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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 mul

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.
    - avalys 1y ago
      Yes, and what do you think it is like in the US? It works exactly the same way.
    - DiogenesKynikos 1y ago
      You have a very simple tax situation. Many people do not. In the US, if you just have wage/salary income and an investment account, and you lived the entire year in one state, your taxes are also very simple. You can fill everything out yourself in one evening, or pay $100 to do it with tax preparation software. But things can rapidly get complicated. Did you move from one state to another during the year? Do you live in one state but work for an employer in a different state? Are there any credits or deductions you're eligible for? Or god forbid you live abroad, at which point you're dealing with double-taxation treaties and the like.
Nursie 1y ago
In the UK, for example, if you are a simple case (PAYE employee, no other sources of income) they just do it, you never interact with HMRC at all in the ordinary procession of things. You may get a yearly summary form (P60) but that's about it. Here in Australia everyone must fill in an annual return, but it’s a fairly well automated online system and they’re probably already already have most of the fields filled in, you just need to add anything more complicated or any deductions you think you’re owed. In both systems you can have an accountant file for you, or use other software, but you don't need to and most British people will never file a single return in their lives.
bloomca 1y ago
> 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. They already do that -- if you calculate your taxes wrong, they will send the adjustment (they will do it both ways, pay you back or ask for the remainder). I guess they might not be aware of all the deductions, but standard deduction beats itemized one for the majority, so they can 100% automate this whole process if they decide to. For complex cases and businesses, sure, you are on your own, but at least most W2 should be covered.
- djoldman 1y ago
  Yes, but tax filers have potential civil and criminal liability risk if they make a mistake. Presumably much less if one pays more than the IRS calculates is owed. Essentially both the IRS and tax filers verify correctness of the tax filer's return and the tax filer can be prosecuted if they make a mistake according to the IRS.
  - fn-mote 1y ago
    > Yes, but tax filers have potential civil and criminal liability risk if they make a mistake. How is this an issue? Why would it be different under another system? I see you posting a lot of what I think are pro-tax-prep messages but they don't seem to have any substance. Please try to take them to the conclusion of an argument. (That is, finish by connecting the facts you are posting with some assertion about the desirability of the current system, or some assertion the parent has made.)
    - djoldman 1y ago
      Apologies. What I mean to highlight is that although a mistake in filing may lead to the IRS rectifying the mistake by sending/requesting the error balance, there are other possible effects, including civil and criminal liabilities. This is undesirable. As mentioned in many comments here, the vast majority of filers, especially those with one employer and no substantial investment income, should not be required to file their taxes and instead the IRS should communicate the calculation result and ask if the filer disagrees. This is a classic problem related to the "you slice, I choose" false dichotomy[0]. Essentially, even assuming it costs zero time to fill out and file a tax return, any mistake at all could lead to a negative consequence to filer. As an aside, always choose to choose and not to cut the cake :) [0] https://en.wikipedia.org/wiki/Fair_cake-cutting https://en.wikipedia.org/wiki/Fair_cake-cutting
mitemte 1y ago
In Australia, if you work in multiple places and at multiple companies, it’s still trivial to file your own taxes. You log in to the government portal, where the collected amounts of tax from each income source, including bank interest, is listed. It can get more complicated if you have your own business but for the majority of people it’s easy and doesn’t require a third party.
- vel0city 1y ago
  Australia has a progressive tax structure, right? If you have multiple income sources how does each source know the proper withholdings? How do they know what deductions you'll be eligible for or are wanting to take?
  - Skinney 1y ago
    If it works anything like what we've got in Norway, they take a rough percentage, and once every year when the taxes are filed, the IRS equivalent charges or repays the missing amount.
    - stephen_g 1y ago
      That's how it works. You indicate if you want the company to take the tax free threshold (you only want to do this for one job if you have multiple), and then you can also elect to tell your employer(s) an estimated taxable income and they'll use that. Otherwise they just assume your income from that job is your taxable income. At the end of the year you file online and put in your deductions, which hopefully cover any other taxable income (capital gains, dividends, interest, etc.) if you didn't give your employer a higher figure. Then you pay if you're owing or get a refund if not.
  - fn-mote 1y ago
    I don't understand how these could be issues. They aren't in my country. You're still responsible. Tell each company how much to withhold. If they take too much, you get it back when you file taxes. If they don't take enough, you pay a penalty for having too large of a bill when you file. The issues you mention exist regardless of how many employers you have, because you can have income that does not come from an employer (e.g. stock dividends).
gdulli 1y ago
> "Here's what we think you owe, based on the information we have on hand - sign and submit if you agree" That implies the government would know significantly more about my life and my day to day affairs. That sounds like it would be a privacy nightmare.
- Ryokurin 1y ago
  How exactly? Currently, you report your earnings, your employers report what they've paid you, and banks report specific transactions. How does simplifying/eliminating the deduction process (which is all that an accountant is doing) give the government more info about you?
  - gdulli 1y ago
    This one government agency would need to know the superset of everything about you that could possibly be reported on any tax form. The simple case breaks down quickly. If taxes were redesigned to become overall much simpler, then sure, the reporting could be much simpler and more passive for the filer.
    - wredcoll 1y ago
      Nobody is suggesting they create a government super computer that does every single person's taxes perfectly. They're suggesting letting the irs actually use the resources they already have to automate the vast majority of the people's taxes to save everyone time and money. It doesn't have to be perfect to be a huge improvement.
- macNchz 1y ago
  Businesses paying people already file copies of the W-2s and 1099s that they send to their employees with the IRS, meaning that, for a very large chunk of Americans, the IRS already knows everything needed to fill out their tax forms.
- pavlov 1y ago
  Having lived in both the US and several European countries, America is already the privacy nightmare because all your data is with corporations who can do absolutely anything with it. European-style effortless automatic tax filing certainly wouldn’t make it any worse. (Also it’s rather ironic that people who think like you have been voting for the party which is currently enabling Palantir to build Chinese-style surveillance in America. But as long as the data is owned by billionaires and they promise to only use it against the “others”, I guess it’s fine.)
runako 1y ago
> the Internal Revenue Service could prepare the taxes of most Americans IRS Direct File[1] did exactly this. It apparently worked really well, and people liked using it, netting ~$20 billion in savings to the Americans that used it (roughly half of that came out of the pockets of the tax-prep industry). Then, DOGE got to it and the new administration's IRS commissioner killed the program. 1 - https://en.wikipedia.org/wiki/IRS_Direct_File https://en.wikipedia.org/wiki/IRS_Direct_File

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.
  - avalys 1y ago
    Yes, and what do you think it is like in the US? It works exactly the same way.
  - DiogenesKynikos 1y ago
    You have a very simple tax situation. Many people do not. In the US, if you just have wage/salary income and an investment account, and you lived the entire year in one state, your taxes are also very simple. You can fill everything out yourself in one evening, or pay $100 to do it with tax preparation software. But things can rapidly get complicated. Did you move from one state to another during the year? Do you live in one state but work for an employer in a different state? Are there any credits or deductions you're eligible for? Or god forbid you live abroad, at which point you're dealing with double-taxation treaties and the like.

Nursie 1y ago

In the UK, for example, if you are a simple case (PAYE employee, no other sources of income) they just do it, you never interact with HMRC at all in the ordinary procession of things. You may get a yearly summary form (P60) but that's about it. Here in Australia everyone must fill in an annual return, but it’s a fairly well automated online system and they’re probably already already have most of the fields filled in, you just need to add anything more complicated or any deductions you think you’re owed. In both systems you can have an accountant file for you, or use other software, but you don't need to and most British people will never file a single return in their lives.

bloomca 1y ago

> 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. They already do that -- if you calculate your taxes wrong, they will send the adjustment (they will do it both ways, pay you back or ask for the remainder). I guess they might not be aware of all the deductions, but standard deduction beats itemized one for the majority, so they can 100% automate this whole process if they decide to. For complex cases and businesses, sure, you are on your own, but at least most W2 should be covered.

djoldman 1y ago
Yes, but tax filers have potential civil and criminal liability risk if they make a mistake. Presumably much less if one pays more than the IRS calculates is owed. Essentially both the IRS and tax filers verify correctness of the tax filer's return and the tax filer can be prosecuted if they make a mistake according to the IRS.
- fn-mote 1y ago
  > Yes, but tax filers have potential civil and criminal liability risk if they make a mistake. How is this an issue? Why would it be different under another system? I see you posting a lot of what I think are pro-tax-prep messages but they don't seem to have any substance. Please try to take them to the conclusion of an argument. (That is, finish by connecting the facts you are posting with some assertion about the desirability of the current system, or some assertion the parent has made.)
  - djoldman 1y ago
    Apologies. What I mean to highlight is that although a mistake in filing may lead to the IRS rectifying the mistake by sending/requesting the error balance, there are other possible effects, including civil and criminal liabilities. This is undesirable. As mentioned in many comments here, the vast majority of filers, especially those with one employer and no substantial investment income, should not be required to file their taxes and instead the IRS should communicate the calculation result and ask if the filer disagrees. This is a classic problem related to the "you slice, I choose" false dichotomy[0]. Essentially, even assuming it costs zero time to fill out and file a tax return, any mistake at all could lead to a negative consequence to filer. As an aside, always choose to choose and not to cut the cake :) [0] https://en.wikipedia.org/wiki/Fair_cake-cutting https://en.wikipedia.org/wiki/Fair_cake-cutting

mitemte 1y ago

In Australia, if you work in multiple places and at multiple companies, it’s still trivial to file your own taxes. You log in to the government portal, where the collected amounts of tax from each income source, including bank interest, is listed. It can get more complicated if you have your own business but for the majority of people it’s easy and doesn’t require a third party.

vel0city 1y ago
Australia has a progressive tax structure, right? If you have multiple income sources how does each source know the proper withholdings? How do they know what deductions you'll be eligible for or are wanting to take?
- Skinney 1y ago
  If it works anything like what we've got in Norway, they take a rough percentage, and once every year when the taxes are filed, the IRS equivalent charges or repays the missing amount.
  - stephen_g 1y ago
    That's how it works. You indicate if you want the company to take the tax free threshold (you only want to do this for one job if you have multiple), and then you can also elect to tell your employer(s) an estimated taxable income and they'll use that. Otherwise they just assume your income from that job is your taxable income. At the end of the year you file online and put in your deductions, which hopefully cover any other taxable income (capital gains, dividends, interest, etc.) if you didn't give your employer a higher figure. Then you pay if you're owing or get a refund if not.
- fn-mote 1y ago
  I don't understand how these could be issues. They aren't in my country. You're still responsible. Tell each company how much to withhold. If they take too much, you get it back when you file taxes. If they don't take enough, you pay a penalty for having too large of a bill when you file. The issues you mention exist regardless of how many employers you have, because you can have income that does not come from an employer (e.g. stock dividends).

gdulli 1y ago

> "Here's what we think you owe, based on the information we have on hand - sign and submit if you agree" That implies the government would know significantly more about my life and my day to day affairs. That sounds like it would be a privacy nightmare.

Ryokurin 1y ago
How exactly? Currently, you report your earnings, your employers report what they've paid you, and banks report specific transactions. How does simplifying/eliminating the deduction process (which is all that an accountant is doing) give the government more info about you?
- gdulli 1y ago
  This one government agency would need to know the superset of everything about you that could possibly be reported on any tax form. The simple case breaks down quickly. If taxes were redesigned to become overall much simpler, then sure, the reporting could be much simpler and more passive for the filer.
  - wredcoll 1y ago
    Nobody is suggesting they create a government super computer that does every single person's taxes perfectly. They're suggesting letting the irs actually use the resources they already have to automate the vast majority of the people's taxes to save everyone time and money. It doesn't have to be perfect to be a huge improvement.
macNchz 1y ago
Businesses paying people already file copies of the W-2s and 1099s that they send to their employees with the IRS, meaning that, for a very large chunk of Americans, the IRS already knows everything needed to fill out their tax forms.
pavlov 1y ago
Having lived in both the US and several European countries, America is already the privacy nightmare because all your data is with corporations who can do absolutely anything with it. European-style effortless automatic tax filing certainly wouldn’t make it any worse. (Also it’s rather ironic that people who think like you have been voting for the party which is currently enabling Palantir to build Chinese-style surveillance in America. But as long as the data is owned by billionaires and they promise to only use it against the “others”, I guess it’s fine.)

runako 1y ago

> the Internal Revenue Service could prepare the taxes of most Americans IRS Direct File[1] did exactly this. It apparently worked really well, and people liked using it, netting ~$20 billion in savings to the Americans that used it (roughly half of that came out of the pockets of the tax-prep industry). Then, DOGE got to it and the new administration's IRS commissioner killed the program. 1 - https://en.wikipedia.org/wiki/IRS_Direct_File https://en.wikipedia.org/wiki/IRS_Direct_File