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Why do Americans have to pay much to file their tax returns when the IRS knows?

38 points by Goety 5y ago

atlasunshrugged 5y ago
Answered in the subtitle of the article: "Filing taxes could be free and easy, but tax-prep companies and antitax politicians have fought to make it expensive, complicated and annoying."
1123581321 5y ago
Given the existence of totally free federal and state e-filing options, the situation is analogous to bemoaning sales of Coke when generic soda exists, and hoping that government soda will put Coke out of business. Now that consumers are not inhibited, what remains is a marketing problem.
- doublepg23 5y ago
  As someone with not a lot of income who would prefer to maximize their return where are theses free e-filing options?
  - 1123581321 5y ago
    I would start with Cash App Tax, formerly CreditKarma free tax software. Depending on your income you might also be able to use MyFreeTaxes, a United Way initiative.
  - javagram 5y ago
    https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...
exabrial 5y ago
The better question is, why do we pay such extreme taxes in the first place? A lot of state/local budgets seems to be well kept, but the federal budget is essentially cash incineration.
- zerocrates 5y ago
  Americans pay quite low taxes relative to other countries. There's clearly plenty of waste and poor spending in the federal budget, though there's wide-ranging disagreement on which parts are the wasteful ones.
nonamenoslogan 5y ago
My wife and I file pretty standard forms every year--no complicated deductions, only 2-3 W2s, maybe a couple 1099s and a 1098-E. For the first few years of our marriage, I did taxes by hand as a point of pride and enjoyed it (yeah, I know--most say yuck). Around 2006ish, I got a copy of TurboTax in a bundle with my first MacBook Pro and I've never looked back. It's absolutely worth it to me for $40 to me for the ease of e-filing, standardized output with all worksheets and forms, and speed of return via direct deposit. I get $40 is a lot to some people and tbh, I fully support a sliding percentage tax system with NO returns, but the vast majority of people get a return anyway, why not count the $40 out of it to be sure your returns were done right? Oh, and yea, I still quite enjoy tax-night when I get to sit down with my reciepts and 109x's and file, though I will say I always mail my state returns in to avoid the additional $20 fee for e-file.
- DiabloD3 5y ago
  Except you're paying $40 to a company that prevents you from having what every other modern western country has: $0, and the government did it for you. They stole your $40 every year and used it to lobby Congress.
  - Gortal278 5y ago
    You can do your taxes for free, it's just a total pita because the tax code is complicated.
  - nonamenoslogan 5y ago
    We have a TON of this kind of catch-22 in the US. Capitalism and all; you can choose the free complicated way or the not-free easy way. You’re still free to complain about either. If I had my way, we’d do a progressive flat-tax; going as high as 75% for anyone making more than 1 million a year with NO returns or deductions whatsoever—-I’m sure you’d happily call me a socialist dunce if I proposed that though.
    - lp0_on_fire 5y ago
      > If I had my way, we’d do a progressive flat-tax; going as high as 75% for anyone making more than 1 million a year with NO returns or deductions whatsoever "Progressive flat tax" Those two things are the opposite of each other.
potamic 5y ago
What thoughts on doing away with income tax altogether? There is already tax on sales. No reason to have tax on source as well. Tiered tax rates based on how much you're buying or how many things you're buying can allow taxing less from the poor. The government should easily be able to structure it so that their net revenue is more or less same. Imagine the amount of overhead and inefficiencies that can be eliminated altogether.
- iggldiggl 5y ago
  > Tiered tax rates based on how much you're buying or how many things you're buying can allow taxing less from the poor. What, so now the government needs to track all my spending in order to figure out my tax rate? No, thank you. Or like the Illinois progressive sales tax experiment of 1977? That's just plain silly¹. ¹ And admittedly not a real occurrence – look up The Pale King by David Foster Wallace.
rufus_foreman 5y ago
How would the IRS know? Are they keeping track of whether I got married or divorced, or had a kid, or a death in the family, or a disability? Of whether I bought or sold a house, took out a HELOC, or started a home office, or installed solar panels? Are they keeping track of whether I sold something for $5 on eBay, or of how much my sales tax was for groceries, even when I pay in cash? Do they have a file keeping track of my charitable contributions? If I'm a teacher who uses their own money to pay for classroom supplies, the IRS already knows this? They know whether the kids are at day care when I'm working? They know how much I spent on medical costs during the year? Whether I took a college class? To the extent the IRS knows, I would consider that a bad thing.

38 points by Goety 5y ago

Answered in the subtitle of the article: "Filing taxes could be free and easy, but tax-prep companies and antitax politicians have fought to make it expensive, complicated and annoying."

1123581321 5y ago

Given the existence of totally free federal and state e-filing options, the situation is analogous to bemoaning sales of Coke when generic soda exists, and hoping that government soda will put Coke out of business. Now that consumers are not inhibited, what remains is a marketing problem.

doublepg23 5y ago
As someone with not a lot of income who would prefer to maximize their return where are theses free e-filing options?
- 1123581321 5y ago
  I would start with Cash App Tax, formerly CreditKarma free tax software. Depending on your income you might also be able to use MyFreeTaxes, a United Way initiative.
- javagram 5y ago
  https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...

exabrial 5y ago

The better question is, why do we pay such extreme taxes in the first place? A lot of state/local budgets seems to be well kept, but the federal budget is essentially cash incineration.

zerocrates 5y ago
Americans pay quite low taxes relative to other countries. There's clearly plenty of waste and poor spending in the federal budget, though there's wide-ranging disagreement on which parts are the wasteful ones.

nonamenoslogan 5y ago

My wife and I file pretty standard forms every year--no complicated deductions, only 2-3 W2s, maybe a couple 1099s and a 1098-E. For the first few years of our marriage, I did taxes by hand as a point of pride and enjoyed it (yeah, I know--most say yuck). Around 2006ish, I got a copy of TurboTax in a bundle with my first MacBook Pro and I've never looked back. It's absolutely worth it to me for $40 to me for the ease of e-filing, standardized output with all worksheets and forms, and speed of return via direct deposit. I get $40 is a lot to some people and tbh, I fully support a sliding percentage tax system with NO returns, but the vast majority of people get a return anyway, why not count the $40 out of it to be sure your returns were done right? Oh, and yea, I still quite enjoy tax-night when I get to sit down with my reciepts and 109x's and file, though I will say I always mail my state returns in to avoid the additional $20 fee for e-file.

DiabloD3 5y ago
Except you're paying $40 to a company that prevents you from having what every other modern western country has: $0, and the government did it for you. They stole your $40 every year and used it to lobby Congress.
- Gortal278 5y ago
  You can do your taxes for free, it's just a total pita because the tax code is complicated.
- nonamenoslogan 5y ago
  We have a TON of this kind of catch-22 in the US. Capitalism and all; you can choose the free complicated way or the not-free easy way. You’re still free to complain about either. If I had my way, we’d do a progressive flat-tax; going as high as 75% for anyone making more than 1 million a year with NO returns or deductions whatsoever—-I’m sure you’d happily call me a socialist dunce if I proposed that though.
  - lp0_on_fire 5y ago
    > If I had my way, we’d do a progressive flat-tax; going as high as 75% for anyone making more than 1 million a year with NO returns or deductions whatsoever "Progressive flat tax" Those two things are the opposite of each other.

potamic 5y ago

What thoughts on doing away with income tax altogether? There is already tax on sales. No reason to have tax on source as well. Tiered tax rates based on how much you're buying or how many things you're buying can allow taxing less from the poor. The government should easily be able to structure it so that their net revenue is more or less same. Imagine the amount of overhead and inefficiencies that can be eliminated altogether.

iggldiggl 5y ago
> Tiered tax rates based on how much you're buying or how many things you're buying can allow taxing less from the poor. What, so now the government needs to track all my spending in order to figure out my tax rate? No, thank you. Or like the Illinois progressive sales tax experiment of 1977? That's just plain silly¹. ¹ And admittedly not a real occurrence – look up The Pale King by David Foster Wallace.

rufus_foreman 5y ago

How would the IRS know? Are they keeping track of whether I got married or divorced, or had a kid, or a death in the family, or a disability? Of whether I bought or sold a house, took out a HELOC, or started a home office, or installed solar panels? Are they keeping track of whether I sold something for $5 on eBay, or of how much my sales tax was for groceries, even when I pay in cash? Do they have a file keeping track of my charitable contributions? If I'm a teacher who uses their own money to pay for classroom supplies, the IRS already knows this? They know whether the kids are at day care when I'm working? They know how much I spent on medical costs during the year? Whether I took a college class? To the extent the IRS knows, I would consider that a bad thing.