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Would You Let the I.R.S. Prepare Your Taxes? (2015)

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281–290 of 438 posts

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#281
post #226

Earlier quoted context omitted.

> Not..entirely true. Obviously. You should read categorical statements like this one as, "The IRS [often and in many of the most common cases] have all the data." That's a generally-applicable, useful, mental substitution that saves us from unnecessary and constant waffling and equivocation in everyday conversation.

They really don't have even close to all the data. The irs will generally have income numbers, as those generally must be reported through 1099k, 1099, and w2, etc. But they have no information on your expenses, depreciation, etc. So they only know your revenues, not your expenses. And this applies for business as well as personal.

This is like when people say, "I don't know anybody who voted for the other party!"

Lots and lots and lots of people don't have any expenses. They don't itemize. They don't want, have, or need any of the stuff you're protesting about. They have a job. And that job reports their income to the IRS. End of story. Case closed. That's it. That's their entire situation.

You're imagining another kind of person, but I'm not talking about that other kind of person.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#282

I'm annoyed that there is no simple system for the IRS to tell me what I owe, and let me pay or dispute. Instead, we play this game where the IRS provides a bunch of complicated documents, I guess which ones to fill out and submit, then wait 3 years to see if I was randomly chosen to see if I was correct. So it's very easy to make a mistake for dozens of years, then suddenly be penalized at random. It's the worst kin…

So... I apparently messed up my 2016 taxes, and the IRS sent me a letter entitled "suggested tax correction" or something to that effect. They attached the data that they claimed I omitted (indeed, Turbotax silently discarded that data), and how much I owed. I then paid them online.

I think the IRS is super paranoid about people hiding information from them, and then never being liable for the taxes. Right now, if they miss some income, you might report it to them on your return, and they get money they didn't know they were entitled to.

I thought the letter with "pay us this amount of money" was great, though. Wish they just sent that at the end of the tax year.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#283

Earlier quoted context omitted.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

I think you have a fundamental misunderstanding about how people drive. People don't look at a speed limit and then drive 15 over; they drive the speed they feel comfortable with, regardless of the speed limit. Studies have shown this: Q. Wouldn’t everyone drive faster if the speed limit was raised? A. No, the majority of drivers will not go faster than what they feel is comfortable and safe regardless of the speed l…

As somebody who is ideologically predisposed against speed limits, bullshit.

If you've ever gone much faster than is customary for a road (say 110mph following a cop), and then slowed down to say 90mph, it will feel quite slow. If you then don't set about consciously lowering your speed, you will even find yourself creeping back up.

Humans are notoriously bad at perceiving what-if dangers and being aware of our own limitations. The level of difficulty we perceive is what's required to keep up with the expected - road curves, passing other predicable cars, etc - not because we're anticipating surprises.

Another example is outdriving one's headlights - either the sheer amount of deer that get hit, or when you flip on your high beams in a fog and actually become aware of how little you could see.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#284

I'm annoyed that there is no simple system for the IRS to tell me what I owe, and let me pay or dispute. Instead, we play this game where the IRS provides a bunch of complicated documents, I guess which ones to fill out and submit, then wait 3 years to see if I was randomly chosen to see if I was correct. So it's very easy to make a mistake for dozens of years, then suddenly be penalized at random. It's the worst kin…

> The IRS have all the data Not..entirely true. My 2016 taxes were professionally done, but we somehow forgot to include one of the something-something-1099 forms from a brokerage firm. The brokerage reported some RSU stock-sells to the IRS but didn't report the cost-basis, and so the IRS assumed the cost-basis was $0 and thus taxed the full sale as income (effectively double-taxing all the RSUs). They just sent a ta…

Oh man, was this Schwab that did that to you? This happened to me and I just paid... but I did not check the cost basis. (I should know, too, because Schwab did this on another year and I caught it.)

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#285
post #142

Earlier quoted context omitted.

http://www.sehinc.com/news/truth-about-speed-limits-explaine... There is no guarantee that a speed limit will have any effect on driving behaviors. The fact is, when driving, most motorists choose a speed in which they personally feel both comfortable and safe.

https://en.m.wikipedia.org/wiki/Autobahn#Travel_speeds on a free-flowing section in 1992, the recorded average speed was 132 km/h (82 mph) with 51% of drivers exceeding the recommended speed. The autobahn has a long history proving that people feel comfortable and safe at excessive velocities.

The recommended speed on the Autobahn is 130 km/h, but in the unrestricted sections you can technically drive as fast as you want, conditions permitting. The fact that the average speed in an unrestricted section with light traffic was only 132 km/h suggests that the vast majority of drivers don't actually want to drive much faster than that.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#286
post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

Except it isn't random. Some cops just look for the fastest cars while others will look for out of state license plates. And some will even go as far as basing it off of the demographics of the driver. We would never tolerate a speed limit that allows difference races to go different max speeds, but allowing selective enforcement by cops enables any cop to do this.

Exactly right. Michelle Alexander explains these racial consequences of selective law enforcement in The New Jim Crowe.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#287
post #273

Earlier quoted context omitted.

This would be fine and good if: 1. There was any relation between how much we spent and what we pay in taxes. There isn't. In the U.S., so-called "fiscal conservatives" routinely give massive tax breaks to the wealthiest Americans while simultaneously voting to increase spending in the largest discretionary spending category we have: the military—which currently represents 53.7% of our discretionary budget. 2. People…

> 2. People currently had any idea what they were spending on taxes Taxes include all the things. Not just Federal income tax. It gets frustrating comparing tax rates to say - European nations - when they typically will be quoting all-in tax rates other than sales tax (VAT) - where the US number will almost invariably list only the federal income tax rate which tells not even half the story in many cases. social secu…

> Programs like social security and medicare are re-distributive in nature and indistinguishable from taxes

I do think the distinction is relevant: The expected result is that you will get every dime you put into social security and medicare back. And then some. They're required savings accounts. Taxes spent on interstates, debt repayment, and the military, however, are truly expenses.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#288

Earlier quoted context omitted.

Most Republican "flat tax" ideas have tax simplification as a major selling point (e.g. Ted Cruz talking about filing your taxes on a postcard); if you can simplify the implementation of the existing tax schedule, you lose that selling point.

Flat tax doesn't even simplify anything. The problem with taxes is to determine what the taxable income is. Figuring out the tax rate is trivial once you have that, no matter what the curve is. Flat tax is just another attempt to give big tax breaks to higher incomes.

    > Flat tax doesn't even simplify anything.
Yes it does, depending on the implementation. There's a 2005 Economist article which does a good job of summarizing why[1].

BEGIN QUOTE

Fewer brackets are simpler to administer, but one bracket is simplest of all. Under a pure flat tax, the taxman takes the same cut from the last dollar you earn that he took from the first. The appeal to high earners is obvious. But the administrative elegance of such a system is not so immediately apparent. Because every dollar is taxed at the same rate, it does not matter to the tax collector how many dollars are going to whom. Thus, in principle, the taxman could simply withhold 20% of a company's payroll, without needing to know who was paid what. Add a second rate of tax, however, or a personal exemption, and the tax collector must find out how much money is going into each pay packet before he can be sure of collecting the right amount from the right person. In America, for example, the tax collector needs to tax the wage packets of 130m or more employees, rather than simply taxing the payrolls of 8m or so enterprises.

END QUOTE

The mistake you're making is assuming that the tax system can only be simplified on the individual level, but as the quote above demonstrates this isn't true.

Certain changes to the tax code do entirely away with the need for the government to exhaustively audit large parts of the economy.

Another quote from the article demonstrating such a case:

BEGIN QUOTE

In Canada, Australia and the European Union, for example, staple foods, but not restaurant meals, are exempted from value-added tax. [Therefore] hot roast chicken is taxed, but cold roast chicken is not. “Does anyone expect tax administrators and business owners to have thermometers on hand when they do their tax calculations?”

END QUOTE

In this example, by progressively taxing food you're creating the accounting problem that the government theoretically has to track economic activity down to the level of whether a chicken was warm or not when it was sold.

Simplifying the tax code does away with needing to solve that problem entirely, and eliminates some of the current incentives for tax avoidance and other fraud.

1. https://www.economist.com/special-report/2005/04/14/the-case...

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#289
post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

Except it isn't random. Some cops just look for the fastest cars while others will look for out of state license plates. And some will even go as far as basing it off of the demographics of the driver. We would never tolerate a speed limit that allows difference races to go different max speeds, but allowing selective enforcement by cops enables any cop to do this.

Speed is just a red herring anyway; as you said it's all about selective enforcement.

I'd rather there were NOT any speed limit enforcement at all UNLESS there's another infraction.

Even more ideally self-driving cars would just save us. However until then I'd prefer that laws like Washington State's 'keep right except to pass' were strongly enforced.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#290

Earlier quoted context omitted.

I think you have a fundamental misunderstanding about how people drive. People don't look at a speed limit and then drive 15 over; they drive the speed they feel comfortable with, regardless of the speed limit. Studies have shown this: Q. Wouldn’t everyone drive faster if the speed limit was raised? A. No, the majority of drivers will not go faster than what they feel is comfortable and safe regardless of the speed l…

As somebody who is ideologically predisposed against speed limits, bullshit. If you've ever gone much faster than is customary for a road (say 110mph following a cop), and then slowed down to say 90mph, it will feel quite slow. If you then don't set about consciously lowering your speed, you will even find yourself creeping back up. Humans are notoriously bad at perceiving what-if dangers and being aware of our own l…

As someone who's driven over distances that had notably higher speed limits (EG 75 MPH in extremely rural areas), I have found that /in those areas/ the speed I went //without// looking at the dashboard was more or less very close to the actual speed limit. I was actually driving at the real speed that is safe for a typical small car on such a road in 'ideal' conditions.
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