4 ms·

Taking a step back... one big problem is that our tax code is way too complex. It means that even common people are wading through a minefield every time they f

Taking a step back... one big problem is that our tax code is way too complex. It means that even common people are wading through a minefield every time they file their taxes. Between unclear deductions and credits, trickiness for those that have to pay estimated taxes, and a mafia led by Intuit lobbying against simple filing it's definitely a pay to play system. More broadly, our tax code is designed to benefit the uber wealthy. High $$$ assets can be sold through holding companies, etc. making enforcement extremely difficult. Phone lines being flooded seem more of a symptom than anything.

ch4s3 2y ago
Yeah, it's amazing that most audits seem to be for misfiling for the Earned Income Tax Credit.
janalsncm 2y ago
There’s a good book “The Dictator’s Handbook” that proposed the Selectorate Theory that explains this, among other things. The complex tax code is a feature, not a bug. And I don’t just mean that Intuit is profiting off of the complexity, although that is also true. Politicians care about staying in office, rewarding their supporters, and maybe implementing prosocial policies. In that order. So tax cuts for the wealthy aren’t because they think it’s good for the economy, they are kickbacks for support. Every single tax deduction and carve out is a reward to the winning coalition at a particular time. We see this with farm subsidies, which are more of a vestige at this point, but at one time farmers were an important demographic. When politicians get into office they reward their supporters. The book is a lot better than I am at explaining it all, so I recommend reading it or watching the Rules for Rulers video on YouTube.
- nebula8804 2y ago
  All of this is enabled by the ability to print money and not have the painful consequences that other countries have to deal with. What happens when this is no longer the case? All this old cruft (farm bill for example) will cause a collapse. What would that even look like?
  - judge2020 2y ago
    > old cruft I don't see it as old cruft, farming still exists and buying their block is important.
    - nebula8804 2y ago
      Subsidizing farmers to grow garbage that makes people unhealthy or provides a inefficient fuel that nobody wants is probably the clearest definition of cruft. That what the subsidies do. They enable production of unprofitable crops like corn and soybeans. Then the farmers turn around and vote against the interests of the majority of the country. Its is a clear motivator of eventual collapse.
  - janalsncm 2y ago
    These principles are still true in countries that don’t control their currency. In fact being bankrupt is one of the most guaranteed ways of losing power. The issue is, any politician who says they’re going to spend less and tax more will lose to the guy who says not to worry about it. That’s why every government loves increasing the national debt.
mywittyname 2y ago
> It means that even common people are wading through a minefield every time they file their taxes. According to the IRS, 87% of people take a standard deduction. There's really no minefield there. So long as you don't lie about how many children you have or any sort of tax credits you're applying for, it's dead simple. And worst case, if you mess something up, the IRS already knows the right answer and will send you a letter correcting your mistake or asking for proof. The complexity is mostly for businesses, with a little bit of it being tax-free savings vectors like IRAs, 509, HSAs, etc. But even those are largely streamlined. So really, it's an 80/20 thing, 80% of the complexity effects 20% of tax paying entities. And certainly those 20% don't want a "simplified" tax code if that means losing out on the money they save by dealing with the complexity.
- deleted 2y ago
  [deleted]
wwweston 2y ago
This sounds a lot like “this codebase is too complex, probably because the last developers weren’t very good, we don’t need all these code branches and special cases, they’re just making it messy, it’s time for something simpler and cleaner” stuff that precedes the often underwhelming rewrite efforts that devs get sucked into. I’m sure it’s possible to improve tax policy but that’d happen through specific conversation about how dynamics from specific relevant pieces of the tax code play out vs how they could play out, not through general judgements like “too complex” that are basically vibes-based.

ch4s3 2y ago

Yeah, it's amazing that most audits seem to be for misfiling for the Earned Income Tax Credit.

janalsncm 2y ago

There’s a good book “The Dictator’s Handbook” that proposed the Selectorate Theory that explains this, among other things. The complex tax code is a feature, not a bug. And I don’t just mean that Intuit is profiting off of the complexity, although that is also true. Politicians care about staying in office, rewarding their supporters, and maybe implementing prosocial policies. In that order. So tax cuts for the wealthy aren’t because they think it’s good for the economy, they are kickbacks for support. Every single tax deduction and carve out is a reward to the winning coalition at a particular time. We see this with farm subsidies, which are more of a vestige at this point, but at one time farmers were an important demographic. When politicians get into office they reward their supporters. The book is a lot better than I am at explaining it all, so I recommend reading it or watching the Rules for Rulers video on YouTube.

nebula8804 2y ago
All of this is enabled by the ability to print money and not have the painful consequences that other countries have to deal with. What happens when this is no longer the case? All this old cruft (farm bill for example) will cause a collapse. What would that even look like?
- judge2020 2y ago
  > old cruft I don't see it as old cruft, farming still exists and buying their block is important.
  - nebula8804 2y ago
    Subsidizing farmers to grow garbage that makes people unhealthy or provides a inefficient fuel that nobody wants is probably the clearest definition of cruft. That what the subsidies do. They enable production of unprofitable crops like corn and soybeans. Then the farmers turn around and vote against the interests of the majority of the country. Its is a clear motivator of eventual collapse.
- janalsncm 2y ago
  These principles are still true in countries that don’t control their currency. In fact being bankrupt is one of the most guaranteed ways of losing power. The issue is, any politician who says they’re going to spend less and tax more will lose to the guy who says not to worry about it. That’s why every government loves increasing the national debt.

mywittyname 2y ago

> It means that even common people are wading through a minefield every time they file their taxes. According to the IRS, 87% of people take a standard deduction. There's really no minefield there. So long as you don't lie about how many children you have or any sort of tax credits you're applying for, it's dead simple. And worst case, if you mess something up, the IRS already knows the right answer and will send you a letter correcting your mistake or asking for proof. The complexity is mostly for businesses, with a little bit of it being tax-free savings vectors like IRAs, 509, HSAs, etc. But even those are largely streamlined. So really, it's an 80/20 thing, 80% of the complexity effects 20% of tax paying entities. And certainly those 20% don't want a "simplified" tax code if that means losing out on the money they save by dealing with the complexity.

deleted 2y ago
[deleted]

wwweston 2y ago

This sounds a lot like “this codebase is too complex, probably because the last developers weren’t very good, we don’t need all these code branches and special cases, they’re just making it messy, it’s time for something simpler and cleaner” stuff that precedes the often underwhelming rewrite efforts that devs get sucked into. I’m sure it’s possible to improve tax policy but that’d happen through specific conversation about how dynamics from specific relevant pieces of the tax code play out vs how they could play out, not through general judgements like “too complex” that are basically vibes-based.