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The reason the tax code is so complicated is BECAUSE OF TurboTax. They lobby heavily to keep things complex and have brought down potential competitors through

The reason the tax code is so complicated is BECAUSE OF TurboTax. They lobby heavily to keep things complex and have brought down potential competitors through legal means. As such, "killing TurboTax" is the correct first step.

ghaff 6y ago
I know it's nice to have a corporate bogeyman to rail against but it's not that simple. For example, there have been all sorts of tax deductions over the years to incentivize things like home energy efficiency improvements, EVs, solar power, charitable contributions, etc. And the mortgage deduction was/is intended to promote home ownership. I could go on. Someone can disagree with some of the choices around tax rates and certain weirdly specific deductions. But most people wouldn't argue that, for example, encouraging people to donate to charities is a bad thing.
- drdeca 6y ago
  There are some people who are weirdly anti-charity, saying that all of it should be done through taxes? I don't understand their point of view.
  - ryandrake 6y ago
    Thread drift, but my objection to encouraging charitable giving is that the more you rely on charity to fund the public good, the more you rely on (largely) millionaires and billionaires to decide what counts as a public good. In other words the average citizen doesn’t get to vote on what good gets funded. This means givers’ pet causes get funded rather than projects that are democratically chosen.
    - drdeca 6y ago
      It is possible (even likely) that I've misunderstood people who were just being hyperbolic and didn't mean to be taken literally, but my impression was that some were saying that literally no charity organizations should be necessary? I (somewhat..) understand the "but then the wealthy are determining what gets done" thing, as a reason to not rely too much on it, but it seems clear to me that there are also major inefficiencies in having to go through a consensus process of government democracy, rather than people simply acting in smaller groups, independent of a larger consensus, to further charitable causes. It seems clear that there are cases where charities work better than govt programs alone, and it is a clear error to think that all charities would be better handled as a govt service, even if some would be better handled by one. Hmm, if the government were to run a quadratic funding of charities thing, with only rather limited requirements for eligibility, perhaps that would somewhat alleviate the "undemocratic" complaint? (It would have to make it illegal to pay someone else to participate in your stead though.)
      - ganafagol 6y ago
        I like your last point. The rest of your post is based on the implicit assumpion that anything government run is inherently bureaucratic and slow and charities are instead simple and fast. But that's an orthogonal issue. Some level of bureaucracy is needed to prevent misuse, otherwise you have a rich guy pay their fines from their charity. Beyond that, there is no inherent reason for charities to be more efficient. You could make those governmnent-charities have local oversight, they could be organized very efficiently too and have the advantage of democratic legitimacy.
  - deleted 6y ago
    [deleted]
  - ska 6y ago
    I suspect most of them are actually saying that relying on charity for some things is a bad idea, which isn't inherently anti-charity.
    - Spivak 6y ago
      I don't think it's enough reason to not give to charities because people need help right now but the fact that food pantries exist makes my blood boil. It is beyond ridiculous that feeding our most vulnerable people requires a charity to take would be thrown out food from grocery stores and inefficiently spread them around a network of churches staffed by volunteers. If only there was a massive logistics network for getting food everywhere we could use.
  - Shivetya 6y ago
    there are many who think others should pay for what they themselves consider important and even get some glee out of forcing people they don't like to pay for something they otherwise would not. then you run into those who think , why should I give to charity because its the government's job to fix that... and finally those who just don't care charity exist for those want to focus their person effort to fix their world and should be encourage but never be required
- zimpenfish 6y ago
  > all sorts of tax deductions over the years to incentivize things like [...] But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime? > but it's not that simple I think if the main difference between the US and other countries is the aforementioned "corporate bogeyman", it probably does boil down to being that simple.
  - javagram 6y ago
    > But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime? Citation needed. How can you have a non-complex tax filing regime when you have so many deductions and credits that only the taxpayer knows about or has documentation of? When I donate to a charity, they don’t report my donations directly to the IRS (nor should they - we don’t want the government to be collecting data on everyone’s charity giving). I have to collect the letters they send me at the end of the year and total my donations in order to deduct my charitable contributions. The government never even knows what charities I donated to unless I’m audited and they ask for proof.
    - zimpenfish 6y ago
      > that only the taxpayer knows about or has documentation of? Therein lies the rub, I suspect; other countries do know about what you're doing with the deductions and credits which means the tax office can handle all that for you - and, indeed, they are much more suited to be handling this - rather than pushing it onto each individual to try and scrabble together once a year. I suppose we can add "incoherent fear of the government" to "corporate bogeyman" to the list of reasons the US has a messed up tax situation. > (nor should they - we don’t want the government to be collecting data on everyone’s charity giving) You do if there's specific tax breaks for doing that.
- anonisko 6y ago
  Basically, the tax code is used by governments as an incentive mechanism to manipulate entities into behaving in ways they want.
  - millstone 6y ago
    Which can be a good thing. If there's an activity with negative (positive) externalities, then there's a deadweight loss, which can be corrected by taxing (subsidizing) that activity.
    - anonisko 6y ago
      Depends on whether you agree with what the people in charge define as a 'good thing'. In a democratic government, you might like how a powerful tool is being wielded when your people are in charge, and be terrified when the 'other' is in charge.
- MeinBlutIstBlau 6y ago
  It's as simple as not deducting my taxes from my paycheck and forcing me to pay in. Almost as if I'd never be overtaxed then.
  - Spivak 6y ago
    Can't you already set your withholding to 0?
yunesj 6y ago
I didn’t see evidence in the linked article and the cited article therein that Intuit tried to prevent a simplification of the tax code. They just tried to stop the government from trying to build competitor software (partially paid for by Intuit and others in the tax accounting industry). Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it. I think it’s unlikely that Intuit has the power to steer the complexity of the tax code. States like NY and CA, for example, oppose a standardization of tax law for “road warriors” because they make so much money from non-resident workers who step foot in their state. US tax policy is about 70,000 pages (mostly regulations, bulletins, and case law). And that doesn’t include state and local taxes. If you stop being an easy case, for example you want to claim FEIE within 5 years of spending > 30 days in the US, then the IRS tells you to get a lawyer to pay for a private letter ruling. This is because, where other countries don’t tax their citizens income worldwide, the US does and then gives a moderate exemption. AFAIK, US tax code complexity dwarfs that of any other country. I find it hard to believe that it’s TurboTax’s fault, a day after reading about Sen. Warren’s plan for a wealth tax and a $100B to the IRS to help them calculate and enforce it...
- kennywinker 6y ago
  > Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it. That's not how the proposed systems work. The proposed system is: gov sends you a notice "here is your filled out tax return based on everything we know about you" and then you look over the return, make any modifications you believe are correct, and send it to them. You're not "challenging" something.
  - yunesj 6y ago
    > and then you look over the return, make any modifications you believe are correct, and send it to them Or more likely, they send you their estimate, based on a tiny fraction of the tax code, you recalculate it from scratch, send it to them, and then they audit you. Civil disagreements with the IRS start under the assumption that the IRS is correct (e.g., “your cost basis is zero,” or “that wasn’t a valid deduction”), and then you must prove to them that they are wrong.
res0nat0r 6y ago
I've been using freetaxusa.com for years as an alternative, it only costs maybe 10-20$ to file state taxes if I remember correctly, and federal is free. It is much cheaper than Turbotax and the UI is essentially the same.
peter303 6y ago
Not Turbox, but Congress. They promise new credits and deductions every election cycle. Every couple decades there are weak attempts to weed out some of these such as for the Reagan and Trump tax reforms.
briandear 6y ago
https://m.youtube.com/watch?v=TruCIPy79w8 https://m.youtube.com/watch?v=TruCIPy79w8
ska 6y ago
> The reason the tax code is so complicated is BECAUSE OF TurboTax. People have been arguing about unnecessary complexity in the tax code since before computers, let alone before TurboTax, so it can't be that simple.
- klipt 6y ago
  Democracies have complex tax codes because tax breaks and subsidies are the easiest way for politicians to reward loyal voting blocs. https://youtu.be/rStL7niR7gs https://youtu.be/rStL7niR7gs
Rebelgecko 6y ago
I don't think that's true. The US has used tax laws as a way to effect policies since before Turbotax existed. I think the mortgage interest deduction goes back 100+ years
- Decade 6y ago
  The mortgage interest deduction was an accidental side-effect of pro-business regulation, and it doesn’t advance any reasonable societal goals. It’s effectively a regressive tax break, the richer the beneficiary the larger the tax break, up to ordinary 7-digit millionaire. https://www.nytimes.com/2006/03/05/magazine/who-needs-the-mortgageinterest-deduction.html https://www.nytimes.com/2006/03/05/magazine/who-needs-the-mo...
refurb 6y ago
Interesting! I had no idea TurboTax was behind the latest electric vehicle rebate program!

ghaff 6y ago

I know it's nice to have a corporate bogeyman to rail against but it's not that simple. For example, there have been all sorts of tax deductions over the years to incentivize things like home energy efficiency improvements, EVs, solar power, charitable contributions, etc. And the mortgage deduction was/is intended to promote home ownership. I could go on. Someone can disagree with some of the choices around tax rates and certain weirdly specific deductions. But most people wouldn't argue that, for example, encouraging people to donate to charities is a bad thing.

drdeca 6y ago
There are some people who are weirdly anti-charity, saying that all of it should be done through taxes? I don't understand their point of view.
- ryandrake 6y ago
  Thread drift, but my objection to encouraging charitable giving is that the more you rely on charity to fund the public good, the more you rely on (largely) millionaires and billionaires to decide what counts as a public good. In other words the average citizen doesn’t get to vote on what good gets funded. This means givers’ pet causes get funded rather than projects that are democratically chosen.
  - drdeca 6y ago
    It is possible (even likely) that I've misunderstood people who were just being hyperbolic and didn't mean to be taken literally, but my impression was that some were saying that literally no charity organizations should be necessary? I (somewhat..) understand the "but then the wealthy are determining what gets done" thing, as a reason to not rely too much on it, but it seems clear to me that there are also major inefficiencies in having to go through a consensus process of government democracy, rather than people simply acting in smaller groups, independent of a larger consensus, to further charitable causes. It seems clear that there are cases where charities work better than govt programs alone, and it is a clear error to think that all charities would be better handled as a govt service, even if some would be better handled by one. Hmm, if the government were to run a quadratic funding of charities thing, with only rather limited requirements for eligibility, perhaps that would somewhat alleviate the "undemocratic" complaint? (It would have to make it illegal to pay someone else to participate in your stead though.)
    - ganafagol 6y ago
      I like your last point. The rest of your post is based on the implicit assumpion that anything government run is inherently bureaucratic and slow and charities are instead simple and fast. But that's an orthogonal issue. Some level of bureaucracy is needed to prevent misuse, otherwise you have a rich guy pay their fines from their charity. Beyond that, there is no inherent reason for charities to be more efficient. You could make those governmnent-charities have local oversight, they could be organized very efficiently too and have the advantage of democratic legitimacy.
- deleted 6y ago
  [deleted]
- ska 6y ago
  I suspect most of them are actually saying that relying on charity for some things is a bad idea, which isn't inherently anti-charity.
  - Spivak 6y ago
    I don't think it's enough reason to not give to charities because people need help right now but the fact that food pantries exist makes my blood boil. It is beyond ridiculous that feeding our most vulnerable people requires a charity to take would be thrown out food from grocery stores and inefficiently spread them around a network of churches staffed by volunteers. If only there was a massive logistics network for getting food everywhere we could use.
- Shivetya 6y ago
  there are many who think others should pay for what they themselves consider important and even get some glee out of forcing people they don't like to pay for something they otherwise would not. then you run into those who think , why should I give to charity because its the government's job to fix that... and finally those who just don't care charity exist for those want to focus their person effort to fix their world and should be encourage but never be required
zimpenfish 6y ago
> all sorts of tax deductions over the years to incentivize things like [...] But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime? > but it's not that simple I think if the main difference between the US and other countries is the aforementioned "corporate bogeyman", it probably does boil down to being that simple.
- javagram 6y ago
  > But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime? Citation needed. How can you have a non-complex tax filing regime when you have so many deductions and credits that only the taxpayer knows about or has documentation of? When I donate to a charity, they don’t report my donations directly to the IRS (nor should they - we don’t want the government to be collecting data on everyone’s charity giving). I have to collect the letters they send me at the end of the year and total my donations in order to deduct my charitable contributions. The government never even knows what charities I donated to unless I’m audited and they ask for proof.
  - zimpenfish 6y ago
    > that only the taxpayer knows about or has documentation of? Therein lies the rub, I suspect; other countries do know about what you're doing with the deductions and credits which means the tax office can handle all that for you - and, indeed, they are much more suited to be handling this - rather than pushing it onto each individual to try and scrabble together once a year. I suppose we can add "incoherent fear of the government" to "corporate bogeyman" to the list of reasons the US has a messed up tax situation. > (nor should they - we don’t want the government to be collecting data on everyone’s charity giving) You do if there's specific tax breaks for doing that.
anonisko 6y ago
Basically, the tax code is used by governments as an incentive mechanism to manipulate entities into behaving in ways they want.
- millstone 6y ago
  Which can be a good thing. If there's an activity with negative (positive) externalities, then there's a deadweight loss, which can be corrected by taxing (subsidizing) that activity.
  - anonisko 6y ago
    Depends on whether you agree with what the people in charge define as a 'good thing'. In a democratic government, you might like how a powerful tool is being wielded when your people are in charge, and be terrified when the 'other' is in charge.
MeinBlutIstBlau 6y ago
It's as simple as not deducting my taxes from my paycheck and forcing me to pay in. Almost as if I'd never be overtaxed then.
- Spivak 6y ago
  Can't you already set your withholding to 0?

yunesj 6y ago

I didn’t see evidence in the linked article and the cited article therein that Intuit tried to prevent a simplification of the tax code. They just tried to stop the government from trying to build competitor software (partially paid for by Intuit and others in the tax accounting industry). Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it. I think it’s unlikely that Intuit has the power to steer the complexity of the tax code. States like NY and CA, for example, oppose a standardization of tax law for “road warriors” because they make so much money from non-resident workers who step foot in their state. US tax policy is about 70,000 pages (mostly regulations, bulletins, and case law). And that doesn’t include state and local taxes. If you stop being an easy case, for example you want to claim FEIE within 5 years of spending > 30 days in the US, then the IRS tells you to get a lawyer to pay for a private letter ruling. This is because, where other countries don’t tax their citizens income worldwide, the US does and then gives a moderate exemption. AFAIK, US tax code complexity dwarfs that of any other country. I find it hard to believe that it’s TurboTax’s fault, a day after reading about Sen. Warren’s plan for a wealth tax and a $100B to the IRS to help them calculate and enforce it...

kennywinker 6y ago
> Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it. That's not how the proposed systems work. The proposed system is: gov sends you a notice "here is your filled out tax return based on everything we know about you" and then you look over the return, make any modifications you believe are correct, and send it to them. You're not "challenging" something.
- yunesj 6y ago
  > and then you look over the return, make any modifications you believe are correct, and send it to them Or more likely, they send you their estimate, based on a tiny fraction of the tax code, you recalculate it from scratch, send it to them, and then they audit you. Civil disagreements with the IRS start under the assumption that the IRS is correct (e.g., “your cost basis is zero,” or “that wasn’t a valid deduction”), and then you must prove to them that they are wrong.

res0nat0r 6y ago

I've been using freetaxusa.com for years as an alternative, it only costs maybe 10-20$ to file state taxes if I remember correctly, and federal is free. It is much cheaper than Turbotax and the UI is essentially the same.

peter303 6y ago

Not Turbox, but Congress. They promise new credits and deductions every election cycle. Every couple decades there are weak attempts to weed out some of these such as for the Reagan and Trump tax reforms.

briandear 6y ago

https://m.youtube.com/watch?v=TruCIPy79w8 https://m.youtube.com/watch?v=TruCIPy79w8

ska 6y ago

> The reason the tax code is so complicated is BECAUSE OF TurboTax. People have been arguing about unnecessary complexity in the tax code since before computers, let alone before TurboTax, so it can't be that simple.

klipt 6y ago
Democracies have complex tax codes because tax breaks and subsidies are the easiest way for politicians to reward loyal voting blocs. https://youtu.be/rStL7niR7gs https://youtu.be/rStL7niR7gs

Rebelgecko 6y ago

I don't think that's true. The US has used tax laws as a way to effect policies since before Turbotax existed. I think the mortgage interest deduction goes back 100+ years

Decade 6y ago
The mortgage interest deduction was an accidental side-effect of pro-business regulation, and it doesn’t advance any reasonable societal goals. It’s effectively a regressive tax break, the richer the beneficiary the larger the tax break, up to ordinary 7-digit millionaire. https://www.nytimes.com/2006/03/05/magazine/who-needs-the-mortgageinterest-deduction.html https://www.nytimes.com/2006/03/05/magazine/who-needs-the-mo...

refurb 6y ago

Interesting! I had no idea TurboTax was behind the latest electric vehicle rebate program!