Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Stanford Professor Loses Political Battle To Simplify Tax Filing Process

npr.org

Post reply on HN
Print view View original

21–30 of 405 posts

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#21

Post by ams6110 »

ars wrote: post #11
oDot wrote: post #6

I've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!

Not everyone earns money via income. You have to define what "income" is exactly, then it starts getting complicated...... Example: I route my investment earning via a company, that company can claim expenses such as paying my utility bills and buying my groceries, anything leftover they give me. They work it out so my net income is zero, oops. It's easier actually to tax purchases.

Taxing consumption would rapidly explode into a vast array of categories and rates for different types of consumption, luxury taxes, etc.

Food, maybe no tax. But maybe there's some tax if it's ready-to-eat. Or based on sugar content.

Automobiles maybe taxed rather heavily, but the first $5000 is exempt so poor people can buy cheap cars, etc. It would become just as complicated as the current code.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#23

Post by ams6110 »

cestith wrote: post #16
gamblor956 wrote: post #14

Correction: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source. Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite th…

I disagree on one point. Block and Intuit are also lobbyists against all sorts of code simplification programs. Anything that makes the filing process easier, and having fewer deductions and penalties available makes it easer, they are against.

The business of H&R Block and Intuit came about in response to tax code complexity, they did not create it.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#24

Post by chiefofgxbxl »

Just for thought: suppose the tax system became so simplified that only goods X, Y,and Z were taxed at rates a,b,c. You pay aX+bY+cZ in taxes per year. It would be easy for voters to campaign their politicians to lower tax rates and easily verify.

Obviously in the real world there aren't 3 levers to adjust: there are probably thousands or tens of thousands. Apart from the lobbying, politicians may themselves desire this, because it would allow them to lower those 3 very-public levers to claim they lowered taxes, while at the end of the day maintaining the same level of spending because they just offset those losses over thousands of other levers. After all, things have to get paid for.

Then at least they can tell the public: "Hey, I lowered tax rates." And when the public's wallet doesn't feel the savings, the politician still wins votes because as far as the public can see, they lowered those tax rate levers. Compare that to a politician under the 3-lever system. Either they lowered taxes or they didn't.

What I'm suggesting is that a complex tax system allows politicians to take the heat off themselves when the public demands lowered taxes, while still maintaining the amount of money the government takes in to cover the budget.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#26

Post by keithnz »

gamblor956 wrote: post #14

Correction: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source. Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite th…

In new zealand, we got rid of having to do tax returns for salaried/wage earners a number of years ago. Makes life easy for a vast majority of people. You can still do a return if you want to though. For the tax department it cuts down on how much infrastructure they need.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#27

Post by lsaferite »

oDot wrote: post #6

I've always wondered, why can't we just pay one tax? Say make income tax 1.5x what it's now and cancel all other taxes. That way it'll be even easier!

If you are going that route, check into the FairTax idea. Basically, replace income tax (and others) with a simple federal sales tax system in the 30% range. Enforcement narrows to businesses and rates aren't determined by income. States get a portion of the tax in exchange for enforcement. Poverty level spending gets a tax rebate (prebate in that plan) to not tax a certain amount. Interesting ideas from my POV, but I'm not an economist.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#28

Post by javajosh »

tedunangst wrote: post #3

Would it have killed them to at least mention his name is Joseph Bankman in the summary?

Good point. I wonder if the omission was an oversight or intentional (his name would make finding an alternative source trivial).

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#29

Post by bmajz »

I was pretty surprised to see Zoe Lofgren's name pop up as an anti tax filing simplification advocate. She's the rep from CA's 19th District which covers San Jose (but not the rest of Silicon Valley) and generally a straight down the line liberal. This is not even Intuit's core district -- that would Anna Eshoo's 17th (previously 14th) district which covers Mountain View and Palo Alto. As a resident of this district, I guess I have something to write in about.

Re: Stanford Professor Loses Political Battle To Simplify Tax Filing Process

#30

Post by djb_hackernews »

gamblor956 wrote: post #14

Correction: this proposal would not have simplified taxes (i.e., the California tax code). It would merely have simplified the filing of tax returns for the most common case, salaried workers receiving all of their income from a single source. Very big difference. HRBlock and Intuit are heavily vested in maintaining the current tax filing system. They are not, however, meaningful players in the attempts to rewrite th…

Interesting objection. To me simplify taxes == simplify filing taxes. "I'm doing my taxes" does not mean I'm doing my tax code, but I am preparing and filing my taxes.

As a lawyer and tax accountant, do you see a flaw in the professor's approach? Any domain expert insight here?

Post reply on HN