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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

#211

Post by hermitdev »

quadrangle wrote: post #182
toomuchtodo wrote: post #169

Earlier quoted context omitted.

I don't think so. 45% of Americans pay zero income tax, even accounting for withholding.

Yeah, zero FEDERAL income tax but most of those pay for SS, Medicare, and state taxes. Those in a lump sum vs withholdings would still be a different experience.

The number of US citizens that pay federal income tax is closer to 35%. All forms of income tax ought be abolished. A consumption tax of around 18% would provide the same federal revenue. It would simplify tax reporting (i.e. reduce expenditures on tax reporting), and increase the tax base (people living on trust funds would pay in at a higher rater). Look into the "Fair Tax" for a well reasoned proposal for such a tax.

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

#212

Post by whack »

toomuchtodo wrote: post #169
joshuaheard wrote: post #151

Earlier quoted context omitted.

I think it's also akin to the withholding tax. If people had to write a check every year, there would be outrage to the amount people are actually paying. Instead, they are grateful for the government "giving" them a tax refund!

I don't think so. 45% of Americans pay zero income tax, even accounting for withholding.

> "This statement, however, is obviously untrue since, if one cares to move one's eyes slightly down the page at the Tax Policy Center web site, one will find that 73.1 percent of all tax units (in 2015) do pay either federal income taxes or federal payroll taxes. In other words, plenty of people who don't pay the "income tax" pay taxes on income via the payroll tax. That income tax is assessed at a flat and regressive rate of more than 15 percent, once both worker and employer shares are included. (The employer share negatively impacts the employees' wages, of course.) In 2014, payroll taxes combined for a total of 34 percent of all federal revenues in 2014, or one trillion dollars. (Those who don't get a paycheck pay the aptly-named "self-employment tax" in its place.)"

https://mises.org/blog/myth-half-americans-dont-pay-federal-...

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

#213

Post by losoq »

jkaptur wrote: post #116
avar wrote: post #110

This whole thread is full of comments from people who obviously haven't read the article / listened to the podcast in question[1]. Joseph Bankman proposed ReadyReturn in California, which is the kind of tax return pretty much the entirety of the rest of the western world uses. I.e. instead of an empty return, it's pre-filled in with the details the government knows anyway. This vastly simplifies things for most peopl…

I think that a major component of Norquist's thinking is that the more painful people find taxes (including the process of calculating them) the more they'll support his agenda of "a government so small you could drown it in a bathtub".

Unfortunately "starving the beast" doesn't seem to actually work. Low tax revenues don't lead to lower spending, just fiscal indiscipline.

I personally would prefer a leaner federal state but it's not clear how to get there.

http://econlog.econlib.org/archives/2013/04/starve_the_beas_...

https://en.wikipedia.org/wiki/Starve_the_beast#Economic_anal...

https://niskanencenter.org/blog/cant-make-government-smaller...

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

#214

Post by gech »

hundt wrote: post #139
avar wrote: post #128

Earlier quoted context omitted.

I've never had to file US taxes so this might be a stupid question, but how exactly are the people in your example worse off with ReadyReturn? Isn't ReadyReturn just e.g. summing up their reported wages for the return, which they'd need to do accurately anyway if they were filling it in from scratch? Yes, if you have a pre-filled in tax return nothing that the government doesn't know about & which might be deductible…

It's not a stupid question at all. In practice the U.S. tax code is not quite as simple as "Here is the tax burden for your income level; tell us if you have any deductions." Right off the bat, you need to determine your "filing status" (single, married, head of household, and some less common options) from a list of five choices, each of which has different rules for all the calculations that follow. Furthermore, fo…

Can you answer the question of whether Intuit lobbying for their interest is in the interest of the public?

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

#215

Post by toomuchtodo »

whack wrote: post #212
toomuchtodo wrote: post #169

Earlier quoted context omitted.

I don't think so. 45% of Americans pay zero income tax, even accounting for withholding.

> "This statement, however, is obviously untrue since, if one cares to move one's eyes slightly down the page at the Tax Policy Center web site, one will find that 73.1 percent of all tax units (in 2015) do pay either federal income taxes or federal payroll taxes. In other words, plenty of people who don't pay the "income tax" pay taxes on income via the payroll tax. That income tax is assessed at a flat and regressi…

Income tax is not payroll tax!

Income tax -> Federal income tax (discretionary spending)

Payroll tax -> Social security and Medicare (non-discretionary spending)

Everyone pays into entitlements via payroll tax. Not everyone pays into discretionary spending (everything except social security and medicare).

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

#216

Post by skissane »

Twirrim wrote: post #82
hnal943 wrote: post #48

Earlier quoted context omitted.

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

The UK does the same thing as NZ, no tax returns. At the end of the tax year you get a P60 form that tells you how much tax you paid over the last year. Instead of opting for the deductibles route, goods are subsidised at point of sale, so e.g. if you're buying solar panels, you don't need to cover the whole thing up front, or whatever financing deal you get, then claim money back in your tax return; instead the pric…

> There is a slight difference between the UK and US, though, in that there is no per-state/county income taxes. Only UK wide.

Not completely true. Scotland has for several years now had the power to set higher or lower income tax rates than the rest of the UK, but until this year they've never actually used that power. But now this year, Scottish income tax rates are actually being set slightly higher than the rest of the UK – http://www.telegraph.co.uk/news/2017/02/02/middle-class-scot...

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

#217

Post by sandworm101 »

ryanwaggoner wrote: post #209
sandworm101 wrote: post #199

Earlier quoted context omitted.

Norquist's tax pledge is very literally the creation of a child. He came up with it as a kid and hasn't felt any need since to revisit the matter. It is the immature and radical thinking of a teenager not tempered by age or experience. That he is still trumpeting it speaks to his character too.

This is a weird critique. It's been phenomenally effective and is consistent with his worldview, so what difference does it make when he thought of it?

That he was a child is immaterial to the immature and radical nature of his idea. It is backstory, colour, to describe the stereotypical nature of the idea. That a child creates an idea doesn't mean that it is bad per se, but should give adults pause before signing up to it themselves. That the young are always more extreme than the old should be common knowledge.

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

#218

Post by vollmond »

ksdale wrote: post #161
fnordsensei wrote: post #138

Earlier quoted context omitted.

Right! We can't make the government less awful, because happy people might not show us the support we need for our cause to make the government less awful.

While I completely agree that the incentives seem absurd on their face, a counterpoint I have is that while I worked in a CPA office for several years, I came to realize that a lot of people really have no idea how much they pay in taxes. Many people seem genuinely grateful to have received a refund, not realizing that it was money previously removed from their paychecks. I have no idea what the correct policy would…

I think that's what has happened with health coverage and with college over the last several decades. Mass ignorance about what people are actually paying, since the costs are removed from our immediate view, via automatic deductions, 3-months-later billing, and student loans.

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

#219

Post by quadrangle »

toomuchtodo wrote: post #190
quadrangle wrote: post #182

Earlier quoted context omitted.

Yeah, zero FEDERAL income tax but most of those pay for SS, Medicare, and state taxes. Those in a lump sum vs withholdings would still be a different experience.

That's not withholding though (as the parent referred to; withholding towards your federal income tax bill); as you mention, that's payroll taxes, which you're going to get in retirement back as entitlements. Consider what would happen if the IRS was efficient enough (through these automated tax accounting systems) to not get an interest free loan from working America for an entire year (ie dynamically modifying ever…

"IRS gets a loan" is metaphorically true in a sense but really doesn't hold up to scrutiny. The IRS doesn't actually get money from taxpayers at all. The IRS is just the bureaucracy that determines things. The money that you "pay" in federal taxes is just dollars that are deleted out of existence so that the dollars created by federal spending don't create inflation.

The federal government's "cash flow" is made up entirely of creating dollars out of nothing by spending and deleting dollars out of existence by taxing. The federal government doesn't "have" dollars.

http://www.moslereconomics.com/wp-content/powerpoints/7DIF.p...

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

#220

Post by accountface »

avar wrote: post #110

This whole thread is full of comments from people who obviously haven't read the article / listened to the podcast in question[1]. Joseph Bankman proposed ReadyReturn in California, which is the kind of tax return pretty much the entirety of the rest of the western world uses. I.e. instead of an empty return, it's pre-filled in with the details the government knows anyway. This vastly simplifies things for most peopl…

Jesus fucking christ fuck Intuit and Grover Norquist.
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