justify making it so that you still have to see and sign a form that shows how much you're paying against what earnings. I think you're falsely equating (as do the Norquist types) a) "the financial burden of the tax should be explicit" (which is fair) and b) "the paperwork should be unnecessarily burdensome" (which is sadistic).
      - SilasX 8y ago
        Can someone explain how rayiner's argument goes against the idea of IRS-prepared taxes itself rather than the UX of the implementation? It sounds like he’s just trying to be devil’s advocate (to put it nicely).
knubie 8y ago
The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax. I see a couple of ways in which it might not be as favorable: 1. It costs more than $100 per tax payer per year to implement (about the cost of Turbotax). However the flat $100 or so that most people pay to Turbotax can be seen as a kind of regressive tax. 2. It is less effective at finding the biggest possible return.
- gambler 8y ago
  >The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax. The question is valid, but the numbers do not add up. TT asks ~$50 for federal return. If everyone in US used the service, the cost would amount to over 16 billion dollars. That is more than the entire IRS budget[1] right now. [1] https://www.irs.gov/statistics/irs-budget-and-workforce https://www.irs.gov/statistics/irs-budget-and-workforce
  - ascagnel_ 8y ago
    On the other hand, the IRS generally already does many of these calculations, since they receive many forms of income directly (W-2s from your employer, 1099-INT from your bank, etc). The better question is how much it costs TT to operate returns, and how much of that $50 is profit-taking.
  - vonmoltke 8y ago
    Every single living person does not file a tax return. You can't just multiply the cost of preparing a return by the population.
    - gambler 8y ago
      It's an order-of-magnitude estimation. Turbo Tax offers multiple products with different prices. Even if you plug in more exact numbers and use the cheapest product you get a hefty sum of 9 billion (150M individual returns * $60). IRS total budget is 11.5 billion and they do way more than just process returns. There is no way an e-File system run by IRS would costs additional 9 billion dollars per year. They already do most of the calculation internally.
poilcn 8y ago
For ages, it's for how long exactly? 10-50 years of more or less "success" history is nothing. It doesn't prove it's save and works in a long run. Also consider scaling. 5.5 mln in Finland, 22 American states have more than that.
tonyedgecombe 8y ago
We can file ours online in the UK, it's easy to use and pretty reliable (now).
- zimpenfish 8y ago
  Also, AFAIK, most people don't even need to file because HMRC handles the simple situations automatically (I've never had to do a return, for example.)
atoav 8y ago
I live in Germany, which is said to have one of the most complicated tax systems known to man. If I had one (realistic) wish for a German government, it would be to do it like Finland. Sadly there is a whole branch of people working on this, without any interest to make it easier..
- kwhitefoot 8y ago
  Norway is very simple too. Most people can just do nothing at all. The way it works is that the tax authority creates a proposed tax record and notifies you by SMS or email or both or even by letter if you ask for it. If you agree that it is correct you don't need to do anything at all, otherwise you log in to the web site and adjust whatever needs adjusting in a bunch of simple forms. The tax authorities also have a duty to calculate the taxes in the way that benefits you most.
  - atticmanatee 8y ago
    In Portugal, of all places, it’s just a web form. This year it took me a grand total of 3 minutes to review all info and less than 10 clicks after logging in.
- germanier 8y ago
  Just a few weeks ago, I logged into Elster, opened the pre-filled tax return (Belegabruf) and sent it. Instead, I could have filled the short and simple Vereinfachte Steuererklärung by hand which covers all common cases. Most workers don't need to do anything to get their overpaid tax back thanks to the Lohnsteuerjahresausgleich. They need to work on their marketing though.
  - retromario 8y ago
    Aldi (or Lidl) every year sell a Tax Prep software for 5 euros. Our in-laws buy a copy, install it, then pass it on to us (same key works on multiple PCs). The software's UI could use some...clarity in certain places but it is incredibly full-featured. We've been happily using it to file our German taxes for years.
reallydontask 8y ago
Is this similar to PAYE or do you actually have to submit a tax return but it's pre-filled for you? In the UK, most people don't have to submit a tax return at all. Not sure the actual cost of this, but the convenience is unparalleled.
- renholder 8y ago
  >Is this similar to PAYE or do you actually have to submit a tax return but it's pre-filled for you? As long as your PAYE is like Ireland's (ROI) PAYE, then the American's system is far-removed from it. Even though their tax revenue office gets the reports from businesses for how much they were paid and how much taxes they paid, the Americans still need to fill out a tax form - every year - to repeat the same information (it's an added benefit for the prison system, in that mistakes on tax forms can equate to jail time). They get a form from their employer (which their tax office also has), that contains all of this information. >In the UK, most people don't have to submit a tax return at all. Not sure the actual cost of this, but the convenience is unparalleled. Aye, it's the same in Ireland (ROI). You can just call-up or email Revenue and they check if you've overpaid, by how much, and they just send you the money. No forms. No bullshit. No threats of jail time. It's pretty deadly[0]. You want nothing to do with the Yanks' tax system, trust me. [0] - https://www.whygo.com/ireland/irish-slang-deadly.html https://www.whygo.com/ireland/irish-slang-deadly.html
  - rayiner 8y ago
    > Even though their tax revenue office gets the reports from businesses for how much they were paid and how much taxes they paid, the Americans still need to fill out a tax form - every year - to repeat the same information (it's an added benefit for the prison system, in that mistakes on tax forms can equate to jail time). They get a form from their employer (which their tax office also has), that contains all of this information. You seem quite ignorant of the U.S. tax system. There are no criminal penalties for mistakes on your tax form. (the IRS doesn't even have prosecution authority--all it can do is collect evidence of a crime, and refer the case to the Department of Justice.) And your tax return doesn't just "repeat the same information" as your W-2s. For example, the W-2 reports income on an individual basis, while married couples file a return as a single unit. The amount of tax owed will generally be different for married couples versus the amount of tax withheld. (And there is no federal government database of marriages the IRS can use to match up things on the back end.) The IRS also has no idea how many children you have living with you, and can't give you the appropriate credits for that.
baud147258 8y ago
I would love automatic filing in France. The process isn't that complicated, as long as it's just a single income. I dread the day where I'll sell my shares or qualify for a tax-return, because it's not going to be fun.
jimbokun 8y ago
In the US, legislation always goes to the highest bidder. Keep that in mind when reading stories about the US government, and it all makes a lot more sense.
_bxg1 8y ago
It's because historically our society has treated businesses, their leaders, and the free market as churches, priests, and God, respectively. They've brought us much wealth and power, but putting restraints on them or getting in their way at all are cardinal sins in American politics. Politicians can take bribes and then package the resulting deregulation with euphemisms like "small government" and "supporting the free market". The most brilliant part is how they serve huge corporations, but then sell their actions as supporting all (read: small, too) businesses, even when they don't.
- blancheneige 8y ago
  seems like the antithesis of small government to have it explicitly bar itself from providing free services helping its citizens pay for said government. the latter should be as seamless as possible given that failure to comply results in adverse government intervention.
- redwall_hp 8y ago
  Small indie companies, like Blizzard.
andrewla 8y ago
Out of curiosity, do you have insight on how this evolved? Did the government go from requiring paper to offering an electronic equivalent? In the US, the IRS supported an e-file system that basically allowed electronic versions of forms to be submitted, but it was arcane enough that a cottage industry developed to assist users in prepping documents for e-file. How does Finland support tax preparation services; what sort of facilities do they offer for people filing on behalf of others? Even if the US went to an IRS-pre-filled return, there would still be room for third-party tax software that improved on the user experience, so I think if the IRS supported direct filing of taxes it would also be good to preserve the ability for software or designated parties to submit information on the taxpayer's behalf.
- fsloth 8y ago
  "Out of curiosity, do you have insight on how this evolved? Did the government go from requiring paper to offering an electronic equivalent?" The taxation has been pretty automated for a long time. As a regular taxpayer nowadays I just get a paper form that describes the precalculated taxes, and if they are fine, I don't have to return anything. There are some pre-deducted things, and if I have anything add to that, I'll then just either fill in the paper form or the electronic equivalent. So yes, there was a basic "semi automated" scheme that has been steadily improving and now the tax authority has just added a web based interface for feeding data into it. About filling the taxes on behalf of someone else - There really is no need for tax preparation services unless you are business entity (in which case you likely already have your own accountant doing it) or the wealth is considerable enough to merit actual tax planning. Otherwise the tax code is so straightforward and simple that anyone can do it. If there are some questions, you can always contact the tax services and they will usually offer helpful and professional advice on how to proceed. So there is no market for that kind of thing in the large. The "defaults" provided by government help in this regard as well. I kinda understand the adverserial positioning of "people vs. the government" in the US - it just sounds to an outsider the main reason not to make things easier is because that would eradicate business from turbo tax. Kinda like the government mandated you need to own a useless dead parrot, that you can only buy from Parrot Co, that needs to be kept in the refridgerator in an exact position mandated by the law.
- 8y ago
kaveh_h 8y ago
We’ve had great digital government services In Sweden for years. I did my taxes yesterday in 3 minutes from my laptop, digitally signed and submitted.
kaveh_h 8y ago
In Sweden too it’s super easy.
otikik 8y ago
> the benefit of the middleman over the benefit of the individual citizen I think you put it just right. Health and Education are the two areas this is bought up, but the taxes are a good example.
Zeebrommer 8y ago
Same in the Netherlands. These types of backwards laws make America look bad.
- tathougies 8y ago
  On the other hands, Americans are much less likely to commit tax fraud than other countries, so perhaps the netherlands should encourage more people to report their sheltered assets? https://www.theatlantic.com/magazine/archive/2019/04/why-americans-dont-cheat-on-their-taxes/583222/ https://www.theatlantic.com/magazine/archive/2019/04/why-ame...
tyfon 8y ago
Same thing here in Norway. We get the tax return forms pre-filled and if we want to make changes it can be done on a government web page easily. Capital gains, most deductions and assets/loans are also registered automatically. If you have no changes then you don't need to do anything at all.
xtracto 8y ago
This makes me laugh a lot, even down here in Mexico have automated, electronic, government provided tax filings. My tax filing is as easy as: Login, verify, click a button.

by fsloth 8y ago

tarabanga 8y ago

More like, corporate interest > citizen interest

Symmetry 8y ago
Corporate pressure is important but the fact that people in the tax preparation industry form a decently sized and committed voting block is even more important.

random42_ 8y ago

You are correct. US Congress (most of the time) legislate in favor of whoever pays more.

linuxftw 8y ago

(in the US) I would trust the government provided tax-return software to provide the smallest refund possible. It will also take $50 billion and 3-4 years to develop, and it will be down from April 1st to May 7th due to overload on the system. Your confirmation emails won't come through, and the database will be hacked and all records leaked within the first 18 months of operation.

maxwell 8y ago
https://designsystem.digital.gov/ https://designsystem.digital.gov/ https://federalist.18f.gov/ https://federalist.18f.gov/ https://www.opensecrets.org/orgs/lobby.php?id=D000026667 https://www.opensecrets.org/orgs/lobby.php?id=D000026667
- linuxftw 8y ago
  Some flash website sites from the government don't do much to address actual concerns. Weak security: [1] Cost overrun: [2] Inability to design a highly available website From [3]: > The basic architecture of the site, built by federal contractors overseen by the Department of Health and Human Services, was flawed in design, poorly tested and ultimately not functional. [1] https://arstechnica.com/information-technology/2015/06/epic-fail-how-opm-hackers-tapped-the-mother-lode-of-espionage-data/ https://arstechnica.com/information-technology/2015/06/epic-... [2] https://www.theatlantic.com/politics/archive/2014/07/obamacare-website-has-cost-840-million/440478/ https://www.theatlantic.com/politics/archive/2014/07/obamaca... [3] http://swampland.time.com/2013/10/24/traffic-didnt-crash-the-obamacare-site-alone-bad-coding-did-too/ http://swampland.time.com/2013/10/24/traffic-didnt-crash-the...
Broken_Hippo 8y ago
Then you can go ahead and use the option to check them for things they forgot. You can also probably use an option to file yourself, which might be the case if you have complicated taxes. The great majority of Americans, however, are pretty poor and qualify for few tax breaks that cannot be done automatically. All they need to do to encourage the automatic filing would be to consistently prove to be accurate. The database will be hacked and all records leaked within the fist 18 months of operation You know, the same information they need for most people's taxes is already in the IRS database. I'd also like to say that I've had automatic filing for my Norwegian taxes since moving here to Norway, and always have to file American taxes manually. The emails get sent to a secure email system which you can check. Letters get lost and stolen as well, by the way. The system doesn't have to go down either - I don't even have to interact. I just get the email telling me I can check taxes, but it is not required that I do. (Safer to do so in case of owing). They tell me I'll get my money in a 3-month timeframe. It goes to the same place paychecks go to, though I imagine if anyone gets checks they take longer, as do the people that manually file. I'm also pretty sure that the reason it would be expensive is that the government isn't exactly known to keep the IRS fairly current and the government isn't really set up to handle the digital age well. But then again, the records are already there. They already plan on getting refunds. And easier filing means more people do tax returns... and it catches more people that owe. Oh, and you won't need as many people working at the call centers because fewer people will need to actually calculate their taxes. I'm gonna guess it would be a net benefit and profit within a very short amount of time. The main people that do badly with this sort of system are the tax filing companies along with, I'm guessing, some accountants.
kej 8y ago
We used to have a telefile option where you spent ten minutes on the phone punching in numbers off your W-2 forms and then you wrote down a confirmation number. It only worked if you had a really simple tax situation, but it was so easy. I assume it was killed by the same lobbyists.
otikik 8y ago
Then vote a better government.
- linuxftw 8y ago
  Why do you believe voting works? Remember when people voted for BRexit?
  - otikik 8y ago
    I believe "Voting doesn't work" works very well for preserving the status quo. Don't you agree?
    - linuxftw 8y ago
      If voting is shown to not work, I'm not sure how you would peaceably replace such a system, but that doesn't mean it shouldn't be replaced.
      - otikik 8y ago
        > voting is shown to not work I'll grant that voting works only sometimes. And when it does change things, it's often not everything we want changed, and definitively not fast enough. But it can change things. If it didn't, voter suppression would not exist[1]. (One of the ways of suppressing vote is promoting voter apathy, by the way). The only sure guarantee is that not voting doesn't work. > peaceably Even something as seemingly mundane as voting carries a lot of risk of physical violence in some places. That's how voting was in the US in the 1870s[2], if you were black. It might sound like a far away past for certain US citizen, but I (an European) own a house older than that. [1] https://en.wikipedia.org/wiki/Voter_suppression_in_the_United_States https://en.wikipedia.org/wiki/Voter_suppression_in_the_Unite... [2] https://en.wikipedia.org/wiki/Disenfranchisement_after_the_Reconstruction_Era https://en.wikipedia.org/wiki/Disenfranchisement_after_the_R...

EGreg 8y ago

Yes, the US really values the middleman. There is something to be said for it, since middlemen can compete and innovate. In computer science, this is called indirection — it provides more flexibility and without it, you have one-size-fits-all solutions. In the real world, you have for example Uber/Amazon/Apple /Google/Facebook squeezing providers, due to their monopoly powers. What happens in the real world is that the doctors aggregate (AMA, ADA) and then the patients aggregate (insurance companies) but it never quite gets to a complete single buyer/payer on both sides without government action. There is also the argument for how many jobs will be lost in X industry if we replace it with a more efficient solution. Here is a recent video of a famous paleoconservative debating it with a famous neoconservative in the US: https://m.youtube.com/watch?v=YFMcq0Vzsb4 https://m.youtube.com/watch?v=YFMcq0Vzsb4 Usually the solution is social democracy - letting the private markets operate but having the government run a single payer system for the basic level of service so sellers compete and buyer’s don’t, and everyone is entitled to the basic level. Single payer can achieve far lower prices, as can eliminating IP protection. But after a while this may have a deleterious effect on R&D (unless you eliminate the IP protection).

SkyBelow 8y ago

>US is really odd how it emphasizes the benefit of the middleman over the benefit of the individual citizen (it seems). I wonder what extent this is decided by how we vote. As long as voters pick the politician who prioritizes the middle man and gets their campaign contribution is selected over the politician who prioritizes the public but whose opponent gets the middleman's campaign contribution we will continue to see this behavior. The moral of the story is to look at the voters' actions and not their words. They select candidates based on oftentimes harmful criteria.

SilasX 8y ago
Is the public really to blame for this? Is there an actual broad constituency that doesn't want this, or at least who trusts an interest group to represent them and who doesn't want this?
- rayiner 8y ago
  I don’t want this? We are very bad in America about hiding taxes, e.g. through unfunded mandates and mandatory cross subsidies. We don’t need to do anything more for people to have even less insight into what the government actually collects from their paycheck.
  - SilasX 8y ago
    That seems more like an argument for a different interface than against the service entirely -- that would justify making it so that you still have to see and sign a form that shows how much you're paying against what earnings. I think you're falsely equating (as do the Norquist types) a) "the financial burden of the tax should be explicit" (which is fair) and b) "the paperwork should be unnecessarily burdensome" (which is sadistic).
    - SilasX 8y ago
      Can someone explain how rayiner's argument goes against the idea of IRS-prepared taxes itself rather than the UX of the implementation? It sounds like he’s just trying to be devil’s advocate (to put it nicely).

knubie 8y ago

The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax. I see a couple of ways in which it might not be as favorable: 1. It costs more than $100 per tax payer per year to implement (about the cost of Turbotax). However the flat $100 or so that most people pay to Turbotax can be seen as a kind of regressive tax. 2. It is less effective at finding the biggest possible return.

gambler 8y ago
>The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax. The question is valid, but the numbers do not add up. TT asks ~$50 for federal return. If everyone in US used the service, the cost would amount to over 16 billion dollars. That is more than the entire IRS budget[1] right now. [1] https://www.irs.gov/statistics/irs-budget-and-workforce https://www.irs.gov/statistics/irs-budget-and-workforce
- ascagnel_ 8y ago
  On the other hand, the IRS generally already does many of these calculations, since they receive many forms of income directly (W-2s from your employer, 1099-INT from your bank, etc). The better question is how much it costs TT to operate returns, and how much of that $50 is profit-taking.
- vonmoltke 8y ago
  Every single living person does not file a tax return. You can't just multiply the cost of preparing a return by the population.
  - gambler 8y ago
    It's an order-of-magnitude estimation. Turbo Tax offers multiple products with different prices. Even if you plug in more exact numbers and use the cheapest product you get a hefty sum of 9 billion (150M individual returns * $60). IRS total budget is 11.5 billion and they do way more than just process returns. There is no way an e-File system run by IRS would costs additional 9 billion dollars per year. They already do most of the calculation internally.

poilcn 8y ago

For ages, it's for how long exactly? 10-50 years of more or less "success" history is nothing. It doesn't prove it's save and works in a long run. Also consider scaling. 5.5 mln in Finland, 22 American states have more than that.

tonyedgecombe 8y ago

We can file ours online in the UK, it's easy to use and pretty reliable (now).

zimpenfish 8y ago
Also, AFAIK, most people don't even need to file because HMRC handles the simple situations automatically (I've never had to do a return, for example.)

atoav 8y ago

I live in Germany, which is said to have one of the most complicated tax systems known to man. If I had one (realistic) wish for a German government, it would be to do it like Finland. Sadly there is a whole branch of people working on this, without any interest to make it easier..

kwhitefoot 8y ago
Norway is very simple too. Most people can just do nothing at all. The way it works is that the tax authority creates a proposed tax record and notifies you by SMS or email or both or even by letter if you ask for it. If you agree that it is correct you don't need to do anything at all, otherwise you log in to the web site and adjust whatever needs adjusting in a bunch of simple forms. The tax authorities also have a duty to calculate the taxes in the way that benefits you most.
- atticmanatee 8y ago
  In Portugal, of all places, it’s just a web form. This year it took me a grand total of 3 minutes to review all info and less than 10 clicks after logging in.
germanier 8y ago
Just a few weeks ago, I logged into Elster, opened the pre-filled tax return (Belegabruf) and sent it. Instead, I could have filled the short and simple Vereinfachte Steuererklärung by hand which covers all common cases. Most workers don't need to do anything to get their overpaid tax back thanks to the Lohnsteuerjahresausgleich. They need to work on their marketing though.
- retromario 8y ago
  Aldi (or Lidl) every year sell a Tax Prep software for 5 euros. Our in-laws buy a copy, install it, then pass it on to us (same key works on multiple PCs). The software's UI could use some...clarity in certain places but it is incredibly full-featured. We've been happily using it to file our German taxes for years.

reallydontask 8y ago

Is this similar to PAYE or do you actually have to submit a tax return but it's pre-filled for you? In the UK, most people don't have to submit a tax return at all. Not sure the actual cost of this, but the convenience is unparalleled.

renholder 8y ago
>Is this similar to PAYE or do you actually have to submit a tax return but it's pre-filled for you? As long as your PAYE is like Ireland's (ROI) PAYE, then the American's system is far-removed from it. Even though their tax revenue office gets the reports from businesses for how much they were paid and how much taxes they paid, the Americans still need to fill out a tax form - every year - to repeat the same information (it's an added benefit for the prison system, in that mistakes on tax forms can equate to jail time). They get a form from their employer (which their tax office also has), that contains all of this information. >In the UK, most people don't have to submit a tax return at all. Not sure the actual cost of this, but the convenience is unparalleled. Aye, it's the same in Ireland (ROI). You can just call-up or email Revenue and they check if you've overpaid, by how much, and they just send you the money. No forms. No bullshit. No threats of jail time. It's pretty deadly[0]. You want nothing to do with the Yanks' tax system, trust me. [0] - https://www.whygo.com/ireland/irish-slang-deadly.html https://www.whygo.com/ireland/irish-slang-deadly.html
- rayiner 8y ago
  > Even though their tax revenue office gets the reports from businesses for how much they were paid and how much taxes they paid, the Americans still need to fill out a tax form - every year - to repeat the same information (it's an added benefit for the prison system, in that mistakes on tax forms can equate to jail time). They get a form from their employer (which their tax office also has), that contains all of this information. You seem quite ignorant of the U.S. tax system. There are no criminal penalties for mistakes on your tax form. (the IRS doesn't even have prosecution authority--all it can do is collect evidence of a crime, and refer the case to the Department of Justice.) And your tax return doesn't just "repeat the same information" as your W-2s. For example, the W-2 reports income on an individual basis, while married couples file a return as a single unit. The amount of tax owed will generally be different for married couples versus the amount of tax withheld. (And there is no federal government database of marriages the IRS can use to match up things on the back end.) The IRS also has no idea how many children you have living with you, and can't give you the appropriate credits for that.

baud147258 8y ago

I would love automatic filing in France. The process isn't that complicated, as long as it's just a single income. I dread the day where I'll sell my shares or qualify for a tax-return, because it's not going to be fun.

jimbokun 8y ago

In the US, legislation always goes to the highest bidder. Keep that in mind when reading stories about the US government, and it all makes a lot more sense.

_bxg1 8y ago

It's because historically our society has treated businesses, their leaders, and the free market as churches, priests, and God, respectively. They've brought us much wealth and power, but putting restraints on them or getting in their way at all are cardinal sins in American politics. Politicians can take bribes and then package the resulting deregulation with euphemisms like "small government" and "supporting the free market". The most brilliant part is how they serve huge corporations, but then sell their actions as supporting all (read: small, too) businesses, even when they don't.

blancheneige 8y ago
seems like the antithesis of small government to have it explicitly bar itself from providing free services helping its citizens pay for said government. the latter should be as seamless as possible given that failure to comply results in adverse government intervention.
redwall_hp 8y ago
Small indie companies, like Blizzard.

andrewla 8y ago

Out of curiosity, do you have insight on how this evolved? Did the government go from requiring paper to offering an electronic equivalent? In the US, the IRS supported an e-file system that basically allowed electronic versions of forms to be submitted, but it was arcane enough that a cottage industry developed to assist users in prepping documents for e-file. How does Finland support tax preparation services; what sort of facilities do they offer for people filing on behalf of others? Even if the US went to an IRS-pre-filled return, there would still be room for third-party tax software that improved on the user experience, so I think if the IRS supported direct filing of taxes it would also be good to preserve the ability for software or designated parties to submit information on the taxpayer's behalf.

fsloth 8y ago
"Out of curiosity, do you have insight on how this evolved? Did the government go from requiring paper to offering an electronic equivalent?" The taxation has been pretty automated for a long time. As a regular taxpayer nowadays I just get a paper form that describes the precalculated taxes, and if they are fine, I don't have to return anything. There are some pre-deducted things, and if I have anything add to that, I'll then just either fill in the paper form or the electronic equivalent. So yes, there was a basic "semi automated" scheme that has been steadily improving and now the tax authority has just added a web based interface for feeding data into it. About filling the taxes on behalf of someone else - There really is no need for tax preparation services unless you are business entity (in which case you likely already have your own accountant doing it) or the wealth is considerable enough to merit actual tax planning. Otherwise the tax code is so straightforward and simple that anyone can do it. If there are some questions, you can always contact the tax services and they will usually offer helpful and professional advice on how to proceed. So there is no market for that kind of thing in the large. The "defaults" provided by government help in this regard as well. I kinda understand the adverserial positioning of "people vs. the government" in the US - it just sounds to an outsider the main reason not to make things easier is because that would eradicate business from turbo tax. Kinda like the government mandated you need to own a useless dead parrot, that you can only buy from Parrot Co, that needs to be kept in the refridgerator in an exact position mandated by the law.
8y ago

kaveh_h 8y ago

We’ve had great digital government services In Sweden for years. I did my taxes yesterday in 3 minutes from my laptop, digitally signed and submitted.

kaveh_h 8y ago

In Sweden too it’s super easy.

otikik 8y ago

> the benefit of the middleman over the benefit of the individual citizen I think you put it just right. Health and Education are the two areas this is bought up, but the taxes are a good example.

Zeebrommer 8y ago

Same in the Netherlands. These types of backwards laws make America look bad.

tathougies 8y ago
On the other hands, Americans are much less likely to commit tax fraud than other countries, so perhaps the netherlands should encourage more people to report their sheltered assets? https://www.theatlantic.com/magazine/archive/2019/04/why-americans-dont-cheat-on-their-taxes/583222/ https://www.theatlantic.com/magazine/archive/2019/04/why-ame...

tyfon 8y ago

Same thing here in Norway. We get the tax return forms pre-filled and if we want to make changes it can be done on a government web page easily. Capital gains, most deductions and assets/loans are also registered automatically. If you have no changes then you don't need to do anything at all.

xtracto 8y ago

This makes me laugh a lot, even down here in Mexico have automated, electronic, government provided tax filings. My tax filing is as easy as: Login, verify, click a button.