8 ms·

Why does the US have a tax prep industry in the first place? In every other country in the world, taxes are handled by their respective financial authorities.

Why does the US have a tax prep industry in the first place? In every other country in the world, taxes are handled by their respective financial authorities. Why must every service and thing in the US must be a private profit making thing?

ta20240528 1y ago
Yip, consider how much money banks make by injecting themselves between you and the reserve bank.
- scott_w 1y ago
  This is a very different situation. If you're interested, I'd recommend reading Can't We Print More Money by staff at the Bank of England (https://www.amazon.co.uk/Cant-Just-Print-More-Money/dp/1847943381 https://www.amazon.co.uk/Cant-Just-Print-More-Money/dp/18479...). The short answer is central banks are not setup to offer services directly to the public. This is different to the tax office in that people already need to interact directly with it! Anyone in the UK can fill out a Self Assessment, for example, however it's optional for almost everyone, because Pay As You Earn takes the tax off your employer instead.
janwl 1y ago
Can’t you file your taxes for free in the US if you know how?
- willis936 1y ago
  That's why GP said "tax prep". Anyone can download and submit a 1040. That isn't the part that takes domain expertise.
  - janwl 1y ago
    I don’t know why assume that in every country in the world that is free. In my European country until 15 years ago or so you had to hire someone to do your taxes for you, and currently the free method only works for the most simple tax filing. In fact what you get is called a “draft” of your tax filings because you’re supposed to make sure it’s okay, and it’s your responsibility if you miss something or if the draft is wrong. And obviously the draft usually assumes that you will have to pay more tax, since there’s a perverse incentive given it’s the government who fills it for you.
    - unbrice 1y ago
      Which country if I may ask? I have lived in France Switzerland and Ireland and haven't seen something like this, even though governments provide the tax filing software. I wonder if the explanation actually had to do with these people who used to do the job 15 years ago influencing the process to ensure they remain relevant. Kind of like in the US actually.
- bloomca 1y ago
  Yes, you can download the form 1040 and fill it by yourself, you'd need a few Schedules attached. They all have instructions available online, your work has to send you a copy of everything they paid you and into the IRS (regular jobs always err on the side of overpaying), and while it is not hard, it definitely looks intimidating and takes time to understand, especially the deductions. You can also just not file your taxes, if you don't owe anything (and as I said, jobs always err on the side of overpaying) they won't bother you, but most people end up eligible for the tax refund, so it is more beneficial to pay for that service.
  - reactordev 1y ago
    Sad part is, when I started working, this was normal. My father showed me how to do it. I did it for a few years and then TurboTax came along and I used that for free. Then they rug pulled me into a deluxe one year because I had 1099 income and ever since I’ve been jailed into paying if I want to use them. 1099 or not.
    - jayknight 1y ago
      Switch to freetax USA. I have 1099 income and it's still free.
      - reactordev 1y ago
        Besides the point. The point I was making is that because I had one year of 1099 income in the past, I was paywalled into paying. I no longer use TurboTax as my tax needs have changed. Thanks though but I wasn’t soliciting for alternatives.
    - bluGill 1y ago
      I used to do that every year. It wasn't hard. However one year I forgot to copy line 12b from form 9876 to line 34c of form 5432 and when the IRS caught that I had a big mess to clean up (since state taxes copy federal taxes so I had to refile state with the corrected numbers...). Now I just pay a small fee to FreeTaxUSA (I figure they deserve some money for their efforts in creating software). One thing I can say for sure: doing taxes with a computer takes me longer than filling out the paper forms by hand! There are so many delays while "calculated" (as if a ghz computer can't add numbers fast), and loading question pages that I can obviously skip (I never worked for the rail road, I'm not blind...) but take extra time because of how they setup the UI.
benjijay 1y ago
Land of the f(r)ee
- bayindirh 1y ago
  This is the greatest comment I have seen in a very long time. Kudos.
- TimTheTinker 1y ago
  My wife and I have visited several European countries, and I just don't agree. Switzerland is the land of many fees, followed by Iceland and other nordic countries. Germany, France, and the UK are also expensive. The going "low" price in Iceland right now for petrol is $8.74 USD/gallon. (Did you know that most of the public transport in the UK is owned by German and Dutch companies? They can rack up prices with little consequence.) The US has gotten more expensive to be sure, but IMO most of our high-cost problems stem from consolidated industries with regulatory capture (healthcare, farming+food+pesticide, tax prep, etc.) and low wages for the bottom 50%, not fees.
DiogenesKynikos 1y ago
The tax preparation industry exists in much of the world. Taxes are simple if you live in one place and only receive income from your employer. If you have multiple sources of income, connections to multiple countries, etc., things can get very complicated very fast. That's why the tax prep industry exists - and not just in the US. That being said, the Internal Revenue Service could prepare the taxes of most Americans. A simple system of, "Here's what we think you owe, based on the information we have on hand - sign and submit if you agree" would work for most people.
- wood_spirit 1y ago
  Right, when the Europeans say the tax is paid as you earn and the authorities let you file differences free and easily, they mean the vast majority of tax payers. It is rare to be the exception. Whereas I guess American Exceptionism (tm) means you all have to pay a rent seeking company to file taxes…?
  - DiogenesKynikos 1y ago
    That only works if all of your income comes from your employer, and is thus reported directly to the financial authorities and subject to withholding. It is not that rare at all for Europeans to have other sources of income, and thus to have to file their own taxes.
    - rsynnott 1y ago
      In Ireland, and I think many other countries, if you have under 6k non-employment income, it’s ~trivial; you fill in a form on the website. It only gets complicated over that (though you would still typically do it all online; the form just gets _a lot_ scarier)
    - krige 1y ago
      As an European with multiple sources of income, all that boils down to is literally excel style fill in the boxes deal. There's even free tools that can handle the simple formulas if I don't trust my calculator enough. 1 hour a year at absolute worst; definitely no space for a finacial parasite to latch onto.
yodsanklai 1y ago
> Why must every service and thing in the US must be a private profit making thing? Culture
- teekert 1y ago
  Indeed, and tbh "work must be paid for" is not necessarily a bad thing. In the Netherlands we pay for our tax-software via our taxes (and I still spend about 250 eur on an accountant to do it for me, as it takes me a whole evening as an someone with a (small) company, I'm better of writing hours), is it the most efficient? I think not, judging from how much our government spends on IT projects that fail. There are a lot of hidden costs. That said, the lobbying is really bad of course, probably also prevents cheaper or FOSS alternatives.
NelsonMinar 1y ago
wait until you hear about our healthcare middlemen.
johnnienaked 1y ago
No other countries have tax prep services?
- rsynnott 1y ago
  Most countries use some sort of PAYE system, so the average person will need to do little or nothing on tax.
  - johnnienaked 1y ago
    Every country I've ever lived in you had to prep and submit your own taxes. Never heard of that system.
    - zinekeller 1y ago
      If you happen to be an entrepreneur, a foreigner (relative to the country of work), or an American citizen (despite holding the citizenship you're on, thanks FATCA!), then, yeah, I can see why you have never encountered the simpler arrangements. If you're an ordinary citizen of most countries and work under a company, the company is obliged to track it for you. What you get is a very simplified form asking if you have more income sources than from your work, and the local tax system means that most of them legally do not have any (for example, banks collect the taxes for the interest you have received, not the arcane American system where you're the one responsible for that).
      - rsynnott 1y ago
        > a foreigner (relative to the country of work) In a PAYE system, merely being a foreigner isn't _usually_ an issue, provided that you're domiciled and don't have foreign income. The exception, as you mention, would be a US citizen; the US's approach to foreign income of its citizens is sufficiently weird that they'll generally have annoying tax situations. > What you get is a very simplified form asking if you have more income sources than from your work, and the local tax system means that most of them legally do not have any If even that. In Ireland, and I believe the UK, you only have to fill out that form if you actually _do_ have non-employment income which is not deducted at source. Most peoples' only interaction with Irish Revenue would be to claim tax credits on rent/mortgage/medical expenditure/whatever.
bell-cot 1y ago
Private, profit-making things are willing & able to "generously support" the politicians who enable their business models. Vs. public services and public servants? Not so much.
bluedino 1y ago
Should the US employ enough people to file 160 million tax returns each year? (Just individuals not corporations) The tax code is a behemoth. Plenty of loopholes to find to save money. Also, most of the tax prep companies are thinly disguised payday loan companies.
- tokai 1y ago
  Yeah they should.
- Philip-J-Fry 1y ago
  I think the point is that the vast majority of people don't really have a unique tax situation. And all the data already exists. There's just no framework set up to allow this to be automated like there is in other countries. It should be the case that all your basic taxes get calculated for you and taken at the point you're paid by your employer. Anything exceptional should be able to be claimed back via a web portal somewhere. So it's not like 160m tax returns NEED to be filed. That's just how it is today.
- bluGill 1y ago
  There are a lot less loop holes than in the past. In the 1950s taxes on the rich were 90% - but there were so many loopholes the rich in reality paid a similar tax rate to their peers today where the tax rates are lower, but there are also less loopholes. In the 1950s the common person couldn't take advantage of most loopholes (I'm not old enough to remember, but I'd guess mortgage interest was the only useful one, the rest where $100 here and there but it never added up to much for the common person)
- rtkwe 1y ago
  Most of the tax code is irrelevant to 90+% of people. ~90% of people just claim the standard deduction every year, you have to be significantly well off or in an odd tax situation for itemized deductions to come out to more than the standard deduction.
test6554 1y ago
Things that need work necessarily cost money. Someone doing the work for free is not inherently sustainable. Profits motivate work to get done all on its own. Profits by definition is money over and above expenses. So it creates a perpetual sustainable mechanism. Competition motivates quality and efficient pricing (eventually). Lobbying corrupts this a bit. However they are not lobbying to suppress private competitors only government-run competition that has no profit motive or competition. When the government runs it we still pay for it, except now people who don’t use it also pay. Also wealthy people pay a disproportionate share as compared to their use due to progressive income tax. In theory anyone can start a company if they have a better or more efficient product or offering and get the profits instead. Thats the rationale in a nutshell.
- wredcoll 1y ago
  It seems worth while to emphasize that, while these are indeed arguments that are made, they're not actually true.
- randallsquared 1y ago
  The usual argument is that taxes are already paying for the collection of data and calculation of amount, so why can't we just use the figure already calculated by default? This is most true for W2 employees without any uncommon circumstances, but there would seem to be a lot of people covered under that.
  - the_snooze 1y ago
    It's a political challenge, not a technical one. There are constituencies that reap concentrated benefits from the current system (e.g., tax-filing services) while imposing disperse costs on everyone else. Also, there are those who believe that the IRS is out to get them, so filing your own taxes is more trustworthy than going with a government-issued pre-filled default. And that going through the motions makes the pain of paying taxes more salient, so you're more likely to complain about it. If you look at it as a practical or technical challenge, you're addressing the wrong question.
- CodingJeebus 1y ago
ernst_klim 1y ago
Citation needed. In Germany tax-prep industry is huge, there is a huge network of tax consultants plus paid online services like taxfix and smartsteuer. The only countries I lived which didn't require you to declare the taxes were Russia and Georgia, mostly because 13% and 20% flat tax rate respectively. Any country which does have complicated progressive tax system would require you to declare taxes at least at some cases.
- rcbdev 1y ago
  Germany, as a de-facto vassal state of the US, is the exception that confirms the rule. This is an observation that comes from almost a lifetime of living in this region of our world.
- 256orbs 1y ago
  Germany has ELSTER, which is a free government provided online service. I use it every year to fill in my tax declaration. It's not perfect but it works pretty good. Not so friendly for expats since it doesn't have internationalisation, so you need to know a bit of german (I use G translate).
  - tirant 1y ago
    ELSTER is available but it is extremely complicated to use. Not even my Tax advisor uses it directly. You must be the first person I’ve heard that uses it directly. For me not worth to use it having extremely good tools like the offering from WISO. In my opinion a complicated tax law is a direct attack from the State against low and middle income population. If you have low income and poor education you will not be able to make use of the tax law to increase your available income, something that high income citizens do daily. In this case we have to thank the free market to provide really easy tools for less than €30 so middle and low income citizens can start at least to take advantage of the tax law. I’ve lived in multiple countries and always did my tax report myself. And the German situation is so blatantly designed, compared to other countries, to benefit only a very small portion of the population. Not only that, If the amount of man/hours that the whole country of Germany spends doing taxes would be spent on productivity gains or just normal work, the country would become immediately the richest country in the world. Instead, it’s just wasted effort and work.
jrochkind1 1y ago
One reason is that the US tax code is horribly complicated compared to anyone else, because we have tried to enact all sorts of social policy and subsidy through the tax code, because it was somehow more politically palatable to do it that way.
- doom2 1y ago
  If the government can determine that my taxes are wrong, then they know the amount I have to pay. So why can't they tell me the correct number up front? (Yes, I know the reason why, but I still feel like it's a valid question)
  - TheJoeMan 1y ago
    They can determine your taxes are "fishy" and then demand further documentation. Say you declared you sold a car and profited, but seemingly under-reported the sale price. They'd show up and demand to see the bill-of-sale, maybe contact the buyer, etc. How would the government know ahead of time what price you sold the car for?
    - Tangurena2 1y ago
      Most fraud about car sales is to claim a lower price in order to skip on sales taxes collected by the states' motor vehicle agencies. Not all states charge a sales tax on individual-to-individual sales. Here in Kentucky, the state constitution says that taxes have to be charged on the assessed value, so part of the annual registration is based on the assessed value (min $100 for boats or $200 for cars/trucks). I used to work for KY's Transportation Cabinet (combo DMV + highway dept).
      - deleted 1y ago
        [deleted]
    - tempest_ 1y ago
      I don't understand how this changes anything? How would they know now? These examples are silly, most people are not selling a car privately all the time and they can handle any reporting or changes when you transfer the ownership.
bluGill 1y ago
Because most people don't know how simple doing their own taxes are. This is aided by a few people who have a complex situation and would have to have a real accountant do their taxes in every country.
- burnto 1y ago
  But it’s typically not simple. People often have some kind of life complexity that makes their taxes hard to confidently self-navigate here in the U.S. Receiving government assistance? Some kinds are taxable, some aren’t. Moved states? You have multiple state filings now. Got married? divorced? Splitting custody or property? Special tax forms to fill. Native American? Veteran with disability? Senior? Student with loans? Bankruptcy? Freelance income? Etc. Normal life events turn into tax complexity consequences. And without expert help, it’s hard to know if you’re doing your taxes correctly, which adds stress and time.
  - Spoom 1y ago
    > Receiving government assistance? Some kinds are taxable, some aren’t. One would think that the government should know what government assistance you're getting. In any case, taxable benefits get reported to the IRS automatically on form 1099-G. > Moved states? You have multiple state filings now. Arguably irrelevant. You can change how filings work federally without changing how state filings work. Perfect is the enemy of good, etc. > Got married? divorced? Splitting custody or property? Special tax forms to fill. Sure. Sometimes you have life events that happen where you'll need to make adjustments. Such possible events can be mentioned in the letter / email you get from the IRS, with details as to how to adjust the filing. This is typically how it's been done in other countries with automatic filing. > Native American? Veteran with disability? Senior? Student with loans? Bankruptcy? Freelance income? Etc. Income typically gets reported to the IRS on a 1099 or a W-2. Loan interest gets reported to the IRS on 1098-E, so the deduction could be automatically calculated. Presumably the IRS would know if you previously filed a tax exemption and could assume that hasn't changed if it's based on things like having registered membership in a federally recognized tribe. Even if you haven't filed that exemption before, presumably the government would know that you registered the membership. The government knows your birth date so presumably they'd be able to calculate when you become a senior, where that's relevant. Bankruptcy is one of those special cases that I'd expect would be an exception case where you'd need to adjust the filing (and your trustee would probably help with that). Most people don't have special cases that require changes. The IRS already has a shockingly large amount of data on people. I encourage you to try getting your tax transcript some time[1], it should be illuminating. 1. https://www.irs.gov/individuals/get-transcript https://www.irs.gov/individuals/get-transcript
gorwell 1y ago
You can do taxes for free most of the time. Millions of us do every year, and the IRS estimates that 70% of tax payers could file for free. > Why must every service and thing in the US must be a private profit making thing? It isn't. There are roughly 2 million nonprofits. "Nonprofit organizations play a significant role in the US economy. In 2022, there were 1.97 million nonprofits operating in the US" And there are endless government programs and millions of government employees. The federal government alone spends over $6 trillion of our money, and money we don't have, per year, and most of it is on mandatory social programs. "About 60% of all federal spending is categorized as mandatory spending — which amounted to $3.8 trillion last year. This spending is essentially on autopilot because it funds programs whose eligibility rules and benefit formulas are set in law. This consists mostly of programs like Social Security, Medicare, Medicaid and Veterans care." https://usafacts.org/just-the-facts/budget/ https://usafacts.org/just-the-facts/budget/
Tangurena2 1y ago
> Why must every service and thing in the US must be a private profit making thing? This is a side-effect of the Protestant Work Ethic. Weber coined the term in 1905 as a way to explain why the Northern European countries (who were predominantly Protestants) were wealthy while the Southern European countries (who were predominantly Catholic) were poor. Prior to the election of JFK as US President, anti-Catholic sentiments were widespread throughout the US (which explains why Irish & Italians were not considered "white" until the early 20th Century). Even today, many Evangelicals do not consider Catholics to be Christians. > Calvin taught that all men must work, even the rich, because to work was the will of God. It was the duty of men to serve as God's instruments here on earth, to reshape the world in the fashion of the Kingdom of God, and to become a part of the continuing process of His creation (Braude, 1975). Men were not to lust after wealth, possessions, or easy living, but were to reinvest the profits of their labor into financing further ventures. Earnings were thus to be reinvested over and over again, ad infinitum, or to the end of time (Lipset, 1990). Using profits to help others rise from a lessor level of subsistence violated God's will since persons could only demonstrate that they were among the Elect through their own labor (Lipset, 1990). > Selection of an occupation and pursuing it to achieve the greatest profit possible was considered by Calvinists to be a religious duty. Not only condoning, but encouraging the pursuit of unlimited profit was a radical departure from the Christian beliefs of the middle ages. In addition, unlike Luther, Calvin considered it appropriate to seek an occupation which would provide the greatest earnings possible. If that meant abandoning the family trade or profession, the change was not only allowed, but it was considered to be one's religious duty (Tilgher, 1930). These 2 paragraphs also explain why many in the US have such an utter hatred for any sort of social safety net for poor people - those people are damned in the Biblical sense and therefore it is a sin to give them any sort of money, food or healthcare. [0] - https://en.wikipedia.org/wiki/Protestant_work_ethic https://en.wikipedia.org/wiki/Protestant_work_ethic [1] - History of it: http://workethic.coe.uga.edu/hpro.html http://workethic.coe.uga.edu/hpro.html [2] - https://en.wikipedia.org/wiki/Anti-Catholicism_in_the_United_States https://en.wikipedia.org/wiki/Anti-Catholicism_in_the_United...
- niwtsol 1y ago
  This is a really interesting take I had not heard before. Any further reading or additional concepts you mind sharing on this idea?
TrackerFF 1y ago
Partially there's this idea that if it the government that's in charge, you'll somehow pay more taxes. But if it's private enterprise, their incentive is to lower your taxes as much as they can, while you pay them a small fee. Not saying that this mentality or assumptions are good / correct, but that's basically the rationale I've heard too many times. There's this deeply, deeply ingrained idea that the government wants to rob you blind, no mater what.
- saulpw 1y ago
  And yet the government as a whole has no incentive to take your money beyond the tax laws they pass. Individuals may be corrupt but that's a very different issue. Whereas a for-profit company's explicitly stated goal is to make as much money off you as they can.
sambull 1y ago
Paywall all the things... all the things.
wredcoll 1y ago
I mean, you answered your own question: because a minority found a way to make a profit at the expense of the majority. (This particular situation is an alliance between the tax preparers, who have the obvious interest, and republicans who are ideogically comitted to inefficient/ineffective governments)
groundzeros2015 1y ago
America is entrepreneurial and many people have a small business of some kind. In other countries the regulation and culture is less business friendly so people don’t do it. Or they operate illegally, I think that a lot of immigrants have to adjust to how seriously tax regulations are taken where they may have been able to ignore them before.
stronglikedan 1y ago
Because we were founded on, and still prefer, that the government stays out of as many things as possible. It's always cheaper to pay a private company for a service than it is to pay your government to do it. And yes, you're paying your respective financial authorities to do it through your tax dollars.
- testing22321 1y ago
  Factually, people in the US pay more for healthcare and get worse outcomes than developed countries. https://healthjournalism.org/blog/2024/09/report-u-s-spends-the-most-on-health-but-outcomes-are-among-the-worst/ https://healthjournalism.org/blog/2024/09/report-u-s-spends-... I can’t find it on mobile right now, but the associated graph is very illustrative It is not cheaper to pay a private company.
  - blasphemers 1y ago
    The us government is heavily involved in healthcare, so that's a terrible example.
calderarrow 1y ago
Two big reasons: 1. If the government is in charge of deciding the tax policy and collecting the taxes, it creates a potential conflict of interest if they are also in charge of telling you how much you owe. In theory, they could charge you more than they're legally allowed to, but how would you know unless you (or someone else) also calculated your taxes? A common suggestion to this is to have the government give a return that shows what they _think_ is owed, but this creates a conflict if the government accidentally underbills you, since you're not likely to correct the mistake. In order to ensure compliance on both sides, both the government and individual need to prepare the tax return. Otherwise, one party risks being overcharged/underpaid. 2. Tax evasion is an effective law enforcement tool for catching criminals, so by putting the burden on the individual to report taxes, you add another tool in the law enforcement toolkit. From the state's perspective, it is more compelling to tell a jury "this person owed $5 but only paid $1" than "this person owed $5, but only paid $1 because we told them they only owed $1." Tax evasion is how famous gangsters like Al Capone and other shady-characters have historically been caught[0] The tax prep industry is lucrative largely because of lobbying and consumer ignorance. There are plenty of free-file options for folks below certain income thresholds, as well as non-profits who will do your taxes for free. There are also lots of free tax-prep sites, but they are being drowned out by the advertising and lobbying of the for-profit tax-prep industry. To add my own 2-cents: if your income comes from investments, 1099, or W2, you likely can do your own taxes in about an hour. I personally use TaxHawk [1] since it's free for federal and $16 per state return, and has the same kind of interface as turbotax and the like. If you want to save on that $16, you could use TaxSlayer [2] instead -- I've used all of them, and personally prefer TaxHawk. Just remember to decline any of the upselling they do just before you submit your refund. You probably don't need the premium service, a dedicated tax pro, nor audit protection. Source: am a CPA [0] https://en.wikipedia.org/wiki/Al_Capone#Tax_evasion https://en.wikipedia.org/wiki/Al_Capone#Tax_evasion [1] https://www.taxhawk.com/software/ https://www.taxhawk.com/software/ [2] https://www.taxslayer.com/#sf_qualify https://www.taxslayer.com/#sf_qualify
- sowbug 1y ago
  #1 works fine in stores and restaurants. Why would the government be different? #2 isn't a strong enough reason to justify the significant out-of-pocket costs and lost productivity of the US tax system. If the tax collector is regularly finding only $1 of $5 tax obligations, that seems better solved by improving the collector's record-keeping, not hanging civil and criminal penalties over the heads of 350 million citizens.
tallowen 1y ago
My lessons from working on IRS direct file lead me to believe there are a couple reasons: 1) How the welfare state is administered - as an example, the US does a child tax credit as part of the tax code, other countries have agencies that are setup to give parents money directly. We are trying to do _more_ with our taxes. 2) State taxes - the fact that there are multiple agencies that have their own rules and procedures makes things more complicated. Many localities have their own laws which can be hard to deal with. Efile has improved this since there are fewer ways for states to ask for new information 3) A lack of political will to simply. For the purposes of taxes, the us have multiple definitions of "are you 65" (were you 65 on Jan 1, were you 65 on Dec 31, etc). This makes taxes more complicated than they need to be 4) Conflicts between making things simple and incentivizing a behavior things like no taxes on tips or an EV tax credit both make filling taxes more complicated with the way that the tax code works right now. With better systems, this could all be taken care of for the taxpayer but right now it would require a more complex tax filing process Direct File was able to solve some of these problems, even automatically using data the government had already where possible. Ultimately I think it is possible to make taxes automatic in the US but the data flows required for it are probably more complex than in other countries due to the fragmented nature of the US government.
- TimTheTinker 1y ago
  > Conflicts between making things simple and incentivizing a behavior Yes. When there's a negative behavior that the free market incentivizes, tax code updates can address it without sounding as scary as "More Industry Regulations". Same with social policy and other goals. A lot of Americans are against the idea of "big government", which incentivizes government to use the tax code and other low-visibility means to accomplish larger goals.
- Gunax 1y ago
  I just want to thank you for this nuanced comment. I had never considered #3. It seems to me that there are many conflicting interests. We want simple taxes but we also want special protections and carve-outs.
  - 1y ago
Goronmon 1y ago
The Republican party is explicitly against any government intervention to simplify tax filing for Americans, so it makes it hard for improvements as they currently control the government. It also means its hard for Democrats to improve as well since removing any improvements in filing are some of the first things Republicans push to undo when the come into power.
gnopgnip 1y ago
Because of the Norquist tax pledge. Many politicians are opposed to any tax increase, including anything that makes paying taxes easier
sowbug 1y ago
Why must every service and thing in the US must be a private profit making thing? In the US, some believe that it's better to replace a government function that costs X with a private entity that charges X. The reasoning is that the efficient free market will drive down X, leading to better prices for everyone. In reality, my city's parking meters now charge a $0.50 minimum with a service fee of $0.25 to the private company that now runs them. I've tried competing by setting up my own lower-priced meters, but that's not working out so well.

ta20240528 1y ago

Yip, consider how much money banks make by injecting themselves between you and the reserve bank.

scott_w 1y ago
This is a very different situation. If you're interested, I'd recommend reading Can't We Print More Money by staff at the Bank of England (https://www.amazon.co.uk/Cant-Just-Print-More-Money/dp/1847943381 https://www.amazon.co.uk/Cant-Just-Print-More-Money/dp/18479...). The short answer is central banks are not setup to offer services directly to the public. This is different to the tax office in that people already need to interact directly with it! Anyone in the UK can fill out a Self Assessment, for example, however it's optional for almost everyone, because Pay As You Earn takes the tax off your employer instead.

janwl 1y ago

Can’t you file your taxes for free in the US if you know how?

willis936 1y ago
That's why GP said "tax prep". Anyone can download and submit a 1040. That isn't the part that takes domain expertise.
- janwl 1y ago
  I don’t know why assume that in every country in the world that is free. In my European country until 15 years ago or so you had to hire someone to do your taxes for you, and currently the free method only works for the most simple tax filing. In fact what you get is called a “draft” of your tax filings because you’re supposed to make sure it’s okay, and it’s your responsibility if you miss something or if the draft is wrong. And obviously the draft usually assumes that you will have to pay more tax, since there’s a perverse incentive given it’s the government who fills it for you.
  - unbrice 1y ago
    Which country if I may ask? I have lived in France Switzerland and Ireland and haven't seen something like this, even though governments provide the tax filing software. I wonder if the explanation actually had to do with these people who used to do the job 15 years ago influencing the process to ensure they remain relevant. Kind of like in the US actually.
bloomca 1y ago
Yes, you can download the form 1040 and fill it by yourself, you'd need a few Schedules attached. They all have instructions available online, your work has to send you a copy of everything they paid you and into the IRS (regular jobs always err on the side of overpaying), and while it is not hard, it definitely looks intimidating and takes time to understand, especially the deductions. You can also just not file your taxes, if you don't owe anything (and as I said, jobs always err on the side of overpaying) they won't bother you, but most people end up eligible for the tax refund, so it is more beneficial to pay for that service.
- reactordev 1y ago
  Sad part is, when I started working, this was normal. My father showed me how to do it. I did it for a few years and then TurboTax came along and I used that for free. Then they rug pulled me into a deluxe one year because I had 1099 income and ever since I’ve been jailed into paying if I want to use them. 1099 or not.
  - jayknight 1y ago
    Switch to freetax USA. I have 1099 income and it's still free.
    - reactordev 1y ago
      Besides the point. The point I was making is that because I had one year of 1099 income in the past, I was paywalled into paying. I no longer use TurboTax as my tax needs have changed. Thanks though but I wasn’t soliciting for alternatives.
  - bluGill 1y ago
    I used to do that every year. It wasn't hard. However one year I forgot to copy line 12b from form 9876 to line 34c of form 5432 and when the IRS caught that I had a big mess to clean up (since state taxes copy federal taxes so I had to refile state with the corrected numbers...). Now I just pay a small fee to FreeTaxUSA (I figure they deserve some money for their efforts in creating software). One thing I can say for sure: doing taxes with a computer takes me longer than filling out the paper forms by hand! There are so many delays while "calculated" (as if a ghz computer can't add numbers fast), and loading question pages that I can obviously skip (I never worked for the rail road, I'm not blind...) but take extra time because of how they setup the UI.

benjijay 1y ago

Land of the f(r)ee

bayindirh 1y ago
This is the greatest comment I have seen in a very long time. Kudos.
TimTheTinker 1y ago
My wife and I have visited several European countries, and I just don't agree. Switzerland is the land of many fees, followed by Iceland and other nordic countries. Germany, France, and the UK are also expensive. The going "low" price in Iceland right now for petrol is $8.74 USD/gallon. (Did you know that most of the public transport in the UK is owned by German and Dutch companies? They can rack up prices with little consequence.) The US has gotten more expensive to be sure, but IMO most of our high-cost problems stem from consolidated industries with regulatory capture (healthcare, farming+food+pesticide, tax prep, etc.) and low wages for the bottom 50%, not fees.

DiogenesKynikos 1y ago

The tax preparation industry exists in much of the world. Taxes are simple if you live in one place and only receive income from your employer. If you have multiple sources of income, connections to multiple countries, etc., things can get very complicated very fast. That's why the tax prep industry exists - and not just in the US. That being said, the Internal Revenue Service could prepare the taxes of most Americans. A simple system of, "Here's what we think you owe, based on the information we have on hand - sign and submit if you agree" would work for most people.

wood_spirit 1y ago
Right, when the Europeans say the tax is paid as you earn and the authorities let you file differences free and easily, they mean the vast majority of tax payers. It is rare to be the exception. Whereas I guess American Exceptionism (tm) means you all have to pay a rent seeking company to file taxes…?
- DiogenesKynikos 1y ago
  That only works if all of your income comes from your employer, and is thus reported directly to the financial authorities and subject to withholding. It is not that rare at all for Europeans to have other sources of income, and thus to have to file their own taxes.
  - rsynnott 1y ago
    In Ireland, and I think many other countries, if you have under 6k non-employment income, it’s ~trivial; you fill in a form on the website. It only gets complicated over that (though you would still typically do it all online; the form just gets _a lot_ scarier)
  - krige 1y ago
    As an European with multiple sources of income, all that boils down to is literally excel style fill in the boxes deal. There's even free tools that can handle the simple formulas if I don't trust my calculator enough. 1 hour a year at absolute worst; definitely no space for a finacial parasite to latch onto.

yodsanklai 1y ago

> Why must every service and thing in the US must be a private profit making thing? Culture

teekert 1y ago
Indeed, and tbh "work must be paid for" is not necessarily a bad thing. In the Netherlands we pay for our tax-software via our taxes (and I still spend about 250 eur on an accountant to do it for me, as it takes me a whole evening as an someone with a (small) company, I'm better of writing hours), is it the most efficient? I think not, judging from how much our government spends on IT projects that fail. There are a lot of hidden costs. That said, the lobbying is really bad of course, probably also prevents cheaper or FOSS alternatives.

NelsonMinar 1y ago

wait until you hear about our healthcare middlemen.

johnnienaked 1y ago

No other countries have tax prep services?

rsynnott 1y ago
Most countries use some sort of PAYE system, so the average person will need to do little or nothing on tax.
- johnnienaked 1y ago
  Every country I've ever lived in you had to prep and submit your own taxes. Never heard of that system.
  - zinekeller 1y ago
    If you happen to be an entrepreneur, a foreigner (relative to the country of work), or an American citizen (despite holding the citizenship you're on, thanks FATCA!), then, yeah, I can see why you have never encountered the simpler arrangements. If you're an ordinary citizen of most countries and work under a company, the company is obliged to track it for you. What you get is a very simplified form asking if you have more income sources than from your work, and the local tax system means that most of them legally do not have any (for example, banks collect the taxes for the interest you have received, not the arcane American system where you're the one responsible for that).
    - rsynnott 1y ago
      > a foreigner (relative to the country of work) In a PAYE system, merely being a foreigner isn't _usually_ an issue, provided that you're domiciled and don't have foreign income. The exception, as you mention, would be a US citizen; the US's approach to foreign income of its citizens is sufficiently weird that they'll generally have annoying tax situations. > What you get is a very simplified form asking if you have more income sources than from your work, and the local tax system means that most of them legally do not have any If even that. In Ireland, and I believe the UK, you only have to fill out that form if you actually _do_ have non-employment income which is not deducted at source. Most peoples' only interaction with Irish Revenue would be to claim tax credits on rent/mortgage/medical expenditure/whatever.

bell-cot 1y ago

Private, profit-making things are willing & able to "generously support" the politicians who enable their business models. Vs. public services and public servants? Not so much.

bluedino 1y ago

Should the US employ enough people to file 160 million tax returns each year? (Just individuals not corporations) The tax code is a behemoth. Plenty of loopholes to find to save money. Also, most of the tax prep companies are thinly disguised payday loan companies.

tokai 1y ago
Yeah they should.
Philip-J-Fry 1y ago
I think the point is that the vast majority of people don't really have a unique tax situation. And all the data already exists. There's just no framework set up to allow this to be automated like there is in other countries. It should be the case that all your basic taxes get calculated for you and taken at the point you're paid by your employer. Anything exceptional should be able to be claimed back via a web portal somewhere. So it's not like 160m tax returns NEED to be filed. That's just how it is today.
bluGill 1y ago
There are a lot less loop holes than in the past. In the 1950s taxes on the rich were 90% - but there were so many loopholes the rich in reality paid a similar tax rate to their peers today where the tax rates are lower, but there are also less loopholes. In the 1950s the common person couldn't take advantage of most loopholes (I'm not old enough to remember, but I'd guess mortgage interest was the only useful one, the rest where $100 here and there but it never added up to much for the common person)
rtkwe 1y ago
Most of the tax code is irrelevant to 90+% of people. ~90% of people just claim the standard deduction every year, you have to be significantly well off or in an odd tax situation for itemized deductions to come out to more than the standard deduction.

test6554 1y ago

Things that need work necessarily cost money. Someone doing the work for free is not inherently sustainable. Profits motivate work to get done all on its own. Profits by definition is money over and above expenses. So it creates a perpetual sustainable mechanism. Competition motivates quality and efficient pricing (eventually). Lobbying corrupts this a bit. However they are not lobbying to suppress private competitors only government-run competition that has no profit motive or competition. When the government runs it we still pay for it, except now people who don’t use it also pay. Also wealthy people pay a disproportionate share as compared to their use due to progressive income tax. In theory anyone can start a company if they have a better or more efficient product or offering and get the profits instead. Thats the rationale in a nutshell.

wredcoll 1y ago
It seems worth while to emphasize that, while these are indeed arguments that are made, they're not actually true.
randallsquared 1y ago
The usual argument is that taxes are already paying for the collection of data and calculation of amount, so why can't we just use the figure already calculated by default? This is most true for W2 employees without any uncommon circumstances, but there would seem to be a lot of people covered under that.
- the_snooze 1y ago
  It's a political challenge, not a technical one. There are constituencies that reap concentrated benefits from the current system (e.g., tax-filing services) while imposing disperse costs on everyone else. Also, there are those who believe that the IRS is out to get them, so filing your own taxes is more trustworthy than going with a government-issued pre-filled default. And that going through the motions makes the pain of paying taxes more salient, so you're more likely to complain about it. If you look at it as a practical or technical challenge, you're addressing the wrong question.
CodingJeebus 1y ago

ernst_klim 1y ago

Citation needed. In Germany tax-prep industry is huge, there is a huge network of tax consultants plus paid online services like taxfix and smartsteuer. The only countries I lived which didn't require you to declare the taxes were Russia and Georgia, mostly because 13% and 20% flat tax rate respectively. Any country which does have complicated progressive tax system would require you to declare taxes at least at some cases.

rcbdev 1y ago
Germany, as a de-facto vassal state of the US, is the exception that confirms the rule. This is an observation that comes from almost a lifetime of living in this region of our world.
256orbs 1y ago
Germany has ELSTER, which is a free government provided online service. I use it every year to fill in my tax declaration. It's not perfect but it works pretty good. Not so friendly for expats since it doesn't have internationalisation, so you need to know a bit of german (I use G translate).
- tirant 1y ago
  ELSTER is available but it is extremely complicated to use. Not even my Tax advisor uses it directly. You must be the first person I’ve heard that uses it directly. For me not worth to use it having extremely good tools like the offering from WISO. In my opinion a complicated tax law is a direct attack from the State against low and middle income population. If you have low income and poor education you will not be able to make use of the tax law to increase your available income, something that high income citizens do daily. In this case we have to thank the free market to provide really easy tools for less than €30 so middle and low income citizens can start at least to take advantage of the tax law. I’ve lived in multiple countries and always did my tax report myself. And the German situation is so blatantly designed, compared to other countries, to benefit only a very small portion of the population. Not only that, If the amount of man/hours that the whole country of Germany spends doing taxes would be spent on productivity gains or just normal work, the country would become immediately the richest country in the world. Instead, it’s just wasted effort and work.

jrochkind1 1y ago

One reason is that the US tax code is horribly complicated compared to anyone else, because we have tried to enact all sorts of social policy and subsidy through the tax code, because it was somehow more politically palatable to do it that way.

doom2 1y ago
If the government can determine that my taxes are wrong, then they know the amount I have to pay. So why can't they tell me the correct number up front? (Yes, I know the reason why, but I still feel like it's a valid question)
- TheJoeMan 1y ago
  They can determine your taxes are "fishy" and then demand further documentation. Say you declared you sold a car and profited, but seemingly under-reported the sale price. They'd show up and demand to see the bill-of-sale, maybe contact the buyer, etc. How would the government know ahead of time what price you sold the car for?
  - Tangurena2 1y ago
    Most fraud about car sales is to claim a lower price in order to skip on sales taxes collected by the states' motor vehicle agencies. Not all states charge a sales tax on individual-to-individual sales. Here in Kentucky, the state constitution says that taxes have to be charged on the assessed value, so part of the annual registration is based on the assessed value (min $100 for boats or $200 for cars/trucks). I used to work for KY's Transportation Cabinet (combo DMV + highway dept).
    - deleted 1y ago
      [deleted]
  - tempest_ 1y ago
    I don't understand how this changes anything? How would they know now? These examples are silly, most people are not selling a car privately all the time and they can handle any reporting or changes when you transfer the ownership.

bluGill 1y ago

Because most people don't know how simple doing their own taxes are. This is aided by a few people who have a complex situation and would have to have a real accountant do their taxes in every country.

burnto 1y ago
But it’s typically not simple. People often have some kind of life complexity that makes their taxes hard to confidently self-navigate here in the U.S. Receiving government assistance? Some kinds are taxable, some aren’t. Moved states? You have multiple state filings now. Got married? divorced? Splitting custody or property? Special tax forms to fill. Native American? Veteran with disability? Senior? Student with loans? Bankruptcy? Freelance income? Etc. Normal life events turn into tax complexity consequences. And without expert help, it’s hard to know if you’re doing your taxes correctly, which adds stress and time.
- Spoom 1y ago
  > Receiving government assistance? Some kinds are taxable, some aren’t. One would think that the government should know what government assistance you're getting. In any case, taxable benefits get reported to the IRS automatically on form 1099-G. > Moved states? You have multiple state filings now. Arguably irrelevant. You can change how filings work federally without changing how state filings work. Perfect is the enemy of good, etc. > Got married? divorced? Splitting custody or property? Special tax forms to fill. Sure. Sometimes you have life events that happen where you'll need to make adjustments. Such possible events can be mentioned in the letter / email you get from the IRS, with details as to how to adjust the filing. This is typically how it's been done in other countries with automatic filing. > Native American? Veteran with disability? Senior? Student with loans? Bankruptcy? Freelance income? Etc. Income typically gets reported to the IRS on a 1099 or a W-2. Loan interest gets reported to the IRS on 1098-E, so the deduction could be automatically calculated. Presumably the IRS would know if you previously filed a tax exemption and could assume that hasn't changed if it's based on things like having registered membership in a federally recognized tribe. Even if you haven't filed that exemption before, presumably the government would know that you registered the membership. The government knows your birth date so presumably they'd be able to calculate when you become a senior, where that's relevant. Bankruptcy is one of those special cases that I'd expect would be an exception case where you'd need to adjust the filing (and your trustee would probably help with that). Most people don't have special cases that require changes. The IRS already has a shockingly large amount of data on people. I encourage you to try getting your tax transcript some time[1], it should be illuminating. 1. https://www.irs.gov/individuals/get-transcript https://www.irs.gov/individuals/get-transcript

gorwell 1y ago

You can do taxes for free most of the time. Millions of us do every year, and the IRS estimates that 70% of tax payers could file for free. > Why must every service and thing in the US must be a private profit making thing? It isn't. There are roughly 2 million nonprofits. "Nonprofit organizations play a significant role in the US economy. In 2022, there were 1.97 million nonprofits operating in the US" And there are endless government programs and millions of government employees. The federal government alone spends over $6 trillion of our money, and money we don't have, per year, and most of it is on mandatory social programs. "About 60% of all federal spending is categorized as mandatory spending — which amounted to $3.8 trillion last year. This spending is essentially on autopilot because it funds programs whose eligibility rules and benefit formulas are set in law. This consists mostly of programs like Social Security, Medicare, Medicaid and Veterans care." https://usafacts.org/just-the-facts/budget/ https://usafacts.org/just-the-facts/budget/

Tangurena2 1y ago

> Why must every service and thing in the US must be a private profit making thing? This is a side-effect of the Protestant Work Ethic. Weber coined the term in 1905 as a way to explain why the Northern European countries (who were predominantly Protestants) were wealthy while the Southern European countries (who were predominantly Catholic) were poor. Prior to the election of JFK as US President, anti-Catholic sentiments were widespread throughout the US (which explains why Irish & Italians were not considered "white" until the early 20th Century). Even today, many Evangelicals do not consider Catholics to be Christians. > Calvin taught that all men must work, even the rich, because to work was the will of God. It was the duty of men to serve as God's instruments here on earth, to reshape the world in the fashion of the Kingdom of God, and to become a part of the continuing process of His creation (Braude, 1975). Men were not to lust after wealth, possessions, or easy living, but were to reinvest the profits of their labor into financing further ventures. Earnings were thus to be reinvested over and over again, ad infinitum, or to the end of time (Lipset, 1990). Using profits to help others rise from a lessor level of subsistence violated God's will since persons could only demonstrate that they were among the Elect through their own labor (Lipset, 1990). > Selection of an occupation and pursuing it to achieve the greatest profit possible was considered by Calvinists to be a religious duty. Not only condoning, but encouraging the pursuit of unlimited profit was a radical departure from the Christian beliefs of the middle ages. In addition, unlike Luther, Calvin considered it appropriate to seek an occupation which would provide the greatest earnings possible. If that meant abandoning the family trade or profession, the change was not only allowed, but it was considered to be one's religious duty (Tilgher, 1930). These 2 paragraphs also explain why many in the US have such an utter hatred for any sort of social safety net for poor people - those people are damned in the Biblical sense and therefore it is a sin to give them any sort of money, food or healthcare. [0] - https://en.wikipedia.org/wiki/Protestant_work_ethic https://en.wikipedia.org/wiki/Protestant_work_ethic [1] - History of it: http://workethic.coe.uga.edu/hpro.html http://workethic.coe.uga.edu/hpro.html [2] - https://en.wikipedia.org/wiki/Anti-Catholicism_in_the_United_States https://en.wikipedia.org/wiki/Anti-Catholicism_in_the_United...

niwtsol 1y ago
This is a really interesting take I had not heard before. Any further reading or additional concepts you mind sharing on this idea?

TrackerFF 1y ago

Partially there's this idea that if it the government that's in charge, you'll somehow pay more taxes. But if it's private enterprise, their incentive is to lower your taxes as much as they can, while you pay them a small fee. Not saying that this mentality or assumptions are good / correct, but that's basically the rationale I've heard too many times. There's this deeply, deeply ingrained idea that the government wants to rob you blind, no mater what.

saulpw 1y ago
And yet the government as a whole has no incentive to take your money beyond the tax laws they pass. Individuals may be corrupt but that's a very different issue. Whereas a for-profit company's explicitly stated goal is to make as much money off you as they can.

sambull 1y ago

Paywall all the things... all the things.

wredcoll 1y ago

I mean, you answered your own question: because a minority found a way to make a profit at the expense of the majority. (This particular situation is an alliance between the tax preparers, who have the obvious interest, and republicans who are ideogically comitted to inefficient/ineffective governments)

groundzeros2015 1y ago

America is entrepreneurial and many people have a small business of some kind. In other countries the regulation and culture is less business friendly so people don’t do it. Or they operate illegally, I think that a lot of immigrants have to adjust to how seriously tax regulations are taken where they may have been able to ignore them before.

stronglikedan 1y ago

Because we were founded on, and still prefer, that the government stays out of as many things as possible. It's always cheaper to pay a private company for a service than it is to pay your government to do it. And yes, you're paying your respective financial authorities to do it through your tax dollars.

testing22321 1y ago
Factually, people in the US pay more for healthcare and get worse outcomes than developed countries. https://healthjournalism.org/blog/2024/09/report-u-s-spends-the-most-on-health-but-outcomes-are-among-the-worst/ https://healthjournalism.org/blog/2024/09/report-u-s-spends-... I can’t find it on mobile right now, but the associated graph is very illustrative It is not cheaper to pay a private company.
- blasphemers 1y ago
  The us government is heavily involved in healthcare, so that's a terrible example.

calderarrow 1y ago

Two big reasons: 1. If the government is in charge of deciding the tax policy and collecting the taxes, it creates a potential conflict of interest if they are also in charge of telling you how much you owe. In theory, they could charge you more than they're legally allowed to, but how would you know unless you (or someone else) also calculated your taxes? A common suggestion to this is to have the government give a return that shows what they _think_ is owed, but this creates a conflict if the government accidentally underbills you, since you're not likely to correct the mistake. In order to ensure compliance on both sides, both the government and individual need to prepare the tax return. Otherwise, one party risks being overcharged/underpaid. 2. Tax evasion is an effective law enforcement tool for catching criminals, so by putting the burden on the individual to report taxes, you add another tool in the law enforcement toolkit. From the state's perspective, it is more compelling to tell a jury "this person owed $5 but only paid $1" than "this person owed $5, but only paid $1 because we told them they only owed $1." Tax evasion is how famous gangsters like Al Capone and other shady-characters have historically been caught[0] The tax prep industry is lucrative largely because of lobbying and consumer ignorance. There are plenty of free-file options for folks below certain income thresholds, as well as non-profits who will do your taxes for free. There are also lots of free tax-prep sites, but they are being drowned out by the advertising and lobbying of the for-profit tax-prep industry. To add my own 2-cents: if your income comes from investments, 1099, or W2, you likely can do your own taxes in about an hour. I personally use TaxHawk [1] since it's free for federal and $16 per state return, and has the same kind of interface as turbotax and the like. If you want to save on that $16, you could use TaxSlayer [2] instead -- I've used all of them, and personally prefer TaxHawk. Just remember to decline any of the upselling they do just before you submit your refund. You probably don't need the premium service, a dedicated tax pro, nor audit protection. Source: am a CPA [0] https://en.wikipedia.org/wiki/Al_Capone#Tax_evasion https://en.wikipedia.org/wiki/Al_Capone#Tax_evasion [1] https://www.taxhawk.com/software/ https://www.taxhawk.com/software/ [2] https://www.taxslayer.com/#sf_qualify https://www.taxslayer.com/#sf_qualify

sowbug 1y ago
#1 works fine in stores and restaurants. Why would the government be different? #2 isn't a strong enough reason to justify the significant out-of-pocket costs and lost productivity of the US tax system. If the tax collector is regularly finding only $1 of $5 tax obligations, that seems better solved by improving the collector's record-keeping, not hanging civil and criminal penalties over the heads of 350 million citizens.

tallowen 1y ago

My lessons from working on IRS direct file lead me to believe there are a couple reasons: 1) How the welfare state is administered - as an example, the US does a child tax credit as part of the tax code, other countries have agencies that are setup to give parents money directly. We are trying to do _more_ with our taxes. 2) State taxes - the fact that there are multiple agencies that have their own rules and procedures makes things more complicated. Many localities have their own laws which can be hard to deal with. Efile has improved this since there are fewer ways for states to ask for new information 3) A lack of political will to simply. For the purposes of taxes, the us have multiple definitions of "are you 65" (were you 65 on Jan 1, were you 65 on Dec 31, etc). This makes taxes more complicated than they need to be 4) Conflicts between making things simple and incentivizing a behavior things like no taxes on tips or an EV tax credit both make filling taxes more complicated with the way that the tax code works right now. With better systems, this could all be taken care of for the taxpayer but right now it would require a more complex tax filing process Direct File was able to solve some of these problems, even automatically using data the government had already where possible. Ultimately I think it is possible to make taxes automatic in the US but the data flows required for it are probably more complex than in other countries due to the fragmented nature of the US government.

TimTheTinker 1y ago
> Conflicts between making things simple and incentivizing a behavior Yes. When there's a negative behavior that the free market incentivizes, tax code updates can address it without sounding as scary as "More Industry Regulations". Same with social policy and other goals. A lot of Americans are against the idea of "big government", which incentivizes government to use the tax code and other low-visibility means to accomplish larger goals.
Gunax 1y ago
I just want to thank you for this nuanced comment. I had never considered #3. It seems to me that there are many conflicting interests. We want simple taxes but we also want special protections and carve-outs.
- 1y ago

Goronmon 1y ago

The Republican party is explicitly against any government intervention to simplify tax filing for Americans, so it makes it hard for improvements as they currently control the government. It also means its hard for Democrats to improve as well since removing any improvements in filing are some of the first things Republicans push to undo when the come into power.

gnopgnip 1y ago

Because of the Norquist tax pledge. Many politicians are opposed to any tax increase, including anything that makes paying taxes easier

sowbug 1y ago

Why must every service and thing in the US must be a private profit making thing? In the US, some believe that it's better to replace a government function that costs X with a private entity that charges X. The reasoning is that the efficient free market will drive down X, leading to better prices for everyone. In reality, my city's parking meters now charge a $0.50 minimum with a service fee of $0.25 to the private company that now runs them. I've tried competing by setting up my own lower-priced meters, but that's not working out so well.