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Filing Taxes in Japan Is a Breeze. Why Not in the US?

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Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#51

Post by ajosh »

wobbleblob wrote: post #39

“We can’t make paying taxes pleasant, but at least we can make it simple.” I actually don't mind paying taxes, because I can see around me every day that the money is mostly put to good use. I can imagine if I lived in a place where there were little or no public services, bad public schools, bad infrastructure, five digit annual college fees, polluted tap water, power with frequent blackouts or brownouts etc, I'd be…

It sounds like you are describing different communities with different problems (i.e. Flint, MI doesn't have problems with frequent Brown outside - that was California 15 years ago) as though they are the same one. Also, most of those examples are things from state governments rather than the federal government. Of course, people don't talk much about state tax reform. State tax revenue sources can vary from property taxes to income tax to sales tax. Some states don't have an income tax and reply mainly on sales tax.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#53

Post by jschulenklopper »

golergka wrote: post #48
IkmoIkmo wrote: post #47

Here in the Netherlands my employer's data is all pre-filled in. Just have to log in to a mobile app and sign with my citizen's digital ID. (just a login with 2FA). All of that takes about 3 minutes, and it's pretty much sufficient for like 80-90% of my peers (fresh out of college). But with more complex deductions, you need to use the 'full web app', which is also pre-filled but comes with tons of questions. They ta…

Wait; employees have to fill taxes themselves? Why?

Employers withhold part of your salary - I think it's a fixed percentage based on the height of the salary - and pay that to the tax authority.

Yearly, citizens file their taxes, giving information that the employer doesn't have or does not take into account (like gifts to charity, partner income, mortgage interest paid, health care related costs, tax paid on dividend, ...) that results in more or less taxes that should have been paid. After receiving that tax-related information, the DTA calculates what you should pay additionally, or whether you get some of the taxes paid back.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#54

Post by eloisant »

It's a breeze in France too. Login to the government website, verify that everything preloaded is correct, add the few things they don't know about and you're done.

It's a mess in the US because Turbotax and others make money on that complexity and do lobbying to keep it that way.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#55

Post by PeterStuer »

oakesm9 wrote: post #20
dagenleg wrote: post #12

Earlier quoted context omitted.

Why would you want to word it like that? Let's not call it 'stop' but rather 'financially discourage'.

I meant is it really a free market when Intuit needs to pay off the government through lobbying to stop them making tax filing simpler so they can keep their market.

Yes. Others are 'free' to pay more to get candidates elected that would simplify the tax return. The 'beauty' of concentrated benefits and distributed pain is that the organization overhead combined with the real but sufficiently diluted pain for each individual sufferer sort of pre-empts this. This is why in these so called 'free' markets you end-up with all these complete absurd situations at the societal level.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#56

Post by spangry »

Does the US have a employer withholding system (i.e. if you get paid $1000 in a week, your employer withholds and remits whatever the pro rata amount is for $52,000 annual income to the Tax Office)? We have that in Australia, and it definitely simplifies the process for workers at the end of the year.

Personally, I've always liked the idea of a 'standard deduction'. People with a steady paying job for the whole year, and simple tax affairs, don't have much of a reason to fill out a tax return given how much data our Tax Office pulls in from other sources (e.g. your bank interest gets pre-filled). The longest part of the whole exercise is claiming all those little work-related deductions here and there. For most people I don't think this ever exceeds $1000 total.

So if the government just gave everyone a default $1000 deduction, combined with pre-filling, filing a tax return for most people would be a simple matter of looking at the summary and hitting 'agree'. You could even take it one step further: if you don't fill out a tax return the government assumes you agree that your default return is correct.

We almost had this in Australia [0]. It was a measure in our 2010-11 Federal Budget [1], but we didn't go through with it for.... reasons...

[0] And there's good reason to believe it would have radically simplified things. I recall 'tax agents' really hating the idea for some strange reason.

[1] http://www.budget.gov.au/2010-11/content/bp2/html/bp2_revenu...

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#57

Post by jschulenklopper »

anewday wrote: post #36
jschulenklopper wrote: post #11

I don't know when the slogan of the Dutch tax authority, "We can’t make paying taxes pleasant, but at least we can make it simple" was introduced, but in my view it has been supported in three different ways: 1) a simplification of the tax rules - mainly by reducing the number of exceptions and tax deduction rules, 2) filing the tax forms digitally - they started with desktop applications, and now the main focus is o…

Point 1 may be a goal of the dutch Tax Administration but all those exceptions and subsidies (toeslagen) are mandated by politics so there is only so much they can do about it. In fact the dutch tax system is actually hugely complicated by the sheer amount of interdependent exceptions and subsidies. So I'm really surprised they use the Netherlands as example.

Tax rules used to be even more difficult, and filing the tax forms used to be manual. So, at least in NL there's been some progress over two decades (compared to in the USA, as mentioned in the article), and filing a simple yearly tax statement is indeed reduced to 20-30 minutes. Mainly because many exceptions have been deprecated over the last decades, also reducing the operating costs of the DTA.

The system of subsidies ("toeslagen") for rent, health care, child daycare and such is complicated indeed... but not really related to tax (although it is sometimes capped based on the income). It was a political coincidence/agreement that the responsibilities for paying those subsidies was put at the Dutch Tax Administration, as that agency was more used to receiving (tax) payments than paying subsidies to citizens. Culturally, handing out money didn't 'fit' the tax administration well in the beginning, but there was no other agency in NL that was deemed capable of getting it done in a short time.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#58

Post by bigtimeidiot »

eloisant wrote: post #54

It's a breeze in France too. Login to the government website, verify that everything preloaded is correct, add the few things they don't know about and you're done. It's a mess in the US because Turbotax and others make money on that complexity and do lobbying to keep it that way.

>It's a mess in the US because Turbotax

Which is odd, because I've used Turbotax (and others) in Canada and it's also been a breeze.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#59

Post by bigtimeidiot »

oakesm9 wrote: post #20
dagenleg wrote: post #12

Earlier quoted context omitted.

Why would you want to word it like that? Let's not call it 'stop' but rather 'financially discourage'.

I meant is it really a free market when Intuit needs to pay off the government through lobbying to stop them making tax filing simpler so they can keep their market.

>I meant is it really a free market when Intuit needs to pay off the government through lobbying to stop them making tax filing simpler so they can keep their market.

You make it sound as if the government is just dying to simplify this stuff, but Intuit won't let them.

Intuit lobbies in its self interest. There is nothing wrong with that. The damage is done by the politicians who listen to the lobbying effort and play along.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#60

Post by gerbal »

philsnow wrote: post #43

pre-filled forms will probably help a largeish proportion of americans who have dead-simple taxes. once you start doing absolutely anything else (having a side job, renting out property, participating in the stock market, having income in multiple states, etc etc etc), you're in the byzantine territory of income/deductions/credits/AMT where nearly every line on every form involves reading the instructions for that li…

Most Americans have fairly simple single income taxes. Also all banks and investment services have to report your assets and income to the IRS.

If your taxes are complicated enough to need an actual accountant (not a tax preparer) you'd still need an accountant. But the tax preparers that fill out forms for simple W2s and a couple 1099 forms would be out of business.

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