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The case you outlined is for employed people - in this case the income and deductions are very clear and relatively easy for government to find out and calculat

by dh2022 1y ago

The case you outlined is for employed people - in this case the income and deductions are very clear and relatively easy for government to find out and calculate the tax. How would the government be able to know the income and deductions for small businesses? And in the USA at least lots of people have small businesses (cleaning businesses, landscaping, sub-contracting in construction industry, mowing lawns, consulting gigs, Uber/Lyft drivers, etc...)

op00to 1y ago
> How would the government be able to know the income and deductions for small businesses Determine the amount of average deductions for small businesses, benchmark against however much money you want to extract from small businesses, then give all small businesses a blanket standard deduction.
- dh2022 1y ago
  I personally have a problem with "benchmark against however much money you want to extract from small businesses"... So a hard NO from me.
  - dyarosla 1y ago
    How do you think tax rates are determined…?
  - op00to 1y ago
    You have to balance the books somehow. I'm not saying "pay for forever wars on the backs of small business owners." I'd like to see a personal wealth tax of 80% of any wealth over a certain benchmark ($50,000,000 maybe?), and 80% profit taxes for any companies with more than $1 billion in net profits. In my ideal world, small business owners should not really have to pay much in taxes, with the largest companies paying the lion's share.
- twoodfin 1y ago
  Yes, this argument is all about the tension between ease of filing and the complexity of the tax code. It really has very little to do with TurboTax lobbying, but that’s a framing that sells.
jedberg 1y ago
They wouldn't, those people would have to file like usual. But the vast majority of filers (something like 90%) only have forms that the government already has, and takes a standard deduction.
- twoodfin 1y ago
  Which forms does the IRS get when you separate from your spouse and the kids (aka dependents) move out, too? Does the IRS get a form when a child is born or dies? You could say, yes, the IRS should keep tabs on all this life activity, but that seems pretty gross.
  - dotnet00 1y ago
    Aren't you literally reporting those events when filing the related tax implications? How is it gross for the IRS to know that when you have to tell them anyway to get the associated tax adjustment? You'd just report it the year that it starts to apply, and then your future filings would have that accounted for.
    - twoodfin 1y ago
      The premise was the IRS could send 90% of taxpayers pre-filled forms for approval & these would have a high degree of accuracy—if you have to go over them with a fine-toothed comb, what’s the point? I don’t know the % of Americans each year who have a tax-related event that isn’t already reported to the IRS, but given something like the complex eligibility rules for the widely-used EITC, or the number of folks paying back college loans, I’m comfortable saying it’s much higher than 10%. A ton of tax law is premised on who lived where for how long to determine primary residence. Many citizens—especially poorer ones—move a lot. The IRS should build reporting mechanisms to keep tabs on where everyone lives month-to-month? You can either simplify the tax code dramatically or increase massively the amount of preemptive reporting to the IRS. Otherwise this idea of the IRS divining the typical American’s tax obligations is unworkable.
  - estimator7292 1y ago
    Those are rare events in any one individual's life. Even assuming those metrics aren't already reported to the IRS, you could still have them file manually when something exceptional happens. There's no reason that for most people in most circumstances couldn't have their taxes done automatically most years. Exceptions will always be the rule and our current processes handle them. That does not in any way exclude the usual cases.

by dh2022 1y ago

op00to 1y ago

> How would the government be able to know the income and deductions for small businesses Determine the amount of average deductions for small businesses, benchmark against however much money you want to extract from small businesses, then give all small businesses a blanket standard deduction.

dh2022 1y ago
I personally have a problem with "benchmark against however much money you want to extract from small businesses"... So a hard NO from me.
- dyarosla 1y ago
  How do you think tax rates are determined…?
- op00to 1y ago
  You have to balance the books somehow. I'm not saying "pay for forever wars on the backs of small business owners." I'd like to see a personal wealth tax of 80% of any wealth over a certain benchmark ($50,000,000 maybe?), and 80% profit taxes for any companies with more than $1 billion in net profits. In my ideal world, small business owners should not really have to pay much in taxes, with the largest companies paying the lion's share.
twoodfin 1y ago
Yes, this argument is all about the tension between ease of filing and the complexity of the tax code. It really has very little to do with TurboTax lobbying, but that’s a framing that sells.

jedberg 1y ago

They wouldn't, those people would have to file like usual. But the vast majority of filers (something like 90%) only have forms that the government already has, and takes a standard deduction.

twoodfin 1y ago
Which forms does the IRS get when you separate from your spouse and the kids (aka dependents) move out, too? Does the IRS get a form when a child is born or dies? You could say, yes, the IRS should keep tabs on all this life activity, but that seems pretty gross.
- dotnet00 1y ago
  Aren't you literally reporting those events when filing the related tax implications? How is it gross for the IRS to know that when you have to tell them anyway to get the associated tax adjustment? You'd just report it the year that it starts to apply, and then your future filings would have that accounted for.
  - twoodfin 1y ago
    The premise was the IRS could send 90% of taxpayers pre-filled forms for approval & these would have a high degree of accuracy—if you have to go over them with a fine-toothed comb, what’s the point? I don’t know the % of Americans each year who have a tax-related event that isn’t already reported to the IRS, but given something like the complex eligibility rules for the widely-used EITC, or the number of folks paying back college loans, I’m comfortable saying it’s much higher than 10%. A ton of tax law is premised on who lived where for how long to determine primary residence. Many citizens—especially poorer ones—move a lot. The IRS should build reporting mechanisms to keep tabs on where everyone lives month-to-month? You can either simplify the tax code dramatically or increase massively the amount of preemptive reporting to the IRS. Otherwise this idea of the IRS divining the typical American’s tax obligations is unworkable.
- estimator7292 1y ago
  Those are rare events in any one individual's life. Even assuming those metrics aren't already reported to the IRS, you could still have them file manually when something exceptional happens. There's no reason that for most people in most circumstances couldn't have their taxes done automatically most years. Exceptions will always be the rule and our current processes handle them. That does not in any way exclude the usual cases.