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Think about all the information (marital status, dependents, residence, childcare spending, healthcare spending, education spending, charitable contributions, …

Think about all the information (marital status, dependents, residence, childcare spending, healthcare spending, education spending, charitable contributions, …) you need to correctly calculate your taxes owed. Now imagine that the IRS is tasked with maintaining all of this information in a single database so they can send you your “statement”. Folks argue that most of this information is available to some level of government already, but that’s a far cry from centralizing all of it in what by definition must be an easily accessible form. Dramatically simplify the tax code and this approach becomes feasible without being a security and privacy nightmare.

sys_64738 3y ago
> Think about all the information (marital status, dependents, residence, childcare spending, healthcare spending, education spending, charitable contributions, …) you need to correctly calculate your taxes owed. Now imagine that the IRS is tasked with maintaining all of this information in a single database so they can send you your “statement”. There's nothing hard about updating a few values with these then you're done in five minutes. State governments already do simple walkthrough forms and federal is really no different. If you have a complex tax situation then that's your problem to deal with. Don't burden 99.9% of the population with something that should be free, should be simple, and should be fast.
- twoodfin 3y ago
  OK, but now we’re back to “free tax filing”, not “send me a statement”.
  - plemer 3y ago
    Reviewing and editing if needed (often not) is dramatically easier than filling out from scratch, regardless of what you call "free tax filing".
    - refurb 3y ago
      It’s actually not. I lived in a country that filled out the forms. I actually had to dig up pay statements, etc to confirm the information. I’m glad I did because my employer made a mistake on a retirement contribution. So what did it save me? Maybe typing in some numbers, which is probably 5% of the total effort. The issue is the complexity of the tax code. It would be great if the IRS pre-filled forms, but the forms aren’t going away. Many people won’t review the dozen or so pages of forms to make sure they’re correct. No doubt that will favor the IRS, not the tax payer.
xp84 3y ago
This is a bad take in my opinion. First of all, we already have W-4 forms today, where you report your intentions to the government, vis-à-vis married, single, etc — they just need to be updated so that you send it in to the government (a joint one for couples) when you make a change (birth, marriage, divorce, deaths). Most people are not eligible for child care deductions, nor healthcare deductions, other than the ones that come through an employer program which can already be reported to the government without your interaction. Education tax credits are based on 1098(?) forms the government should already have their copy of. Also most people don’t give enough charity to bother with those either. You could log into a website occasionally and upload charity receipts or click through a wizard to apply for a deduction for one of those deductions most people don’t use, but the flow for basically 80% of taxpayers, and essentially 100% of the bottom 70% of earners, should be a quick form update when life changes happen, and a yearly EITC-funded refund check that just shows up.
- twoodfin 3y ago
  This is a lot like the argument that Microsoft’s Office products could be so much simpler: 80% of users use only 20% of the features. But of course everyone in that 80% uses a different 20%. When you consolidate the overlapping deductions, credits, exceptions, exemptions, … you end up with a staggering amount of data required to accurately “pre-compute” income tax bills for even 80% of taxpayers. “Quick form update when life changes happen” is, I think, an overly sanguine way to express a requirement that grieving parents file paperwork with the revenue service when a child has passed. That’s a bit melodramatic, but my point is that centralizing the execution of a complex tax code inside a state bureaucracy creates a perverse relationship with the folks who are supposedly in charge. Once all the calculations are taking place in an opaque, voracious IRS database, what constraint is there on even more complex taxes and exemptions? Your doctor knows you’re a smoker. Should you pay a Medicare surcharge? ACA plan purchasers already do, in contrast with most private employer plan members.
  - xp84 3y ago
    > everyone in that 80% uses a different 20%. No, no they don’t. Because we already have determined what most people use and made a special form for them called 1040EZ. It only offers simple things but is enough for most people. Then there’s the 1040A which goes a few steps further but is still simple. Millions and millions of returns are submitted on these short forms every year. These filers are proving that they don’t need complicated deductions and stuff because they already don’t use them. > grieving parents file paperwork with the revenue service when a child has passed. What are you talking about, in our current system you’d be filing next April and omitting the deceased person from the list of dependents. Your grieving strawmen would be able to take many months to go update the info before the cutoff when they print your check/bill (likely it would be minimum 4 months after year end like it is today). > Once all the calculations are taking place in an opaque, voracious IRS database, what constraint is there on even more complex taxes and exemptions? I don’t really want to talk politics on here, but I think this is a separate battle to fight. The tax system is already ridiculously complex because it’s trying to use the tax system to incentivize/punish behavior and at least two parties/factions have engineered it, so it’s quite confused. All politicians will continue to use this to scam the people who they like less, for the benefit of whoever they like more (campaign contributors) and they obviously don’t mind complexity even when it’s on taxpayers to compute. All things equal I’d rather force a computer to compute it and know that I can’t be audited for not understanding tax code.

sys_64738 3y ago

> Think about all the information (marital status, dependents, residence, childcare spending, healthcare spending, education spending, charitable contributions, …) you need to correctly calculate your taxes owed. Now imagine that the IRS is tasked with maintaining all of this information in a single database so they can send you your “statement”. There's nothing hard about updating a few values with these then you're done in five minutes. State governments already do simple walkthrough forms and federal is really no different. If you have a complex tax situation then that's your problem to deal with. Don't burden 99.9% of the population with something that should be free, should be simple, and should be fast.

twoodfin 3y ago
OK, but now we’re back to “free tax filing”, not “send me a statement”.
- plemer 3y ago
  Reviewing and editing if needed (often not) is dramatically easier than filling out from scratch, regardless of what you call "free tax filing".
  - refurb 3y ago
    It’s actually not. I lived in a country that filled out the forms. I actually had to dig up pay statements, etc to confirm the information. I’m glad I did because my employer made a mistake on a retirement contribution. So what did it save me? Maybe typing in some numbers, which is probably 5% of the total effort. The issue is the complexity of the tax code. It would be great if the IRS pre-filled forms, but the forms aren’t going away. Many people won’t review the dozen or so pages of forms to make sure they’re correct. No doubt that will favor the IRS, not the tax payer.

xp84 3y ago

This is a bad take in my opinion. First of all, we already have W-4 forms today, where you report your intentions to the government, vis-à-vis married, single, etc — they just need to be updated so that you send it in to the government (a joint one for couples) when you make a change (birth, marriage, divorce, deaths). Most people are not eligible for child care deductions, nor healthcare deductions, other than the ones that come through an employer program which can already be reported to the government without your interaction. Education tax credits are based on 1098(?) forms the government should already have their copy of. Also most people don’t give enough charity to bother with those either. You could log into a website occasionally and upload charity receipts or click through a wizard to apply for a deduction for one of those deductions most people don’t use, but the flow for basically 80% of taxpayers, and essentially 100% of the bottom 70% of earners, should be a quick form update when life changes happen, and a yearly EITC-funded refund check that just shows up.

twoodfin 3y ago
This is a lot like the argument that Microsoft’s Office products could be so much simpler: 80% of users use only 20% of the features. But of course everyone in that 80% uses a different 20%. When you consolidate the overlapping deductions, credits, exceptions, exemptions, … you end up with a staggering amount of data required to accurately “pre-compute” income tax bills for even 80% of taxpayers. “Quick form update when life changes happen” is, I think, an overly sanguine way to express a requirement that grieving parents file paperwork with the revenue service when a child has passed. That’s a bit melodramatic, but my point is that centralizing the execution of a complex tax code inside a state bureaucracy creates a perverse relationship with the folks who are supposedly in charge. Once all the calculations are taking place in an opaque, voracious IRS database, what constraint is there on even more complex taxes and exemptions? Your doctor knows you’re a smoker. Should you pay a Medicare surcharge? ACA plan purchasers already do, in contrast with most private employer plan members.
- xp84 3y ago
  > everyone in that 80% uses a different 20%. No, no they don’t. Because we already have determined what most people use and made a special form for them called 1040EZ. It only offers simple things but is enough for most people. Then there’s the 1040A which goes a few steps further but is still simple. Millions and millions of returns are submitted on these short forms every year. These filers are proving that they don’t need complicated deductions and stuff because they already don’t use them. > grieving parents file paperwork with the revenue service when a child has passed. What are you talking about, in our current system you’d be filing next April and omitting the deceased person from the list of dependents. Your grieving strawmen would be able to take many months to go update the info before the cutoff when they print your check/bill (likely it would be minimum 4 months after year end like it is today). > Once all the calculations are taking place in an opaque, voracious IRS database, what constraint is there on even more complex taxes and exemptions? I don’t really want to talk politics on here, but I think this is a separate battle to fight. The tax system is already ridiculously complex because it’s trying to use the tax system to incentivize/punish behavior and at least two parties/factions have engineered it, so it’s quite confused. All politicians will continue to use this to scam the people who they like less, for the benefit of whoever they like more (campaign contributors) and they obviously don’t mind complexity even when it’s on taxpayers to compute. All things equal I’d rather force a computer to compute it and know that I can’t be audited for not understanding tax code.