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How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

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Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#191

Post by Broken_Hippo »

foota wrote: post #121
xupybd wrote: post #97

I live in New Zealand. I don't have to file taxes if my income is a standard wage my tax payments are automatic. My employer deducts them from my wage and they are sent to the IRD (Our government tax dept). My student loan and super payments are also automatic. If there is anything wrong then at the end of the tax year I can file to correct things. I also get donations rebates, this is a one page form that lists all…

The United States has a complicated tax code because it attempts to make things more "fair" for some people. Some of these are things people like, such as deductions for people with children, paying mortage, etc. Some are more dubious.

This, in general, shouldn't affect most folks' ability to have a simple tax filing system.

Your bank already has records of things like mortgages which they [can] report to the IRS. You can figure out two-earner tax rates with a program or chart. People already report their children in the W2's. The IRS already has the information on file and I imagine they use it to filter out folks that might need audited.

Even with tax credits, a complicated tax system, and all that, there isn't a reason why this can't just be done upfront instead of after the fact - at least for most folks.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#192

Post by sokoloff »

bluejekyll wrote: post #178
sokoloff wrote: post #80

Earlier quoted context omitted.

I think you're still stuck on W-2 employees (which is a pretty large and common case, I admit, and I'd love to see that simplified). You will always need accounting for businesses (IMO). Suppose you ran a lemonade stand. You bought some equipment, some raw materials, you used some utilities, you used some space, you bought a banner and some flyers to advertise your stand, you hired a lawyer to help set it up, you bou…

Sure. Let's focus on the individual return first. In terms of businesses, I hold somewhat controversial belief that businesses should not be taxed. Their employees are taxed, and people recieving dividends are taxed. By not taxing businesses, we'd also balance out the unfairness in the system today, where large companies are able to offset all profits with deductions, and small companies which actually pay quite a bi…

I don't know that I agree with the fairness points you raised, but from a sensibility standpoint, I like the idea. Corporate income tax is only 9% of total federal receipts, so it seems like we could make that up without incredibly burdensome changes. It would also make the US competitive again as a corporate domicile for multi-nationals (though without taxing them, it's not clear how advantageous that would be).

I do worry that it would raise other forms of exploitation of loopholes though. There would be less pressure to report payroll expenses (decreasing compliance and decreasing payroll taxes as anyone you pay off the books is cheaper out of pocket for you per dollar they receive) and I suspect we'd see a lot more people not taking large salaries at companies they control but rather funding their lifestyle needs with perks and loans from the company, the repayment of which would not be taxed.

Payroll taxes are 1/3 of federal receipts; any significant decrease in compliance there would perhaps be more damaging than losing the corporate tax income directly.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#193

Post by sampo »

dragonwriter wrote: post #153
stult wrote: post #144

Earlier quoted context omitted.

That's not the point of the article at all, nor of Intuit's lobbying. Even with the current complexity of the tax code, the IRS could easily auto file your taxes for you if your income is below a certain very high level and you do not have any special complications. Such a system would work for 98% of Americans. This has nothing to do with what deductions are available or whatever complexity they introduce into the s…

> There is simply no reason whatsoever not to implement return-free filing, beyond the large dollar amounts tax industry lobbyists spend on the Hill. It's not all Intuit lobbying. Many politicians of a particular faction oppose return free filing because they want to keep tax proxess as painful as possible to make people emotionally susceptible to anti-tax and, more generally, anti-government rhetoric.

Government which stays in power based on people's anti-government sentiment, isn't that something.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#194

Post by frogpelt »

As strange it may seem, a portion of people/corporations are always pro-privatization and anti-nationalization.

This helps explain why there is an anti-net-neutrality faction. It's not just because people don't understand. And it's not just because people are bought and paid for. There are actually legitimate arguments for privatizing things and then regulating them rather than nationalizing and trusting the government to manage effectively.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#195

Post by wpietri »

sbuttgereit wrote: post #90
tschwimmer wrote: post #36

Serious question: Is it possible for society to criminalize rent seeking behaviors like this? It seems clear that there's no benefit to keeping the status quo tax filing system except for the benefit of tax preparers. What's stopping the US from creating a law that says if a company attempts to lobby for something in bad faith (like the tax example), they will face sanction?

Fair question and I dislike this sort of thing as much as anyone. And of course such an opening comment means there is a "but..." coming. What you're asking for is to criminalize certain petitions of government. So how do you choose whom to discriminate against such that they cannot petition their government in regards to law making without, at the same time, simply institutionalizing the viewpoints of the other side…

I think "only solution" is far too strong. It seems to me there are two sorts of lobbying: positive sum informing of legislators, and zero/negative sum jockeying for societal advantage. We want to keep the former and minimize the latter.

So my proposal is:

1. Make all paid lobbying illegal. Make corporate donations to candidates, campaigns, and parties illegal. Eliminate revolving doors. Strongly limit individual donations. (And, while we're at it, maybe add federal funding of elections with spending caps.)

2. Industry groups, consumer groups, and the like can exist and publish what they want on their websites, but may not have private contact with legislators, their staffs, etc.

3. Legislators can communicate with outside groups to request information, opinions, and the like, but all requests and responses must be published in a permanently maintained record.

4. We increase the budget for congressional staffing and for neutral research groups like the CBO, so legislators have the resources necessary to make good law without having to lean on paid lobbyists.

I'm sure there are plenty of other proposals that could be made as well. The flow of ideas isn't the problem. It's the flow of money and power.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#197

Post by frogpelt »

sampo wrote: post #193
dragonwriter wrote: post #153

Earlier quoted context omitted.

> There is simply no reason whatsoever not to implement return-free filing, beyond the large dollar amounts tax industry lobbyists spend on the Hill. It's not all Intuit lobbying. Many politicians of a particular faction oppose return free filing because they want to keep tax proxess as painful as possible to make people emotionally susceptible to anti-tax and, more generally, anti-government rhetoric.

Government which stays in power based on people's anti-government sentiment, isn't that something.

The House and the Senate were established by the Constitution. Someone will be "in power" regardless of the prevailing sentiments.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#198

Post by frogpelt »

hackuser wrote: post #94

A tangential issue: It seems almost impossible to me that the systems of tax preparation services, whether cloud-based, local software, or offline, are secure. The standard of security is, make the target more expensive to breach than it's worth to the attacker. How much would it be worth to have access to the tax returns of large swaths of the population? I don't know the answer, but I'm guessing it's easily worth b…

But the Federal Government, now that's a secure bunch there.

/sarcasm

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#199

Post by abiox »

mikeash wrote: post #172
abiox wrote: post #171

Earlier quoted context omitted.

one might be that people are not fond of obsolescence and would prefer to keep putting food on the table.

Which in this case would mean keeping people sick. What's the difference?

does intent ever matter when evaluating a circumstance?

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing (2013)

#200

Post by geofft »

JohnDotAwesome wrote: post #104
geofft wrote: post #23

Earlier quoted context omitted.

That's what the 1040EZ is. Seriously, take a look at it, it's a single page, only half of which is calculations: https://www.irs.gov/pub/irs-prior/f1040ez--2016.pdf If you object that this isn't sufficient for you or someone else, I'll be happy to argue that whatever behavior would make you 1040EZ-ineligible should either not be permitted in a free society (because it's a tax-avoidance scheme for certain types of ric…

> Use this form if: Your taxable income (line 6) is less than $100,000. For a lot of the folks on HN, I'd bet that isn't true. At the end of the day, US taxes are super weird. This may be an overly simplistic view, but I'm definitely of the opinion that we need to drastically simplify taxes. Complex systems generally produce more opportunities for exploitation. I wonder just how simple a viable tax system could be.

I assume that's because it gets vaguely into AMT territory (nothing in the normal 1040 changes at or even near $100K), and the AMT mostly exists because of the complications of tax law.
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