311–320 of 438 posts
It shouldn't require any form of "trust". A person should be able to tell within minutes that it's correct.
Otherwise the filing method isnt't the problem but the complexity of the tax code (for the large majority).
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 has actually run trials like this in the past. Very successful, at least for simply W2-based returns, since most people's taxable transactions get reported by companies anyway (i.e., mortgages/interest, other income, etc.) and most people use the standardized deduction. Inuit and Quicken subsequently lobbied to end those programs and even bar the IRS from running similar programs...
Intuit and friends are a red herring: https://www.huffingtonpost.com/grover-norquist/grover-norqui...
“Your taxes” is such an overloaded term that it’s almost comical to refer to it as if it means the same thing for everyone. There is basically one straight-forward case where the IRS preparing taxes makes sense: that of full time employees whose only income is from their job which issues W2s. For everyone else — which includes: - People working multiple part time jobs - People with non-standard investment portfolios…
"There is basically one straight-forward case where the IRS preparing taxes makes sense: that of full time employees whose only income is from their job which issues W2s." And as it turns out, this is the vast majority of cases. Just because there are a few other cases where it doesn't work out does not justify not doing this.
https://www.irs.gov/statistics/soi-tax-stats-individual-stat...
They don't have this category exactly, but it is clear that that there are many more than "a few other cases" that are not full-time W-2 employees. For example, 25M returns in 2015 (17%) have no wage income at all and around 13% have self-employment income.
Earlier quoted context omitted.
> The parent's comment still applies. If the progressive brackets were just swapped for a flat tax, the tax man still needs to know how much each employee had as deductibles, e.g. number of dependents, donations to charity, mortgage interest, etc. No, because the idea behind a flat tax is to eliminate most or all of those deductions, the same way they've already been eliminated for people who pay AMT instead of norma…
True in theory, but virtually every mainstream "flat tax" that actually gets to the stage of having a concrete proposal acknowledges the need for deductions. I don't recall ever seeing a true flat tax.
E.g. the case of the warm and cold chicken being taxed at different rates, as described in the linked Economist article.
It's common in places with such a distinction in the tax code for some stores to sell packaged cold food clearly intended to be eaten on the go, and then to conveniently offer a customer-operated microwave on-site partly as a way to avoid paying a tax that distinguishes between food sold as groceries v.s. take-away food.
I'm not advocating for flat taxes, but it is correct to say that such proposals in general do away with such emergent absurdities, and decrease the need for government bureaucracy.
Earlier quoted context omitted.
The parent's comment still applies. If the progressive brackets were just swapped for a flat tax, the tax man still needs to know how much each employee had as deductibles, e.g. number of dependents, donations to charity, mortgage interest, etc.
> The parent's comment still applies. If the progressive brackets were just swapped for a flat tax, the tax man still needs to know how much each employee had as deductibles, e.g. number of dependents, donations to charity, mortgage interest, etc. No, because the idea behind a flat tax is to eliminate most or all of those deductions, the same way they've already been eliminated for people who pay AMT instead of norma…
Removing deductions has nothing to do with the tax curve. You could do that with the current curve and tweak it accordingly.
Earlier quoted context omitted.
The autobahn is different. The people who drive on the autobahn self select because they want to drive fast and they have a disproportionate number of cars that can handle the speed. I doubt I would have been driving my first car - a Mercury Tracer - on the autobahn. But 80 miles per hour is not an abnormal speed on the highway. The posted speed limit is so rarely enforced, that it still isn’t a deterrent. For instan…
I'm not sure I understand this point. The autobahn is just the German highway system. Do Germans who don't want to drive fast and don't own fast cars all emigrate to Denmark or something?
Earlier quoted context omitted.
It is boring for the IRS's computers, which calculate everything the IRS needs to know automatically from the data sent by my brokerage firm.
Right but you are very OT at this point. The parent was arguing that for the vast majority of people taxes are boring and do not involve 1099-INTs or taxes on numerous stock trades. While true, these people have the easiest time calculating their required tax. No one ever was trying to say that IRS doing your taxes for you would never make things easier.
https://www.irs.gov/statistics/soi-tax-stats-individual-inco...
Earlier quoted context omitted.
> The parent's comment still applies. If the progressive brackets were just swapped for a flat tax, the tax man still needs to know how much each employee had as deductibles, e.g. number of dependents, donations to charity, mortgage interest, etc. No, because the idea behind a flat tax is to eliminate most or all of those deductions, the same way they've already been eliminated for people who pay AMT instead of norma…
"No, because the idea behind a flat tax is to eliminate most or all of those deductions," Removing deductions has nothing to do with the tax curve. You could do that with the current curve and tweak it accordingly.
In theory, but (serious) advocates of the flat tax generally are proposing both.
Earlier quoted context omitted.
The IRS has actually run trials like this in the past. Very successful, at least for simply W2-based returns, since most people's taxable transactions get reported by companies anyway (i.e., mortgages/interest, other income, etc.) and most people use the standardized deduction. Inuit and Quicken subsequently lobbied to end those programs and even bar the IRS from running similar programs...
Fun fact. Intuit spent just $2.4 million on lobbying per year and $775,000 on campaign contributions: https://www.opensecrets.org/orgs/summary.php?id=D000026667&c... . If their lobbying dollars are what caused the IRS to stop those programs, you could "outbid" them with just a Kickstarter. Intuit and friends are a red herring: https://www.huffingtonpost.com/grover-norquist/grover-norqui...
Also, IMHO, few people have messed up US tax policy like Grover Norquist. Even if you don't agree with that particular humble opinion, he is, at the very least, a figure with his own agenda to push. He's far from an unbiased source.
“Your taxes” is such an overloaded term that it’s almost comical to refer to it as if it means the same thing for everyone. There is basically one straight-forward case where the IRS preparing taxes makes sense: that of full time employees whose only income is from their job which issues W2s. For everyone else — which includes: - People working multiple part time jobs - People with non-standard investment portfolios…
Think of it this way. There are about 125 million households in the US. 80% of those households obtain money via: W-2, Retirement (Social Security, 1099-r), bank interest via 1099, dividends or other investment income via 1099, contractor income via 1099 and similar. 13% of taxpayers can file a 1040EZ (aka simple enough to use a phone IVR) 100 million households can be freed of a needless administrative burden. Why n…
But secondly there's a lot more to taxes than just income.
For example: - Filing status (married, head of household, etc.) - Education credits - Child credits - Personal exemptions (income adjustment reduced to zero, but you still need to calculate them to determine qualification for various things)
These things affect most taxpayers and require information that is not reported to the IRS. The IRS could make "worst-case" assumptions (single, no kids, etc) thus requiring everyone to revise their returns, or they could guess and invite tax fraud and inadvertent errors.
So that's a reason why not.