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1. You can file your taxes for free in the US. You only have to pay if you want to do so through a tax preparation service or software. 2. It's actually pretty

1. You can file your taxes for free in the US. You only have to pay if you want to do so through a tax preparation service or software. 2. It's actually pretty easy to use the electronic forms or just use paper. 3. Tax software is good, and a competent tax preparer is even better. Why we have a tax system which creates so much work there is an entire set of industries (tech, tax preparers, etc) built around it just to pay the government is kind of loony...

lotsofpulp 6y ago
Part of the reason is because tax software companies pay legislators to make and keep taxes complicated. There is no reason, with the advent of internet and databases, that 90% of people’s taxes can’t be completely automated. Part of the reason is because more tax rules means more loopholes to take advantage of.
- indymike 6y ago
  "There is no reason, with the advent of internet and databases, that 90% of people’s taxes can’t be completely automated." This is an area where there could be a lot of improvement. Many people work at least partially as a contractor and have to self-report and make payments. The self-reporting and making payments is where a lot of the problems start with automation. Employees? Mostly solved except for where people do stuff that isn't paid with employment wages. "Part of the reason is because more tax rules means more loopholes to take advantage of." Loopholes are often deliberate ways of encouraging behavior with money. For example, an exemption on mortgage interest lets people avoid paying tax on most of their spend on their mortgage. Why? To encourage people to buy homes. Guess what, people with big, expensive homes with large mortgage payments benefit the most. Another was the infamous Hummer credit in the 90s and 00s where if you bought a big SUV or truck, you could take 100% depreciation on it in the first year. So people bought lots of Ford Excursions, Hummer H2s and other gigantic gas guzzlers. It did help the US auto industry.
  - lotsofpulp 6y ago
    > Loopholes are often deliberate ways of encouraging behavior with money. I don’t buy this. There is an easy way to encourage behavior with money. Give people money in exchange for the behavior. If the goal is to encourage someone to buy a house, then pay them to buy a house. The reason politicians don’t do this is because this lays bare all the costs associated with the incentive. Whereas with tax loopholes, they can understate it using whatever assumptions they want. The tax deduction method allows for loopholes to open up, as well as discrimination by way of making it complicated, and understatement of costs. A straight cash incentive, on the other hand, reduces the avenues of corruption, has a transparent cost, and does the job just as well.
    - indymike 6y ago
      Two thoughts without getting into the morality or ethics of existing law: The legal standard for giving money is different than taking money. A tax incentive that is legal (i.e. mortgage interest deduction) would be illegal as a giveaway (giving money to only taxpayers with mortgages) as it would fail equal protection under the law. Second, often times tax incentives help avoid having the government use taxpayers as the bank. For example, if I take deductions for my dependents on my w-2, I have less money taken out of my paycheck. The other way around, no loopholes, would a) discourage having dependents and b) would force me to act as the bank for the government.
      - lotsofpulp 6y ago
        > A tax incentive that is legal (i.e. mortgage interest deduction) would be illegal as a giveaway (giving money to only taxpayers with mortgages) as it would fail equal protection under the law. This is a good thing, exactly the type of corruption that needs to be eliminated. >For example, if I take deductions for my dependents on my w-2, I have less money taken out of my paycheck. The other way around, no loopholes, would a) discourage having dependents The other way around would be to pay you for having dependents. I do not see how that would discourage having dependents. >and b) would force me to act as the bank for the government. I do not understand what acting as a bank for the government means.
- mellavora 6y ago
  In Sweden taxes are fully automated. Has been for years. What makes it possible is a comprehensive national ID system. Which has advantages and disadvantages.
  - lotsofpulp 6y ago
    The US also has a comprehensive national ID system. We just happen to get all the disadvantages, without the advantages.
  - bluGill 6y ago
    The US has everything needed, except the political will.
THE_PUN_STOPS 6y ago
You can thank Grover Norquist[1] for that. The Taxpayer Protection Pledge [2] that he promulgates to US republican lawmakers is the primary mechanism though which those legislators justify blocking simplification and streamlining of tax filing. If it's easier for people to pay taxes the government will probably ask for more cash if we implement those systems, right? Therefore it must be blocked according to the pledge! The logic is airtight! Ironically in reality this is actually pretty much the opposite of taxpayer protection and amounts to additional tax paid to private corporations on TOP of our existing taxes. [1]: https://en.wikipedia.org/wiki/Grover_Norquist https://en.wikipedia.org/wiki/Grover_Norquist [2]: https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Taxpayer_Protection_Pledge https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Taxpa...
- chrisfinazzo 6y ago
  Theoretically, the ideas he's talking about make sense. If say, you're a single person w/ no dependents who doesn't itemize making the process much simpler is attractive. However - as Ted Cruz showed everyone - being able to do your taxes on something the size of a postcard is only possible if just about every specific deduction is cut out. Once people saw that, it was DoA. Also, while I'm here, can someone explain what was supposed to replace the IRS in Cruz's plan? (State Governments?) I mean, somebody has to administer and manage this process, however simple it might be.
  - justin66 6y ago
    > Theoretically, the ideas he's talking about make sense. You'll want to be very clear about which of his ideas "make sense." You're talking about the guy who equates estate taxes with the Holocaust. https://www.npr.org/templates/story/story.php?storyId=1452983 https://www.npr.org/templates/story/story.php?storyId=145298... https://www.washingtonpost.com/archive/opinions/2004/01/06/out-of-their-anti-tax-minds/3d6e1bd0-8160-4779-a7f6-0a42e3974e72/ https://www.washingtonpost.com/archive/opinions/2004/01/06/o... > Also, while I'm here, can someone explain what was supposed to replace the IRS in Cruz's plan? It wasn't meant to be good government, or even tenable government. It was an idea designed to appeal to stupid people. That is all. (The failure of such a stupid idea to actually work or be implementable could be spun politically. The spin wouldn't have to be especially plausible, either, because, you know... stupid people)

lotsofpulp 6y ago

Part of the reason is because tax software companies pay legislators to make and keep taxes complicated. There is no reason, with the advent of internet and databases, that 90% of people’s taxes can’t be completely automated. Part of the reason is because more tax rules means more loopholes to take advantage of.

indymike 6y ago
"There is no reason, with the advent of internet and databases, that 90% of people’s taxes can’t be completely automated." This is an area where there could be a lot of improvement. Many people work at least partially as a contractor and have to self-report and make payments. The self-reporting and making payments is where a lot of the problems start with automation. Employees? Mostly solved except for where people do stuff that isn't paid with employment wages. "Part of the reason is because more tax rules means more loopholes to take advantage of." Loopholes are often deliberate ways of encouraging behavior with money. For example, an exemption on mortgage interest lets people avoid paying tax on most of their spend on their mortgage. Why? To encourage people to buy homes. Guess what, people with big, expensive homes with large mortgage payments benefit the most. Another was the infamous Hummer credit in the 90s and 00s where if you bought a big SUV or truck, you could take 100% depreciation on it in the first year. So people bought lots of Ford Excursions, Hummer H2s and other gigantic gas guzzlers. It did help the US auto industry.
- lotsofpulp 6y ago
  > Loopholes are often deliberate ways of encouraging behavior with money. I don’t buy this. There is an easy way to encourage behavior with money. Give people money in exchange for the behavior. If the goal is to encourage someone to buy a house, then pay them to buy a house. The reason politicians don’t do this is because this lays bare all the costs associated with the incentive. Whereas with tax loopholes, they can understate it using whatever assumptions they want. The tax deduction method allows for loopholes to open up, as well as discrimination by way of making it complicated, and understatement of costs. A straight cash incentive, on the other hand, reduces the avenues of corruption, has a transparent cost, and does the job just as well.
  - indymike 6y ago
    Two thoughts without getting into the morality or ethics of existing law: The legal standard for giving money is different than taking money. A tax incentive that is legal (i.e. mortgage interest deduction) would be illegal as a giveaway (giving money to only taxpayers with mortgages) as it would fail equal protection under the law. Second, often times tax incentives help avoid having the government use taxpayers as the bank. For example, if I take deductions for my dependents on my w-2, I have less money taken out of my paycheck. The other way around, no loopholes, would a) discourage having dependents and b) would force me to act as the bank for the government.
    - lotsofpulp 6y ago
      > A tax incentive that is legal (i.e. mortgage interest deduction) would be illegal as a giveaway (giving money to only taxpayers with mortgages) as it would fail equal protection under the law. This is a good thing, exactly the type of corruption that needs to be eliminated. >For example, if I take deductions for my dependents on my w-2, I have less money taken out of my paycheck. The other way around, no loopholes, would a) discourage having dependents The other way around would be to pay you for having dependents. I do not see how that would discourage having dependents. >and b) would force me to act as the bank for the government. I do not understand what acting as a bank for the government means.
mellavora 6y ago
In Sweden taxes are fully automated. Has been for years. What makes it possible is a comprehensive national ID system. Which has advantages and disadvantages.
- lotsofpulp 6y ago
  The US also has a comprehensive national ID system. We just happen to get all the disadvantages, without the advantages.
- bluGill 6y ago
  The US has everything needed, except the political will.

THE_PUN_STOPS 6y ago

You can thank Grover Norquist[1] for that. The Taxpayer Protection Pledge [2] that he promulgates to US republican lawmakers is the primary mechanism though which those legislators justify blocking simplification and streamlining of tax filing. If it's easier for people to pay taxes the government will probably ask for more cash if we implement those systems, right? Therefore it must be blocked according to the pledge! The logic is airtight! Ironically in reality this is actually pretty much the opposite of taxpayer protection and amounts to additional tax paid to private corporations on TOP of our existing taxes. [1]: https://en.wikipedia.org/wiki/Grover_Norquist https://en.wikipedia.org/wiki/Grover_Norquist [2]: https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Taxpayer_Protection_Pledge https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Taxpa...

chrisfinazzo 6y ago
Theoretically, the ideas he's talking about make sense. If say, you're a single person w/ no dependents who doesn't itemize making the process much simpler is attractive. However - as Ted Cruz showed everyone - being able to do your taxes on something the size of a postcard is only possible if just about every specific deduction is cut out. Once people saw that, it was DoA. Also, while I'm here, can someone explain what was supposed to replace the IRS in Cruz's plan? (State Governments?) I mean, somebody has to administer and manage this process, however simple it might be.
- justin66 6y ago
  > Theoretically, the ideas he's talking about make sense. You'll want to be very clear about which of his ideas "make sense." You're talking about the guy who equates estate taxes with the Holocaust. https://www.npr.org/templates/story/story.php?storyId=1452983 https://www.npr.org/templates/story/story.php?storyId=145298... https://www.washingtonpost.com/archive/opinions/2004/01/06/out-of-their-anti-tax-minds/3d6e1bd0-8160-4779-a7f6-0a42e3974e72/ https://www.washingtonpost.com/archive/opinions/2004/01/06/o... > Also, while I'm here, can someone explain what was supposed to replace the IRS in Cruz's plan? It wasn't meant to be good government, or even tenable government. It was an idea designed to appeal to stupid people. That is all. (The failure of such a stupid idea to actually work or be implementable could be spun politically. The spin wouldn't have to be especially plausible, either, because, you know... stupid people)