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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?

#61
post #56

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,…

US companies do withhold money from each paycheck, but this varies not just by how much you make, but also by how many dependents you have and a few other things [0]. The US also has default deductions, or a person can choose to itemize. These vary if you are "head of household", single, married. However then there's all kinds of other deductions and things to complicate your tax return such as retirement accounts, mortgages, kids, side income, student loan interest, interest earned and on and on. Would be great if it was easier. :)

[0] https://www.irs.gov/pub/irs-pdf/fw4.pdf

Edit: People who are contractors / not employees have to remember to set aside a portion of their income that the employer would take out automatically for them.

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

#62
post #50

The NTA (National Tax Authority, cited as the Kokuzeicho in the article) doesn't figure out your taxes for you. Your employer does, as one of the (many!) ways in which they exercise paternalistic control of your life. If you do not have an employer, you get to go through a process which is almost exactly as fun as it is in the US, modulo a modestly competent online filing application. I spent $3k this year on account…

$3k??! How is that possible? I get personal and business taxes done for $200

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

#63
post #56

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,…

Disclaimer: I am not a tax professional, this is not tax advice, and I'm not your lawyer either!

> We have that [a employer withholding system] in Australia, and it definitely simplifies the process for workers at the end of the year.

We have that in America too, only it complicates our tax forms.

When filling out your Form 1040s, under "Payments" you fill field 64 "Federal income tax withheld from Forms W-2 and 1099" from your employer-provided W-2's field 2 "Federal income tax withheld" (ignoring fields 4 and 6, "Social security tax" and "Medicare tax" withheld.) And of course, any 1099-Rs with federal income tax withheld must also be attached to your tax return...

You can ask your employer to adjust your withholding - if you owe too much money (more than $1000 and more than 10% of your total yearly taxes?) come tax time, you'll have to pay an additional penalty. If you paid too much already, the government can wire it back to you, or apply it to next year's taxes.

> Personally, I've always liked the idea of a 'standard deduction'

We have this in America, it's great - mine was "only" $6300 this year (single, no dependents). On the other hand, there are deductions for everything from mortgages to electric vehicles (expiring after this tax year), which can add up quick. Fortunately I'm not there... yet...

I got lucky this year: Only 5-6 forms to mail.

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

#64
post #56

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,…

Yes, the US does have an employer withholding system but there are so many more layers of taxes and complexity because the taxation system is less federalised.

In Australia there is a single federal employment tax, and a single federal sales tax. States and counties typically collect property tax and fees from services.

In the US both the federal and state governments collect income tax. The tax rates and deduction complexity varies widely between the 52 states. Then the states AND counties (districts) have different sales tax rates. California alone has over 1790 districts each with sales taxes set at a local level.

Not to mention capital gains, Medicare tax etc...

Then the comparatively high lobbying, wealth inequality and inefficiencies in the US political systems makes tax change very slow or regressive.

*I'm an Australian living in the US

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

#65
Overlooked in this article and comments is the influence of one man -- Grover Norquist.

He runs an extremely influential organization that administers a sort of purity pledge that, for most Republican candidates for Congress, is necessary to sign in order to avoid being primaried.

He has decided that making taxes easier to do would make people more okay with tax increases, and so he has decreed that support for the kind of systems other countries use is a violation of this pledge. His excuse is that such a system would effectively slightly increase taxation by preventing people from getting away with taking erroneous deductions. This excuse is obvious, total bullshit.

Grover Norquist wants taxes to be painful because he wants people to dislike government and the concept of taxation in general. Thus, Republicans in Congress must take the same opinion or risk having their purity stamp revoked. Thus, no reforms get passed.

Perhaps this is one area Trump can do some good; certainly he's much less beholden to the traditions that bind the old guard (for better or for worse).

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

#66
post #16

"Hey, we here at The Government would like to make your experience paying taxes less painful. Hence forth, we're just going to take whatever amount we think is accurate, and you don't have to do anything! Just trust us!" Politely sir, take one giant step back from that and your beachfront property in Arizona, and diddle your own face. Now, serious answer? Because EVERYTHING about the US Government is intentionally de…

I'm not sure why other people in this thread think this is crazy. This is actually a widely held belief by Republicans. Many of them want paying taxes to be hard so people will be conscious of government burden. They believe making tax filing simple is a risk to our liberties.

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

#67
post #33

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…

UK equivalent: "Tax doesn't have to be taxing". The UK web filing system is also pretty good (part of the GOV.UK project), although if you're in a nice straightforward salaried job you won't have to use it at all.

I find it pretty annoying actually. I have been submitting my returns digitally for several years now and I haven't noticed any improvements?

For example, it pre-fills some data but omits obvious stuff like my first name and email address which are highly unlikely to have changed since last year?

Some non-relevant sections can be ignored but others need you to enter 0.00.

Also, if there is an error in the electronic filing, so your return is not submitted, good luck on finding what that error was because they aren't going to tell you.

And, lastly, the switch from the old style site to the new could be handled better, like all in one go instead of randomly switching you between the two.

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

#68
post #62
post #50

The NTA (National Tax Authority, cited as the Kokuzeicho in the article) doesn't figure out your taxes for you. Your employer does, as one of the (many!) ways in which they exercise paternalistic control of your life. If you do not have an employer, you get to go through a process which is almost exactly as fun as it is in the US, modulo a modestly competent online filing application. I spent $3k this year on account…

$3k??! How is that possible? I get personal and business taxes done for $200

Well it could be that my accountants just totally lucked out and presented a proposal to someone whose motto is Charge More For Professional Services, but it's mostly "I have a number of factors which make writing my tax return complicated", many alluded to here: https://news.ycombinator.com/item?id=10810367

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

#69
post #26

I'm in the UK. If you work as a regular employee, your tax gets automatically deducted and noted in your payslip. Each year you get a form posted out and if you disagree with the amount (I don't know anyone who ever has) you can contact HMRC to sort out the difference. If you work as a contractor/self employed, you have to fill in a self assessment form. I personally don't need to do one, but my partner did, and it t…

HRMC will actually tell if your employer(s) have screwed up and you're due a refund.

I imagine that they will also tell you if you need pay more for the same reason, but that's never happened to me.

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

#70
Ex-Russian here: this year I had very pleasant experience with FNS to declare and pay income tax for some extra income (13% flat rate btw). 5 minutes on the web site just to declare the money they were not yet aware of, click submit and choose payment method (could be cash payment in any bank, credit card or via integration with lots of banking APIs - my choice). Few more minutes after I figured out there's a small old debt on property tax, that they never bothered to collect, to pay it too. They started with rather complex desktop app and continuously improved UX, so now it's really good. Worth to mention that they have 2FA option with security token.
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