Every time this comes up, people seem to be missing the reason tax codes are as complicated and loophole-filled as they are, because they approach the problem from the wrong place. The tax codes of all modern nations are not about revenue. They're about control. The entire purpose of the machinery is to punish some behaviours and incentivise others without having to go through all the trouble and checks and balances of passing specific new laws. The overall income from taxes isn't how the government funds their spending, it's simply a means to control (but never enough to eliminate) inflation.
Killing TurboTax
541–550 of 692 posts
Re: Killing TurboTax
#542Earlier quoted context omitted.
Basically, the tax code is used by governments as an incentive mechanism to manipulate entities into behaving in ways they want.
Which can be a good thing. If there's an activity with negative (positive) externalities, then there's a deadweight loss, which can be corrected by taxing (subsidizing) that activity.
Depends on whether you agree with what the people in charge define as a 'good thing'.
In a democratic government, you might like how a powerful tool is being wielded when your people are in charge, and be terrified when the 'other' is in charge.
Re: Killing TurboTax
#543Earlier quoted context omitted.
This is how it is done in Sweden. And after having lived in 2 other countries it is clearly the way to go. The tax authority sends you a summary and you just approve it.
As a Swedish expat in California I cringe everytime tax season comes. Both because of how annoying it is, and because I know how simple it can be.
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Re: Killing TurboTax
#544Earlier quoted context omitted.
> The IRS themselves need to provide this "auto tax" service. Interestingly, they now can: under the Free File program, tax prep companies would offer free filing (for taxpayers below 72k AGI) and the IRS would not compete with their service. After a ProPublica investigation in their dark pattern shenanigans (leading to about 3.5% of taxpayers to use the program when 70% are eligible) confirmed by the HSGA Senate Com…
> the GOP We now have an opportunity to test your hypothesis- for at least two years there will be single party rule by the other party.
Would the time until October 2022 be a conclusive test? There are many priorities and limited amount of legislative time. It’s very possible that no laws are passed with respect to the IRS, not because of a lack of desire or unwillingness to change, but because of lack of time and competing issues.
Re: Killing TurboTax
#545Earlier quoted context omitted.
I disagree that it's nonsensical for it to work this way since that unemployment benefit is being granted after your parents are claiming that they are supporting you - so essentially they're getting a big tax deduction on their income for your costs but then the unemployment benefit is being claimed to make sure for a lack of them covering costs - in a simple world one might make the other ineligible but that could…
The overall law had a good reason, to keep parents from transferring appreciating assets to their children (who wouldn't have any other income), in order to lessen the tax burden of those assets. So the tax code references any unearned income. It just isn't logical for most people to know that their unemployment income is also unearned income, and that you could be underpaying your taxes even after filling out the 10…
This also happens with some PhD stipends - depends on the school/funding source, but I know a few people who started PhD straight out of college and got screwed by still being dependents. I honestly don't understand why getting a stipend for doing research would be considered unearned.
Re: Killing TurboTax
#546Earlier quoted context omitted.
I agree, a vastly simplified tax code is needed. Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST. Pros: - Individuals never have to think about tax. It would completely eliminate tax returns. That alone is worth it's weight in gold since tax returns are such a time and money burden. - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spend…
I think this is fundamentally a regressive idea. Currently the very poor pay zero (or effectively zero) income taxes. No matter how you structure the sales tax, you cannot go below zero. (I think negative sales tax is not actually realistic, nor particularly progressive.) A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest.
It could be coupled with a hefty UBI. No need for means-testing. If everyone got e.g. $10,000/yr, that would completely offset VAT for people who don't buy much. People who spend millions every year wouldn't even notice it.
Re: Killing TurboTax
#547Earlier quoted context omitted.
> The IRS themselves need to provide this "auto tax" service. Interestingly, they now can: under the Free File program, tax prep companies would offer free filing (for taxpayers below 72k AGI) and the IRS would not compete with their service. After a ProPublica investigation in their dark pattern shenanigans (leading to about 3.5% of taxpayers to use the program when 70% are eligible) confirmed by the HSGA Senate Com…
> the GOP We now have an opportunity to test your hypothesis- for at least two years there will be single party rule by the other party.
It might look that way to you but it's not that way. Two Democrats in the Senate are against almost every progressive idea (IMHO). Even if all of the Democrats except for those two want something they have to convince a couple of Republicans to go their way. Those 2 sensare basically the most powerful people in the Senate.
Re: Killing TurboTax
#548"Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code. There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business. I really hate to say this as someone who makes a living out of it, but dealing with the current amount of complexity in the tax code with a piece of software that a non-expe…
I agree, a vastly simplified tax code is needed. Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST. Pros: - Individuals never have to think about tax. It would completely eliminate tax returns. That alone is worth it's weight in gold since tax returns are such a time and money burden. - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spend…
A wealth tax. All assets and cash need to be properly valued and then that value taxed. I agree with the sibling comment and also with past discussions where a wealth tax is the only non-regressive (not-keep the poor down) tax code.
Re: Killing TurboTax
#549Earlier quoted context omitted.
You’re imagining an army of tax accountants to continually keep a system up to date to put themselves out of business?
They use software too. Their competition is turbotax.
In many cases, that software is Intuit’s ProSeries which has obvious TurboTax code sharing when I interact with my preparer.
Re: Killing TurboTax
#550Earlier quoted context omitted.
Unless you really screw up[1], or are intentionally trying to screw the IRS[2], you don't have to worry about an audit. The IRS's goal isn't to bring down their wrath upon you, their goal is to accurately collect the taxes they are due. If you pay too little, they'll ask you to pay the difference. If you pay too much, they'll refund it. Really: I once used the single-payer tax table instead of the filing-jointly tax…
Which begs the question if they essentially already know how much tax they think you should owe (for most people) why don't they present that number to get first and let you either agree or disagree?
They don’t know until mid to late summer. Your transcript is incomplete (or incompletely processed) prior to that.