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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?

#211

Post by oppositelock »

The tax code is too complex, which is why it takes so much work to correctly compute what you owe. It doesn't matter whether the tax payer does this, or someone does this on their behalf to make it "easy". Taxes should be simple to pay because they're simply structured.

In the US, Congress derives much of its power from tweaking the tax code, it's how campaign contributions are rewarded. Do this for a hundred years, and you get a complex tax code. This is also why it's not going to be simplified anytime soon, since Congress will never vote to reduce its own power.

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

#212

Post by kelnos »

BoorishBears wrote: post #155
eitally wrote: post #148

Earlier quoted context omitted.

It's only 10min [using Turbo Tax | Tax Act | Whatever] if you have a simple 1040/1040EZ. Even simple things like 1099-DIV or 1099-INT, capital gains & losses on investments (including employee stock purchase or options programs), and charitable donations can add many hours, especially if the software doesn't have an automated interface to your various financial accounts. I typically use Turbo Tax, too, and even pulli…

I lucked out with the integrations lining up with most of my accounts this year(and personally I think the charitable donations wizard takes that long but I guess it depends on the nature of them), but even in years where it took days of slogging through wizards I still think about what the alternatives around the world are and I'm pretty ok with it. Obviously given the choice of a comparable tax burden and simplifie…

And yet people somehow still manage to live happy, financially-secure lives in Sweden. There's a lot more to consider about livability than just "what would my tax burden look like?"

I would much rather pay more to a Sweden-/Europe-style system and feel like I was actually getting something for my taxes, vs. the current state in the US where I only feel like a small fraction of my tax bill actually goes toward expenditures I think are reasonable. And to top it off, this year my tax bill is going to an administration that actively hurts people I care about with its policies. Gross.

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

#213

Post by basseq »

I did some work for the IRS several years ago to explore the same idea. There are many benefits, including simplicity and accuracy of filing (closing the $500B tax gap), as well as better fraud protection (another $25B). Protectionism of the tax return industry is common, but not the primary reason. Instead, the biggest pushback is from taxpayer advocacy groups. The issue is this: for many Americans, particularly low income Americans, their tax refund is the largest check they receive all year. Delaying that refund in order to receive all tax information (e.g., from banks and employers) and pre-populate a tax return would push back initial refund checks by 1-2 months. This is tantamount to political suicide.

More detail: https://news.ycombinator.com/item?id=14004152

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

#214

Post by kelnos »

Sir_Substance wrote: post #28
i_feel_great wrote: post #6

In Australia, via the mygov tool, for a simple wage earner like me, 10 minutes. All the payroll taxes amounts are prefilled, maybe 10 questions in all. Got my refund in ~ 10 days. The Australian Tax Office has a fairly extensive developers program to encourage more/better tooling and compliance. Edit: The ATO developers programme: http://softwaredevelopers.ato.gov.au/

BTW, the refund is a super-cool thing about the Australian system that may not be super-widespread. The Icelandic system is a very similar pay-as-you-go tax system, so tax is predicted and withheld from your wages over the course of the year. But Iceland errs on the side of under-withholding, if they don't know what your income is going to be. As a result, come tax time, most people get a letter saying "you owe us 60…

I would feel less opposed to over-withholding if the government were required to pay interest along with your refund.

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

#215

Post by mvidal01 »

This is a very interesting story about a Stanford professor that tried to get California to pass a law to make paying state taxes easier.

http://www.npr.org/templates/transcript/transcript.php?story...

More: https://priceonomics.com/the-stanford-professor-who-fought-t...

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

#216

Post by zeveb »

sidlls wrote: post #116
caseysoftware wrote: post #96

Earlier quoted context omitted.

There's good evidence for this. That was part of the reason the Feds pushed employers to do withholding "on our behalf" during the 1930s. Prior to that, taxes were filed quarterly and then only a small % of people. But people actually saw how much they paid. Withholding was a clever and subtle way for us to never see part of our paycheck so then any tax return we get feels like a bonus when it was actually just an in…

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…

> 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.

In my case, because I spend significantly less than I make, so I don't really need to think about my monthly bills. Yes, that's an incredible luxury, and yes I have friends and family for whom even a few tens of dollars of unexpected expense at the wrong time can mean disaster (and yes, I help them out).

Like you, when I made minimum wage I knew my after-withholding figure. But now? I honestly don't know.

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

#217

Post by kelnos »

danjoc wrote: post #191

I'm the only American I know that does my own taxes. I've never paid anyone to do them. I've never use software to do it. I print the form, and fill it out with a pen. It only takes me a few minutes. I even filed my own C corporation taxes once long ago. I'm not a CPA or tax lawyer or in any line of work related to taxes.

My handwriting is terrible; I'd at least want to use a form-fillable PDF, and having the ability to copy/paste figures between forms and a digital calculator would make me feel better about not making arithmetic or transcription errors.

I used to use TaxAct to do my taxes, but unfortunately they aren't simple enough anymore that I even feel comfortable using that without making a mistake. I just got my completed return back from my CPA the other day, and there are (required) things he did on there that I definitely would not have known how to do, even with the prompts in tax-prep software. If I had to puzzle through IRS form instructions, it'd be even more of a mess.

I actually did decide to look up one of the more confusing things my CPA did by reading some IRS form instructions, and it confused me beyond belief. I asked him about it and his explanation sounded reasonable, but there's no way I would have figured it out on my own. The US tax system is so messed up.

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

#218

Post by ams6110 »

gumby wrote: post #195
II2II wrote: post #127

Earlier quoted context omitted.

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…

How do you think the IRS checks your return? They already have everything they need for the vast majority of people (which includes tax payers, those who don't need to pay tax, those who don't need to even file, etc). People with various sorts of cash businesses that don't appear at any of the classic touch points are few and far between, and probably don't report anyway. And for the remaining people who, say, want t…

Since the sale of your primary residence rarely involves capital gain tax liability anymore, there's not even that much incentive to keep track of improvement expenses.

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

#219

Post by msound »

tantalor wrote: post #147

I don't mind the idea of figuring my own taxes, after all I can lookup all the numbers pretty easily, but the main obstacle to that is the tax instructions are impossible to parse. We should require the IRS to release the tax forms in a machine-readable format, e.g., as open-source software. The human-readable instructions should merely be the spec. Other people can write nice interfaces on top of that. Then you can…

In India, our income tax department accepts returns as an XML document, and tax prep software developers have built tools that basically help you generate the XML and upload it to the e-filing website.

PDF Link: https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPD...

Other than this, the government run e-filing website also has a nice interface to do your taxes. It's fairly simple. Just fill in numbers and click Next Next Next Submit, and you're done.

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

#220

Post by zeveb »

andrewla wrote: post #94

Ah, this takes me back -- one of things that I really liked in Obama's 2008 campaign [1]: > Simplify Tax Filings for Middle Class Americans: Obama will dramatically simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes. Obama will ensure that the IRS uses the information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms…

Pity that didn't work out. No doubt the tax industry's lobbyists earned their pay on that one …
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