4 ms·

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 refer

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.
SavantIdiot 5y ago
> Isn’t most of the complexity associated with itemized deductions I had to laugh a little at this, its like saying, "CPUs, isn't that just a bunch of switches?" Yes, you are correct. But it's been nearly a century of wealthy people hiring lawmakers to create hundreds of thousands of esoteric deductions that are only accessible to people who own business that they can fiddle with, aka rich folks.
- prostoalex 5y ago
  In the grandparent post you were excusing Intuit’s lobbyism by using a what-aboutist look-the-other-way argument to appoint a different entity (collection of “rich people”) as the designated tormentor for tax code complexity. I surmised that complexities introduced by that group are irrelevant in calculating standard tax return costs, as no one requires a low income earner to deal with vagaries of obscure deductions. It’s mainly Intuit who should be blamed for beefing up those costs. You seem to agree with that statement in your subsequent comment, so I’m no longer sure about the insight you are trying to drive through. Is it just a trivial “taxes are complex, man” thesis?
  - SavantIdiot 5y ago
    > In the grandparent post you were excusing Intuit’s lobbyism by using a what-aboutist look-the-other-way I did nothing of the sort. You inferred your own narrative and are now blaming me. Know what that is called?
    - prostoalex 5y ago
      I must’ve misread. My apologies.

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.

SavantIdiot 5y ago

> Isn’t most of the complexity associated with itemized deductions I had to laugh a little at this, its like saying, "CPUs, isn't that just a bunch of switches?" Yes, you are correct. But it's been nearly a century of wealthy people hiring lawmakers to create hundreds of thousands of esoteric deductions that are only accessible to people who own business that they can fiddle with, aka rich folks.

prostoalex 5y ago
In the grandparent post you were excusing Intuit’s lobbyism by using a what-aboutist look-the-other-way argument to appoint a different entity (collection of “rich people”) as the designated tormentor for tax code complexity. I surmised that complexities introduced by that group are irrelevant in calculating standard tax return costs, as no one requires a low income earner to deal with vagaries of obscure deductions. It’s mainly Intuit who should be blamed for beefing up those costs. You seem to agree with that statement in your subsequent comment, so I’m no longer sure about the insight you are trying to drive through. Is it just a trivial “taxes are complex, man” thesis?
- SavantIdiot 5y ago
  > In the grandparent post you were excusing Intuit’s lobbyism by using a what-aboutist look-the-other-way I did nothing of the sort. You inferred your own narrative and are now blaming me. Know what that is called?
  - prostoalex 5y ago
    I must’ve misread. My apologies.