Would You Let the I.R.S. Prepare Your Taxes? (2015) • Hacker News Board

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#131

Post by Xixi » Mon, Aug 13, 2018, 6:03 PM UTC

rb808 wrote: post #43

sologoub wrote: post #2

Colleagues from the EU countries who relocate to the US generally tend to have a two-fold reaction - excitement at the lower tax rates and dismay at the filing complexities. Would be amazing to have the cake and eat it too - lower taxes and a simple filing system!

Lower taxes? In France the bracket for a family for €104,120 to €279,132 is only 30%. Sure if you live in Oaklahoma you might pay less than that but CA/NY state taxes plus property taxes, plus fewer investment tax free options, I think US taxes are now similar or higher. Ie 28% federal + 10% state + 10% property taxes equals nearly 50%. Sure sales tax is lower. Plus - you still have to pay for your medical care, and…

It's 30% of what remains after the "cotisations sociales" (or "charges sociales" as people who hate them like to call them). These social contributions amount to close to 50% of what the employer pays. So it's 30% of what remains, which is already only barely half of what the employer paid... These social contributions cover health insurance, retirement contributions, a pretty generous unemployment insurance, etc. So even though they are expensive for people working in France, the social safety net they provide is pretty good.

The 30% income tax you refer to would not be enough to cover that. I think the income tax in France doesn't even cover the interests of the national debt, that how little it is in the grand scheme of things. Hence why we have a hell of a lot of other taxes (VAT at 20%, CSG, etc.) to keep going...

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#132

Post by cortesoft » Mon, Aug 13, 2018, 6:03 PM UTC

kartan wrote: post #51

I have paid taxes in Sweden and Spain. In both countries, I get a preliminary tax form with all my data. If I don't want to change anything I just need to go online. Click Accept. And pay with my credit card the difference between what my employer pays to the government monthly and the total, around 100$. It is very efficient. I have the feeling that apart from lobbying USA loves to hate taxes. To make paying taxes o…

This is certainly true. In particular, Americans for Tax Reform (the group founded by Grover Norquist) lobbies against any attempt at making paying taxes easier for this reason. Their argument is that people should be constantly aware of how much they are paying in taxes, and making it too easy would hinder this.

These groups, combined with tax preparation companies, prevent any meaningful attempt to make paying taxes easier.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#133

Post by froindt » Mon, Aug 13, 2018, 6:04 PM UTC

rb808 wrote: post #43

sologoub wrote: post #2

Colleagues from the EU countries who relocate to the US generally tend to have a two-fold reaction - excitement at the lower tax rates and dismay at the filing complexities. Would be amazing to have the cake and eat it too - lower taxes and a simple filing system!

Lower taxes? In France the bracket for a family for €104,120 to €279,132 is only 30%. Sure if you live in Oaklahoma you might pay less than that but CA/NY state taxes plus property taxes, plus fewer investment tax free options, I think US taxes are now similar or higher. Ie 28% federal + 10% state + 10% property taxes equals nearly 50%. Sure sales tax is lower. Plus - you still have to pay for your medical care, and…

> ...I think US taxes are now similar or higher. Ie 28% federal + 10% state + 10% property taxes equals nearly 50%.

You can't just add the percentages up like that since federal and state taxes are marginal rates. You'd have to add the effective tax rates.

> Lower taxes? In France the bracket for a family for €104,120 to €279,132 is only 30%.

This range is $118,000 to $318,000 USD. At the federal level for a family $165,000-$315,000 is at the 24% marginal rate of taxable income (not gross).

In the convoluted system we have, you'd knock off $24,000 as a standard deduction, then any amounts contributed to retirement accounts (401k's and IRA's), HSA contributions if applicable. If you add all those vehicles up, that's up to another $54,000 taken off of your gross income. No idea how taxes in France works, aiming to point out there are tax advantaged spaces which would significantly reduce the tax burgeon.

Quick looking at things, NY state income tax would be about $20,500 on $323,000 in earnings (no deductions, credits, averages to about 6.3%).

I'm curious where you got your 10% property tax guesstimate though? I'm not familiar with New York to try to estimate through things, but [5] makes it seem not nearly that bad. Is it a highly localized thing?

"Property taxes in New York vary greatly between New York City and the rest of the state. In New York City, property tax rates are actually quite low. The average effective property tax rate in the Big Apple is just 0.80%. The statewide average rate is 1.65%."

--

Interestingly, Iowa, which people on the coasts would probably lump together with Oklahoma as low cost of living flyover states, has very high state taxes. 8.98% on earnings above $70,785. [4] New York's highest bracket hits at $2,100,000 and is 8.82%. [2]

[1] Federal Income Tax: https://www.nerdwallet.com/blog/taxes/federal-income-tax-bra... [2] NY Income Tax: https://www.tax-brackets.org/newyorktaxtable [3] NY Property Tax: https://smartasset.com/taxes/new-york-property-tax-calculato... [4] Iowa Income Tax: https://www.tax-brackets.org/iowataxtable [5] New York Property Tax: https://smartasset.com/taxes/new-york-property-tax-calculato...

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#134

Post by zzzeek » Mon, Aug 13, 2018, 6:04 PM UTC

Coding_Cat wrote: post #92

volkk wrote: post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

I live in a state that has 55 mph limit, and I've spent lots of time in states that have a 70mph limit. everyone drives the same speed regardless, around 75-80 on a straight and wide highway in the left lane, around 65 in the right lane. the sign means nothing.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#135

Post by AcerbicZero » Mon, Aug 13, 2018, 6:04 PM UTC

Coding_Cat wrote: post #92

volkk wrote: post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

Surprisingly enough, that tends to not be the case - http://www.sehinc.com/news/truth-about-speed-limits-explaine...

My personal anecdotal evidence on this, having recently driven cross country on I-80 (mostly 80MPH speed limits) and through Montana on I-90 (Again, mostly 80 MPH) shows that people drive at a speed that is safe for them. My car, and those that also seemed to drive a few MPH over the limit were all newer, highly capable vehicles, and the largest added risk was the chance of running into excessively slow moving traffic. When the visibility dropped, I slowed down, and when the visibility was clear, there was no additional risk in pushing it up a few MPH.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#136

Post by chipotle_coyote » Mon, Aug 13, 2018, 6:04 PM UTC

whatok wrote: post #66

ritchiea wrote: post #39

Earlier quoted context omitted.

It's not just that, anti-tax zealot Grover Norquist has outsized interest on the right and he gets republicans to sign a pledge to not raise taxes, and if they violate the pledge Norquist raises money and campaigns against them. The problem is, the pledge also requires signees also do not support legislation to make paying taxes easier. The radical anti-tax groups are so anti-tax that they see making it easier to pay…

The reasoning against many simplified tax filing proposals is that many of them reduce transparency and arguably raise taxes in an indirect sense because it makes it harder to file for deductions. I agree with that if you keep the current underlying tax system but just "simplify" filing.

While I suppose it depends on the proposal in question, the ones I've seen generally follow a "make the simple cases easier" rule: get the forms pre-filled with what's possible to prefill, verify what's filled in is correct, and if necessary, complete what's missing. If you need to file for deductions that such a system misses, it doesn't have to be any harder than it is now.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#137

Post by imgabe » Mon, Aug 13, 2018, 6:05 PM UTC

Coding_Cat wrote: post #92

volkk wrote: post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

> If you were to raise the speed limit to 75mph, people would just use the same logic to drive 90mph instead.

I've driven in parts of the country where the speed limit is 75 or even 80 and that wasn't my experience. There were not a lot of people blowing past me doing 95.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#138

Post by dionian » Mon, Aug 13, 2018, 6:05 PM UTC

chrischen wrote: post #115

Coding_Cat wrote: post #92

Earlier quoted context omitted.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

Perhaps for places with realistic speed limits, but there are places with unrealistic limits: http://articles.chicagotribune.com/2013-12-17/opinion/ct-enf...

Still true to this day - I've been pulled over for speeding just over 80, and the State Police knocked my recorded speed down to just below 80 so I wouldn't get a very serious "aggravated" speeding ticket (something like 15mph over limit)

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#139

Post by scarface74 » Mon, Aug 13, 2018, 6:05 PM UTC

icedchai wrote: post #122

stephengillie wrote: post #85

Earlier quoted context omitted.

Doesn't the bank send the same tax documents to the IRS as they send to you? (Mortgage interest is a commonly itemized deduction.) Itemized deductions could be a "dispute" item, where you would login, switch from Standard to Itemized, then itemize your deductions. It could possibly recall this setting, and even the deductions, from the previous year's input.

For some, yes. However, in some cases, no. For example, I have a sole proprietor with a lot of 'business expenses' (web hosting, software licenses, etc.) Those get deducted. It would be nice to get this streamlined! taxes are such a chore. Too bad there's a multi billion dollar industry - tax preparation and accounting - supported by taxes. It will never happen.

It wouldn’t be meant to cover every case. But most people have simple taxes - they receive an income from a job and investments that are already reported and thier only deductions are charity, home mortgage, state taxes and dependent (or did that change this year?)

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#140

Post by pratheekrebala » Mon, Aug 13, 2018, 6:06 PM UTC

ryanianian wrote: post #121

stephengillie wrote: post #3

I'm annoyed that there is no simple system for the IRS to tell me what I owe, and let me pay or dispute. Instead, we play this game where the IRS provides a bunch of complicated documents, I guess which ones to fill out and submit, then wait 3 years to see if I was randomly chosen to see if I was correct. So it's very easy to make a mistake for dozens of years, then suddenly be penalized at random. It's the worst kin…

> The IRS have all the data Not..entirely true. My 2016 taxes were professionally done, but we somehow forgot to include one of the something-something-1099 forms from a brokerage firm. The brokerage reported some RSU stock-sells to the IRS but didn't report the cost-basis, and so the IRS assumed the cost-basis was $0 and thus taxed the full sale as income (effectively double-taxing all the RSUs). They just sent a ta…

I don't think this would prevent you from using a CPA or Itemizing your return. However, this system could be very beneficial for the 68.5% of the population that doesn't itemize[1].

[1] https://taxfoundation.org/who-itemizes-deductions/