Tax System in the Faroe Islands

> They already do your taxes for you.

They have no way of knowing what all your business expenses are (especially ones that don't require sending the recipient one of the various Form 1099s). They can look at what you claim as business expenses and retroactively require you to show proof of those expenses (i.e., audit you) if they seem unreasonable, but that's an entirely different thing.

The W-2 case with maybe a 1099 and standard deduction is pretty simple. And should probably be even simpler by autofilling a "Here's what we think you owe/are owed" return. But you get into complex returns pretty quickly for the reasons you describe. I don't even have that complex a return and what I got from my accountant was probably a 1/2 inch thick last year.

Let's list out a partial list of major US tax problems:

1. As we all know, tax preparation is intentionally complicated and hard thanks to lobbying by the tax preparation industry;

2. Access to the financial system should be a right. This article correctly points out there are ~6 million "unbanked" individuals. I haven't actually seen this problem in other developed countries. People will quite literally take their paycheck and cash it;

3. Also noted here: decades of Republicans starving the IRS (and pretty much everything else the government does bar the military of course). This creates a cycle where a starved government is then used as an argument to further starve the government. It's not surprising the Republicans are so incensed at last year's bill to fund the IRS and paint it as armed IRS officers coming and seizing your mobile home to try and rally support for it. It's the same reason the 15% minimum corporate tax was opposed even though the nominal corporate tax rate is 21%: to benefit the ultra-wealthy and corporations;

4. Deductions. Honestly pretty much everything should be gotten rid of for personal income other than maybe retirement saving. But there are simply way too many vested interests here for this to ever happen;

5. We need to annually tax unrealized capital gains;

6. Stop double taxing dividends. This leads to a lot of unnecessary complexity (eg passthrough corporation tax benefits). Dividend tax imputation is not hard;

7. Tax trusts as we do estates;

8. Tax land use based on assessed value, particularly for single-family houses. A $1 million house should pay higher property tax than a $1 million apartment.

The US really is a dystopian hellscape.

This isn't true. Lower income people are more likely to work more than one job simultaneously, or to do casual work or a string of jobs, or be 'contractors' than have a single W2 with accurate numbers. Only 20% of taxpayers who qualify for free direct filing use it - mostly because they don't even know it exists. Many Americans are challenged by even the process of completing the form.

> THE FAROES ARE ONE OF THE RICHEST COUNTRIES in the world by per capita GDP—even slightly richer than Denmark itself.

The Faroe Islands are a strange place. There aren't many people, yet you'll see huge infrastructure projects to literally drill tunnels through mountains to connect at 2-3 families with the main roads. A gigantic amount of public money gets pumped into every part of their industry and infrastructure, funded by Denmark.

On a completely unrelated note, the the wife of the previous prime minister is from the Faroe Islands, and he has been known for being bad at separating private and public interests, and for cases of pumping money into specific monopolistic fishermens pockets while taking huge donations from the same to his own funds. The two of them also own a company that plans tours from Denmark to the Faroe Islands.

He's no longer prime minister but managed to create a central party that was key in establishing the current government. I'm sure we'll see a continuation of pumping money into the Faroe Islands.

All that said, it's a lovely place to visit, especially for people who enjoy hiking and don't mind damp weather, and there's some cool places to see puffins.