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Stanford Professor Loses Political Battle To Simplify Tax Filing Process

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Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#11

Post by ars »

oDot wrote: post #6

I've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!

Not everyone earns money via income. You have to define what "income" is exactly, then it starts getting complicated......

Example: I route my investment earning via a company, that company can claim expenses such as paying my utility bills and buying my groceries, anything leftover they give me. They work it out so my net income is zero, oops.

It's easier actually to tax purchases.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#12

Post by thebrettd »

I love this idea in theory, and basically revisit it every year during tax season.

The tax/tax prep lobby is strong, and perhaps needfully so, as a whole bunch of people have their livelihoods wrapped up in it, but I often wonder if that whole industry is not actually a net negative for the economy.

edit: How do we help this idea take flight?

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#13

Post by jdpedrie »

oDot wrote: post #6

I've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!

Most tax reform proposals (at least those aiming for flatter systems) advocate lowering rates in exchange for eliminating the deductions and loopholes. Bringing the statutory rate and the effective rate closer together.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#14

Post by gamblor956 »

Correction: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source.

Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite the tax code.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#15

Post by thebrettd »

gamblor956 wrote: post #14

Correction: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source. Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite th…

This is a good point. I think a real solution to the 'tax problem' requires both a) having the gubment send us an itemized invoice instead of making us file and b) having a transparent, simple to grok code so that we can validate the bill.

edit: this is obviously a huge huge problem to tackle, but dont we all feel a lot of energy around this during tax season? :)

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#16

Post by cestith »

gamblor956 wrote: post #14

Correction: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source. Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite th…

I disagree on one point. Block and Intuit are also lobbyists against all sorts of code simplification programs. Anything that makes the filing process easier, and having fewer deductions and penalties available makes it easer, they are against.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#17

Post by charlesdm »

oDot wrote: post #6

I've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!

Then people living off of investment income wouldn't be paying any tax. At the same time, if you mean, tax all gains at 1.5x the income tax rate, investors wouldn't be properly compensated for the risk they take + inflation.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#18

Post by ribosometronome »

stanleydrew wrote: post #10
oDot wrote: post #6

I've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!

Because while simple, that's pretty regressive.

They're not proposing a flat income tax, though. You can have a progressive income tax provided we're liberal with how we define income.
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