Andrew Yang, who was the 1st declared Democratic presidential candidate for 2020, has a whole policy around the strange aspects of US taxation, including automatic filing and getting a breakdown of where your money went.
>> Instruct the IRS to implement a system whereby any American can opt into a program to have their taxes filed automatically.
>> Instruct the IRS to coordinate with the Treasury to prepare a report on federal spending, and send each taxpayer a rundown of the actual amount of their taxes that went to each major spending area (e.g., domestic programs, foreign aid, military, etc).
>> Increase the budget of the IRS by 50% to $16.2 billion and modernize it with the latest technology. Money spent on the IRS will almost certainly pay for itself many times over via better tax compliance and less wasted time of citizens. Running the country like a business means both taking care of constituents and collecting revenue as seamlessly and efficiently as possible.
If you live in the US and you think your taxes are bad, you haven't seen anything yet. The IRS starts to really make your life miserable once you move out of the country and live as an expat. The reporting requirements (FBAR and FATCA) border on ridiculous. As an example you need to report all your financial accounts, interest on them with no minimums, you have to know the maximum amount in each account over the course of a year, and BTW, if you are a shareholder in a non-public company, that company's statement goes into your tax filing, too. Preparing your tax return becomes a major project that you do once a year, and you really have to pay a specialized company to do it for you, because there are so many pitfalls.
The part that I found most surprising is that in the US there is basically no way for an individual to read the law and follow it. The law is way too complex and murky. As a contrast to that, in most countries that adopted German law principles, it is perfectly normal for a person to go read the law if in doubt.
The worst part about taxes is that I never know if I did them correctly since the feedback loop is up to 3 years. Just shoot them off into the ether and cross your fingers you don't get a giant bill next year.
The first time I filed, I had not updated my W4 soon enough after moving and owed NYC like $4k in taxes which came up around 18 months after I filed. The following year the software I was using said I owed around $10k in taxes, which I was pretty sure was wrong, so I went to an accountant and they did it for me and said I owed nothing. Even after all that, there is no way to know who is right until 3 years from now (IRS theoretically doesn't look back more than 3 years for individual returns).
Yeah, in Sweden it's trivial to do your taxes: you log into a website online, you check that the salary number seems accurate, and if you have no amendments, you just click "OK" (more or less). You sign it with something called BankID, which is an internet-identity thing you can get from your bank. I think it took me all of 7 minutes last year.
Planet Money just did a story on this, someone in California tried to get Ready Return passed (which does almost what you're stating). It didn't pass by one vote.
I'm Chilean. It just took me ~40 seconds to complete my tax declaration, skimmed through all companies involved (employer, banks and pension fund), typed in my bank account for my tax return and done.
The single thing that bugged me the most this year was on my state taxes. I got this nice W2, with copies for the federal tax filing, the state tax filing, and my own copy. But my state doesn't want me to send them the W2. No, they want me to print out their own special little additional form, and transcribe the numbers from the W2 onto that. Seriously, WTF?
I actually thought about civil disobedience on this - just staple the state copy of the W2 there and let them deal with it. Maybe next year...
tl;dr: All the infrastructure is in place and everybody loves the idea (Literally 99% approval in the test-run of 80,000 taxpayers); but Intuit (Makers of the TurboTax software, who get rich thanks to people's confusion and frustration), spent $28 million lobbying against it.
The Planet Money podcast just had an episode on this topic ("Joe Bankman, professor at Stanford, figured out a way to make filing your taxes easy and painless. Then the tax lobby found out about it.")
Just listened to it. It kind of annoyed me how breezy they were - corporate interests and the Republicans making 120 million American lives miserable - ah it can't be helped.
The screwed up taxes is a symptom of a dysfunctional government.
The fix is to address the root cause--reducing excessive lobbying that seems to control the government and implementing a direct democracy that puts the government better under the people's control (it's time to replace the electoral college).
I'm not sure it as simple as blaming lobbyism or the electoral college. In France and Germany filing taxes is also an insanely painful procedure.
There are massive bureaucratic institutions and processes that need to be changed, huge IT systems to be created and maintained (doesn't the IRS use magnetic tape??) and laws to be adjusted.
Making complex things simple is one of the hardest jobs out there.
This was my first year doing my own Swiss taxes (US citizen in CH). Even though I only know German to an A2 level, the free software provided by the Canton and the instructions on how to fill out the return completely guided me with no problems, even through the additional forms. In addition, as a side effect I have accurate numbers for my income, my interest payments, my wealth, and my debts.
The US side of things has been... not the same experience.
I’m in the exact same position as you (first year filing taxes in CH as a US citizen). I filed for an extension because I’m waiting for AHV to be resolved due to some ambiguities in my tax status (employed vs self employed), but I’ve read the paper form and it’s so straightforward. My friends here are so confused when I talk about US taxes and ask questions from that perspective—my questions make no sense because it’s just obvious how to do here vs the US where you have to hunt for every tiny little detail.
If you ever want to meet up and compare notes as a US expat in CH, let me know! Email in profile.
That seems like an uncharitable characterization of a group that has argued for a simpler tax code with generally fewer loop holes (as opposed to an elaborate tax code that no one can understand, with a pre-filled form that in theory one could double check but in practice few would check).
"uncharitable characterization of a group that has argued for a simpler tax code with generally fewer loop holes"
Fewer loopholes for middle and lower class folks? Yes. Repealing the estate tax is very literally a new loophole that allows the rich to keep more money while closing that pesky mortgage interest deduction for the middle class. Taxes are just a way of redistributing money. Calling a party pro-tax because theyre moving the burden from one group to another is...interesting.
I was particularly entertained by the tax forms this year. The 1040 is now only half a page, but there are several other required forms that didn't exist last year.
I hate filing taxes so much. I wish we would switch to purely sales tax and corporate tax. I know the arguments against them, but I just don't want to do paper work.
This story is disingenuous. For people with "simple" tax situations (no itemized deductions, etc) the forms are already very simple.
The scenario they paint with chasing down form after form simply does not happen for most people. For most people it's one page.
But the idea that your taxes can be pre-computed by the IRS is fantasy beyond that, unless the tax code is significantly changed.
Sure they know your W2 income and some other standard stuff. How do they know your self-employment or business income? How much you gave to charity? How do they know what unreimbursed expenses you had? How do they know how many kids you have? How do they know your marital status?
I guess most of that could be addressed by just eliminating all deductions and allowances but even at that there are a lot of things they simply cannot possibly know until you, the taxpayer, tell them.
In the UK you only have to file if you have particularities like that which you describe. For everyone else, the PAYE system seems to deduct the right amount ("withholding" in the U.S.). It's simple enough that not everyone needs to file: https://www.gov.uk/self-assessment-tax-returns/who-must-send...
Not really. The IRS really does know your W2 and all your bank and investment income. If you've worked for several different companies, you often have scattered investments that you have to chase down that, in fact, they already know. There's really no reason why they couldn't provide you with pre-filled forms for all that stuff. Sure, there's stuff they don't and can't know, but for most people those are the simple things (how many children, marital status.
> How do they know your self-employment or business income?
If it's 1099 income, they know it for the reason that the 1099 gets filed with the IRS, as well as a copy going to you.
> How do they know how many kids you have?
That doesn't change very often, and there is interaction with the federal government which easily could be, if it isn't already, shared with IRS for the most common reason for changes in the positive direction.
> How do they know your marital status?
Again, that doesn't change frequently, so mostly they have a good basis for it by assuming whatever it was he previous year.(For this and the preceding, and a lot of similar status issues, it would be easy enough to move the data collection to a pre-filed form—for regular workers you could collect it, or changes to it, as part of the W-4—instead of the equivalent of the current retrospective tax return, expanding the accuracy of precomputed taxes and reducing the need for supplemental retrospective filing.
But, yeah, you'll probably always need an option for at least supplemental filing for information that differs from information the IRS has from other sources or is outside of it.
Most people do not have income that doesn't already show up in the IRS records. Yes, there are those of us who are self-employed and would still have to fill out stuff. Charity? Most people don't itemize and if you don't charity doesn't matter. Unreimbursed expenses? Didn't that get eliminated this year? Kids? Same as last year, if that changed you modify the return. Marital status? Same thing.
Personally I wouldn't gain that much from simply a pre-filled return (I'd keep B and D and chuck the rest) but many would.
For most people that’s not a problem in the UK. Partly that’s because all employed income has to be reported to HMRC by your employer, and party we just don’t have the same system of tax deductions - you can’t write off charity donations, and expenses are only deductible by companies. For children you have to register for child benefit payments with the government.
Even for the self employed it’s generally a pretty simple process of filling in your income and expenses and then everything else is calculated for you.
If you have other income you can just go to the HMRC web site and fill in the forms on-line. I've had to do it a few times, and its not a big deal.
If you have a simple one-off event (like a capital gain when selling something) then you can just write a plain ordinary letter telling them about it and they will sort out the tax bill for you.
Taxes are extracted during payroll and that’s a very easy process for individuals. The tax return is just an adjustment. It’s an annoying process to get a direct deposit for at least as many people as it is an annoying process to send a check.
If I were a strategist in charge in making taxes hurt, I would try to help people understand how much bigger their paychecks could be. Please read this comment as politically neutral.
It's painful here in Canada, too. I read passages like this about civilized countries, also heavily socialized like my country, and am envious:
> "Netherlands, the procedure is simple ... Dutch citizens can file their taxes in minutes ... in Sweden, 72 percent of taxpayers say filing taxes is easy"
I enjoy what I receive from paying my taxes. Please make it easier.
It's cheaper to offer a 10% gift voucher than a 10% discount.
Where I live, most people approve a pre-filled statement. This boosts tax revenue, because people don't think twice about deductions that are not pre-filled.
It's more convenient not to do your own math, if you trust the actor who does the math for you.
Is there any reason we don't require the government to create software that largely does the taxes for us? They have the W2s, etc. and it seems like they could fill most of the forms out. We'd just need to set the deductions.
The argument they try to make is that the government could take advantage of its citizens. As in, it wouldn't be in their interest to reduce our taxes as much as possible.
Here in NZ most people do not need to file - the tax system is deliberately simple, there are essentially no deductions/etc.
Most people who have a single regular income will find that their employer has paid the exact correct amount of PAYE on their behalf, people who have multiple employers may receive a tax refund, they can file for it by filling out a 2 page online return (I think this year the IRD will start doing this for you, you'll just get a cheque in the mail)
As an employer filing monthly PAYE is equally trivial, it can be done with 1 line in a spreadsheet - I spend 30 minutes a month paying bills/taxes/etc for my company
A fair tax system would be one where you are sent a bill every month and you allocate your money as you want it to be soent. Some baseline auto-allocation should be a part of this. Perhaps you control 75% and the rest is automatic. No tax filings and the IRS is reduced rather than grown into a larger monster.
People don’t revolt about taxation because they never see the money. If people had to pay the bill themselves every month there would be riots in every city within a year or less.
Well, unless you're poor, at least you likely don't have to worry about being audited. The IRS is too busy auditing the poor and minorities to worry about anyone else.
I'm not saying that conclusion is incorrect, but I'm not convinced by the article's preemptive rebuttal to the population heatmap counterargument. To its credit the article mentions it:
> The sociologist Kieran Healy has joked that most data visualization maps of the US show one of two things: population density or the percentage of the population that’s black. This is decidedly one of the latter maps, with the notable additions of heavily Latino counties in southern Texas and Indian reservations in South Dakota and Montana.
However...statistics are pernicious. This is an extraordinary accusation, and before I accept it as true I'd like to see more due diligence to ensure there isn't (for example) a stray, superfluous correlation between population density and Hispanic/Black demographics at play here.
With that aside, this looks like something that should definitely be investigated more thoroughly. Even if this is ultimately a side effect of minority groups being correlated with greater population density (and I don't know if that's true, to be clear), the ultimate consequence looks pretty negative.
[+] [-] jasonshen|7 years ago|reply
>> Instruct the IRS to implement a system whereby any American can opt into a program to have their taxes filed automatically.
>> Instruct the IRS to coordinate with the Treasury to prepare a report on federal spending, and send each taxpayer a rundown of the actual amount of their taxes that went to each major spending area (e.g., domestic programs, foreign aid, military, etc).
>> Increase the budget of the IRS by 50% to $16.2 billion and modernize it with the latest technology. Money spent on the IRS will almost certainly pay for itself many times over via better tax compliance and less wasted time of citizens. Running the country like a business means both taking care of constituents and collecting revenue as seamlessly and efficiently as possible.
https://www.yang2020.com/policies/filing-income-taxes/
[+] [-] jwr|7 years ago|reply
The part that I found most surprising is that in the US there is basically no way for an individual to read the law and follow it. The law is way too complex and murky. As a contrast to that, in most countries that adopted German law principles, it is perfectly normal for a person to go read the law if in doubt.
[+] [-] skizm|7 years ago|reply
The first time I filed, I had not updated my W4 soon enough after moving and owed NYC like $4k in taxes which came up around 18 months after I filed. The following year the software I was using said I owed around $10k in taxes, which I was pretty sure was wrong, so I went to an accountant and they did it for me and said I owed nothing. Even after all that, there is no way to know who is right until 3 years from now (IRS theoretically doesn't look back more than 3 years for individual returns).
[+] [-] Reedx|7 years ago|reply
Bonus: An option to indicate where ~5% of your taxes goes to.
[+] [-] moviuro|7 years ago|reply
2. We also have a website for that (though it's probably just a glorified multiplication and graph) [2]
[0] https://www.impots.gouv.fr/portail/particulier
[1] it looks like https://www3.impots.gouv.fr/simulateur/calcul_impot/2019/sim...
[2] https://aquoiserventmesimpots.gouv.fr/
[+] [-] OskarS|7 years ago|reply
[+] [-] thehoff|7 years ago|reply
https://en.wikipedia.org/wiki/ReadyReturn
[+] [-] Sharlin|7 years ago|reply
[+] [-] rmujica|7 years ago|reply
[+] [-] ortusdux|7 years ago|reply
[+] [-] AnimalMuppet|7 years ago|reply
I actually thought about civil disobedience on this - just staple the state copy of the W2 there and let them deal with it. Maybe next year...
[+] [-] alfonsodev|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] Shish2k|7 years ago|reply
tl;dr: All the infrastructure is in place and everybody loves the idea (Literally 99% approval in the test-run of 80,000 taxpayers); but Intuit (Makers of the TurboTax software, who get rich thanks to people's confusion and frustration), spent $28 million lobbying against it.
[+] [-] ataturk|7 years ago|reply
[deleted]
[+] [-] clausok|7 years ago|reply
https://www.npr.org/sections/money/2017/03/22/521132960/epis...
[+] [-] mixmastamyk|7 years ago|reply
[+] [-] FormFollowsFunc|7 years ago|reply
[+] [-] jostmey|7 years ago|reply
The fix is to address the root cause--reducing excessive lobbying that seems to control the government and implementing a direct democracy that puts the government better under the people's control (it's time to replace the electoral college).
[+] [-] mxschumacher|7 years ago|reply
There are massive bureaucratic institutions and processes that need to be changed, huge IT systems to be created and maintained (doesn't the IRS use magnetic tape??) and laws to be adjusted.
Making complex things simple is one of the hardest jobs out there.
[+] [-] ataturk|7 years ago|reply
[deleted]
[+] [-] cjslep|7 years ago|reply
The US side of things has been... not the same experience.
[+] [-] lukeqsee|7 years ago|reply
If you ever want to meet up and compare notes as a US expat in CH, let me know! Email in profile.
[+] [-] jkingsbery|7 years ago|reply
That seems like an uncharitable characterization of a group that has argued for a simpler tax code with generally fewer loop holes (as opposed to an elaborate tax code that no one can understand, with a pre-filled form that in theory one could double check but in practice few would check).
[+] [-] ryguytilidie|7 years ago|reply
"uncharitable characterization of a group that has argued for a simpler tax code with generally fewer loop holes"
Fewer loopholes for middle and lower class folks? Yes. Repealing the estate tax is very literally a new loophole that allows the rich to keep more money while closing that pesky mortgage interest deduction for the middle class. Taxes are just a way of redistributing money. Calling a party pro-tax because theyre moving the burden from one group to another is...interesting.
[+] [-] grigjd3|7 years ago|reply
[+] [-] dec0dedab0de|7 years ago|reply
[+] [-] ams6110|7 years ago|reply
The scenario they paint with chasing down form after form simply does not happen for most people. For most people it's one page.
But the idea that your taxes can be pre-computed by the IRS is fantasy beyond that, unless the tax code is significantly changed.
Sure they know your W2 income and some other standard stuff. How do they know your self-employment or business income? How much you gave to charity? How do they know what unreimbursed expenses you had? How do they know how many kids you have? How do they know your marital status?
I guess most of that could be addressed by just eliminating all deductions and allowances but even at that there are a lot of things they simply cannot possibly know until you, the taxpayer, tell them.
[+] [-] mancerayder|7 years ago|reply
[+] [-] bwanab|7 years ago|reply
[+] [-] dragonwriter|7 years ago|reply
If it's 1099 income, they know it for the reason that the 1099 gets filed with the IRS, as well as a copy going to you.
> How do they know how many kids you have?
That doesn't change very often, and there is interaction with the federal government which easily could be, if it isn't already, shared with IRS for the most common reason for changes in the positive direction.
> How do they know your marital status?
Again, that doesn't change frequently, so mostly they have a good basis for it by assuming whatever it was he previous year.(For this and the preceding, and a lot of similar status issues, it would be easy enough to move the data collection to a pre-filed form—for regular workers you could collect it, or changes to it, as part of the W-4—instead of the equivalent of the current retrospective tax return, expanding the accuracy of precomputed taxes and reducing the need for supplemental retrospective filing.
But, yeah, you'll probably always need an option for at least supplemental filing for information that differs from information the IRS has from other sources or is outside of it.
[+] [-] dmitriid|7 years ago|reply
[+] [-] LorenPechtel|7 years ago|reply
Personally I wouldn't gain that much from simply a pre-filled return (I'd keep B and D and chuck the rest) but many would.
[+] [-] jon-wood|7 years ago|reply
Even for the self employed it’s generally a pretty simple process of filling in your income and expenses and then everything else is calculated for you.
[+] [-] PaulAJ|7 years ago|reply
If you have a simple one-off event (like a capital gain when selling something) then you can just write a plain ordinary letter telling them about it and they will sort out the tax bill for you.
[+] [-] mixmastamyk|7 years ago|reply
[+] [-] hdfbdtbcdg|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] 1123581321|7 years ago|reply
If I were a strategist in charge in making taxes hurt, I would try to help people understand how much bigger their paychecks could be. Please read this comment as politically neutral.
[+] [-] CodeSheikh|7 years ago|reply
[+] [-] emptybits|7 years ago|reply
> "Netherlands, the procedure is simple ... Dutch citizens can file their taxes in minutes ... in Sweden, 72 percent of taxpayers say filing taxes is easy"
I enjoy what I receive from paying my taxes. Please make it easier.
[+] [-] jpttsn|7 years ago|reply
Where I live, most people approve a pre-filled statement. This boosts tax revenue, because people don't think twice about deductions that are not pre-filled.
It's more convenient not to do your own math, if you trust the actor who does the math for you.
[+] [-] andbberger|7 years ago|reply
edit: 'tax', I am not being literal
[+] [-] deeg|7 years ago|reply
[+] [-] dguo|7 years ago|reply
The argument they try to make is that the government could take advantage of its citizens. As in, it wouldn't be in their interest to reduce our taxes as much as possible.
[+] [-] Taniwha|7 years ago|reply
Most people who have a single regular income will find that their employer has paid the exact correct amount of PAYE on their behalf, people who have multiple employers may receive a tax refund, they can file for it by filling out a 2 page online return (I think this year the IRD will start doing this for you, you'll just get a cheque in the mail)
As an employer filing monthly PAYE is equally trivial, it can be done with 1 line in a spreadsheet - I spend 30 minutes a month paying bills/taxes/etc for my company
[+] [-] robomartin|7 years ago|reply
People don’t revolt about taxation because they never see the money. If people had to pay the bill themselves every month there would be riots in every city within a year or less.
[+] [-] JustSomeNobody|7 years ago|reply
https://www.vox.com/future-perfect/2019/4/3/18292741/irs-tax...
I really wish, as a country, we could stop beating up on the poor.
[+] [-] throwawaymath|7 years ago|reply
> The sociologist Kieran Healy has joked that most data visualization maps of the US show one of two things: population density or the percentage of the population that’s black. This is decidedly one of the latter maps, with the notable additions of heavily Latino counties in southern Texas and Indian reservations in South Dakota and Montana.
However...statistics are pernicious. This is an extraordinary accusation, and before I accept it as true I'd like to see more due diligence to ensure there isn't (for example) a stray, superfluous correlation between population density and Hispanic/Black demographics at play here.
With that aside, this looks like something that should definitely be investigated more thoroughly. Even if this is ultimately a side effect of minority groups being correlated with greater population density (and I don't know if that's true, to be clear), the ultimate consequence looks pretty negative.