I just donated to ProPublica. Amazing work.
IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
401–410 of 489 posts
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#402Earlier quoted context omitted.
Capping the deduction for state and local taxes is proper. The cap should be $0. If those taxes can be deducted, the nation is subsidizing the more wasteful states. We create a situation where the winning move is to jack up state and local taxes. This diverts more money to the state. The cost of wasteful spending gets spread across the nation, while the benefits stay with those who are wasteful. This encourages a rac…
That’s double taxation. It’s not fair to literally tax me on the taxes I have to pay to another government entity. I don’t even get taxed on the taxes I pay to foreign governments with no cap (?!). The government is “one” from my perspective wrt taxes. No reason for me to pay federal tax on my state tax, period. Your argument just makes it more efficient for the federal government to be wasteful than state government…
I was in fact thinking of that idea that "high tax states also pay for literally all the other states", and I pointed out a flaw in that argument. They are underpaying their federal taxes. The voters in those states also happen to be the ones voting for expensive government programs, so it is only fair that they pay.
There is no double taxation. You owe tax first to the federal government. The state could let you deduct federal taxes from your state taxes, or not. The federal government has no duty to give you a discount for your choice to live in a place that would divert lots of your income to local purposes.
As a thought experiment, consider the ultimate extreme. The local government takes 100% in taxes, then provides you with everything (house, food, clothes, etc.) as government services. Your region thus pays ZERO federal income tax despite having wealth to enjoy (you are fed, etc.) and receiving federal funds for various things.
What you have is a partial version of that extreme. Your state isn't being 100% unfair to the other states. It is just modestly unfair. The federal government shouldn't enable that kind of unfairness.
BTW, politifact is not credible due to strong partisan bias. I also don't think that "transfer payments" are a proper accounting for differences.
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#403Earlier quoted context omitted.
Tax brackets are the simplest thing in the world but I've heard this argument several times. Is it made it good faith? Are there really people who think tax brackets make taxes complicated and not 401ks, mortgage interest tax deductions, capital gains, etc? A flat tax is completely orthoganal to the complexity of the tax system(which is almost entirely what counts as income, and what type of income does it count as).…
If you have 5 tax brackets, all the other parts of the tax system basically get multiplied by 5 in the number of combinations that could cause weird optimal equilibriums. Eg, maybe the most optimal retirement plan changes depending on whether you are in the 2nd-to-lowest or highest tax bracket. That means advice for one person might be suboptimal for someone else solely because they are in a different tax bracket. Fa…
> I don't want to be incentivised to be thinking about that sort of thing, I'd rather just know there are no options.
That's the flip side to a flat tax, we save a ton on the opportunity costs paid for with time and the development of expertise in all this minutiae. We have entire industries and corporations devoted to taxation. At what point does the benefits gained by our tax complexity get outweighed by the regulatory costs and burdens associated with compliance to that complexity?
A quick check
> Tax preparation is BIG business – there were 300k people employed at 109k firms in 2012 - generating $9 billion in revenue in 2012. The industry grew over 2% from 2010-2015, and is expected to speed up the pace of growth. Revenues of $11 billion are forecast for 2018. https://www.franchisehelp.com/industry-reports/tax-preparati...
What else could we get with that sort of brain/man power?
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#404This USA tax thing has always baffled me... it is the exact definition of why we pay taxes: for the government to provide services that are common to the country´s citizens. There´s nothing more common than tax collection: rich, middle class or poor. Why wouldn't citizens demand a public tax filing process? Even in Mexico we have an automagical tax filing process that makes: a) The great majority of the population wh…
a) The great majority of the population who perceives a salary not needing to file taxes. In the United States, and many other nations, the vast majority of taxes aren't collected from payroll. If that was the case, things would be easy. But there are hundreds of other ways that taxes are collected, and they vary from person to person. More importantly, taxes aren't exclusively about revenue generation. They're used…
Or people do understand how taxes are used and fundementaly disagree that taxes should be used for those purposes
Taxes sole purpose should be to collect money to provide services, Nothing else
they should not be used to socially engineer the society the way the government sees fit, that is not a free society or a functioning democracy/republic at that point
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#405Earlier quoted context omitted.
When I've guessed wrong, I've also been rewarded with unexpected large dollar figure checks in the mail. I did once make an error that cost me, and someone at the IRS was excellent in working together over the phone to get things square.
> I've also been rewarded with unexpected large dollar figure checks in the mail. But did they also send any interest? Notice if you owe them, you also owe interest, unless you negotiate. If they owe you, you don't usually get the interest sent do you.
I'm not sure if this is the exact situation you're referring to, but you do get interest sent to you if you later amend a tax return in your favor.
Source: I've filed a 1040X twice, both times in my favor (due to my own mistake I noticed on my own later). The IRS issued me a 1099-INT the next year for the interest they paid me. The rate was substantially above market!
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#406Earlier quoted context omitted.
a) The great majority of the population who perceives a salary not needing to file taxes. In the United States, and many other nations, the vast majority of taxes aren't collected from payroll. If that was the case, things would be easy. But there are hundreds of other ways that taxes are collected, and they vary from person to person. More importantly, taxes aren't exclusively about revenue generation. They're used…
Or people do understand how taxes are used and fundementaly disagree that taxes should be used for those purposes Taxes sole purpose should be to collect money to provide services, Nothing else they should not be used to socially engineer the society the way the government sees fit, that is not a free society or a functioning democracy/republic at that point
Australia gives tax cuts if you have a family with children. (Family tax benefit part A and B).
Do you think that's unacceptable social engineering?
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#407Earlier quoted context omitted.
ProPublica reported that after they published this story, people eligible for free filing contacted TurboTax to get refunds. At first, they were able to get refunds of the fees that they paid but once word got out the customer service reps stonewalled them. So ProPublica invited readers to submit stories of their experiences with TurboTax customer service. Quality journalism.
Not only quality journalism, but a really solid look at what modern data-driven journalism should be like.
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Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#408In the US, we've had decades of (largely GOP) messaging that the government can't do anything properly. A substantial portion of the population believes it. As noted in a sibling comment, the IRS could pre-fill forms that would be correct for the vast majority of tax payers (who take the standard deduction/don't itemize, have a single job, and no other edge cases). These people should not be paying TurboTax either wa…
> messaging that the government can't do anything properly I would love to hear about things the government has done exceptionally better than private companies. Please go on.
Private schools have never succeeded except for tiny % of rich kids
Also, big one, GPS
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#409Earlier quoted context omitted.
Of course, there's a long list of items that help rig the system including outdated electoral votes, accepting unlimited funding from big business, the removal of term limits in 1995, and now the rampant gaslighting and spread of false news where the louder voice wins instead of facts coming out on top.
I once had a PS professor that liked to say "The problem with our system is the people who vote."
To complement the sibling, here is another Friedman quote which hangs at the top of [0]:
> We do not influence the course of events by persuading people that we are right when we make what they regard as radical proposals. Rather, we exert influence by keeping options available when something has to be done at a time of crisis.
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#410Earlier quoted context omitted.
The regression application here seems flawed, that assumes a fixed percentage is applied to a fixed amount, where that amount is invariant to income. That is not the case with a flat tax where a fixed percentage is applied to a variable amount. The flatness of the flat tax is on the percentage, the amount (income) is the variable portion that will be more or less based on the individual. The percents however will be…
You're not accounting for the marginal utility of money. The marginal utility of money decays exponentially with respect to income.
It probably does, but why is that relevant? I'm curious about these branching criticisms that come up, another fella above mentioned equal opportunity to earn higher income, you and a few others mention this marginal utility idea. I think these are valid concerns but lumped into taxation break what I think should be an application of the single responsibility principle (https://en.wikipedia.org/wiki/Single_responsibility_principl...). That single responsibility in this case is to make a contribution of our income to fund the government, period. We should have a simple tax formula strictly dedicated to funding the government where everyone has skin in the game and contributes equally along some metric. The flat tax seems a dead simple reasonable metric and is unquestionably equal when focused on contributions.
Once we start trying to equalize along these other dimensions of marginal utility or equality of some other thing we're no longer focused on funding government but enacting some equality/justice endeavor. Those I imagine probably also suffer from holding no simple formula to calculate their equalities against. Let such endeavors be handled by some other government agency dedicated to those causes, why drag the tax system into the mix and complicate things is what baffles me.