Of course I would, since they already do. Whatever I submit is checked by them anyway, and it's generally too expensive and painful to challenge them. So…why do I have to pay the Intuit tax every year?
In my country (Denmark) it has now become much easier to file taxes, and most taxpayers don’t need to do anything at all if the government prepared return does not need changes.
Even before it became that easy, it was always possible to get a so-called “R75” statement before filing. R75 contains all the information that the tax authority has on you for a given tax year, including all filings from employers, banks, stock brokers, lenders, etc. That way it was easy to see if you missed anything and to double check the return.
(Today R75 is easily available online.)
IRS has a lot of information from W-2 and 1099 filings, but it’s not possible to quickly and easily get that. A FOIA or Privacy Act request would probably not be processed in time to be useful for a tax return, and it might raise suspicion. Mailing all the reported information to taxpayers, without pre-filling a tax return, would be a good first step to making tax time easier in the US.
Well they don't check them when you submit them as they don't have all the information at the same time you do. Your W2 by law must be sent to you by the end of January I believe, however delivery to the IRS is not required by the same date.
As such fraud creeps in.
You pay Inuit because there are nearly eighty thousand pages of tax law that even IRS workers cannot properly comprehend all because politicians use the IRS as a political tool to benefit those they like and punish those they don't.
Hence why any attempt to overhaul the tax process is quickly denounced by supposed neutral groups; groups at the beck and call of powerful political interest. There is an entire FUD industry built to keep the current system to benefit of the political class and those well off enough to pay them.
Intuit doesn't know tax law better than IRS workers, they just spend lots of money lobbying Congress to prevent simplified filing processes.
Intuit is one if the powerful political interests you refer to, an integral part of the FUD system you talk about built to keep the current system as-is for their own benefit.
Wait till you try to figure taxes on employee stock purchases that you do through payroll deductions. I could not get a straight answer even from the IRS, to the point some told me to track each share back to its original purchase price and fill a form per affected shares. When you call and get a different answer each time it screams that the system is to complex.
Intuit is a convenient fall guy and nothing more. The real threat is that if the system were simpler and more open it could not be used to political advantage.
No, they don't. They don't know how much I paid in sales tax, property tax, or mortgage interest. They don't know how much I donated to various charities. They don't know how much I made from cash jobs. They don't know how much my small side business made or lost. There are a whole slew of variables the IRS doesn't know until I tell them, and that they take my word for until and unless I get audited.
They actually do know many of those things--e.g., mortgage interest you get in a 1098 is also filed with the IRS. There is no reason the IRS couldn't pre-prepare returns based on what is already required to be filled with them and precomputed taxes based on them, and still provide you the option of providing additional data. It would be easier for those work no additional info but also for those who needed to put some additional info, as a lot of the work that needs done now would already be done.
Well, there is a reason, and is that tax preparation software and services companies spend lots of money lobbying Congress to keep the existing system since simplified filing would kill much of their business.
I used to be in an investment partnership and prepared the tax returns for said partnership. We filled the return out and sent it to the IRS in parallel with the members getting their K1 forms. The members actually got the forms before the IRS did. In order for the IRS to know what each member should have on their return the IRS would have to process the business' return first.
All those other forms are the same way. 1098s and 1099 are sent to the IRS at the same time they are sent to the taxpayers. The IRS takes who knows how long to process those forms from all the various generators, and it is highly likely that most people are done with their tax returns before the IRS gets to the forms submitted by the banks and brokerages. Same thing again for W2s.
So yes, the IRS has all this information. Eventually. They do not have it by the deadline they set for people to make their tax accounts right.
That the IRS does not have all of the necessary information until after individual tax returns are due is probably because people have to file their own taxes. They don't need those forms until people file their own taxes, because they don't need to verify until after the taxes are filed. That can be changed, if we want the IRS to send people provisional reports that say, "Here is what we think [you owe | we owe you]. If you agree, sign and return. Otherwise, file using the appropriate forms."
> So yes, the IRS has all this information. Eventually. They do not have it by the deadline they set for people to make their tax accounts right.
To the extent that is true for some information simply due to filing and delivery deadlines and processing times for various forms, the policy changes necessary to rectify it are fairly trivial to implement alongside any provision allowing IRS precomputation.
And thats why you can do it your self. Forcing everyone to perform a repetitive task which can be easly automated (for 90% of people) is not a sensible default to take.
According to another post by someone who actually worked tax prep[1], it's more like 30%. In light of that and the delay in the IRS receiving the information from other parties, it does seem like a reasonable default.
The real problem is that the US tax code is horribly, unnecessarily complicated.
Most taxpayers don't have enough deductions to itemize, cash jobs, or side business income. You'd still have the option to file a return if there's additional income or deductions the IRS doesn't know about.
Also, I believe mortgage interest is reported to the IRS.
> A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not actually exist, that will not be put into effect, or that would not otherwise exist if the racket did not exist. (http://en.wikipedia.org/wiki/Racket_(crime))
Can someone explain to me how this description does not apply to Intuit?
You know that people that use lobbying will almost always care more, because their money is on the line? Also they are willing to use that money to prove it?
Yeah sure. What does that have to do with my comment?
My point is that legislators are almost universally dedicated to keeping their jobs and will pretty much limit their responses to lobbying to the situations where it won't lower their chances of getting reelected.
Because they need contributions(direct and indirect) to get (re)elected or even able to be a candidate?
And there are other ways to use money to influence this?
The 2008 presidential election certainly showed the impact that pulling in the right electorate can have on the result of an election (in some literal sense, the Obama campaign got more people on their side to care enough to vote). I think that is the most powerful effect money can have on an election.
I don't think campaign dollars have such a big impact on the elections of Senators and Representatives. Maybe Senators, but for representatives, the primary force right now is the shape of the districts.
What I'd like to see is the removal of the special seats that the parties have at the table. Make it staged signature collection for everybody, for everything.
(staged in the sense that 5 signatures would be enough to be the only name on the ballot but not enough to show up next to 3 other people that collected 1000+ signatures)
Shapes maybe indicate that Democrat or Republican wins, but doesn't indicate with one. With enough money you can outdemocrat any Democrat or outrepublican any Republican. After election they better play ball or next time no one will give them any money.
“It was a huge signal to politicians everywhere how much Intuit cares about this,” Mr. Bankman said. “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’”
Intuit is not a human being. It is a corporation. A legal fiction. It doesn't "care" about anything, nor does it have fights picked with "it". It can't autonomously decide to spend millions on lobbying. There are executives who make decisions to keep the tax system complex through lobbying, so that they can extract wealth from the rest of us and enjoy it for themselves and their families.
I understand that this is a standard reporting convention, but reporters need to call the executives who make these decisions to account. They shouldn't go to corporate PR to do this.
Once the media and public refuse to buy into corporate person-hood, we could see corporations behaving better.
Agreed. My litmus test is, unless you can name a person, then the statement of intent is meaningless. E.g. when I get emails from 'corporate HR' I delete them without reading them.
I have done taxes using the free way historically, on TurboTax. This year, I again opted for 'no charge' option, went though, and at the very end had to pay $104.00 without any explanation. I tried going back but I couldn't find if I had mistakingly selected something because they throw in payed options as you go. But I couldn't find or change anything, so decided to file instead of doing taxes the old fashioned paper way. I still have a bitter feeling, like I got scammed. I talked to a few friends and they had similar experiences, especially their older parents ending up paying more then a hundred dollars. I really hope IRS filing will happen, but with the amount of money they are skimming off poor folks and insider lobbying, I can't imagine it will.
SCOTUS has decided that it's not corruption unless there is quid pro quo. In this case, the pro part is missing, because Intuit gave them money, and the politicians did something to benefit Intuit, but it can't be proven that Intuit gave them the money for doing it.
America was built because we rebelled from our government via violent revolution. The Constitution was clearly written by people fearing a new tyrannical government (see 2nd amendment). Whether this attitude should be so pervasive is another discussion, but that's where the seed is from.
> The Constitution was clearly written by people fearing a new tyrannical government (see 2nd amendment).
The original text of the Constitution was written by people tired of the failings of a weak government and wanting to replace it with a much stronger one. The bill of rights, including the 2nd Amendment, was written to mitigate the fears of a significant but somewhat less prominent faction that feared that without the express boundaries it provided, a stronger central government would become too strong.
Yes, they were responding to the impossibly weak Articles of Confederation. The framers put several checks in place to prevent the federal government from becoming too powerful:
1) Enumerating the powers of the executive. There will be no King George in America!
2) Designing the checks & balances system such that (in theory) no one of legislative, executive, judicial could become too powerful to override the other two.
3) As you mentioned, the inclusion of the second amendment (and third, fourth, eighth) were all designed to prevent repeating problems the colonists faced before the war.
4) Tenth amendment was added to further strip the federal government of its non-enumerated powers.
The framers wanted something stronger than AoC, but they were very clear in their desire to limit the power of the federal government. They wanted a weak executive, and the legislative, particularly the Senate, was designed to be the main "doer of things".
The executive was initially quite powerless on purpose. When Jefferson tried to do the Louisiana Purchase, people challenged whether the executive had this power. Andrew Jackson then came along and began the journey of expanding the powers of the executive, followed by Lincoln suspending habeus corpus, and more modern figures such as FDR with the internment camps and New Deal all continuing to expand these powers. While this is obviously only a partial list of expansion, it contains several notable examples.
> The Constitution was clearly written by people fearing a new tyrannical government (see 2nd amendment).
Alright quick pet peeve: First off I agree that the constitution was specifically written to make it hard for a dictatorship and or tyrannical government.
But my pet peeve is: You cannot use the 2nd amendment as an example of that. It was written four years later and by almost a completely different set of people.
That's a fair criticism of my post. However, do you believe the mindset just four years later was any different? The second amendment very explicitly mentions militias, which implies the same fear of government.
Yes, it's worrisome. Don't forget that we've had 45 years of one of the major parties telling us 'government is the problem'. So, a whole generation has been brought up hearing this as a valid view.
And, there's a deep distrust of centralized authority in American history. Up until the closing I'd the western frontier (1890s), that distrust could be mollified by moving to 'unsettled' land. Then the USA had a almost a century of increasing government size and action, and then the Reagan reaction I mention above.
> As an non-american this baffles me.
Why is there so much distrust towards the government, police, and military in US ? Isn't the US the oldest democracy ?
I don't think you speak on behalf on all non-Americans. As an Eastern European, I can perfectly understand mistrust of government and police (and I think people from many other countries can share these feelings).
No. They're one of the youngest. The English empire had a parliamentary system when the US left, that's where the whole "taxation without representation" thing comes from, they didn't get a representative in the English parliament.
In fact the US governmental system is largely influenced by the English government system (with several changes made due to lack of monarch, and a need to elect 100% of their government as a policy).
PS - Before you argue that "if people are appointed it isn't a democracy!" you may want to think that position though, the two houses and the president are elected, but most other positions remain appointed in the US (e.g. supreme court for just one example).
PPS - I'd also argue that any FPTP system is only "barely" a democratic system since by design a vast majority of people feel they have no one who really represents their interests in either house. Instead of minority voices getting one seat, they get none, see the Nordic countries for how it should work in a democracy.
Distrust towards the government might by one of the reasons why the US is the oldest (or one of the oldest, depending on the definition) uninterrupted democracy.
I don't quite understand how someone with the username 1971genocide could possibly trust the government. But I guess operation searchlight was a minor thing - after all, official government statistics say only 26,000 people were killed.
You are taking two very completely different situations to create a false equivalency.
The people of Bangladesh fairly elected Sheikh Mujib but for some reason the government didnt want a bengali as the president and that was a good reason to overthrow the government.
If Obama won the election by a decisive victory and someone said "hey! that was joke - we are putting Mitt Romney in power". That would be a good cause to rebel against the government don't you think ?
My concern is that the american people are able to elect their representative and the same time seem to have a deep mistrust towards them. That is what I am brining up.
Having distrust towards your government is healthy - but just like everything, taking that ideology too far can be problematic as things needs to get done. Roads cannot be built if people think the government is up to something nefarious. I remember a paul graham article where he talks about "putting checks in a system" , it reminds of software systems that have validation set up. Do you think any software system can run with having validation every-time you pass an value to a function ? We put validation only in cases where the cost of putting it ( time-efficiency , memory ) is lower than the cost of security.
I'm very much pro-Bangladeshi independence, and pro-secession/revolution in general. I didn't mean to suggest any pro-Pakistan sentiment whatsoever. I'm just citing it as an example of why governments in general can't be trusted.
But I don't know why you cite Obama's election favorably. He ran on a platform opposing an individual mandate and then personally pulled the "hey! that was a joke - Obamacare time." Before him, Bush ran on a platform of humble foreign policy and limited government and then pulled "hey! that was a joke".
I'm not sure why "hey! that was a joke" is horrible when applied to a person, but acceptable when applied to policies. But then again I don't really go for identity politics - e.g., I don't care if the president is a Bengali or not, I care what actions he takes. (I'm also not pro-democracy.)
Do you think any software system can run with having validation every-time you pass an value to a function ? We put validation only in cases where the cost of putting it ( time-efficiency , memory ) is lower than the cost of security.
I believe the future of computing will be in dependently typed languages (e.g. Idris) which do exactly this sort of thing at compile time.
> I'm not sure why "hey! that was a joke" is horrible when applied to a person, but acceptable when applied to policies.
Let me quote Bret Stephens' take on the matter, writing in the (Republican-leaning) Wall Street Journal --
"Sometime in the 1990s I began to understand the Clinton way of lying, and why it was so successful. To you and me, the Clinton lies were statements demonstrably at variance with the truth, and therefore wrong and shameful. But to the initiated they were an invitation to an intoxicating secret knowledge.
What was this knowledge? That the lying was for the greater good, usually to fend off some form of Republican malevolence. What was so intoxicating? That the initiated were smart enough to see through it all. Why be scandalized when they could be amused? Why moralize when they could collude?"
Disclaimer. No representation is made in this comment as to the exclusivity or generality of this manner of lying to any particular political parties, politicians, or nations -- that is left as an exercise to the reader.
> Why is there so much distrust towards the government, police, and military in US ? Isn't the US the oldest democracy ?
The US became a democracy in no small part because there was so much distrust towards the government, police and military right there at the get-go... and the distrust of the system that is built into the system (the whole three-branch, checks-and-balances system) is one of the reasons it has never veered off into a deranged dictatorship like, say, ancient Rome.
(I mean, the power and longevity of the FDR administration was pretty insane -- probably the closest we got to that -- but nothing like Julius Caesar).
I think for the connotation in the parent comment you might say that the US became a democracy in 1920 or 1965 (but we still deny, for instance, children, the right to vote).
(at least, I tend to think that the modern concept of democracy is bound up with self determination, something that ancient Greece sort of did not have, nor did the US when it was founded)
This is going to depend on the definition of "democracy". Iceland, the Isle of Man, and New Zealand all have strong claims. UK has constitutional continuity back to 1707 but neither the UK nor US had universal suffrage until the 20th century.
What really baffles me is how others DON'T intrinsically mistrust those in power. Human nature is human nature after all.
NSA revelations, "I'm going to close GITMO", "weapons of mass destruction", "I did not have sexual relations with that women"... This list goes on and on.
Trust is out of the question at this point for many people. The word gullible comes to mind.
For the record, I don't mistrust the government. I think most of it is low level bureaucracy that somewhat functions, (albeit a bit inefficiently), and basically keeps things running. But it is run by people. And historically most people have been lazy, a bit stupid, and corruptible. But there isn't necessarily a pernicious conspiracy. And I would let the government prepare my taxes. As long as they have good software and it isn't a politician doing it.
> Why is there so much distrust towards the government, police, and military in US ?
Well, for one thing because certain factions (heavily represented, oddly enough, in government, including the police and military) actively promote that distrust to get more power for themselves. This doesn't seem like it would work, but it has more than one would think.
> Isn't the US the oldest democracy ?
US politicians, especially recently, have taken to claiming that a lot, but you'd probably have to construct a very special definition of democracy for that to be even arguably true.
At least since WWI, the US Federal Government has a long history of fucking people over in profoundly undemocratic ways.
What's happened to actual Americans is nothing compared to what the Pakistani Government did to East Pakistan in 1971... but it happens over and over again, the global consequences have been huge and terrible, and the wealth and political power of most Americans have been systematically eroded by it. Even small betrayals accumulate to significant mistrust.
I'm also non american, and I'm always surprised how much american politics piss me off.
Maybe I'm kinda scared since it's the most powerful country in the world, so the whole world might be influenced by how crappy those politics are. Capitalism is everywhere, tax dodging is rampant, and it all seems to seed from american capitalism.
I'm not anti american, I love so many things about the US, but there are particular aspects that are just so senseless.
The US individual tax reporting process is an annual reminder to voters of what they pay in taxes, that cannot be easily ignored. I am sure that fiscally conservative politicians see this as an advantage to their cause, though they are unlikely to publicly say so.
Someone else said that elsewhere in the thread, and I disagreed there, too... it's funny how people can look at the same situation and come to completely opposite conclusions. But to me it looks as though the entire system is designed to hide how much people pay in taxes. Almost everybody pays via automatic withholding so they never see the money in the first place; the defaults are designed so that people over-withhold by a small amount and get a refund; and even that's not enough so we have some taxes that are partially "paid by the employer" to even hide it from a deduction line on the paycheck. As I said in the other thread, if "we" wanted to make sure voters couldn't ignore their tax burden, we'd end automatic withholding.
You have a point - it could be worse, but automatic withholding is not likely to go away, because the government needs the cash flow, and even most fiscally conservative politicians tacitly recognize this.
I think the the emotional impact is important: preparing a return is still burdensome, even if not as bad as it could be, and that adds to and reinforces the pile of negative emotions associated with taxation.
Automatic withholding is also really important for taxpayers, as few people are fiscally responsible enough to save up the money throughout the year on their own. People end up living paycheck to paycheck regardless as to whether they're earning 20k/yr, 50k/yr, or 100k/yr, so sudden expense of several thousand dollars, even one they knew was coming, would be seriously damaging to their financial stability.
I've tried telling people to save even just $50/mo. until they've built up a three month cushion, and they insist they can't afford that. You wanna try convincing them to also set aside a few hundred bucks a month for taxes?
If people were perfectly rational, this might be the case, but I don't think receiving a statement has the same emotional impact, and is not as attention-grabbing and drawn-out, as going through the process of preparing a return - especially if, as for many people, you get a refund.
My guess is that relatively few people, of those who currently prepare their own returns, would invest as much time and effort into verifying an IRS-prepared return as they do in preparing one. I would also guess that a majority of swing voters prepare their own returns (I know, that's a fair amount of supposition on my part...)
Well in US there are like 2 levels of government, the state gvt and the federal one. Some people think the federal gvt is despotic and abuses the powers granted by the constitution.
The irony is that the state governments are way more corrupt and despotic. Almost all the "police brutality" news you hear isn't DEA agents or FBI. It's municipal law enforcement.
In my opinion, this is typically the position of the party with the least amount of power. Those that have lost seats are often advocates of "states' rights".
I volunteer through the IRS-funded program to help low-income people file their taxes.[1] I see a few dozen returns per year, and I don't know how representative they are of the "typical" return.
I would say maybe 30% of them would be done correctly if they were filled out automatically based on what the IRS knows. The great majority involve one or more questions like:
- (Education credit) When did you actually pay the tuition that your school reported to the IRS as "billed"? What kind of degree program are you in?
- (Dependents) Did you provide most of your brother's support for the year?
- (Earned income credit) Is your child a full-time student?
- (Married filing separately) Is your spouse going to itemize deductions this year?
- (Self-employed) What business expenses did you have?
- (Obamacare) What months did you have health insurance for? Do you qualify for any of the exceptions for the individual mandate penalty?
- (Mortgage interest deduction) Was this a home equity loan?
- (Gambling income) Did you have any offsetting losses?
As I said, I don't know how representative my sample is, but based on my own anecdotal experience, I just don't buy that the vast majority of people could have their return correctly prepared by the IRS without a TurboTax-like questionnaire. I would like to see more evidence for that claim.
If we're talking about greatly simplifying the tax code, then that's one thing. Or if we're talking about the IRS developing their own version of TurboTax, fine. But the idea that "the government has everything they need and only lobbying from Intuit is preventing them from just doing your tax return for you" strikes me as highly suspect.
> If you’re a typical American and you get this packet from the I.R.S. that says, ‘Here’s what we’ve determined your liability is,’ no one is going to challenge it
That's the biggest load I have ever heard. I have anecdotal evidence that the theory is incorrect (in South Africa we get filled-returns): all my friends validate, or pay someone to validate, their returns. Mr. Ellis has absolutely no evidence what-so-ever in support of his theory.
I would argue that the trend of Americans never challenging phone/cable bills suggests that his theory might hold some water, at least in the US. If the IRS shows a really good track record of not screwing them up in any way, people will just accept it as free money, only challenging when they owe money.
People saying "Intuit controls the government" are missing the forest for the trees. The IRS doesn't compute your taxes and send you a bill because then you'll forget you ever had the money in the first place. Lots of people want to make paying taxes painful, so once a year you have to spend hours facing the reality of how much money the government is taking from your paycheck.[1] Intuit just jumped on the bandwagon. It's a probably the most common lobbying tactic: support a position that politicians want to do anyway.
[1] It works too. We love paying our taxes, but my wife and I have been stewing for a week about the patriarchal bullsht that is the marriage penalty. The problem is that the rage subsides by Election Day--they should move tax season to October.
I would contend that's the opposite of what happens: most people get their taxes automatically withheld so they never saw the money in the first place, and then get a small refund after filing. If "we" wanted people to actually see how much money they were paying in taxes, we'd end automatic withholding.
Yeah, I just now looked up how much I was actually paying in withholding, because I seriously had no idea. I know how much I had to pay when I filed this year, and how much I've gotten in refunds in past years, but I couldn't have told you within a 100% margin of error what actual withholding was without checking.
It's been my understanding that a significant portion (perhaps approaching > 90%?) of the funding for federal spending during a specific year comes from those "pay as you go" sources, i.e. withholding and quarterly estimated tax payments for those not subject to withholding.
If that's the case, wouldn't the end of withholding (and presumably also quarterly estimated payments since they serve the same purpose) leave the federal government with a serious inability to "pay the bills" throughout that tax year?
No. The gov't would just borrow against the expected revenue windfall in April.
The problem is that people wouldn't save enough money to pay their taxes and wouldn't be able to pay. It's the same reason your landlord expects you to pay monthly and won't let you pay yearly.
I think that saying "lots of people want to make paying taxes painful" is quite a bold assumption, and it works all too nicely with the argument that Intuit is merely riding along with public sentiment. The reality is that the bottom 50% of tax filers in the United States have a federal tax rate of about 3%. [1] That isn't too much to get worked up about, and certainly not worth the punishment of needing to deal with complicated tax forms that can otherwise be completely between employer and government. I can't find a statistic that backs up my instinct here, but considering that 56% of individual returns were filed by preparers [2], I would posit that most of these 3% tax rate filers pay someone to do their taxes, such that they are hardly aware of the "reality" of their tax situation. Why would these people want to continue paying Intuit or HR Block or whomever for something that can (and should) be completely automatic?
A more accurate assumption might be that "lots of people [with money to throw around] want to make paying taxes painful [so that they can continue being employed/acting as a middle-man in an industry that would otherwise be rendered obsolete by advances in technology]." See this comment [3].
That still doesn't respond to the issue regarding why it is Intuit's TurboTax, and not a free solution provided by the government. I mean free, both in terms of cost to the end user, and cost to the government to implement. (I would imagine that long-term, it would even have negative cost to the government.)
I can't tell if this is a serious comment or a sarcastic one, but I'll bite.
This is blatantly false. I'm not asking them to replicate the full features of TurboTax. These low-income households do not need a full-featured free program. They pretty much just need a single field filled in on their 1040EZ from their W-2, with maybe some questions about child support, local taxes, and the like. This is well within the reach of the US government. For example, both Federal and State governments are able to automatically link household names and addresses together with tax returns to automagically populate college financial aid forms. [1]
It was serious. I agree with you here though about simpler tax filers. They should be able to make it easy and free for 1040EZ filers. State taxes make it a bit more complex but whatever.
> People saying "Intuit controls the government" are missing the forest for the trees.
No one has says Intuit controls the government. Some people have said Intuit is a special interest that heavily, and successfully, lobbies the government on this one issue, which isn't the same thing as controlling the government.
> The IRS doesn't compute your taxes and send you a bill because then you'll forget you ever had the money in the first place.
No, I won't. As long as I'm still seeing the deductions on every paycheck, and the amount I end up paying at the end of the year, I'm going to remember that I had, and paid, the money.
All dealing with the headache of filing taxes does is give me reason to be upset at the incompetence of the decisionmakers mandating that wasteful and inefficient process, which at least temporarily surpasses and overwhelms any frustration I have about the amount of tax paid. (Given the number of people who pay extra money for tools, services, etc., to mitigate the pain of tax filing, I don't think that's an uncommon feeling, either.)
Do you think it's possible that other people might have a different emotional reaction from you if their taxes were withheld/calculated/paid in a less painful manner?
I think intentional infliction of pain on those not convicted of some wrong as a tool for getting those people on whom pain is thereby inflicted to side with one faction's political view on a policy issue is an illegitimate use of government power irrespective of whether or not it might in some cases actually work, and, to the extent that "it works in some cases" is at all relevant to its legitimacy, don't think its actually a positive factor.
So, I don't so much discount the possibility that you raise as dismiss its relevance as a defense of the tactic.
Well, you started off dismissing the tactic as ineffective, but now you've switched to dismissing it as illegitimate.
I might very well agree with your latter assertion. I was just pointing out that you were wrong on the first. Most people aren't as homo economicus as you claim to be.
> Well, you started off dismissing the tactic as ineffective
I don't think the tactic is ineffective at what it is designed to do -- including where that comes to eliciting a certain emotional response among a substantial segment of the population.
I think that the upthread description of what that intent is is completely wrong, though, and that it would be ineffective at what was described upthread.
> I was just pointing out that you were wrong on the first.
No, you were asking if I would admit the possibility of variation in emotional response, which isn't the same thing as "pointing out that I was wrong". If you want to actually pose an argument that I was wrong, go ahead.
But I still don't agree that it is effective at making people notice the money paid in taxes any more than they would without it (nor do I in fact think that that's what any of the powerful interests backing the policy actually want), which was the claimed reason it was necessary.
I think it may be effective at getting some people angry at the IRS and government in general, irrespective of the actual level of taxation or any awareness of the actual money involved. Which, I think, is a lot more likely what the political actors involved actually want than reminding people of the actual money involved in taxes is.
(I also think it is illegitimate either for that purpose or the purpose posited upthread, for similar reasons.)
I don't think the marriage penalty is patriarchal bullshit. It's just recognition that couples have lower combined expenses than two single people and hence have more income available to pay for taxes.
The tax code does not allow you to deduct cost of living expenses, as a general principle. So someone making $200k in Iowa has more disposable income than someone making $200k in NYC, but the Fed. Gov. taxes them the same. To me, it follows that the tax code shouldn't impose an extra burden because of an inference about your living expenses made from your marital status.
Why does it have to follow in that direction? Maybe because of the marriage penalty it follows that the tax code should take into account cost of living based on your zip code.
You've said several times that the tax code is set up to tax increases in wealth.
That's a fair point too, but I'm taking the premise of the current tax code (that cost of living doesn't matter), as a given. I'd be less unhappy with the marriage penalty if the tax code otherwise accounted for cost of living.
Some of it is also accounted for in the deductions/exemptions (which will all count against the top bracket).
So if you have a couple that makes $50,000 and $100,000, they will deduct/exempt at least $20,000 out of the 28% bracket. Filing alone, the $50,000 earner wouldn't have any income subject to that tax to begin with. That's only $300 for those earning levels, so I guess it should only be a fraction of the difference (and it would not happen for many couples, for example a dual $100,000 couple would deduct/exempt roughly the same bracket single or married).
In other countries it's the employers that pay pretty much all of your taxes. They just keep the taxes from your salary and then when they pay their own taxes they also pay yours.
I do think there's a slight disadvantage in having the taxes essentially "hidden away from you". This could be somewhat alleviated if instead of 10 different taxes there are just 2 or 3 at most, to make the whole thing more understandable.
However, ultimately the benefit of having the taxes automatically done for you, not having to "get into trouble with IRS" or other such issues, is a much bigger benefit than the drawback of having the taxes somewhat hidden from you.
This is the case in the US as well. But the US tax code is complicated and every year we take a form from our employer that declares how much tax they paid on our behalf and combine it with forms from our banks and receipts from tax deductable things like paying a mortgage, educational costs, retirement savings, donations to charity or random things like buying an electric car or solar panels, and come away with a total number we owe. Usually, since many people in the US get deductions that their employer doesn't compensate for when paying our taxes, this results in the government returning some of our money. Some people make more money from investments than their deductions cover that results in them having paid too little, and they have to send a check to the IRS.
For example, in 2014 my overall graduated tax liability should have been 21%. However, due to deductions, it was 16%. I got the difference back as a refund.
In the UK employers usually sort out taxes for you via the Pay As You Earn system. Everytime you get paid you will be issues with a payslip which shows how much you were paid before deductions (tax, student loans), a break down of the deductions and how much you earned after tax.
The only tax you don't see is Employers National Insurance - this is a tax on employing someone that is around 12% of their wage.
I'm living in one of those other countries. My employer removes tax from my salary every month. But they just follow some guidelines. Our tax system is quite complex and my employer doesn't have enough information to know how much to send to the IRS. They can't even make a decent estimate, actually. So we still need to file a tax report every year. The guidelines and the system are set up so that most people pay too much tax in general.
We do get our tax reports already filled-in by the IRS though. It's getting better each year. For now most people just check everything is there and whether it is correct and just sign and send (everything is done digitally of course).
I live in Austria, where we have such a system. The money isn't hidden away at all, you get a letter every month detailing how much you paid income tax, health insurance, unemployment insurance, retirement plans etc.
The big advantage is that you never have the chacne to spend all the money you have to save for taxes; makes budgeting a lot easier.
Unfortunately, this only works correctly when you have a single employer. If you have multiple employers, you need to send a form to the authorities and they will determine how much you overpaid or underpaid.
And if you're self-employed, you're on your own; you have to file your taxes yourself. But in that case most people hire a tax adviser to do it for them.
Is it so that employers don't subtract your taxes in the US? How does that work? Do you get one big invoices in the mail for a year of tax?
Here in Norway one normally pays around 45% of one's salary in tax. The employer has to subtract the money from your pay directly. Because no one sees the money before it goes to the government, many people don't really think much about it. If that on the other hand got one big bill at the end of the year I think there would have a lot more outcry on all the waste of taxpayers’ money that is going on.
In the US there's commonly withholding on your paycheck for your state and federal income taxes and Medicare/Social Security. You can tell whatever company does your paychecks to withhold more or less depending on if you know you have a lot of deductions (married, supporting children, etc.).
On my paycheck I have a break down for how much is being deducted this period then year to date.
I am a CPA and unless you have dealt with the IRS over the long-term, I think most of America has no idea how incompetent the IRS is.
You would be frightened if they prepared your taxes for any more than the simple return, ie some W2s. I would not even want the IRS to automatically prepare taxes for "simple" forms such as 1099-Int/1099-Div or 1099-B for stock sales.
And I do not say that from a "job security" perspective for the tax work we do.
The solution isn't government prepared taxes, it is less taxes.
I am a bit confused by the article, where it initial talks about how the system would be return-free, and that it would save everyone from doing record-keeping. But later, it talks about a system very similar to Sweden where tax returns has been prefilled with financial data, which people have to verify and sign. That system is not return-free and you still need to do record-keeping, since the numbers reported in by the employer could be incorrect.
This is a ridiculous idea. Might work for people who have a very simple tax return but the IRS could not possibly calculate my tax return it's incredibly complicated and is not based only on information that they have access to.
I think you missed the actual mechanics of the proposal. The idea is that the IRS sends you something that says, "This is the information we have. This is what we think you [owe use | we owe you]. Sign and return if you agree." If you agree, then it takes you a few minutes and you're done. For many people, who have "boring" taxes, this would work great.
But if you don't have "boring" taxes, then you could still do them yourself. The idea, though, is that relatively few people have to do this.
I always wondered why the IRS doesn't just deploy its own turbotax-like app. Then the fiasco with the health exchanges happened. So maybe government just doesn't do GUIs then. How about at least a RESTful API?
> If it came with some sort of indemnity from audit penalties
Not really possible, after all you may have income streams you must declare which the IRS is not immediately aware of, and failure to declare those would be an audit failure.
> and as long as I could amend or re-file with my own calculated return, yes.
If it's anything like most of the developed world (which I'd expect), the tax authority's automated systems simply pre-fill the declaration with what they know, it's expected that the taxpayer will check and amend it, or ignore it entirely if you want to file "from scratch".
Indemnity against mistakes made by the IRS for sure; against the taxpayer intentionally hiding income, not so much. Then there is the whole problem of determining intent, but that's already a problem.
