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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

#261

Post by fjdlwlv »

baudehlo wrote: post #196
ksdale wrote: post #161

Earlier quoted context omitted.

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…

Most people in the U.K. (the only other place I have experience with) never file a tax return. It's just assumed that the government is doing the right thing. Taxes are taken at source for all things, and if you have things outside of the norm you can tell your employer about it and they'll take care of it. Filing taxes was pretty alien to me. I'm used to it now, but it seems there are simpler ways.

In the US that's called "nanny state". The US has a stronger tradition of citizens who think and act independently, even when they are working cooperatively.

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

#262

Post by spoonie »

virmundi wrote: post #193
megablast wrote: post #143

Earlier quoted context omitted.

Which is also one of the big reasons the US is one of the few countries that don't automatically add on sales tax.

I thought that had more to do with the fractured taxing powers of the Feds, state and various local taxing authorities. For example Florida sales tax is 6%, but my county charges a 1% tax to provide sand road maintenance and paving. Pretacking is easy enough once in the stores, but somewhat odd when dealing with taxed and no taxes items.

It's the same in Canada: different sales tax/VAT rates in different provinces on different goods. E.g. HST on clothes in Ontario but no tax at all on clothes in P.E.I. I think it does have a lot to do with the federal system. The UK is unitary, so there is a flat 20% VAT on everything taxable, which is included in the sticker price. I wonder if Australia includes tax?

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

#263

Post by spoonie »

pbh101 wrote: post #235
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…

>since taxpayers might end up paying taxes already on the books that they might have previously unintentionally evaded. To take the charitable explanation of this position: studies have shown that prices go up when the payer gets more separated from the actual payment process: credit cards, automated tollbooths, and further open-road tolling have all been shown to significantly (statistically) correlate to higher pri…

How is easy filing for those who only earn income through employment any different from people who pay for tax prep every year? The people who pay for tax prep probably aren't thinking much about it either.

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

#264

Post by toomuchtodo »

fjdlwlv wrote: post #259
toomuchtodo wrote: post #190

Earlier quoted context omitted.

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…

Social security is not funded to pay back what current workers pay in

The funds are not held in escrow. The obligation is a social contract with the government.

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

#265

Post by spoonie »

imgabe wrote: post #206
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…

If people might pay taxes they were unintentionally evading, might they not avoid taxes they were unintentionally paying when they didn't have to? It seems the latter would be more likely, given how arcane the deduction/credit system can be. Just today I had to convince my girlfriend that no, just because she lives in one state and works in another she doesn't have to pay taxes twice to two states. This requires find…

I suppose it comes down to who you trust more: your tax preparer to get as many deductions and credits as possible for you, or the government to give them to you.

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

#266

Post by socialist_coder »

bingomad123 wrote: post #167
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…

> taxes already on the books that they might have previously unintentionally evaded. I agree with Grover Norquist. It might be counter intuitive but I would rather leave it to Turbo-tax to figure out the details than signing the form sent to me by IRS. Let IRS do the extra work of catching me if they think I am filing fraudulent taxes. Grover Norquist's view might be counter-intuitive but I a agree with him.

Ok, is anything in this proposal preventing you from using Turbo-tax, your accountant, or just doing it yourself by hand?

No one is forcing you to use the IRS pre-filled form. What is the problem? Let the "idiots" pay extra taxes if they want and smart guys like you can spend extra time and money doing your taxes the old way.

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

#267

Post by paulddraper »

frogpelt wrote: post #234
paulddraper wrote: post #223

Earlier quoted context omitted.

I guess I don't know what regressive means anymore. It doesn't mean the poor pay more. It doesn't mean the poor pay more proportionally to income...

A flat tax is called regressive because it drastically reduces discretionary income for the poor.

But isn't everything bigger to a small denominator?

E.g. the poor recieve me government services relative to discretionary income?

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

#268

Post by spoonie »

cookiecaper wrote: post #254
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.

I agree. In fact, withholding should be done away entirely. Try taking money from people in a non-transparent way and see how well that goes. It's amazing how quickly someone's feeling on taxation can flip once tax season means writing a check instead of getting a refund. Of course, that's exactly why the system is set up the way it is; a number on a pay slip feels much less real than dollars that you have to fork ov…

I think people would freak out because many would forget to keep money aside to pay for taxes at the end of the year. If it were phased in or there was a large public education campaign to remind people to put money aside I bet there would be less anger.

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

#269

Post by cookiecaper »

ccvannorman wrote: post #77
ThomPete wrote: post #38

Earlier quoted context omitted.

I am not sure I see what you mean with "merely" it's quite a big thing not to have to deal with it every year. In Denmark and many other countries this is a non-issue. The US should be too but too many interest from the lobbying of people like Intuit.

This is the correct answer to American's "That won't work because ..." on this thread. Turn your head to the right and take a look at Europe where it is plainly working just fine. Turn your head back left and look at how F'd up taxes are in the U.S. and it's pretty clear that objectively we have no excuse other than "some small minority of people are profiting from a broken system and are going to keep it that way."

First, what works in Europe is not necessarily portable. We could just as easily pick things that are better about the U.S. and badger Europeans about why they're not doing it that way when "it is plainly working fine".

Second, everyone attempts to cast every policy decision they dislike as evidence of corruption, chicanery, etc., but I don't think that's typically the case. The fact that a corporation and an elected representative agree regarding some policies does not immediately invalidate the position, nor should it immediately implicate the representative in accusations of malfeasance.

People have spent significant time in this thread discussing the pros and cons of such a policy, yet you insist that the only possible reason it would fail with the people's representatives is that "a small minority are profiting from a broken system". I guess since an advocate carried around a binder full of positive reviews, we assume that must be the universal sentiment of the people?

Is it not plausible that, as seen throughout this thread, many people simply don't agree that this would be a positive change?

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

#270

Post by cookiecaper »

MaysonL wrote: post #136
rayiner wrote: post #61

Earlier quoted context omitted.

The Chamber of Commerce has been lobbying for a simpler tax code (including flat taxes) for decades. They can direct vastly more lobbying dollars to the problem than can Intuit or H&R Block. If it was just a matter of lobbying dollars, the 0.5% of the economy that benefits from more complicated taxes could not possibly out-lobby the 99.5% of the economy that benefits from simpler taxes (all else being equal).

The thing is, there are a lot of people and industries lobbying to keep the tax system complicated: real eatate agents and home builders want the mortgage deduction, oil and gas industries want the depletion allowance, hedge funds want carried interest, et cetera ad libitum. It's nowhere near 0.5% of the influential people in the economy, plus the people it benefits, it benefits a lot, while everybody else, it grinds…

Turns out that people want to pay less tax. You say this like it's unexpected.

Most people are not going to have personal concerns over a pre-filled return as long as they are confident that they can modify it without repercussions. They may oppose it ideologically, on the basis that the government should experience as much friction as possible in its efforts to fleece the populace. Such an ideological position is a valid reason to oppose this change.

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