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This article[1] has more details. Sen. Wyden[2] has been pushing for more funding to IRS to develop its free file program, but Turbotax has been successful via

This article[1] has more details. Sen. Wyden[2] has been pushing for more funding to IRS to develop its free file program, but Turbotax has been successful via their lobbying of Republican politicians and some Democratic politicians in preventing it from happening. 1. https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free https://www.propublica.org/article/inside-turbotax-20-year-f... 2. https://www.nytimes.com/2021/07/19/opinion/intuit-turbotax-free-filing.html https://www.nytimes.com/2021/07/19/opinion/intuit-turbotax-f...

memish 5y ago
ThunderSizzle 5y ago
Lol. Its always the Republicans. If it was priority for the Dems, they'd have done it. They have gotten through several other things the Republicans opposed. Anyhow, the better alternative is to return to lower the rates and remove deductions (aside from the standard deduction). Even simpler yet would be to go to a flat tax with an extremely high standard deduction (e.g. ~$50k with ~10% after that). I can't think of many good reasons to continue complicating the IRS code aside from political targeting and giving Congress more kickbacks.
- throw10920 5y ago
  This is a really good point - if the tax code were a few dozen pages for the common case instead of a few hundred, then you might not even need tax-prep software in the first place. "The best program is the one that doesn't exist", to quote a popular refrain. Ongoing software projects require periodic refactoring to reduce complexity and increase comprehension - why would the law be any different?
  - giraffe_lady 5y ago
    I think we've fairly well established that the complexity of the code isn't the problem. The IRS knows what you owe and could just tell you if they wanted to. Having citizens exposed directly to the mechanics of it during the filing process is a policy choice and the way to fix that is to change the policy, not try to reinvent the tax code from first principles. This is a complex set of laws yes but it is also detailed multi-generational documentation of all the shit people have tried to pull. You don't just throw that out because it has grown complex. Like all necessary complexity, you isolate and manage it, not spray it all over the end user.
    - thaumasiotes 5y ago
      > I think we've fairly well established that the complexity of the code isn't the problem. The IRS knows what you owe and could just tell you if they wanted to. The IRS has no way to know which of your expenditures are tax-deductible.
      - jonathankoren 5y ago
        If you think you can do better than the standard deductions, you’re more than welcome to itemize — just like today. Pretending that the current system is as good as it can get the for the vast majority of individuals is disingenuous. Just look at every other country that sends out prefilled forms.
        thaumasiotes 5y ago
        If you're taking the standard deduction, preparing your taxes is already the simple affair everyone says it should be.
        toast0 5y ago
        Eh, you can take the standard deduction and the foreign tax credit or any of a bunch of other things that don't always have great information on forms. A whole lot of preparing a tax return is plugging in numbers from forms that are sent to you and the IRS. It would be simpler (but perhaps less timely) if the IRS sent the taxpayer the return and if you disagreed, you could send in an ammended form with any documentation, or just pay the bill/cash the check.
  - wolverine876 5y ago
    > if the tax code were a few dozen pages for the common case instead of a few hundred Isn't this the fantasy of clean sheet software? 'We'll get rid of all this cruft and make it clean and simple.' But it turns out that the cruft is needed to deal with reality, which is messy rather than the abstract clean-room requirements of our imaginations. I can't see how the tax code can be short, having to deal with such a wide range of situations. Has anyone every successfully used a tax code like the short, simple ones that people fantasize about?
    - IG_Semmelweiss 5y ago
      yes. I believe a baltic country (Slovakia) taxes flat tax rates. https://taxfoundation.org/flat-tax-lessons-slovakia https://taxfoundation.org/flat-tax-lessons-slovakia https://accace.com/tax-guideline-for-slovakia/ https://accace.com/tax-guideline-for-slovakia/
      - rags2riches 5y ago
        (Slovakia is a Central European country, far from Baltic.) But all three of Estonia, Latvia and Lithuania also have pretty flat tax rates I believe. Not sure about deductions and other details.
    - throw10920 5y ago
      > Isn't this the fantasy of clean sheet software? 'We'll get rid of all this cruft and make it clean and simple.' But it turns out that the cruft is needed to deal with reality, which is messy rather than the abstract clean-room requirements of our imaginations. The fantasy is that the software can be made completely clean and simple because there are no edge cases. The reality is that it can be made less terrible by reworking complex parts of the design that were slowly hacked into place over time, and by eliminating technical debt. The fact that the ideal is unobtainable is irrelevant to the fact that there are still concrete, worthwhile, and necessary improvements to be made. If your perspective on taxes were applied to software engineering, then most large projects would have collapsed by now. > I can't see how the tax code can be short, having to deal with such a wide range of situations. Not "short", but short-er than the 74,000 pages that it currently is. And, it's already dealing with a wide range of situations by simply compressing the feature-space down a lot, so one way of making it simpler is to compress it down even more. For instance, you could eliminate a bunch of individual rules that reduce effective taxes for low-income earners, and then just reduce the tax rate at that bracket.
- wolverine876 5y ago
  The GOP opposes it; they are the obstacle. I think such actions by the GOP has become normalized for people, and so they overlook it. I don't see how you can blame the Democrats, who are voting for it. > If it was priority for the Dems, they'd have done it. Easily said, but as we know, not easily done.
  - ThunderSizzle 5y ago
    https://www.opensecrets.org/political-action-committees-pacs/intuit-inc/C00361741/summary/2022 https://www.opensecrets.org/political-action-committees-pacs... https://www.opensecrets.org/political-action-committees-pacs/h-r-block/C00188177/summary/2022 https://www.opensecrets.org/political-action-committees-pacs... Seems like the donations are pretty evenly split for the companies that would be the largest lobbies over the past several years. This seems like the case of the uniparty being apparent, where there's no real drive to simplify the tax code because it's something both can blame each other on when nothing is done. Of course, this was the entire point of the TEA Party (which later became manifested as MAGA), which was mainly a conservative movement, so it manifested inside the GOP, but the GOP RINOs in Congress did nothing.
    - wolverine876 5y ago
      Despite your hypothesis, the evidence is that the Democrats vote for it, and the GOP against it.
      - ThunderSizzle 5y ago
        I haven't seen the Dems get into law a significant simplification of the tax code in the last 20 years. The last simplification we got was from Trump (which was a good step, but obviously isn't the final desired location). He also did that before the Dems took back the House, so he had the GOP sign on to it.
- ArnoVW 5y ago
  You're not wrong in saying that tax codes in general are complex. The problem is, they're complex for a reason. Tax codes are a tool of policy makers. They allow wealth and income distribution. They allow compensation. And they allow policy makers to promote or penalize specific behaviors or activities. Look at the legal system as a code base (in French, 'law' translates to 'code'). And imagine having 538 product owners, each asking for 'just one feature' that is both 'critical and urgent'. Is it any wonder that we are in this situation? Perhaps we should implement more sunset provisions? I don't know. But 'we need a simpler system' is sort of like 'we have too many LoC'. It's true, but not easily actionable.
  - Dracophoenix 5y ago
    >Tax codes are a tool of policy makers. Therein the problem lies. >They allow wealth and income distribution. They allow compensation. And they allow policy makers to promote or penalize specific behaviors or activities. Robbing Peter to pay Paul is not a good reason to tax. Taxation should be decided by the whims of a crab bucket. >Look at the legal system as a code base (in French, 'law' translates to 'code'). And imagine having 538 product owners, each asking for 'just one feature' that is both 'critical and urgent'. Is it any wonder that we are in this situation? We're in this situation because most of congressmen believe they have the right to impose their morals on and the expense of thst individual men and women by way of legislative fiat. >Perhaps we should implement more sunset provisions? I don't know. But 'we need a simpler system' is sort of like 'we have too many LoC'. It's true, but not easily actionable. It is actionable. Politicians, however, are usually ignorant of tax law until there comes a point where the "wrong" people "win" too much. That is the issue in what should mostly be an administrative affair, if it should at all occur. The people who complicate the tax do not code lack the wherewithal to simplify it. Their feigned weakness and indifference is a choice.
  - furyg3 5y ago
    Yes, but we all know that business rules and logic can be very complex, but you can still simplify the interface for the vast majority of users. The IRS collects tax information from most businesses with employees, banks and investment firms, so it's is comically easy to pre-load that information in a tax return. Ask a few simple questions (did you buy a house, did you start a business, do you have a new dependent). Pre-fill what you can. Generate a report which you can directly file or share with your tax expert. Many developed countries do this. While this (correctly) tanks an entire industry of tax preparation software, it actually makes it easier for politicians to do their thing. Right now a tax break for X is buried under form 92921X2 which you learn about after reading the instructions for line 48 on schedule 8812 which you are filling in after being told to in the supplementary instructions for line 21 on your 1099. If you elected to use the alternative streamlined maximum option, of course, if you chose for the default minimum compensation model, well, those are different forms. With a properly made simple official tax filing process, you just see you got an extra $400 back this year because of the tax break for X.
- tzs 5y ago
  > Even simpler yet would be to go to a flat tax with an extremely high standard deduction (e.g. ~$50k with ~10% after that). That's not a flat tax. That is a progressive tax with two brackets. Once you have accepted that progressive taxes are acceptable, it is hard to see why two brackets is better than three, or 4, or even dozens. One might argue that two brackets is simpler than say 10 brackets, but that is a very weak argument since it is just a table lookup, and nobody can argue with a straight face that a 10 line table is too complicated. An interesting exercise is to consider what it would be like if instead of a single tax to cover everything funded by income tax we did a two bracket progressive tax for each budget item separately, with the taxes applied serially. By applied serially I mean that the taxable income for tax N+1 is what is left after you have paid tax N. You then end up with a progressive tax with N+1 brackets where N are the number of budget items (and then you would have a table big enough that it would arguable be complicated!). If you keep the same total budget but divide the budget items into smaller subitems, your tax curve approaches a continuous curve which represents a progressive tax with an infinite number of infinitely small brackets. I remember working out the equation for that curve once, and finding the result mathematically satisfying, but I've totally forgotten what it was.
  - ThunderSizzle 5y ago
    > Once you have accepted that progressive taxes are acceptable. . .nobody can argue with a straight face that a 10 line table is too complicated. First, I don't think anyone should pay taxes on their labor. And just because my labor makes more shouldn't mean I pay a higher percentage; so, no, I don't agree with the concept of progressive taxation on labor. Regardless, that's what we have. Anyway, 10% after $50,000 is dead simple. e.g. make $120,000 as a family, take away $100,000, left with $20,000, I pay $2,000. Real tax rate is only 1.6%, so maybe that's too nice for the American family? You can change it to 15% after $25,000 and it's still simpler. $120k-$50k=$70k x .15=$10.5k or 8.75% real tax rate, all without worrying about IRAs, 401ks, HSAs, etc. With a 6-12 tax brackets with crazy amount of deductions, I need to: 1) calculate taxable income. This is some func of deductions. i.e. standard deduction ($25k) + max 401k ($20k) brings taxable income to $75,000. There's other deductions such as IRAs, HSAs, 529, etc; all with their own maxes based on various criterias and income, which has it's own list of gotchas that screw over people. Hopefully you didn't forget a deduction on top of all that. 2) Now determine tax rate. 22%. Feels bad, but whatever -nearly a quarter of your income (nominally, at least) to finance the debt to keep inflation going. The graph says ~$4,800+22% of anything over ~$42,000. Alright. So $4,800+(22% x $33,000)=$12,060 are taxes owed. 3) Now determine your credits, if any. Such as a child credit. I hope you know your credits, because you might've forgot about a tax credit for something you bought. Let's assume you know you get $3600 for a toddler, and put that in. Now your $12,000 is $8,400. 4) Ensure your paid taxes is correct. You paid throughout the year, adds up to ~$8000. So taxes due are now $400. 5) Now you go to pay $400. Welp. Now you need to pay $50 because you decided you wanted to buy a stock that gave you $10 in dividends in a brokerage account, and now you can no longer free file. But you don't want to be audited, so you report the $10 and pay the $50. Yeah, that's very simple and straight forward. But good news is the actual tax rate is actually only 7%, even though you felt like you just paid nearly 22%, wasted hours of your life, and were insulted with an additional fee just to pay your taxes.

memish 5y ago

ThunderSizzle 5y ago

Lol. Its always the Republicans. If it was priority for the Dems, they'd have done it. They have gotten through several other things the Republicans opposed. Anyhow, the better alternative is to return to lower the rates and remove deductions (aside from the standard deduction). Even simpler yet would be to go to a flat tax with an extremely high standard deduction (e.g. ~$50k with ~10% after that). I can't think of many good reasons to continue complicating the IRS code aside from political targeting and giving Congress more kickbacks.

throw10920 5y ago
This is a really good point - if the tax code were a few dozen pages for the common case instead of a few hundred, then you might not even need tax-prep software in the first place. "The best program is the one that doesn't exist", to quote a popular refrain. Ongoing software projects require periodic refactoring to reduce complexity and increase comprehension - why would the law be any different?
- giraffe_lady 5y ago
  I think we've fairly well established that the complexity of the code isn't the problem. The IRS knows what you owe and could just tell you if they wanted to. Having citizens exposed directly to the mechanics of it during the filing process is a policy choice and the way to fix that is to change the policy, not try to reinvent the tax code from first principles. This is a complex set of laws yes but it is also detailed multi-generational documentation of all the shit people have tried to pull. You don't just throw that out because it has grown complex. Like all necessary complexity, you isolate and manage it, not spray it all over the end user.
  - thaumasiotes 5y ago
    > I think we've fairly well established that the complexity of the code isn't the problem. The IRS knows what you owe and could just tell you if they wanted to. The IRS has no way to know which of your expenditures are tax-deductible.
    - jonathankoren 5y ago
      If you think you can do better than the standard deductions, you’re more than welcome to itemize — just like today. Pretending that the current system is as good as it can get the for the vast majority of individuals is disingenuous. Just look at every other country that sends out prefilled forms.
      - thaumasiotes 5y ago
        If you're taking the standard deduction, preparing your taxes is already the simple affair everyone says it should be.
        toast0 5y ago
        Eh, you can take the standard deduction and the foreign tax credit or any of a bunch of other things that don't always have great information on forms. A whole lot of preparing a tax return is plugging in numbers from forms that are sent to you and the IRS. It would be simpler (but perhaps less timely) if the IRS sent the taxpayer the return and if you disagreed, you could send in an ammended form with any documentation, or just pay the bill/cash the check.
- wolverine876 5y ago
  > if the tax code were a few dozen pages for the common case instead of a few hundred Isn't this the fantasy of clean sheet software? 'We'll get rid of all this cruft and make it clean and simple.' But it turns out that the cruft is needed to deal with reality, which is messy rather than the abstract clean-room requirements of our imaginations. I can't see how the tax code can be short, having to deal with such a wide range of situations. Has anyone every successfully used a tax code like the short, simple ones that people fantasize about?
  - IG_Semmelweiss 5y ago
    yes. I believe a baltic country (Slovakia) taxes flat tax rates. https://taxfoundation.org/flat-tax-lessons-slovakia https://taxfoundation.org/flat-tax-lessons-slovakia https://accace.com/tax-guideline-for-slovakia/ https://accace.com/tax-guideline-for-slovakia/
    - rags2riches 5y ago
      (Slovakia is a Central European country, far from Baltic.) But all three of Estonia, Latvia and Lithuania also have pretty flat tax rates I believe. Not sure about deductions and other details.
  - throw10920 5y ago
    > Isn't this the fantasy of clean sheet software? 'We'll get rid of all this cruft and make it clean and simple.' But it turns out that the cruft is needed to deal with reality, which is messy rather than the abstract clean-room requirements of our imaginations. The fantasy is that the software can be made completely clean and simple because there are no edge cases. The reality is that it can be made less terrible by reworking complex parts of the design that were slowly hacked into place over time, and by eliminating technical debt. The fact that the ideal is unobtainable is irrelevant to the fact that there are still concrete, worthwhile, and necessary improvements to be made. If your perspective on taxes were applied to software engineering, then most large projects would have collapsed by now. > I can't see how the tax code can be short, having to deal with such a wide range of situations. Not "short", but short-er than the 74,000 pages that it currently is. And, it's already dealing with a wide range of situations by simply compressing the feature-space down a lot, so one way of making it simpler is to compress it down even more. For instance, you could eliminate a bunch of individual rules that reduce effective taxes for low-income earners, and then just reduce the tax rate at that bracket.
wolverine876 5y ago
The GOP opposes it; they are the obstacle. I think such actions by the GOP has become normalized for people, and so they overlook it. I don't see how you can blame the Democrats, who are voting for it. > If it was priority for the Dems, they'd have done it. Easily said, but as we know, not easily done.
- ThunderSizzle 5y ago
  https://www.opensecrets.org/political-action-committees-pacs/intuit-inc/C00361741/summary/2022 https://www.opensecrets.org/political-action-committees-pacs... https://www.opensecrets.org/political-action-committees-pacs/h-r-block/C00188177/summary/2022 https://www.opensecrets.org/political-action-committees-pacs... Seems like the donations are pretty evenly split for the companies that would be the largest lobbies over the past several years. This seems like the case of the uniparty being apparent, where there's no real drive to simplify the tax code because it's something both can blame each other on when nothing is done. Of course, this was the entire point of the TEA Party (which later became manifested as MAGA), which was mainly a conservative movement, so it manifested inside the GOP, but the GOP RINOs in Congress did nothing.
  - wolverine876 5y ago
    Despite your hypothesis, the evidence is that the Democrats vote for it, and the GOP against it.
    - ThunderSizzle 5y ago
      I haven't seen the Dems get into law a significant simplification of the tax code in the last 20 years. The last simplification we got was from Trump (which was a good step, but obviously isn't the final desired location). He also did that before the Dems took back the House, so he had the GOP sign on to it.
ArnoVW 5y ago
You're not wrong in saying that tax codes in general are complex. The problem is, they're complex for a reason. Tax codes are a tool of policy makers. They allow wealth and income distribution. They allow compensation. And they allow policy makers to promote or penalize specific behaviors or activities. Look at the legal system as a code base (in French, 'law' translates to 'code'). And imagine having 538 product owners, each asking for 'just one feature' that is both 'critical and urgent'. Is it any wonder that we are in this situation? Perhaps we should implement more sunset provisions? I don't know. But 'we need a simpler system' is sort of like 'we have too many LoC'. It's true, but not easily actionable.
- Dracophoenix 5y ago
  >Tax codes are a tool of policy makers. Therein the problem lies. >They allow wealth and income distribution. They allow compensation. And they allow policy makers to promote or penalize specific behaviors or activities. Robbing Peter to pay Paul is not a good reason to tax. Taxation should be decided by the whims of a crab bucket. >Look at the legal system as a code base (in French, 'law' translates to 'code'). And imagine having 538 product owners, each asking for 'just one feature' that is both 'critical and urgent'. Is it any wonder that we are in this situation? We're in this situation because most of congressmen believe they have the right to impose their morals on and the expense of thst individual men and women by way of legislative fiat. >Perhaps we should implement more sunset provisions? I don't know. But 'we need a simpler system' is sort of like 'we have too many LoC'. It's true, but not easily actionable. It is actionable. Politicians, however, are usually ignorant of tax law until there comes a point where the "wrong" people "win" too much. That is the issue in what should mostly be an administrative affair, if it should at all occur. The people who complicate the tax do not code lack the wherewithal to simplify it. Their feigned weakness and indifference is a choice.
- furyg3 5y ago
  Yes, but we all know that business rules and logic can be very complex, but you can still simplify the interface for the vast majority of users. The IRS collects tax information from most businesses with employees, banks and investment firms, so it's is comically easy to pre-load that information in a tax return. Ask a few simple questions (did you buy a house, did you start a business, do you have a new dependent). Pre-fill what you can. Generate a report which you can directly file or share with your tax expert. Many developed countries do this. While this (correctly) tanks an entire industry of tax preparation software, it actually makes it easier for politicians to do their thing. Right now a tax break for X is buried under form 92921X2 which you learn about after reading the instructions for line 48 on schedule 8812 which you are filling in after being told to in the supplementary instructions for line 21 on your 1099. If you elected to use the alternative streamlined maximum option, of course, if you chose for the default minimum compensation model, well, those are different forms. With a properly made simple official tax filing process, you just see you got an extra $400 back this year because of the tax break for X.
tzs 5y ago
> Even simpler yet would be to go to a flat tax with an extremely high standard deduction (e.g. ~$50k with ~10% after that). That's not a flat tax. That is a progressive tax with two brackets. Once you have accepted that progressive taxes are acceptable, it is hard to see why two brackets is better than three, or 4, or even dozens. One might argue that two brackets is simpler than say 10 brackets, but that is a very weak argument since it is just a table lookup, and nobody can argue with a straight face that a 10 line table is too complicated. An interesting exercise is to consider what it would be like if instead of a single tax to cover everything funded by income tax we did a two bracket progressive tax for each budget item separately, with the taxes applied serially. By applied serially I mean that the taxable income for tax N+1 is what is left after you have paid tax N. You then end up with a progressive tax with N+1 brackets where N are the number of budget items (and then you would have a table big enough that it would arguable be complicated!). If you keep the same total budget but divide the budget items into smaller subitems, your tax curve approaches a continuous curve which represents a progressive tax with an infinite number of infinitely small brackets. I remember working out the equation for that curve once, and finding the result mathematically satisfying, but I've totally forgotten what it was.
- ThunderSizzle 5y ago
  > Once you have accepted that progressive taxes are acceptable. . .nobody can argue with a straight face that a 10 line table is too complicated. First, I don't think anyone should pay taxes on their labor. And just because my labor makes more shouldn't mean I pay a higher percentage; so, no, I don't agree with the concept of progressive taxation on labor. Regardless, that's what we have. Anyway, 10% after $50,000 is dead simple. e.g. make $120,000 as a family, take away $100,000, left with $20,000, I pay $2,000. Real tax rate is only 1.6%, so maybe that's too nice for the American family? You can change it to 15% after $25,000 and it's still simpler. $120k-$50k=$70k x .15=$10.5k or 8.75% real tax rate, all without worrying about IRAs, 401ks, HSAs, etc. With a 6-12 tax brackets with crazy amount of deductions, I need to: 1) calculate taxable income. This is some func of deductions. i.e. standard deduction ($25k) + max 401k ($20k) brings taxable income to $75,000. There's other deductions such as IRAs, HSAs, 529, etc; all with their own maxes based on various criterias and income, which has it's own list of gotchas that screw over people. Hopefully you didn't forget a deduction on top of all that. 2) Now determine tax rate. 22%. Feels bad, but whatever -nearly a quarter of your income (nominally, at least) to finance the debt to keep inflation going. The graph says ~$4,800+22% of anything over ~$42,000. Alright. So $4,800+(22% x $33,000)=$12,060 are taxes owed. 3) Now determine your credits, if any. Such as a child credit. I hope you know your credits, because you might've forgot about a tax credit for something you bought. Let's assume you know you get $3600 for a toddler, and put that in. Now your $12,000 is $8,400. 4) Ensure your paid taxes is correct. You paid throughout the year, adds up to ~$8000. So taxes due are now $400. 5) Now you go to pay $400. Welp. Now you need to pay $50 because you decided you wanted to buy a stock that gave you $10 in dividends in a brokerage account, and now you can no longer free file. But you don't want to be audited, so you report the $10 and pay the $50. Yeah, that's very simple and straight forward. But good news is the actual tax rate is actually only 7%, even though you felt like you just paid nearly 22%, wasted hours of your life, and were insulted with an additional fee just to pay your taxes.