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The complexity is a feature not a bug. If you have more complexity, you have more opportunities for loopholes. Those loopholes are currently used by those wealt

The complexity is a feature not a bug. If you have more complexity, you have more opportunities for loopholes. Those loopholes are currently used by those wealthy enough to hire creative firms to help them get through them and minimize owed taxes If there’s one outcome I really hope from AI automating work, it’s taking away the advantage the monied class has in this regard. Then perhaps there’s less purpose for the complexity

dennis_jeeves2 1y ago
>The complexity is a feature not a bug. If you have more complexity, you have more opportunities for loopholes. Those loopholes are currently used by those wealthy enough to hire creative firms to help you get through them Agreed that the complexity is a feature but it's not for the rich ( though the rich will take advantage of it, and why not? ) . It's mostly for the powers that be. If there were a 'flat' tax ( and one could argue what constitutes a flat tax) the rich will be more willing to pay that flat tax. I'd say complexity support a very large govt, keeping several people employed including accountants, tax software companies etc. It serves the parasite class.
- deleted 1y ago
  [deleted]
- DiogenesKynikos 1y ago
  The tax brackets are not what make taxes complicated. Knowing how to categorize different types of income is what makes taxes complicated. The flat tax would not make tax preparation any bit easier. They only thing it would do would be to eliminate progressive taxation. In other words, the rich would pay less. The poor would pay more.
  - deleted 1y ago
    [deleted]
  - smcl 1y ago
    This is exactly correct. That said, I'm quite surprised how many people struggle to understand how progressive tax bands/brackets work. It maybe doesn't help that the (right wing) media often portray them dishonestly (i.e. claiming that a 50% tax band starting at $100k/year means you would pay $50k/year in tax if you earn $100k/year)
    - Terr_ 1y ago
      > portray them dishonestly Tangentially, the same motivated-disinformation occurs with Social Security. It's best-understood as an insurance-policy (OASDI is literally named that way) against dying poor and old/orphaned/disabled. With an insurance policy, it's normal for my month's premium to be spent on somebody else's current tragedy, it's normal for me to expect no cash if the Bad Thing never actually happens to me, and it's normal that there's no asset for me to pass on to my heirs. However wall-street bankers can't make tons of profits competing under that model, so instead they try to trick citizens into misunderstanding what the model is. They want people to think it's a government-managed investment account instead, where every person is filling an individual bucket of "their" money that will someday be tipped back out for them. With this deception, their job is much easier: They just need to say that they'll be a nicer manager of the accounts than the government is, because they'll give you more choices for managing "your" money. It's dishonest because the two things are fundamentally different in how they work and what they're good for.
  - fn-mote 1y ago
    > The flat tax would not make tax preparation any bit easier. This is absolutely not true in the USA. Income from different sources is taxed differently. Example: The forms distinguish between short term capital gains, long term capital gains, and e.g., income from government bonds is taxed differently at lower levels of government.
  - dennis_jeeves2 1y ago
    >The flat tax would not make tax preparation any bit easier. there are many way to 'define' a 'flat' tax. My way would be a fixed sum. Not a fixed rate. ( yes the rich pay the same as poor) This would ofcourse have it's own if/buts but it would eliminate 90%+ complexity. The ideal situation would be be no income tax and many other forms of taxation.
    - DiogenesKynikos 1y ago
      A fixed sum is impossible. It would have to be so low that everyone could pay it, no matter how poor. It's basically a proposal to eliminate government (meaning anarchy, chaos, and inevitably the rise of some new order that will, of necessity, go back to a more rational system of taxation).
- Terr_ 1y ago
  > If there were a 'flat' tax [...] the rich will be more willing to pay That's just because moving from progressive-taxation to a flat-tax reduces how much they pay! The "simplicity" of the math done by their usual accounting firm that does their taxes for them is irrelevant by comparison. _________ To illustrate why the burden shifts, suppose the nation of Elbonia needs a constant $540 to operate, and it moves from a progressive tax to a flat tax. This year, progressive taxation, rising %: 90 peasants each earn $10 and are taxed 20% -> $2 per peasant. 10 nobles each earn $90 and are taxed 40% -> $36 per noble. Total collection is $540. Next year, flat tax, same % for all: 90 peasants each earn $10 and are taxed 30% -> $3 per peasant. 10 nobles each earn $90 and are taxed 30% -> $27 per noble. Total collection is $540. It should be no surprise that most of the Elbonian nobles are "willing" to see that change happen. Meanwhile, the peasants that are already living paycheck-to-paycheck have to plan how to cut back on luxuries like keeping their teeth.
  - themafia 1y ago
    It's worth pointing out that the Treasury takes in tax revenues throughout the year. The sources of that income are: 50% Payroll Income Tax. 35% Social Security Taxes. 7% Business Taxes. 7% Excise Taxes. 70 years ago they were: 25% Payroll Income Tax. 25% Social Security Taxes. 25% Business Taxes. 25% Excise Taxes. I think the priority is fixing this distribution to levels which were historically perceived as being more fair. The wealthy are one problem. The oversized corporations are the everlasting machine which drives them.
    - AnthonyMouse 1y ago
      Excise taxes are effectively sales tax but only on specific products. This is less economically efficient than broad-based taxes unless the thing you're taxing is something you're specifically trying to discourage (e.g. cigarettes) rather than having the purpose of generating revenue, but since 1955 the government has become more inclined to ban things it doesn't like than tax them. In a global economy higher business taxes just cause large international corporations to incorporate in a different jurisdiction, which gives them an advantage over smaller purely domestic corporations, which is bad. Social Security is already taking in less money than it's paying out. Reducing the Social Security tax would imply reducing Social Security benefits, since that's where it goes, unless you're proposing a more significant reform of the system in general. The size of corporations and the amount they're taxed are two entirely different things. Indeed, the tax code does a lot of things to encourage corporations to be larger, like taxing dividends and capital gains after corporate income has already been taxed, which creates a tax preference for leaving the money inside of an existing corporation rather than investing it in starting a new competitor.
bni 1y ago
AI will increase the complexity even more
dguest 1y ago
Maybe the AI will create a level playing field and make the tax prep / loophole industry collapse. Or maybe the free models will start responding with """ It looks like you're asking for help with tax preparation. I recommend our designated AI tax service [link to service that asks you to upgrade your plan or pay a one-time fee]. """ They are operating free models at a loss now, but at some point they are going to have to turn a profit. At that point tax prep becomes a revenue stream for AI as well.
- saagarjha 1y ago
  Using AI to do your taxes seems like a quick way to get into a bunch of trouble.
  - ibizaman 1y ago
    Not if the IRS verifies using the same AI. Actually, it’s probably twice the trouble.
    - potato3732842 1y ago
      >Actually, it’s probably twice the trouble. Plus interest and fees (they can't call them fines because then you'd have rights), so call it triple to be safe.
- _heimdall 1y ago
  Please don't allow a computer to guess, one token at a time, what you tax liability is or how to fill out the forms properly.
ta20240528 1y ago
This is incorrect: the wealthy don't use loop holes. They use incentives explicitly enumerated in the tax code. What else is an incentive for, but that the government wants you to use it? Hell, Google got pre-approval from the IRS for their Dutch Sandwich tax structure. Most poor people don't read the tax code. They should.
- defrost 1y ago
  ~ Kerry Packer, before House of Reps Select Committee on Print Media, November 1991. ( https://www.youtube.com/watch?v=e97kq2XflKE https://www.youtube.com/watch?v=e97kq2XflKE ) It's still largely maximising what can be pushed through unintended loopholes.
- smaudet 1y ago
  Most poor people don't read* They should. Of course, this is not to say they always are stupid or illiterate, it's again usually just another form of exploitation, they don't have (or feel they don't) time to read it. Which is arguably explicit exploitation/enslavement - the Walmart door greeter doesn't have a difficult job, however their role doesn't allow them to do anything that would benefit themselves. I wouldn't care if they were reading their phones or a book, but noo... can't have the peasants educating themselves. And they aren't paid enough, so when they return home, they likely don't have any time after needing to perform meal prep, taking a second job, etc. The USA is a third world country in many respects.
  - ta20240528 1y ago
    I'll grant you that: in many cases individual incentives combine in ways that are lucrative and unintended.
victorbjorklund 1y ago
They could still live side by side. You could still have a system where you have simplified filing where for 99.99% of the people you can just pretty much fill in one or two fields of what you made and something like that and even maybe get this data directly from the employers. That's how it works in Sweden. And then for the people who have complicated business, you could have a more complicated form where you need to hire a lawyer or accountant to do it. This is just assuming you don't care about whether or not there are loopholes for people. Like that's a political decision maybe more, because I guess the people defending them would say that there are good reasons they exist and you know wealth creation and so on. But it makes no sense to make it so complicated for people who have very simple lives where they have one employer who is paying them a salary and that's it.
- _heimdall 1y ago
  My entire life (in the US) there has been the idea floated that our tax code should be simplified to the point where filing can be done on something the size of a postcard. We absolutely could do that, but the government has no incentive to do so. At least in the US, taxes are a form of control, a source of power for those in charge, a political chip for elections, and a mechanism to further the wealth divide. Taxes are not primarily meant to fund our government, and definitely don't include goals related to making the average person's life easier.
  - mrguyorama 1y ago
    This idea is "floated" by the exact people who make taxes complicated in the US. Every time they insist they want to "simplify" taxes, they demonstrate that what that means is just another tax break to wealthy businesses. The DOGE team shut down a simple tax filing system the IRS had freely made available. It's republicans. Stop saying "Government" when it is republicans Form 1040 isn't even complicated! But republicans have convinced millions that the IRS is going to black bag them for missing a decimal point somewhere. Guess what! The IRS is not funded enough to care! They will send you an automated form saying "We fixed it for you, here's how much you owe/are getting back". You can even ignore that letter and you won't end up in prison! They just seized a couple of my state tax returns!
tzs 1y ago
Much of the complexity is to close loopholes. Many things in the tax code start out fairly simple, then people find ways to use them in ways that were not intended, and then the simple thing becomes complex as additional rules are added to try to fix that. This can iterate and what started out as a couple of sentences that most people knew what they intended becomes a few pages of convoluted rules.

dennis_jeeves2 1y ago

>The complexity is a feature not a bug. If you have more complexity, you have more opportunities for loopholes. Those loopholes are currently used by those wealthy enough to hire creative firms to help you get through them Agreed that the complexity is a feature but it's not for the rich ( though the rich will take advantage of it, and why not? ) . It's mostly for the powers that be. If there were a 'flat' tax ( and one could argue what constitutes a flat tax) the rich will be more willing to pay that flat tax. I'd say complexity support a very large govt, keeping several people employed including accountants, tax software companies etc. It serves the parasite class.

deleted 1y ago
[deleted]
DiogenesKynikos 1y ago
The tax brackets are not what make taxes complicated. Knowing how to categorize different types of income is what makes taxes complicated. The flat tax would not make tax preparation any bit easier. They only thing it would do would be to eliminate progressive taxation. In other words, the rich would pay less. The poor would pay more.
- deleted 1y ago
  [deleted]
- smcl 1y ago
  This is exactly correct. That said, I'm quite surprised how many people struggle to understand how progressive tax bands/brackets work. It maybe doesn't help that the (right wing) media often portray them dishonestly (i.e. claiming that a 50% tax band starting at $100k/year means you would pay $50k/year in tax if you earn $100k/year)
  - Terr_ 1y ago
    > portray them dishonestly Tangentially, the same motivated-disinformation occurs with Social Security. It's best-understood as an insurance-policy (OASDI is literally named that way) against dying poor and old/orphaned/disabled. With an insurance policy, it's normal for my month's premium to be spent on somebody else's current tragedy, it's normal for me to expect no cash if the Bad Thing never actually happens to me, and it's normal that there's no asset for me to pass on to my heirs. However wall-street bankers can't make tons of profits competing under that model, so instead they try to trick citizens into misunderstanding what the model is. They want people to think it's a government-managed investment account instead, where every person is filling an individual bucket of "their" money that will someday be tipped back out for them. With this deception, their job is much easier: They just need to say that they'll be a nicer manager of the accounts than the government is, because they'll give you more choices for managing "your" money. It's dishonest because the two things are fundamentally different in how they work and what they're good for.
- fn-mote 1y ago
  > The flat tax would not make tax preparation any bit easier. This is absolutely not true in the USA. Income from different sources is taxed differently. Example: The forms distinguish between short term capital gains, long term capital gains, and e.g., income from government bonds is taxed differently at lower levels of government.
- dennis_jeeves2 1y ago
  >The flat tax would not make tax preparation any bit easier. there are many way to 'define' a 'flat' tax. My way would be a fixed sum. Not a fixed rate. ( yes the rich pay the same as poor) This would ofcourse have it's own if/buts but it would eliminate 90%+ complexity. The ideal situation would be be no income tax and many other forms of taxation.
  - DiogenesKynikos 1y ago
    A fixed sum is impossible. It would have to be so low that everyone could pay it, no matter how poor. It's basically a proposal to eliminate government (meaning anarchy, chaos, and inevitably the rise of some new order that will, of necessity, go back to a more rational system of taxation).
Terr_ 1y ago
> If there were a 'flat' tax [...] the rich will be more willing to pay That's just because moving from progressive-taxation to a flat-tax reduces how much they pay! The "simplicity" of the math done by their usual accounting firm that does their taxes for them is irrelevant by comparison. _________ To illustrate why the burden shifts, suppose the nation of Elbonia needs a constant $540 to operate, and it moves from a progressive tax to a flat tax. This year, progressive taxation, rising %: 90 peasants each earn $10 and are taxed 20% -> $2 per peasant. 10 nobles each earn $90 and are taxed 40% -> $36 per noble. Total collection is $540. Next year, flat tax, same % for all: 90 peasants each earn $10 and are taxed 30% -> $3 per peasant. 10 nobles each earn $90 and are taxed 30% -> $27 per noble. Total collection is $540. It should be no surprise that most of the Elbonian nobles are "willing" to see that change happen. Meanwhile, the peasants that are already living paycheck-to-paycheck have to plan how to cut back on luxuries like keeping their teeth.
- themafia 1y ago
  It's worth pointing out that the Treasury takes in tax revenues throughout the year. The sources of that income are: 50% Payroll Income Tax. 35% Social Security Taxes. 7% Business Taxes. 7% Excise Taxes. 70 years ago they were: 25% Payroll Income Tax. 25% Social Security Taxes. 25% Business Taxes. 25% Excise Taxes. I think the priority is fixing this distribution to levels which were historically perceived as being more fair. The wealthy are one problem. The oversized corporations are the everlasting machine which drives them.
  - AnthonyMouse 1y ago
    Excise taxes are effectively sales tax but only on specific products. This is less economically efficient than broad-based taxes unless the thing you're taxing is something you're specifically trying to discourage (e.g. cigarettes) rather than having the purpose of generating revenue, but since 1955 the government has become more inclined to ban things it doesn't like than tax them. In a global economy higher business taxes just cause large international corporations to incorporate in a different jurisdiction, which gives them an advantage over smaller purely domestic corporations, which is bad. Social Security is already taking in less money than it's paying out. Reducing the Social Security tax would imply reducing Social Security benefits, since that's where it goes, unless you're proposing a more significant reform of the system in general. The size of corporations and the amount they're taxed are two entirely different things. Indeed, the tax code does a lot of things to encourage corporations to be larger, like taxing dividends and capital gains after corporate income has already been taxed, which creates a tax preference for leaving the money inside of an existing corporation rather than investing it in starting a new competitor.

bni 1y ago

AI will increase the complexity even more

dguest 1y ago

Maybe the AI will create a level playing field and make the tax prep / loophole industry collapse. Or maybe the free models will start responding with """ It looks like you're asking for help with tax preparation. I recommend our designated AI tax service [link to service that asks you to upgrade your plan or pay a one-time fee]. """ They are operating free models at a loss now, but at some point they are going to have to turn a profit. At that point tax prep becomes a revenue stream for AI as well.

saagarjha 1y ago
Using AI to do your taxes seems like a quick way to get into a bunch of trouble.
- ibizaman 1y ago
  Not if the IRS verifies using the same AI. Actually, it’s probably twice the trouble.
  - potato3732842 1y ago
    >Actually, it’s probably twice the trouble. Plus interest and fees (they can't call them fines because then you'd have rights), so call it triple to be safe.
_heimdall 1y ago
Please don't allow a computer to guess, one token at a time, what you tax liability is or how to fill out the forms properly.

ta20240528 1y ago

This is incorrect: the wealthy don't use loop holes. They use incentives explicitly enumerated in the tax code. What else is an incentive for, but that the government wants you to use it? Hell, Google got pre-approval from the IRS for their Dutch Sandwich tax structure. Most poor people don't read the tax code. They should.

defrost 1y ago
~ Kerry Packer, before House of Reps Select Committee on Print Media, November 1991. ( https://www.youtube.com/watch?v=e97kq2XflKE https://www.youtube.com/watch?v=e97kq2XflKE ) It's still largely maximising what can be pushed through unintended loopholes.
smaudet 1y ago
Most poor people don't read* They should. Of course, this is not to say they always are stupid or illiterate, it's again usually just another form of exploitation, they don't have (or feel they don't) time to read it. Which is arguably explicit exploitation/enslavement - the Walmart door greeter doesn't have a difficult job, however their role doesn't allow them to do anything that would benefit themselves. I wouldn't care if they were reading their phones or a book, but noo... can't have the peasants educating themselves. And they aren't paid enough, so when they return home, they likely don't have any time after needing to perform meal prep, taking a second job, etc. The USA is a third world country in many respects.
- ta20240528 1y ago
  I'll grant you that: in many cases individual incentives combine in ways that are lucrative and unintended.

victorbjorklund 1y ago

They could still live side by side. You could still have a system where you have simplified filing where for 99.99% of the people you can just pretty much fill in one or two fields of what you made and something like that and even maybe get this data directly from the employers. That's how it works in Sweden. And then for the people who have complicated business, you could have a more complicated form where you need to hire a lawyer or accountant to do it. This is just assuming you don't care about whether or not there are loopholes for people. Like that's a political decision maybe more, because I guess the people defending them would say that there are good reasons they exist and you know wealth creation and so on. But it makes no sense to make it so complicated for people who have very simple lives where they have one employer who is paying them a salary and that's it.

_heimdall 1y ago
My entire life (in the US) there has been the idea floated that our tax code should be simplified to the point where filing can be done on something the size of a postcard. We absolutely could do that, but the government has no incentive to do so. At least in the US, taxes are a form of control, a source of power for those in charge, a political chip for elections, and a mechanism to further the wealth divide. Taxes are not primarily meant to fund our government, and definitely don't include goals related to making the average person's life easier.
- mrguyorama 1y ago
  This idea is "floated" by the exact people who make taxes complicated in the US. Every time they insist they want to "simplify" taxes, they demonstrate that what that means is just another tax break to wealthy businesses. The DOGE team shut down a simple tax filing system the IRS had freely made available. It's republicans. Stop saying "Government" when it is republicans Form 1040 isn't even complicated! But republicans have convinced millions that the IRS is going to black bag them for missing a decimal point somewhere. Guess what! The IRS is not funded enough to care! They will send you an automated form saying "We fixed it for you, here's how much you owe/are getting back". You can even ignore that letter and you won't end up in prison! They just seized a couple of my state tax returns!

tzs 1y ago

Much of the complexity is to close loopholes. Many things in the tax code start out fairly simple, then people find ways to use them in ways that were not intended, and then the simple thing becomes complex as additional rules are added to try to fix that. This can iterate and what started out as a couple of sentences that most people knew what they intended becomes a few pages of convoluted rules.