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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

#41

Post by anigbrowl »

rayiner wrote: post #37
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…

The entire tax-prep industry generates about the same revenues as Dunkin Donuts. The idea that it is a significant causal factor in keeping taxes complicated is preposterous.

What's preposterous about it? You can buy a lot of influence for a couple million a year. Are you saying they're wasting their money and might as well just redistribute it to shareholders? If not, then presumably they think it a worthwhile expense or they wouldn't spend it.

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

#42

Post by javajosh »

javajosh wrote: post #40
KZeillmann wrote: post #25

Earlier quoted context omitted.

How do we "fix money in politics" without chilling free speech?

We put all candidates online, for free. They are not allowed to spend money on getting elected - although they can spend their time (generally speaking, sometimes studying, a particular problem, history, how other countries do it, etc). Citizens subscribe to individuals, and groups of individuals, that best reflect their views. Additionally, citizens will be exposed to views that are slightly or significantly differe…

Right speech is independent of its volume. Money can only increase volume, so get rid of it. Money isn't speech, it's amplification of speech, and as such should not be protected.

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

#43

Post by undersuit »

bmajz wrote: post #29

I was pretty surprised to see Zoe Lofgren's name pop up as an anti tax filing simplification advocate. She's the rep from CA's 19th District which covers San Jose (but not the rest of Silicon Valley) and generally a straight down the line liberal. This is not even Intuit's core district -- that would Anna Eshoo's 17th (previously 14th) district which covers Mountain View and Palo Alto. As a resident of this district,…

According to open data[1] the largest contributor to her campaign is Intuit and it's employees.

[1] https://www.opensecrets.org/politicians/summary.php?cid=N000...

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

#44

Post by lmkg »

djb_hackernews wrote: post #30
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…

Interesting objection. To me simplify taxes == simplify filing taxes. "I'm doing my taxes" does not mean I'm doing my tax code, but I am preparing and filing my taxes. As a lawyer and tax accountant, do you see a flaw in the professor's approach? Any domain expert insight here?

Depends on what you mean by "preparing." If the tax code is simpler, that means that there are less lines to fill out and fewer pieces of supporting documentation to find and attach. When people talk about making filing simpler, they mean that the lines are pre-filled, and the supporting documentation is either easier to obtain or somehow not necessary.

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

#45

Post by betenoire »

chiefofgxbxl wrote: post #24

Just for thought: suppose the tax system became so simplified that only goods X, Y,and Z were taxed at rates a,b,c. You pay aX+bY+cZ in taxes per year. It would be easy for voters to campaign their politicians to lower tax rates and easily verify. Obviously in the real world there aren't 3 levers to adjust: there are probably thousands or tens of thousands. Apart from the lobbying, politicians may themselves desire t…

You desire a system that encourages and facilitates blatant deceit?

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

#46

Post by rayiner »

chiefofgxbxl wrote: post #24

Just for thought: suppose the tax system became so simplified that only goods X, Y,and Z were taxed at rates a,b,c. You pay aX+bY+cZ in taxes per year. It would be easy for voters to campaign their politicians to lower tax rates and easily verify. Obviously in the real world there aren't 3 levers to adjust: there are probably thousands or tens of thousands. Apart from the lobbying, politicians may themselves desire t…

That's exactly why we have a proliferation of taxes and tax breaks instead of a simple tax system. Perform a thought experiment. Say we just have a straight 35% income tax. Now, say you need to raise additional revenues. Do you (1) raise the single tax; or (2) impose a new tax on some specific part of the economy? Option (1) gets everybody mad at you. Option (2) gets only a tiny number of people mad at you.

Same thing for tax breaks. Say you want to cut taxes. Do you cut the marginal rate, which helps everyone (even non-voters), or do you target cuts in a way that helps people who are likely to vote (homeowners, people with employer-paid health insurance, old people, etc.)? Same thing with business tax breaks. Do you cut rates for all businesses, or do you target them for businesses that are big employers in your state/district?

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

#47

Post by [deleted] »

ams6110 wrote: post #23
cestith wrote: post #16

Earlier quoted context omitted.

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.

The business of H&R Block and Intuit came about in response to tax code complexity, they did not create it.

[deleted]

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

#48

Post by hnal943 »

keithnz wrote: post #26
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…

In new zealand, we got rid of having to do tax returns for salaried/wage earners a number of years ago. Makes life easy for a vast majority of people. You can still do a return if you want to though. For the tax department it cuts down on how much infrastructure they need.

I think that's optimizing the wrong thing; people should be aware of the amount they are paying in taxes.

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

#49

Post by maccard »

ams6110 wrote: post #21
ars wrote: post #11

Earlier quoted context omitted.

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.

Taxing consumption would rapidly explode into a vast array of categories and rates for different types of consumption, luxury taxes, etc. Food, maybe no tax. But maybe there's some tax if it's ready-to-eat. Or based on sugar content. Automobiles maybe taxed rather heavily, but the first $5000 is exempt so poor people can buy cheap cars, etc. It would become just as complicated as the current code.

Taxing consumption is already done in many parts of the world. UK: most things are subject to 20% vat. Fresh food is 0% (normally), and there are a handful of things (children's clothes being the only one I know offhand) at 5%.

There's also heavy duties charged on fuel - over 2 pounds per US gallon (plus 20% vat). Alcohol - 28 pounds per litre of spirit.

Lots of these systems exist, and work, outside the US.

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

#50

Post by nicwolff »

lsaferite wrote: post #33
smt88 wrote: post #7

Earlier quoted context omitted.

Wealthy people are against that. They prefer regressive taxes, like sales tax, that will be shift much more of the burden to the poor. In fact, there's a whole batshit-crazy tax plan called FairTax that proposes changing all taxes to a simple sales tax.

Honest question, why is it batshit-crazy?

Because rich people spend a much smaller percentage of their income on taxable goods, so to be revenue-neutral the "fair" sales tax would have to be at least 30% (if you believe the FairTax fans) or over 50% (if you believe other economists).
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