18 ms·

It's worse than that. They lobbied to create the situation where taxes are so complicated that most people need software to figure it out.

by mkr-hn 5y ago

bloodyplonker22 5y ago
Many people can't even figure out easily what to fill into the boxes, even with software.
- xd1936 5y ago
  "Government: You owe us money. It’s called taxes. Me: How much do I owe? Gov’t: You have to figure that out. Me: I just pay what I want? Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too. Me: What if I get it wrong? Gov’t: You go to prison" https://twitter.com/jordan_stratton/status/1118141455061671939 https://twitter.com/jordan_stratton/status/11181414550616719...
  - mkr-hn 5y ago
    The fear people have about going to jail over taxes is not really supported by the statistics. It turns out people who work for the IRS aren't stupid and recognize it's hard to pay taxes from jail. Most people who get nailed that way knew exactly what they were doing. PDF: https://www.ussc.gov/sites/default/files/pdf/research-and-publications/quick-facts/Tax_Fraud_FY20.pdf https://www.ussc.gov/sites/default/files/pdf/research-and-pu...
    - pkghost 5y ago
      It's a reductio ad absurdam joke
    - jakelazaroff 5y ago
      That vignette is meant to be sardonic, not realistic. The point is that the government absolutely could just file your taxes for you and send you a check or a bill, if they weren't lobbied by tax prep companies like Intuit and extremists like Grover Norquist.
      - aerosmile 5y ago
        That's a popular view, but only true for people who don't have any deductions, depreciations, business expenses, mileage, etc. For a large group of people, the IRS can run the math only after you submit the full list of inputs.
        tppiotrowski 5y ago
        This doesn’t preclude the government pre-filling and giving you the option to amend. It would save everyone time, even the people who amend because some information would already be pre-filled.
        coliveira 5y ago
        You could always apply to a refund based on that information. But the government already has 99% of what is needed to file your taxes, they are just not allowed by the lobby of tax preparation.
        kazoomonger 5y ago
        In sane countries, the "popular view" holds, as it should. Not so much in the US, though. The IRS knows how much I make, I want them to send me a form that says "we think you made this much, if that's true and you have no fancy deductions, sign here". Then I just sign a form and return it instead of slogging through the bullshit that Intuit et al has lobbied for.
  - Lamad123 5y ago
    Ef the gouvernement! I know! not very constructive, but the topic is too depressive for any constructivability
  - ineedasername 5y ago
    You have to be pretty obviously flouting tax law to have it become a criminal case. Apart from that, IRS workers are just like workers at any other job where throughput is a primary metric: They just want to close cases quickly with a resolution. That may mean penalties and interest rate if you screwed up or were actually trying to avoid what you owe. They're not taking you to court and prosecuting for $100k if you're working with them to fix things though. In the end, they don't much care if the settlement takes 10 years to pay off $200/month at a time as long as they can close the case as resolved. Source: 1) I have a friend who was an IRS lawyer and then a tax attorney. 2) I know someone who went bankrupt and came to long term multi-year agreement to pay $50/month.
    - stingrae 5y ago
      up to the prison part, it is largely accurate. The punishment is just more likely to be penalties and expensive audits.
      - otherme123 5y ago
        My wife is currently facing a fine because she had some extra income in 2020 that the local IRS don't understand. Not that it's illegal, shady or remotely fraudulent: they just don't understand how could she earn some small money (around $500) doing X when she mainly does Y. The "solution" they deem as legal is to create a whole new bussiness dedicated to do X, or refuse to do it. And to my eyes X and Y are related (like doing a security audit to a web and building a web), but IRS don't think so.
        vxNsr 5y ago
        There's another form you can fill out for extra income... I don't know your situation but it's likely you didn't fill out that form but someone on the other side of that transaction did.
        ineedasername 5y ago
        If it's basically pass-through income from a business then you fill out (in the US) a Schedule C. And you do one for each business like that. And you also have to separately fill out the medicare & social security taxes, paying both the employer and employee side of it. It sounds complicated, but paying about $100 for the TurboTax edition that handles small businesses will make it fairly easy. Yep, they've got strong regulatory capture in this space, but business income isn't always straight forward so I would consider ~$100 well worth it. Though I'm sure that some dead-simple home businesses really wouldn't need it.
User23 5y ago
I agree that Intuit has done some shady things with tax lobbying, but it's naive to credit them for the ridiculous state of the tax code. There are plenty of other cooks with far more sway stirring that pot.
- jimt1234 5y ago
  This is a really good point. Intuit profits off the complex tax laws, but the real beneficiaries are the wealthy. Any proposal to significantly simplify the tax laws are gonna be met with huge resistance from the rich and powerful, primarily because their taxes will certainly increase. Bezos isn't gonna allow his taxes to increase just so the rest of us can have a simplified tax code.
  - buerkle 5y ago
    Not just the wealthy or tax companies. https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis... is a good episode explaining some of the behind the scenes on our messy tax situation.
  - respondo2134 5y ago
    This is not really true. Intuit et al. make money from pretty simple tax laws that apply to most people, who use their consumer-grade prep software. The idea was the government could prefill your taxes and for this huge segment of the population that would be it; the rich or complicated returns could still be filed by accountants and specialized software. Intuit makes a huge amount of money off these relatively simple returns though, so instead lobbied to provide "free" tax software to the same target segment. It turns out their free software is anything but and they used it as a marketing ploy to funnel poorer people to paid versions. Having the IRS predefine your taxes would be far more efficient and wouldn't cost rich people any more. The tax code is complicated because of it's scale and interactions; neither impacts most of these basic returns.
    - User23 5y ago
      Similarly big companies benefit from complex regulatory regimes that their staff attorneys can easily handle but startups can’t.
SavantIdiot 5y ago
Taxes were complicated long before Intuit, its designed that way to benefit the wealthy. If it were simple they couldn't cheat.
- prostoalex 5y ago
  Isn’t most of the complexity associated with itemized deductions, which at lower levels of income default to a straight-up standard deduction? Or are you referring to some other provisions?
  - lsiebert 5y ago
    So the biggest complexity is in terms of capital investments as opposed to income. Basically if you are paid money and put that money in the bank, you pay yearly income taxes on the income the money earns. If you are instead given a bunch of stock shares, you don't pay taxes on the stock when the price goes up, only when it's sold, which leads to all sorts of possible ways to side step paying taxes, or put them off and then paying them in a lump sum, or paying interest on loans secured with the stock, where the loan isn't considered income for tax purposes, etc. https://www.businessinsider.com/american-billionaires-tax-avoidance-income-wealth-borrow-money-propublica-2021-6?op=1 https://www.businessinsider.com/american-billionaires-tax-av...
  - nathanvanfleet 5y ago
    1. Your employer already reports how much you made to the government. 2. At the end of the year the government could just send you a summary and give you the ability to apply deductions. The above case would cover 99% of people. Instead you have to do a whole bunch of song and dance using some third party and hopefully the numbers match.
    - da_chicken 5y ago
      They could also assume that not filing assumes standard deduction. The government is already told about nearly everything. The weirdness comes if you work two jobs or are self-employed, which is why the quarterly estimates exist.
stjohnswarts 5y ago
It would be more than likely they lobbied to KEEP tax laws complicated and fight any changes to simplify filing. They were complicated decades before intuit ever showed up on the scene. Edit: I'm being downvoted for THIS particular comment? lol is intuit monitoring this thread or something?
- mkr-hn 5y ago
  They've been at it for decades, so it's probably going to be hard to figure out how much they're responsible for. We've got a Tax Code of Theseus paradox. How much do they have to change it before they're responsible for the avalanche that follows? Compare to, for example, Twitter and Facebook. All they did was amp up grievances that already existed, some centuries old. No one can agree on how much fault they deserve for the consequences even if it's clear they played a huge role in the current state of things.

It's worse than that. They lobbied to create the situation where taxes are so complicated that most people need software to figure it out.

by mkr-hn 5y ago

It's worse than that. They lobbied to create the situation where taxes are so complicated that most people need software to figure it out.

bloodyplonker22 5y ago

Many people can't even figure out easily what to fill into the boxes, even with software.

xd1936 5y ago
"Government: You owe us money. It’s called taxes. Me: How much do I owe? Gov’t: You have to figure that out. Me: I just pay what I want? Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too. Me: What if I get it wrong? Gov’t: You go to prison" https://twitter.com/jordan_stratton/status/1118141455061671939 https://twitter.com/jordan_stratton/status/11181414550616719...
- mkr-hn 5y ago
  The fear people have about going to jail over taxes is not really supported by the statistics. It turns out people who work for the IRS aren't stupid and recognize it's hard to pay taxes from jail. Most people who get nailed that way knew exactly what they were doing. PDF: https://www.ussc.gov/sites/default/files/pdf/research-and-publications/quick-facts/Tax_Fraud_FY20.pdf https://www.ussc.gov/sites/default/files/pdf/research-and-pu...
  - pkghost 5y ago
    It's a reductio ad absurdam joke
  - jakelazaroff 5y ago
    That vignette is meant to be sardonic, not realistic. The point is that the government absolutely could just file your taxes for you and send you a check or a bill, if they weren't lobbied by tax prep companies like Intuit and extremists like Grover Norquist.
    - aerosmile 5y ago
      That's a popular view, but only true for people who don't have any deductions, depreciations, business expenses, mileage, etc. For a large group of people, the IRS can run the math only after you submit the full list of inputs.
      - tppiotrowski 5y ago
        This doesn’t preclude the government pre-filling and giving you the option to amend. It would save everyone time, even the people who amend because some information would already be pre-filled.
      - coliveira 5y ago
        You could always apply to a refund based on that information. But the government already has 99% of what is needed to file your taxes, they are just not allowed by the lobby of tax preparation.
      - kazoomonger 5y ago
        In sane countries, the "popular view" holds, as it should. Not so much in the US, though. The IRS knows how much I make, I want them to send me a form that says "we think you made this much, if that's true and you have no fancy deductions, sign here". Then I just sign a form and return it instead of slogging through the bullshit that Intuit et al has lobbied for.
- Lamad123 5y ago
  Ef the gouvernement! I know! not very constructive, but the topic is too depressive for any constructivability
- ineedasername 5y ago
  You have to be pretty obviously flouting tax law to have it become a criminal case. Apart from that, IRS workers are just like workers at any other job where throughput is a primary metric: They just want to close cases quickly with a resolution. That may mean penalties and interest rate if you screwed up or were actually trying to avoid what you owe. They're not taking you to court and prosecuting for $100k if you're working with them to fix things though. In the end, they don't much care if the settlement takes 10 years to pay off $200/month at a time as long as they can close the case as resolved. Source: 1) I have a friend who was an IRS lawyer and then a tax attorney. 2) I know someone who went bankrupt and came to long term multi-year agreement to pay $50/month.
  - stingrae 5y ago
    up to the prison part, it is largely accurate. The punishment is just more likely to be penalties and expensive audits.
    - otherme123 5y ago
      My wife is currently facing a fine because she had some extra income in 2020 that the local IRS don't understand. Not that it's illegal, shady or remotely fraudulent: they just don't understand how could she earn some small money (around $500) doing X when she mainly does Y. The "solution" they deem as legal is to create a whole new bussiness dedicated to do X, or refuse to do it. And to my eyes X and Y are related (like doing a security audit to a web and building a web), but IRS don't think so.
      - vxNsr 5y ago
        There's another form you can fill out for extra income... I don't know your situation but it's likely you didn't fill out that form but someone on the other side of that transaction did.
        ineedasername 5y ago
        If it's basically pass-through income from a business then you fill out (in the US) a Schedule C. And you do one for each business like that. And you also have to separately fill out the medicare & social security taxes, paying both the employer and employee side of it. It sounds complicated, but paying about $100 for the TurboTax edition that handles small businesses will make it fairly easy. Yep, they've got strong regulatory capture in this space, but business income isn't always straight forward so I would consider ~$100 well worth it. Though I'm sure that some dead-simple home businesses really wouldn't need it.

User23 5y ago

I agree that Intuit has done some shady things with tax lobbying, but it's naive to credit them for the ridiculous state of the tax code. There are plenty of other cooks with far more sway stirring that pot.

jimt1234 5y ago
This is a really good point. Intuit profits off the complex tax laws, but the real beneficiaries are the wealthy. Any proposal to significantly simplify the tax laws are gonna be met with huge resistance from the rich and powerful, primarily because their taxes will certainly increase. Bezos isn't gonna allow his taxes to increase just so the rest of us can have a simplified tax code.
- buerkle 5y ago
  Not just the wealthy or tax companies. https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis... is a good episode explaining some of the behind the scenes on our messy tax situation.
- respondo2134 5y ago
  This is not really true. Intuit et al. make money from pretty simple tax laws that apply to most people, who use their consumer-grade prep software. The idea was the government could prefill your taxes and for this huge segment of the population that would be it; the rich or complicated returns could still be filed by accountants and specialized software. Intuit makes a huge amount of money off these relatively simple returns though, so instead lobbied to provide "free" tax software to the same target segment. It turns out their free software is anything but and they used it as a marketing ploy to funnel poorer people to paid versions. Having the IRS predefine your taxes would be far more efficient and wouldn't cost rich people any more. The tax code is complicated because of it's scale and interactions; neither impacts most of these basic returns.
  - User23 5y ago
    Similarly big companies benefit from complex regulatory regimes that their staff attorneys can easily handle but startups can’t.

SavantIdiot 5y ago

Taxes were complicated long before Intuit, its designed that way to benefit the wealthy. If it were simple they couldn't cheat.

prostoalex 5y ago
Isn’t most of the complexity associated with itemized deductions, which at lower levels of income default to a straight-up standard deduction? Or are you referring to some other provisions?
- lsiebert 5y ago
  So the biggest complexity is in terms of capital investments as opposed to income. Basically if you are paid money and put that money in the bank, you pay yearly income taxes on the income the money earns. If you are instead given a bunch of stock shares, you don't pay taxes on the stock when the price goes up, only when it's sold, which leads to all sorts of possible ways to side step paying taxes, or put them off and then paying them in a lump sum, or paying interest on loans secured with the stock, where the loan isn't considered income for tax purposes, etc. https://www.businessinsider.com/american-billionaires-tax-avoidance-income-wealth-borrow-money-propublica-2021-6?op=1 https://www.businessinsider.com/american-billionaires-tax-av...
- nathanvanfleet 5y ago
  1. Your employer already reports how much you made to the government. 2. At the end of the year the government could just send you a summary and give you the ability to apply deductions. The above case would cover 99% of people. Instead you have to do a whole bunch of song and dance using some third party and hopefully the numbers match.
  - da_chicken 5y ago
    They could also assume that not filing assumes standard deduction. The government is already told about nearly everything. The weirdness comes if you work two jobs or are self-employed, which is why the quarterly estimates exist.

stjohnswarts 5y ago

It would be more than likely they lobbied to KEEP tax laws complicated and fight any changes to simplify filing. They were complicated decades before intuit ever showed up on the scene. Edit: I'm being downvoted for THIS particular comment? lol is intuit monitoring this thread or something?

mkr-hn 5y ago
They've been at it for decades, so it's probably going to be hard to figure out how much they're responsible for. We've got a Tax Code of Theseus paradox. How much do they have to change it before they're responsible for the avalanche that follows? Compare to, for example, Twitter and Facebook. All they did was amp up grievances that already existed, some centuries old. No one can agree on how much fault they deserve for the consequences even if it's clear they played a huge role in the current state of things.