11–20 of 160 posts
Feature request: Put the effective overall tax rate calculation somewhere on the page - so often people are confused that they are paying the same percentage tax as their highest marginal tax rate, this tool could help elucidate that mistake.
For example, I inputted married, with no dependents with $500,000 salary and in 1977, the federal amount was $299,864 and in 2020 was $133,947. I assume these amounts can be compared without further adjusting for inflation?
Tangentially, did federal taxes really come down that much?
I think one issue with calculators like this is it doesn’t account for excluding revenue that now has to be included.
That's brilliant work, thanks! Imagine if IRS would produce something like this (open sourced) and we could file our returns like this.
The IRS can already calculate your taxes for you. In other countries you just have to confirm what the revenue department calculates as your liability and hit "submit". You have to do the calculations yourself because TurboTax et al., and accountants lobbied so taxes are complicated and must be completed by the filer (or their accountant).
> Each year Americans spend over two billion hours and $30 billion preparing individual tax returns, and these filing costs are regressive. To lower and redistribute the filing burden, some commentators have proposed having the IRS pre-populate tax returns for individuals. We evaluate this hypothetical policy using a large, nationally representative sample of returns filed for the tax year 2019. Our baseline results indicate that between 62 and 73 million returns (41 to 48 percent of all returns) could be accurately pre-populated using only current-year information returns and the prior-year return. Accuracy rates decline with income and are higher for taxpayers who have fewer dependents or are unmarried. We also examine 2019 non-filers, finding that pre- populated returns tentatively indicate $9.0 billion in refunds due to 12 million (22 percent) of them.
[1] https://www.nber.org/system/files/working_papers/w30008/w300...
Tax straddles were only banned in 1977 before that you should have easily been able to more then halve your tax bill with futures.
Are all the dollar amounts in the simulated tax output at the top of the page inflation adjusted? For example, I inputted married, with no dependents with $500,000 salary and in 1977, the federal amount was $299,864 and in 2020 was $133,947. I assume these amounts can be compared without further adjusting for inflation? Tangentially, did federal taxes really come down that much?
https://taxfoundation.org/historical-income-tax-rates-bracke...
That's brilliant work, thanks! Imagine if IRS would produce something like this (open sourced) and we could file our returns like this.
The IRS can already calculate your taxes for you. In other countries you just have to confirm what the revenue department calculates as your liability and hit "submit". You have to do the calculations yourself because TurboTax et al., and accountants lobbied so taxes are complicated and must be completed by the filer (or their accountant).
This only works because there's a high level of trust in the government and low corruption, and having detailed tracking isn't (very) controversial. The US is almost the exact opposite on every metric so it wouldn't work for it.
That's brilliant work, thanks! Imagine if IRS would produce something like this (open sourced) and we could file our returns like this.
The IRS can already calculate your taxes for you. In other countries you just have to confirm what the revenue department calculates as your liability and hit "submit". You have to do the calculations yourself because TurboTax et al., and accountants lobbied so taxes are complicated and must be completed by the filer (or their accountant).
Are all the dollar amounts in the simulated tax output at the top of the page inflation adjusted? For example, I inputted married, with no dependents with $500,000 salary and in 1977, the federal amount was $299,864 and in 2020 was $133,947. I assume these amounts can be compared without further adjusting for inflation? Tangentially, did federal taxes really come down that much?
A quick google shows that yes, there was a 70% marginal tax rate (applying to income over $108,300 - not inflation adjusted - for a single filer) as recently as 1981 https://taxfoundation.org/historical-income-tax-rates-bracke...