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

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371–380 of 438 posts

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

#371

Earlier quoted context omitted.

Most Republican "flat tax" ideas have tax simplification as a major selling point (e.g. Ted Cruz talking about filing your taxes on a postcard); if you can simplify the implementation of the existing tax schedule, you lose that selling point.

The problem is the existing tax schedule isn’t so clear. Depreciation of assets for example. By “simplifying” tax filing without simplifying the underlying calculations, there is far less public visibility of just how broken the tax system is. A flat tax is closer to good than our current system. People that oppose flat taxes do so because they want other people to pay more. It’s that simple. See what Milton Friedman…

> A flat tax is closer to good than our current system.

No, it's not.

> People that oppose flat taxes do so because they want other people to pay more. People that oppose flat taxes do so because they want other people to pay more. It’s that simple.

Some of the richest people oppose the flat tax. And they do so because they want people poorer than themselves to pay less than they would in a flat tax scheme funding the same services.

> See what Milton Friedman had to say about tax code complexity. TLDR: it gives politicians the ability to curry favor or punish and it’s the source of their real power.

Maybe Friedman said that, but it's wrong; the monopoly on violence does that, and the tax system isn't particularly special among the avenues by which the power that monopoly grants can be applied.

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

#372

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...

Nearly everyone I've talked to (on both sides of the political spectrum) agrees on this issue; if the IRS has the means to verify and audit the data, they might as well prepare the forms and just get authorization (+ any additional info they might be lacking) before tax returns are submitted. So how is it that lobbying alone is enough to persuade lawmakers to take the side of Intuit et al.? And which lawmakers are so…

If a policy would bring a small benefit to a large number of people, but a large loss to a small number, the small group is much more motivated to fight against the policy, and will often win. This is why it is generally not possible to abolish special programs, shrink the size of the government, etc.

Also note that the "pure flat tax" idea earlier in this discussion and the "universal basic income" idea discussed elsewhere on this website have the same problem: the promised simplification comes from eliminating a bunch of special programs, exemptions, benefits etc., which is impossible.

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

#373

Earlier quoted context omitted.

> 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. Which is so stupid because so many people have no idea at all what they pay in taxes because of employer withholding. I knew more than one coworker who thought they didnt pay taxes because they get a check back at the end of the year. They had no idea how withholding worked until…

A lot of these people also argue against withholding for this reason. If people had to write a check every year (or every quarter, month, whatever) then, the argument goes, people would be outraged at how much they pay and there would be enormous pressure on Congress to cut taxes.

This cuts the opposite way. The practice of withholding and the overcomplicated code leads Americans to greatly over-estimate how much they pay in taxes.

Increasing tax transparency would lead to surprise at how little we actually pay in taxes.

http://time.com/money/5224749/how-much-americans-pay-taxes-i...

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

#374
The most time consuming part of filing taxes for me is not the actual filing or the data entry, it's the gathering of the data. Logging into a bunch of websites. Calling people trying to figure out how to get the forms. Looking through folders and old emails, etc.

At a minimum if there was a secure way that we could look that up and then feed that into tax prep software I think that would save us 80% of the time.

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

#375

They already do prepare your taxes. They just make you do the same work twice.

If they do, they are terrible at it. I get 'corrections' from the IRS about once a year to previous returns, all of which are basically them making an error and then sending me a bill. Not only do I have to waste time preparing my taxes, but I have to waste additional time disputing their BS 'corrections'.

I'm in my 40's and have only once received a correction that was an error on the IRS's part. I wonder why you receive so many, is your tax situation rather complicated?

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

#377

Earlier quoted context omitted.

https://www.propublica.org/article/filing-taxes-could-be-fre...

How do you tell which bills were targeted with their lobbying dollars? In 2016 Intuit's revenue was something like $4.7 billion. And they spent $2 million lobbying against bills that threaten the fundamental nature of their business? That seems absurdly low to me.

It turns out buying votes in Congress is actually quite cheap.

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

#378
post #96

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 radical anti-tax groups are so anti-tax that they see making it easier to pay taxes as support for taxes. So they want it to be difficult to pay taxes to make it easier for them to argue against taxes entirely. I don't know if getting rid of taxes entirely is really a goal for many of these people, but what you describe doesn't sound that unreasonable. Making paying taxes easier does sound like support for taxe…

Grover Norquist is on record saying that his anti-tax stance is to get rid of most if not all of government.

Starving the beast is a major policy aim.

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

#379
post #261

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…

I'm citizen of Austria and resident of the United States. Austrian tax returns are much simpler because in the majority of cases they don't exist: Your employer and your banks automatically withhold the correct amount of taxes (capital gains are taxed at a flat rate and don't influence regular income taxes). Marriage status doesn't matter for income tax as the same tax brackets apply to everyone. Deductions are much…

Australian here (we speak English and have kangaroos, not in the towns to be clear but they do outnumber the people). Australian personal tax returns are getting easier and easier with the move to electronic filing combined with pre-filling of income from employers and financial institutions. Log onto MyGov, check the pre-filled information which is about 90% of what you need then figure out the remaining special cases such as charitable donations, work related expenses and you are done. Accountants and tax filing firms are nervous and a bit worried but not showing that publicly or apparently lobbying.

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

#380

Earlier quoted context omitted.

Itemizing isn’t the only thing that makes taxes too difficult to do automatically.

Yes, but this isn't for the outliers who know they are outliers. This is for the people who right now are paying some company to essentially and unnecessarily siphon off some of their tax money.

I get it, but anyone making more than $100k probably has investments Schedule Ds and all that other crap to worry about. And anyone else can file a 1040EZ anyways. Not ideal for sure, but the hard case remains the hard case.
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