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This USA tax thing has always baffled me... it is the exact definition of why we pay taxes: for the government to provide services that are common to the countr

• deleted 7y ago
  [deleted]
• skizm 7y ago
  An actual argument I've heard from TurboTax shills is that tons of people underpay taxes now with the self report system, and having the government pre-fill forms for you to rubber stamp would effectively increase taxes on the working class.
  • mehhh 7y ago
    Great, sounds like TurboTax will still be able to compete if the IRS gives people tax filings precalculated, as TurboTax can say "We can save you $XXX!"
    • fedorareis 7y ago
      I’m sure for a large percentage of Americans like myself the “$XXX” that they saved you is just the standard deduction. Maybe at some point in my life an itemized deduction will actually save me more money, but every time I have filed taxes TurboTax looks at my info and decides that the standard deduction is the best I’m going to get. So for some percentage of Americans TurboTax won’t be able to compete because they can’t save you more than the IRS already did with its deductions.
      • twblalock 7y ago
        > So for some percentage of Americans TurboTax won’t be able to compete because they can’t save you more than the IRS already did with its deductions. Except many people will try TurboTax or a competing solution anyway, just in case they can get a little bit of money back.
        • fedorareis 7y ago
          I would expect that to be common for the first couple years but after a couple years of realizing that they aren’t saving any additional money or are saving less than they are paying for TurboTax I’d expect that to drop off.
          • twblalock 7y ago
            Unless using TurboTax actually saves people money. I wouldn't expect the IRS to have enough information to be able to predict in advance the deductions people might be able to take -- stuff like business expenses, mortgage interest, charitable donations, state taxes, etc. Tax evasion and overstating deductions are common partly because the IRS doesn't have access to the information necessary to verify everything -- that's the same information the IRS would need in order to pre-fill tax forms accurately for the 1/3 of taxpayers who itemize their deductions. 1/3 of American taxpayers a pretty big market for TurboTax and similar services to thrive in.
  • JohnFen 7y ago
    That's such a nonsense argument, though. Having the IRS pre-fill basic forms for you would not obligate you to accept them. People could still compute their taxes themselves (or pay someone else to do it).
    • cortesoft 7y ago
      Ok, I disagree with the TurboTax reasoning, but I think your argument doesn't make sense... if most people have their pre-filled tax forms making them pay more than they should, then everyone is going to compute their taxes themselves anyway to avoid paying too much... at that point, why is it better than the current system?
      • JohnFen 7y ago
        (Edited to correct an error) About 20% of people (particularly low income people) have simple tax returns and file using 1040EZ. If the IRS computed that form, then what they send out would be ideal for the majority of taxpayers. So it would benefit those by eliminating the expense of tax preparation without actually costing them more in taxes. Then there are those like myself who fall into an in-between area. I have more complex taxes, although not as complex as a lot of people, but would gladly pay more than is strictly necessary in order to not have to bother with figuring them out. In fact, I already do, in the form of paying a tax preparer (I fully consider the expense of tax preparation as a tax itself.) Those whose taxes are more complex are very likely aware of that fact, and would continue to do their own tax preparation. Also, if the IRS provided a prefilled 1040EZ, that would make computing your own taxes easier because you could use the figures supplied as a reference.
        • ac29 7y ago
          1040EZ died after tax year 2017: https://www.irs.gov/forms-pubs/about-form-1040-ez https://www.irs.gov/forms-pubs/about-form-1040-ez
          • MaulingMonkey 7y ago
• opportune 7y ago
  Even a lot of the more complex things could be automated. For example, the only slightly complex thing about my taxes are capital gains and interest. It would not be hard to have my brokerages/banks coordinate with the IRS to autopay my taxes on that as well, just like my income taxes are auto paid.
  • briandear 7y ago
    Does the government automatically know what you spent in business expenses? Or what charitable donations you made? Or what property you may have lost during the year?
    • opportune 7y ago
      I’m not saying those are easy to automate, or that everything can be automated, I’m saying a lot of things are able to be automated. Not only capital gains and interests, I suppose mortgage interest deduction would also be easy.
    • zacharycohn 7y ago
      That's a great example of something most Americans don't have to worry about. They could take advantage of autofile and you wouldn't. Simple as that.
• dahfizz 7y ago
  I think it comes down to who people trust. Americans on the whole don't trust their government quite a lot. If the government just said "you owe X in tax this year", nearly everyone's knee jerk reaction would be that the government is overestimating and cheating them. On the other hand, you can pay a flat fee to let a third party fight the government on your behalf. That's something that many Americans like the sound of. I think the real problem is that the tax system is complicated, and turbo tax does a good job of making it feel even more complicated than it is. You can fill out your own 1040EZ, if you even know what that is, but people have this sense that the tax system is full of loopholes and they want to exploit that.
  • erik_seaberg 7y ago
    It's the same problem as with auto repair and medicine. It's nice that we have competing providers, except we don't have the expertise to judge their performance.
    • dahfizz 7y ago
      > except we don't have the expertise to judge their performance. Well, this is a bit different in that regard. Last time I tried it, it was free to put all my info into turbo tax and see what my amount owed would be, and then it would be a fee to actually file. I assume most tax software works that way. So it's actually very easy and objective to see the performance of these systems. It would obviously be a big hassle though to spend a whole afternoon playing with all the different tax softwares.
      • pishpash 7y ago
        I can assure you the secret sauce in "exploiting" tax law is almost never in choosing one thing or another during filing (there should only be one optimal answer once the facts are already created), but in tax planning. The tax software even hints at that. Paying for tax filing itself is basically a low-level scam.
        • 7y ago
• caconym_ 7y ago
  Corporations are people, money is free speech, and our politicians are bought and paid for. They have every incentive not to make things work better if corporations are profiting from the broken status quo.
• jacurtis 7y ago
  Most countries have this "automagical tax filing process". And what kills me the most is that America actually secretly has this same system too. Yet every year we have to go through the charade of filing taxes ourselves, when the governemnt already knows what we owe without us needing to round up paperwork, W2 forms, 1099 forms, and so forth. Yet they make us do it anyway. Don't believe me? Simply don't file your taxes next year. You will get a letter from the IRS sent to you that literally tells you what you owe. They know all of your income down to the cent, they know what you owe. This automagical system exists. Yet the only way to "use" it is to either not pay your taxes, or to pay them wrong. Yet every year, the IRS makes us go through the charade of putting our taxes together and all the work (and money) that it entails, when the whole time they know what we owe already and expects us to pay that unless we can prove them otherwise.
  • dehrmann 7y ago
    > They know all of your income down to the cent If you have a W-2 job and all your investments are in a bank or brokerage, but they still don't know your filing situation, dependents, other income, or deductions. Not that I'm justifying the current system. It's just that the IRS only knows the big picture for most people. The rest is complicated.
    • redisman 7y ago
      Don't they know that from the W-4? Or does that not go to the IRS
      • dehrmann 7y ago
        I'm not sure if it does or not, but you can have one W-4 per paycheck, so I thought it was just used to figure out your withholding. The amount withheld shows up on your W-2.
      • deleted 7y ago
        [deleted]
      • zrail 7y ago
• plerpin 7y ago
  It's by design. The GOP wants you to rub your face in the fact that the government runs on tax revenue, in the hope that you'll develop an allergy to taxes.
  • zrail 7y ago
    The thing of it is, the US government hasn’t run on tax revenue for over 20 years. Clinton was president last time the US had a balanced budget.
    • adventured 7y ago
      The US hasn't had a real balanced budget in much longer than that. During the Clinton era the balance was achieved in part by stealing from Social Security by keeping the surplus inflows and pretending there's a magic locked Social Security box with trillions of dollars in it (which are really IOUs backed by the Fed's ability to debase the future for past over-spending). We similarly treated as 'surplus' tax revenue that should have been set aside for future higher Medicare costs (which back then we knew full well were coming) and is now burning a massive hole in the present budget. The Clinton years were the twilight of the fantasy of abusing inbound entitlement tax flows for spending in the present and ignoring the future. That government spending party trick - kicking the can down the road - is now exhausted on a normalized basis, so we're rapidly heading toward perma QE as the only solution remaining other than very high taxation across all major income groups.
      • intopieces 7y ago
        Can someone explain to me the negative consequences of running a deficit? Countries aren’t people. They don’t die. As long as countries are willing to lend us money and the US can service the debt, what does it really matter if the national debt is multiples of the GDP?
        • zrail 7y ago
          There are no real negative consequences. Fiscally conservative people want people to think there are because it's a way to counter government spending with an argument that makes sense on the surface, despite the fact that the argument is completely wrong if you spend a few minutes thinking about it.
• jeffdavis 7y ago
  "it is the exact definition of why we pay taxes: for the government to provide services that are common to the country´s citizens" I disagree with that definition. In a limited government, taxes are only for specific purposes, not any service that might be commonly (or even universally) needed/wanted. You can agree or disagree about whether a limited government is good, or whether tax filing services should fall within those limits. But it's certainly not the definition of taxes to be for any and all "common services".
• reaperducer 7y ago
  a) The great majority of the population who perceives a salary not needing to file taxes. In the United States, and many other nations, the vast majority of taxes aren't collected from payroll. If that was the case, things would be easy. But there are hundreds of other ways that taxes are collected, and they vary from person to person. More importantly, taxes aren't exclusively about revenue generation. They're used to encourage people to do or not do things: Save money, invest money, buy houses, have babies, buy cars, add solar panels, and thousands of other things. There are plenty of people who shout "flat tax!" whenever this topic comes up. But they're mostly people who have only led simple lives where the IRS only touches them on their paycheck, or who don't understand the full range of how taxes are used.
  • naniwaduni 7y ago
    > They're used to encourage people to do or not do things: They might be better if this were the goal if people could actual interpret what they're being encouraged to do!
  • syshum 7y ago
    Or people do understand how taxes are used and fundementaly disagree that taxes should be used for those purposes Taxes sole purpose should be to collect money to provide services, Nothing else they should not be used to socially engineer the society the way the government sees fit, that is not a free society or a functioning democracy/republic at that point
    • Sabinus 7y ago
      Australia gives tax cuts if you have a family with children. (Family tax benefit part A and B). Do you think that's unacceptable social engineering?
      • layoutIfNeeded 7y ago
        That’s ok, because by having children you provide a service to the state (i.e. ensuring its existence in the long run).
• jellicle 7y ago
  Citizens do demand it, but the US does not have a government that is in any way responsive to the demands of the general citizenry.
• rayiner 7y ago
  > Why wouldn't citizens demand a public tax filing process? Because they don’t want to make it easy for the government to impose lots of taxes. Americans have the lowest taxes in the developed world. Not especially for rich people, but for everyone else: https://www.heritage.org/sites/default/files/inline-images/IB-big-government-high-taxes-middle-class-2-CHARTS-page1.gif https://www.heritage.org/sites/default/files/inline-images/I.... This isn’t the work of some secretive cabal of billionaires. Rich people hire accountants to do their taxes anyway. The absence or existence of free tax filing doesn’t affect them at all. But a platform of “we’re going to make taxes painful so the government is afraid to raise taxes” gets a lot of votes. (In my view, is nothing bad about people being confronted once a year with the cost of the government to themselves. I just looked at my taxes for 2018 and concluded I’m taxed too little and would rather pay more for a government that offers more services. But people should be making that decision with eyes wide open.)
  • ma2rten 7y ago
    Not if you into account the price of health insurance...
  • CorvusCrypto 7y ago
    how would that affect ease of tax generation? You would still need to have the proper congressional authorities vote on the matter, no? And sure, when I am in sweden I get taxed more because of VAT and such, but having a national standard where I can just declare my taxes for the year by pushing a single button for free through the government tax app is a benefit to outweigh any worry that you will get shafted by new taxes. In the US it just seems backwards and no excuse can justify this. Horrible system.
    • rayiner 7y ago
      > how would that affect ease of tax generation? You would still need to have the proper congressional authorities vote on the matter, no? People aren’t paying attention to tax bills that are getting voted on. But when they do their taxes, they’re forced to actually work out how much they’re paying the government. A bill or invoice they get in the mail wouldn’t have the same effect. As to the US system being unjustifiable, I think Europeans don’t really understand America. In an ideal world, I’d prefer a Swedish system with high taxes, lots of social services, etc. But Americans aren’t Swedes. They don’t trust their government, and they don’t really trust each other. A quarter of Americans polled favor their state seceding from the country (ranging from 20-34% depending on region). By comparison, only 15% of people in the Basque region of Spain want independence. I live in Maryland, which is about the same population as Denmark and only moderately smaller than Sweden. It’s a “blue state.” Our capital is Baltimore. Schools in Baltimore spend 40% more per student than schools in Sweden, in a city where you can get a beautiful townhouse for maybe 1/4 of what it would cost in Stockholm. The schools should be amazing, right? No. They’re awful, with terrible test score and enormous gang violence. The city government is corrupt. Not in the way you probably think the US as a whole is corrupt (controlled by wealthy elite), but the sort of reciprocity that typifies developing countries. The former mayor has been convinced of felonies, and in February will probably receive a sentence of 5-10 years in prison. So despite being a strongly blue state, we elected a Republican Governor by an overwhelming majority that promised to control spending, cancel public projects like transit lines, etc. Because we don’t trust (can’t trust) our government to use our tax dollars effectively. So yes, there is support in America for things that make people think hard about how much they pay the government: https://www.youtube.com/watch?v=BcEhl5HfGMM https://www.youtube.com/watch?v=BcEhl5HfGMM. And it’s not irrational or crazy. Our situation is very different than what you face in Sweden.
• jimbokun 7y ago
  "Why wouldn't citizens demand a public tax filing process?" Our government doesn't respond to citizens, only corporations.
• peteretep 7y ago
  > the government to provide services That the market could provide?! That sounds like Communism
• stjohnswarts 7y ago
  It's mostly because so many special interests have gotten loopholes put in for their particular pet project, simplicity be damned. That's just the way politics works in America.
• Mauricio_ 7y ago
  It's intentional. Anti-tax republicans believe taxes should hurt. That's the main reason it's still not automatic.