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It's funny that, with the importance of tax to government revenue, why do governments not make a habit of funding/creating really high quality tax software for

It's funny that, with the importance of tax to government revenue, why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? Increases in collection efficiency have historically been associated with growth of the state coffers (and state's whose bureacracies failed to adequately capture tax had to resort to funding themselves in other ways, frequently in the past through "expansionist tendencies", ie, war--for territory, resources etc...which then only works if you can pay for soldiers and equipment). Not that governments seem great at making software (in general), but with something so critical, a focus on this seems like a "sort of" low-hanging fruit...

wildmanx 5y ago
> It's funny that, with the importance of tax to government revenue, why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? Because there is a strong lobby that prevents it. 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... Money has too strong a foothold in American politics. (In other countries too, but especially in the land of the free.)
- graderjs 5y ago
  Ah yes I heard about this tax software lobby before. It's weird in this case since it's like "money fighting money" haha
- alistairSH 5y ago
  Not just the “TurboTax” lobby, but also a strong contingent of anti-tax conservatives. One of their approaches to gain sympathy to their cause is to keep making taxes hard. If taxes are hard, the general population will want less of them.
  - JackFr 5y ago
    That's not fully true. There is also a contingent of people who like to use the the tax code as a mechanism of policy apart from efficient collection of revenue. Tax credits for education, clean energy, penalties, small businesses, mortage interest, each one of those one-off changes adds complexity, and in total ultimately can make the process dramatically more difficult.
    - samatman 5y ago
      While all of this is true, other countries have a system where the government tells you what tax they believe you owe, and provide the details of how they reached this number. The citizen can either pay that number, or offer amendments to the details which imply a lower rate (or higher if you're a masochist, I suppose). That's independent of the complexity of how that number is derived, and in balance I would rather the US (as a citizen thereof) use this sort of system than the one we happen to have.
      - yencabulator 5y ago
        One thing to add: You're typically still obligated to file a return if the prepared taxes are not correct. You're not "off the hook" in any way by accepting what the prepared statement says. This mostly bites e.g. entrepreneurs with more complicated taxes, especially if you filed for an extension on the business side.
    - rtkwe 5y ago
      In the US that's mostly because that's the biggest lever the Federal government has to pull. The power to legislate things within states directly is mostly devolved to the states so Congress mostly has the tax code to point a firehose of money to incentivize things. It's why the Affordable Care Act hinged on the individual mandate initially, all the regulation of healthcare legally depended on the existence of a tax to put it in Congress's legal authority.
    - wildmanx 5y ago
      > There is also a contingent of people who like to use the the tax code as a mechanism of policy apart from efficient collection of revenue. There is nothing inherently wrong with that. Whether you do or do not agree is a different question. It's interesting to look at different cultures: The Swedish word for "tax" is "skatt", which literally means "treasure". Historically it was part of the treasure to be collected by the monarch and other people in power. So, not really a way to cover government expenses, but for somebody in power to enrich themselves further. Luckily, the country has moved on from that, just kept the word (and the king). The German word for "tax" is "steuer", which literally means "to steer". That makes it clear that those fees are not just collected to finance government expenses but to even steer society in a certain direction, i.e., what you mean with policy.
refurb 5y ago
Not sure how software is going to always find "...credit card fraud, internal theft, mis-priced items, mistakes....". I don't care how good AI in finding tumors in x-rays is, I still want a set of skilled eyes to confirm findings. It's the same reason I double check all my paychecks to make sure I'm paid the right amount and the deductions are correct. All of it's automated on the backend, but it's still my money and worth double-checking.
- graderjs 5y ago
  No I wasn't thinking it's a replacement, not 'directly' replying to the ancestor, just riffing on the idea. :)
HWR_14 5y ago
> why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? They do. We can leave aside the practice in many European countries to compute your income taxes for you, based on reporting by your employer and financial services. Even in the US, high quality software is provided for sales tax compliance. In fact, according to the Supreme Court, the presence of that software is one of the main reason they overturned their "no interstate online sales tax" decision in 2018. One reason was > Streamlined Sales and Use Tax Agreement. This system standardizes taxes to reduce administrative and compliance costs: It requires a single, state-level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules. It also provides sellers access to sales tax administration software paid for by the State. Sellers who choose to use such software are immune from audit liability. Which, I guess to return to the point we set aside, is because companies can lobby for public software for their benefit, but tax prep companies can lobby against public software for their benefit.
wil421 5y ago
I have enough experience with local and federal government that there is no way I want them to build any kind of software. Much less a complicated tax software. It might work in the EU but in the US there’s state/county/municipality taxes that can get quite complicate. My zip code has a small area in my county and my county is at a 6% tax rate. Most of the zip code is another county that has a %7.5 tax rate. I have to double check large online purchases just to make sure it’s correct. Almost every place shows the wrong tax at checkout due to using my zip but’s it’s always fixed when my card is actually charged. Most people are using SAP or Oracle to do this kind of thing because they already know the ins and outs of tax locales.
- YawningAngel 5y ago
  If the tax law is so complex that the government can't correctly implement tax software, how is the government going to collect the taxes?
  - SteveNuts 5y ago
    They pour the resources and money into the enforcement side instead of the collection side.
  - snovv_crash 5y ago
    It's often easier to evaluate compliance than it is to engineer a compliant system.
  - sokoloff 5y ago
    The software would have to work everywhere. The tax collections (review/enforcement, really) process only has to work in one place. Tax law in one place is usually clear enough; the complexity is in the aggregate. My state doesn’t have to give a rip that NYC has a city surtax on this but not that, or that some other jurisdiction treats clothing items up to $100 as non-taxable while we put the limit at $175.
  - wil421 5y ago
    The federal government is only one part of it. States, counties, and cities can also impose their own income taxes or sales tax. Or like Florida they can choose not to have an income tax. I suppose that would be like asking the EU commission to provide tax software for all its member states.
giaour 5y ago
> why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? In the US, jurisdictional/funding issues are the biggest blocker. There is no federal sales tax, so the IRS can't use its budget to pay for this. State agencies are not going to be able to use their funds to pay developers to add functionality for a different jurisdiction, and ditto for counties/cities/special districts, which tend to have much smaller budgets anyways. The best avenue would probably be something like ITOR (the funds that give USDS its wide remit to help any gov agency with their tech needs), but states and localities aren't always open to receiving this kind of help. (It did happen with unemployment programs during the pandemic, but the lawyers had to lawyer pretty hard to make that possible.)
- giaour 5y ago
  That said, congress could fund this tomorrow if they wanted. Budgetary concerns apply to executive actions in this arena, but the whole idea sounds like it's necessary and proper for smooth interstate commerce.
dikaio 5y ago
Government made software… I imagine yearly or bi-yearly updates, horrendous UI/UX, count me out.
- chrissnell 5y ago
  That’s honestly only a small part of why I would never want this. More significant, for me, is that this TaxSoftware.gov idea would mean literally thousands more employees on the government payroll, being ineffectual, slow, and bureaucratic. And when their government career is finally over, those people will all take home government pensions, as will their future replacements. Once you create more government, it will never end and will never go away. “The only thing government is good at is creating more government.” - P.J. O’Rourke

wildmanx 5y ago

> It's funny that, with the importance of tax to government revenue, why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? Because there is a strong lobby that prevents it. 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... Money has too strong a foothold in American politics. (In other countries too, but especially in the land of the free.)

graderjs 5y ago
Ah yes I heard about this tax software lobby before. It's weird in this case since it's like "money fighting money" haha
alistairSH 5y ago
Not just the “TurboTax” lobby, but also a strong contingent of anti-tax conservatives. One of their approaches to gain sympathy to their cause is to keep making taxes hard. If taxes are hard, the general population will want less of them.
- JackFr 5y ago
  That's not fully true. There is also a contingent of people who like to use the the tax code as a mechanism of policy apart from efficient collection of revenue. Tax credits for education, clean energy, penalties, small businesses, mortage interest, each one of those one-off changes adds complexity, and in total ultimately can make the process dramatically more difficult.
  - samatman 5y ago
    While all of this is true, other countries have a system where the government tells you what tax they believe you owe, and provide the details of how they reached this number. The citizen can either pay that number, or offer amendments to the details which imply a lower rate (or higher if you're a masochist, I suppose). That's independent of the complexity of how that number is derived, and in balance I would rather the US (as a citizen thereof) use this sort of system than the one we happen to have.
    - yencabulator 5y ago
      One thing to add: You're typically still obligated to file a return if the prepared taxes are not correct. You're not "off the hook" in any way by accepting what the prepared statement says. This mostly bites e.g. entrepreneurs with more complicated taxes, especially if you filed for an extension on the business side.
  - rtkwe 5y ago
    In the US that's mostly because that's the biggest lever the Federal government has to pull. The power to legislate things within states directly is mostly devolved to the states so Congress mostly has the tax code to point a firehose of money to incentivize things. It's why the Affordable Care Act hinged on the individual mandate initially, all the regulation of healthcare legally depended on the existence of a tax to put it in Congress's legal authority.
  - wildmanx 5y ago
    > There is also a contingent of people who like to use the the tax code as a mechanism of policy apart from efficient collection of revenue. There is nothing inherently wrong with that. Whether you do or do not agree is a different question. It's interesting to look at different cultures: The Swedish word for "tax" is "skatt", which literally means "treasure". Historically it was part of the treasure to be collected by the monarch and other people in power. So, not really a way to cover government expenses, but for somebody in power to enrich themselves further. Luckily, the country has moved on from that, just kept the word (and the king). The German word for "tax" is "steuer", which literally means "to steer". That makes it clear that those fees are not just collected to finance government expenses but to even steer society in a certain direction, i.e., what you mean with policy.

refurb 5y ago

Not sure how software is going to always find "...credit card fraud, internal theft, mis-priced items, mistakes....". I don't care how good AI in finding tumors in x-rays is, I still want a set of skilled eyes to confirm findings. It's the same reason I double check all my paychecks to make sure I'm paid the right amount and the deductions are correct. All of it's automated on the backend, but it's still my money and worth double-checking.

graderjs 5y ago
No I wasn't thinking it's a replacement, not 'directly' replying to the ancestor, just riffing on the idea. :)

HWR_14 5y ago

> why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? They do. We can leave aside the practice in many European countries to compute your income taxes for you, based on reporting by your employer and financial services. Even in the US, high quality software is provided for sales tax compliance. In fact, according to the Supreme Court, the presence of that software is one of the main reason they overturned their "no interstate online sales tax" decision in 2018. One reason was > Streamlined Sales and Use Tax Agreement. This system standardizes taxes to reduce administrative and compliance costs: It requires a single, state-level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules. It also provides sellers access to sales tax administration software paid for by the State. Sellers who choose to use such software are immune from audit liability. Which, I guess to return to the point we set aside, is because companies can lobby for public software for their benefit, but tax prep companies can lobby against public software for their benefit.

wil421 5y ago

I have enough experience with local and federal government that there is no way I want them to build any kind of software. Much less a complicated tax software. It might work in the EU but in the US there’s state/county/municipality taxes that can get quite complicate. My zip code has a small area in my county and my county is at a 6% tax rate. Most of the zip code is another county that has a %7.5 tax rate. I have to double check large online purchases just to make sure it’s correct. Almost every place shows the wrong tax at checkout due to using my zip but’s it’s always fixed when my card is actually charged. Most people are using SAP or Oracle to do this kind of thing because they already know the ins and outs of tax locales.

YawningAngel 5y ago
If the tax law is so complex that the government can't correctly implement tax software, how is the government going to collect the taxes?
- SteveNuts 5y ago
  They pour the resources and money into the enforcement side instead of the collection side.
- snovv_crash 5y ago
  It's often easier to evaluate compliance than it is to engineer a compliant system.
- sokoloff 5y ago
  The software would have to work everywhere. The tax collections (review/enforcement, really) process only has to work in one place. Tax law in one place is usually clear enough; the complexity is in the aggregate. My state doesn’t have to give a rip that NYC has a city surtax on this but not that, or that some other jurisdiction treats clothing items up to $100 as non-taxable while we put the limit at $175.
- wil421 5y ago
  The federal government is only one part of it. States, counties, and cities can also impose their own income taxes or sales tax. Or like Florida they can choose not to have an income tax. I suppose that would be like asking the EU commission to provide tax software for all its member states.

giaour 5y ago

> why do governments not make a habit of funding/creating really high quality tax software for businesses/individuals to use? In the US, jurisdictional/funding issues are the biggest blocker. There is no federal sales tax, so the IRS can't use its budget to pay for this. State agencies are not going to be able to use their funds to pay developers to add functionality for a different jurisdiction, and ditto for counties/cities/special districts, which tend to have much smaller budgets anyways. The best avenue would probably be something like ITOR (the funds that give USDS its wide remit to help any gov agency with their tech needs), but states and localities aren't always open to receiving this kind of help. (It did happen with unemployment programs during the pandemic, but the lawyers had to lawyer pretty hard to make that possible.)

giaour 5y ago
That said, congress could fund this tomorrow if they wanted. Budgetary concerns apply to executive actions in this arena, but the whole idea sounds like it's necessary and proper for smooth interstate commerce.

dikaio 5y ago

Government made software… I imagine yearly or bi-yearly updates, horrendous UI/UX, count me out.

chrissnell 5y ago
That’s honestly only a small part of why I would never want this. More significant, for me, is that this TaxSoftware.gov idea would mean literally thousands more employees on the government payroll, being ineffectual, slow, and bureaucratic. And when their government career is finally over, those people will all take home government pensions, as will their future replacements. Once you create more government, it will never end and will never go away. “The only thing government is good at is creating more government.” - P.J. O’Rourke