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Killing TurboTax

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Re: Killing TurboTax

#661

Post by grumple »

sneeze-slayer wrote: post #641
grumple wrote: post #637

Earlier quoted context omitted.

I strongly disagree with this. The tax code is relatively straightforward for a programmer. It’s a bunch of conditional statements and simple math. Even the cases you mention are straightforward compared to the usual ambiguity that comes with engineering a product. TurboTax is awful software. One question at a time, their user flow is AWFUL. Truly abysmal design for even the simplest of tax situations. The IRS’s free…

You mean for free file forms you don't like getting an email with some incomprehensible language? Oh, don't worry they provide a tool. Just copy the _entire_ email they send you and paste in some tool. Genuinely it is a horrible experience, but I suppose it is better filing by paper and waiting a few weeks for a small correction.

Well, I thought so too. Until I realized six months later that I hadn't gotten my refund. Turns out that I'd gotten an email shortly after submission that had gone unnoticed saying that my return had failed xml validation, just like you. What was the point of the frontend validation before submission? Why isn't the full validation done before submission properly? Total nonsense.

I re-filed with paper... still hasn't showed up on the IRS website.

Re: Killing TurboTax

#662

Post by dataexporter »

arduinomancer wrote: post #653
trymas wrote: post #296

Earlier quoted context omitted.

It's a racket. Government already knows how much you owe them. So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?

> Government already knows how much you owe them. I don’t get why people think this is true. Take a really simple example of donating to a charity. How would the government know you donated without you telling them? How is the government going to know exactly where you put all your money?

In an ideal scenario, the charity would be reporting your donations to the IRS. That way IRS has the information.

If you put your money in a bank, the bank reports it to the IRS. That's how it works everywhere.

Re: Killing TurboTax

#663

Post by [deleted] »

tylerhou wrote: post #440
warkdarrior wrote: post #435

Earlier quoted context omitted.

If I donate to a charity, it may reduce the tax I have to pay, especially my income is at the boundary between two tax brackets. Would IRS suggest such a donation in order to reduce the tax amount? Tax advisors do that all the time.

That's not how taxes work. Unless you would have donated to a charity anyway in a subsequent year, you never gain money on net from donating since your tax rate is marginal. Even if you have super low income and you are on the border for benefits (EITC, Medicare), donating to a charity will not make you eligible for those benefits because that eligibility is determined by AGI, which is income before deductions. The o…

[deleted]

Re: Killing TurboTax

#664

Post by xyzelement »

FabHK wrote: post #652
xyzelement wrote: post #556

Earlier quoted context omitted.

> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does. I used to think this because it's often said, but learned it's not true. This sums it up: The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent. The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the botto…

Counterpoint (note that this is tax relative to wealth, not income): > The big picture: The very richest Americans pay much less tax, as a proportion of their total net worth, than the rest of us. > By the numbers: The bottom 99% of Americans pay about 7.2% of their net worth every year in taxes, per Warren. The top 0.1%, by contrast, pay about 3.2%. Source: Section 3 here: https://www.axios.com/newsletters/axios-cap…

Agree - there are different ways to slice this, but at the end of the day, should we?

Let's say you and I start off with zero wealth, but we both graduate with a good degree, both get high-paying jobs and both make the same amount of money.

We also pay the same amount of taxes - which sounds fair, right?

Lets say we both make 150K a year, but I spend it all on my living expenses/fun while you are able to live on 50K and save 100K every year.

In 10 years, you will have over a million dollars in savings/investments while I lets say managed to save 10K.

We still make the same salary and pay the same tax but our wealth is grossly unequal. I pay 100X tax-per-wealth than you do. That sounds horrible but in the above example is totally reasonable.

Obviously the Warren Buffet example is a bit different than that but - he pays a ton of absolute $$$s compared to you, me, and anyone else, why is his total wealth an absolute necessity to look at?

Re: Killing TurboTax

#665

Post by sokoloff »

harperlee wrote: post #642
sokoloff wrote: post #628

Earlier quoted context omitted.

There is a lot of financial information (which is private by default) which is irrelevant to a person’s current tax obligation. That’s the information that I only want my paid advisor(s) to have; this is a privacy concern, not a cheat-on-taxes concern.

But if it is irrelevant why do you fear that you will need to provide it? I’m honestly at a loss. Do you mean something such as to whom do you send wire transfers, or which specific companies you have on your portfolio? Or more like having an account together with someone? Something else?

Why would I want to give private data which is irrelevant to the IRS to the IRS? I'm honestly at a loss as to why you think that position is unreasonable.

My data is my data. I truthfully and completely provide to people, companies, and government agencies who have a need to hold or process only that data is required.

I also have a group of advisors whom I trust entirely and I share data more openly so they can help me plan and execute better.

What specific positions (or even total account value) I hold in my various accounts is not required for the IRS to compute my taxes. My advisors on the other hand I willingly give that information so they can give me better advice/guidance.

My tax preparer knows what is required for the IRS and ensures they get that correctl, completely, and precisely nothing more. There's no way the IRS could find all the data that's relevant to my taxes without getting any not relevant data without some expert actor doing that filtering (and from a comparative advantage perspective, I want to pay someone more expert than me to do that)

Re: Killing TurboTax

#666

Post by KirillPanov »

vkou wrote: post #660
KirillPanov wrote: post #583

Earlier quoted context omitted.

> biggest single thing that would simplify the tax code is removing the separate capital gains tax and just counting it all as income That's okay during times like ~1990-2020, a time of wonderfully low dollar inflation. The justification behind the long-term capital gains rate is this: during times of high dollar inflation , taxation on capital asset values turns into an outright tax on investment. If the dollar is i…

> This kind of economy-wide, sudden, and simultaneous disinvestment would be a catastrophe for the economy. I don't know, it sounds like a great opportunity for the non-super-wealthy to buy shares in productive assets at a discount. Haven't all the prudent people in the room spent the past 8 years grousing about how poor the P/E ratio of the S&P is?

It's only a "great opportunity" for people who don't file income tax returns.

Those people generally end up in prison. The few who don't are not economically significant.

Re: Killing TurboTax

#667

Post by Aeolun »

xyzelement wrote: post #664
FabHK wrote: post #652

Earlier quoted context omitted.

Counterpoint (note that this is tax relative to wealth, not income): > The big picture: The very richest Americans pay much less tax, as a proportion of their total net worth, than the rest of us. > By the numbers: The bottom 99% of Americans pay about 7.2% of their net worth every year in taxes, per Warren. The top 0.1%, by contrast, pay about 3.2%. Source: Section 3 here: https://www.axios.com/newsletters/axios-cap…

Agree - there are different ways to slice this, but at the end of the day, should we? Let's say you and I start off with zero wealth, but we both graduate with a good degree, both get high-paying jobs and both make the same amount of money. We also pay the same amount of taxes - which sounds fair, right? Lets say we both make 150K a year, but I spend it all on my living expenses/fun while you are able to live on 50K…

> Why is his total wealth an absolute necessity to look at

Because money needs to move. Having it sit somewhere in a bank account is not something you want to encourage (as a government).

Re: Killing TurboTax

#668

Post by curryst »

null0pointer wrote: post #537
Others wrote: post #534

Earlier quoted context omitted.

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.

Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. > A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest. That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only s…

> Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage.

Lets say apples have a -5% tax rate, and cost $1. Every time I buy an apple from the store, I pay $0.95 (the government pays the rest, which is a problem in and of itself). I can sell that apple for $1, and the government basically just paid me $0.05 for selling an apple.

The problem with the government paying that $0.05 is that sales tax is assessed at time of purchase, but the government isn't there to pay their part. The grocery store basically has an IOU from the government. 5% may be higher than the grocery store's margins, which means the customer payment is actually less than the good is worth, so the grocery store's ledger actually goes down for that sale until the government pays back their part.

And then you have to deal with fraud. Nobody wants to overreport their sales tax, it costs them money. If you can make money off sales tax, people will filing fraudulent tax reports, and I really don't want the IRS having to track how many apples the grocery store actually sold. I'm sure money launderers would also find a way to use it to buffer their costs.

Subsidies probably still have fraud, but it's a smaller number of entities to work with. We can also budget for it because we determine the amount. I can give a budget to the subsidy, but I can't tell people to only buy 10,000 apples next year.

Re: Killing TurboTax

#669

Post by curryst »

mjevans wrote: post #548
null0pointer wrote: post #527

Earlier 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…

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.

Things still get complicated there. What is the value of a car? I'm not planning on selling mine, so I have no idea. Do I just Blue Book it? If I key the shit out of it every Christmas and then have it repainted in January, can I knock 40% of the value off? It might be cheaper to just have it repainted.

What's the value of a painting? You could use the price I bought it for, but what if we just swap paintings instead? You know, I give you this fancy painting, you give me some Goodwill shit and you pay me a $100k "finders fee".

What's a yacht worth? What are super fancy houses worth? One of Mike Tyson's old mansions is still abandoned, so I assume it was worth nothing since they couldn't sell it.

Properly valuing things is hard. Wealth taxes are also regressive, in a way, because poor people are much less likely to have access to financial instruments that will return greater than the wealth tax rate. The poor and the middle class are far more likely to have their money in functional investments (homes, cars, etc) than they are to have them in something that generates profit.

So you'd still have to just not assess the tax on assets under the value of a reasonable home and car, at which point we're basically just back to what we have now, which is carving out a loophole for the poor.

Re: Killing TurboTax

#670

Post by xyzelement »

Aeolun wrote: post #667
xyzelement wrote: post #664

Earlier quoted context omitted.

Agree - there are different ways to slice this, but at the end of the day, should we? Let's say you and I start off with zero wealth, but we both graduate with a good degree, both get high-paying jobs and both make the same amount of money. We also pay the same amount of taxes - which sounds fair, right? Lets say we both make 150K a year, but I spend it all on my living expenses/fun while you are able to live on 50K…

> Why is his total wealth an absolute necessity to look at Because money needs to move. Having it sit somewhere in a bank account is not something you want to encourage (as a government).

His wealth doesn't sit in a bank account, it's invested in his companies.
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