Filing Taxes in Japan Is a Breeze. Why Not in the US? • Hacker News Board

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

#171

Post by secabeen » Fri, Apr 14, 2017, 5:54 PM UTC

rbcgerard wrote: post #124

sidlls wrote: post #116

Earlier quoted context omitted.

How can one not know what they make post-tax, at least well enough to not be off by a few dollars? That is, after all, what one has to actually pay bills with. I know what my net earnings after taxes, retirement, etc. are to the nearest dollar, every paycheck. When I was substantially poorer (in academia, and prior to that school) I knew down to the penny (as a function of hours worked, even, when I worked hourly pay…

I think the allusion was to what their all-in tax rate is. Everyone knows what their take home paycheck is, but ask the same person what their effective tax rate was for the year, and most people don't have a clue (over withholding, 401k deduction, mortgage interest deduction, state and property tax deductions, phase outs etc)

Not everyone uses it of course, but TurboTax includes your effective tax rate in the Tax Summary they provide at the end of the process.

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

#172

Post by gamblor956 » Fri, Apr 14, 2017, 5:57 PM UTC

spangry wrote: 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,…

You've described the American tax system in a nutshell.

Employers withheld on wages, which is how most Americans "pay" their taxes. Most Americans also use a standard deduction, which is several thousand dollars. Taxpayers can alternatively itemize up all of their deductions and if the sum total is larger, use that sum instead of the standard deduction.

A US taxpayer with just W2 (employee) wages taking the standard deduction can fill out a tax return in 5 minutes or less. It only gets complicated when you try to take advantage of the many deductions and tax credits available in the tax code.

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

#173

Post by outside1234 » Fri, Apr 14, 2017, 5:59 PM UTC

patio11 wrote: 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…

How does your employer compute your taxes without knowing your outside income in interest, dividends, etc?

Or do you have to share that with your employer in Japan?

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

#174

Post by gozur88 » Fri, Apr 14, 2017, 6:03 PM UTC

csomar wrote: post #107

patio11 wrote: 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…

yeah I was not too convinced when I read the article. The government can easily figure out the taxes for your wage (which your employer did actually figure out) but they can't figure out the taxes on your real estate revenue, and maybe other activities (traded cryptocurrency? freelanced on the side? Airbnb"ing" some of your estate)

I would be willing to bet good money only a tiny percentage of people have income outside their employment. People who have real estate or bitcoin profits could always file an andendum.

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

#175

Post by mnm1 » Fri, Apr 14, 2017, 6:06 PM UTC

All other developed countries have no problem doing ________.

Why can't the US do _________?

Lobbying.

Works for simple tax returns, healthcare, labor laws, unionizing, etc.

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

#176

Post by rayiner » Fri, Apr 14, 2017, 6:09 PM UTC

II2II wrote: post #127

patio11 wrote: 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…

Wouldn't American employers also be spending a fair bit of money figuring out taxes for their employees prior to handing off the data and money to the IRS? And wouldn't financial institutions be doing something similar for their clients? The systems described by the article seem to be using the data submitted by employers and financial institutions to generate a tax return, which the tax payer verifies or adds to (in…

American employers only have to do withholding, which is extremely easy to calculate. Employees submit a W-4 listing the number of exemptions and any additional withholding. They plug it into a simple formula to calculate your withholding.

The withholding is not a calculation of actual taxes owed. E.g. it doesn't even have a way to account for spousal income for married couples.

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

#177

Post by nebabyte » Fri, Apr 14, 2017, 6:11 PM UTC

mnm1 wrote: post #175

All other developed countries have no problem doing ________. Why can't the US do _________? Lobbying. Works for simple tax returns, healthcare, labor laws, unionizing, etc.

The only justification I've ever heard for why lobbyism should be legal is "lobbyists act as 'lawyers' to help the people be heard in the legislative sphere".

If that were true, "if you cannot afford a lobbyist, one will be provided to you" would be a thing (and no, I'm not talking about crowd-funded 'patches' like the public funded NPOs/watchdogs protecting our rights).

As far as I'm concerned it's functionally equivalent to straight-up bribery. Accomplishes the same ends for the same people, just sidesteps the definition.

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

#178

Post by sfifs » Fri, Apr 14, 2017, 6:12 PM UTC

outside1234 wrote: post #173

patio11 wrote: 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…

How does your employer compute your taxes without knowing your outside income in interest, dividends, etc? Or do you have to share that with your employer in Japan?

Not in Japan but live in India which follows essentially a similar system. In India at least, the short answer is the employer doesn't.

However, every financial institution that deals with you deducts and prepays some taxes on your behalf and also reports the income. So at the end of the year, it shows up in a report which shows tax deposited and you just have to fill in the sum of that income as "other income". This system is good enough that if you are a salaried person with some investments and some tax deductibles like housing loan, tax filing takes about an hour and also normally doesn't have any surprise element of "you owe the taxman X"

It becomes complex only for business owners which is a small minority of the population of any country.

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

#179

Post by rayiner » Fri, Apr 14, 2017, 6:19 PM UTC

I love paying my taxes, and I kinda like the baroque U.S. process. Every April, I spend a couple of weeks being salty that government is penalizing me for being married, penalizing me for not taking out a giant loan to buy a McMansion in the suburbs, taking my money and using it to bomb Syria instead of helping working class families, etc. If my taxes just got auto-paid, I don't think I would even think of these things, and I don't think that'd be a good thing.

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

#180

Post by kspaans » Fri, Apr 14, 2017, 6:20 PM UTC

alkonaut wrote: post #168

I file mine by ticking a checkbox and signing with the normal national digital id app. This is Sweden. I do not understand how the hell this is still so complicated in the US. Just change it? My impression of politics and authorities is "if something is obviously broken then it's already worked on and probably fixed within a year or two". The reason crap isn't fixed in the US? Beats me - but I'll guess: because a lot…

To give you a small example: the deduction for moving expenses[0]. If you move for work (plus some other small conditions), you can deduct those expenses from your taxable income. This can't be claimed for you automatically, you have to ask for it. To automatically file your taxes would very likely mean you miss this deduction. It's the legions of (arguably) boutique tax credits like this that crank up the complexity of filling. Individually most of them are reasonable, but it would be hard to take them away because they are likely to be used by a lot of people (the mortgage interest deduction for homeowners, for example).

0 - https://www.irs.gov/taxtopics/tc455.html