Killing TurboTax • Hacker News Board

Re: Killing TurboTax

#671

Post by vkou » Fri, Mar 05, 2021, 4:52 AM UTC

KirillPanov wrote: post #666

vkou wrote: post #660

Earlier quoted context omitted.

> 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.

In the long run, you, as a human being who works, retires, and dies, are better off owning a larger share of productive assets, even if you have to pay more taxes on them, than owing fewer productive assets, because the price to buy them is too damn high.

Not to mention that as I get older, I expect my income tax bracket to drop. I'd rather buy productive assets cheaply now, and deal with the tax consequences, than be cut out of buying productive assets, period.

Re: Killing TurboTax

#672

Post by ganafagol » Fri, Mar 05, 2021, 7:18 AM UTC

curryst wrote: post #668

null0pointer wrote: post #537

Earlier quoted context omitted.

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 govern…

An instance of that fraud is that re-selling would generate money. I buy that apple for 95ct. Sell it to the next supermarket for 98ct. They sell it to a customer for 100ct of which the customer pays 95ct. Goes to the next supermarket etc etc. Today you'd just accumulate more and more tax so nobody does that. With negative VAT this loop is now generating money.

Re: Killing TurboTax

#673

Post by ganafagol » Fri, Mar 05, 2021, 7:21 AM UTC

ktapcnbje wrote: post #638

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.

Fair tax, a proposal for replacing current taxes with a federal sales tax, has already come up with a solution for this. Under its plan every person receives a check to cover the sales tax on spending up to the poverty level.

How do those plans tackle the problem of heterogenious tax systems internationally? No tourist is going to visit you if the restaurant visit costs 3x as much as in their home country (assuming similar living standards in both countries). Those tourists would effectively be taxed twice. Income tax at home and then again full charge on the steak on vacation.

Re: Killing TurboTax

#674

Post by ganafagol » Fri, Mar 05, 2021, 7:29 AM UTC

Double_Cast wrote: post #645

ajmadesc wrote: post #607

Earlier quoted context omitted.

Wealth tax has nothing to do with markets and Nobody whants to tax the level of wealth for an ordinary retire silly. That's a straw man. The American capital, legal, and tax structure collude to reduce wages, whereas the Dutch system incentivises responsible 'market based solutions' The only people who want to live with a somali gov are gop

The retiree example is intended to demonstrate that a wealth tax is inherently perverse, regardless of who is targeted. Savings are just deferred expenditure and debt is just expedited expenditure. When you tax wealth, you expedite consumption. Another way of thinking about this: A wealth tax is like inflation, except assets are also devalued alongside your savings. Which means the wisest strategy is to consume now,…

50 dollars tomorrow may be more useful to you than 100 dollars today if today you'd only buy useless crap for it but tomorrow there is a brilliant investment opportunity.

Re: Killing TurboTax

#675

Post by ganafagol » Fri, Mar 05, 2021, 7:31 AM UTC

harshalizee wrote: post #555

mjevans wrote: post #548

Earlier quoted context omitted.

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.

I'm not sure that would work as simply as that. Imagine buying a volatile stock, say, TSLA at $100. This then skyrockets to $1000. You're now taxed on your wealth at that price point. Then it immediately crashes down to $120. All this while, you're just holding the stock but paid taxes on a non existent value.

This is a solved problem. For taxation purposes, just integrate over all price points in the taxation interval. In other words, average it.

Re: Killing TurboTax

#676

Post by ganafagol » Fri, Mar 05, 2021, 7:37 AM UTC

Uke wrote: post #597

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…

another con is: It's very hard to figure out how high your personal tax rate is if you don't track all your spending. I guess it's less of a problem for you guys over the pond, but at least in countries like Japan and Germany where at least 60-80% of all payments are done with cash it's near impossible to know unless you track your spending by hand. I agree with you that VAT would be cool to have as the sole tax, tho…

Why would you need or want to derive that number?

Re: Killing TurboTax

#677

Post by ganafagol » Fri, Mar 05, 2021, 7:46 AM UTC

drdeca wrote: post #430

ryandrake wrote: post #384

Earlier quoted context omitted.

Thread drift, but my objection to encouraging charitable giving is that the more you rely on charity to fund the public good, the more you rely on (largely) millionaires and billionaires to decide what counts as a public good. In other words the average citizen doesn’t get to vote on what good gets funded. This means givers’ pet causes get funded rather than projects that are democratically chosen.

It is possible (even likely) that I've misunderstood people who were just being hyperbolic and didn't mean to be taken literally, but my impression was that some were saying that literally no charity organizations should be necessary? I (somewhat..) understand the "but then the wealthy are determining what gets done" thing, as a reason to not rely too much on it, but it seems clear to me that there are also major ine…

I like your last point.

The rest of your post is based on the implicit assumpion that anything government run is inherently bureaucratic and slow and charities are instead simple and fast. But that's an orthogonal issue. Some level of bureaucracy is needed to prevent misuse, otherwise you have a rich guy pay their fines from their charity. Beyond that, there is no inherent reason for charities to be more efficient. You could make those governmnent-charities have local oversight, they could be organized very efficiently too and have the advantage of democratic legitimacy.

Re: Killing TurboTax

#678

Post by zimpenfish » Fri, Mar 05, 2021, 8:18 AM UTC

javagram wrote: post #648

zimpenfish wrote: post #380

Earlier quoted context omitted.

> all sorts of tax deductions over the years to incentivize things like [...] But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime? > but it's not that simple I think if the main difference between the US and other countries is the aforementioned "corporate bogeyman", it probably does boil down to being that simple.

> But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime? Citation needed. How can you have a non-complex tax filing regime when you have so many deductions and credits that only the taxpayer knows about or has documentation of? When I donate to a charity, they don’t report my donations directly to the IRS (nor should they - we don’t want the government to be collec…

> that only the taxpayer knows about or has documentation of?

Therein lies the rub, I suspect; other countries do know about what you're doing with the deductions and credits which means the tax office can handle all that for you - and, indeed, they are much more suited to be handling this - rather than pushing it onto each individual to try and scrabble together once a year.

I suppose we can add "incoherent fear of the government" to "corporate bogeyman" to the list of reasons the US has a messed up tax situation.

> (nor should they - we don’t want the government to be collecting data on everyone’s charity giving)

You do if there's specific tax breaks for doing that.

Re: Killing TurboTax

#679

Post by harrierpigeon » Fri, Mar 05, 2021, 8:20 AM UTC

jessaustin wrote: post #581

root_axis wrote: post #576

Earlier quoted context omitted.

I'm not opposed to the idea of UBI, but it doesn't really solve any problems here, it just adds massive political and logistical complexity that would essentially doom any possibility of reforming the tax code.

In this thread, we're discussing how to ameliorate the regressive aspects of sales taxes. Poor people spend most of what they have, so they are subject to proportionally more sales taxes than rich people who spend very little of their vast accumulated wealth on goods subject to those taxes. The initial, flawed response to this issue would be to construct some "massive political and logistical complexity" in order to…

One of the things that worries me with UBI is that the somewhat-better-off people without a moral compass- for instance, slumlords- will raise rent and eat really far into other people's UBI because they know everyone gets it and needs a place to live, thus keeping them from being able to save up to afford even a modest "starter home". Like GPU scalpers, they provide very little value and charge a lot for their services. There's a small group of people in my town that really do the poor in via rent already without so much as a care about the quality of housing they provide, and I fear that one of the unintended effects of UBI is that the slumlord class will get a ton more money without doing anything to improve other people's lives.

TL;DR: my fear with UBI is that unscrupulous people will do unfair things like significantly raise rent to eat into other people's free money thus leaving the poor in the same spot, more or less.

Re: Killing TurboTax

#680

Post by cmeacham98 » Fri, Mar 05, 2021, 10:17 AM UTC

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…

This type of example pervades online discussion about taxes but is based on a ridiculous hypothetical and is close to victim blaming people for being poor.

In reality, factors outside of someone's control (ex: parent's education and wealth) are greater predictors of their wealth than _any_ decisions they make. I am ok with allowing some people who make irresponsible life choices to get away with lower taxes if it makes the system as a whole fairer.

> why is his total wealth an absolute necessity to look at?

Your claim was that the poor aren't disproportionately taxed. "Poor" is a statement about wealth, not income, and income is an inaccurate substitute for wealth.