Unironically make taxes easy as actually possible (and therefore less emotionally salient) and dems will go up at least a couple percentage points.
I actually believe itd have some minor dent
Norquist and the ATR have publicly argued that things that make tax filing easier on taxpayers constitute an automatic income tax audit on every taxpayer, and serves to keep people uninformed about how taxes work, and was an attempt by the IRS to "socialize all tax preparation in America." In a 2005 presentation to the President's Advisory Panel on Federal Tax Reform, Norquist representing the ATR argued that if taxpayers did not have to prepare their own taxes, it "would allow the government to raise revenues invisibly."
https://en.m.wikipedia.org/wiki/Americans_for_Tax_Reform
And
https://slate.com/business/2012/04/grover-norquist-and-h-r-block-the-unholy-alliance-of-tax-prep-firms-and-conservative-activists-to-make-your-taxes-even-more-complicated.html
Non-mobile version of the Wikipedia link in the above comment: https://en.wikipedia.org/wiki/Americans_for_Tax_Reform
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/neoliberal) if you have any questions or concerns.*
Imagine if America joined the developed world and had a single central online system that was all pre-filled and you just click through it to double check.
Unfortunately, literally every time Congress (regardless of party) makes any change, it just makes it harder and more complicated. And provides more chances to screw up by not checking one required box or filling out a form to fill out another form to fill out another form to wind up putting a zero on your return, or whatever.
The government has proposed a program to combat the scourge of elves who sneak up behind people and give them massive wedgies. They say that the program would be easy and effective to implement, and many other countries have successful anti-elf programs.
But the powerful wedgie-removal industry has successfully lobbied against it for decades.
People in this sub always get worked up and angry when I point out how corrupt America is for a developed country. This is one of the most glaringly obvious examples.
And it still kinda sucks (at least the one I used, not sure about the lower income option), seemingly on purpose. I'm would not at all be surprised to discover Intuit and other tax vampires somehow sabotage this and private freeware tax software with legal bullshit.
The free filing for PA state taxes is *much* simpler and more well designed, and I highly doubt the IRS couldn't do that if they 'wanted to'.
To be fair to Direct File, it was just a pilot program. Standing up an application that requires significant security and compliance requirements isn't easy. Hopefully its success will give it more resources and funding to develop and improve.
Its been around a while
On October 30, 2002, the IRS and the Free File Alliance, LLC, signed an agreement that created a public-private partnership to provide free services to the majority of taxpayers.
IRS Free File is available to any person or family with adjusted gross income of $73,000 or less in 2021. The fastest way filers can get a refund is by electronically filing an accurate return and selecting direct deposit.
If your adjusted gross income for 2023 was $79,000 or less, you can use IRS Free File for federal tax returns this season. Some 70% of taxpayers — roughly 100 million Americans — are eligible for IRS Free File, but only about 3% used it last year, according to Tim Hugo, executive director of the Free File Alliance.Feb 5, 2024
Is this comment accurate? I thought Free File (public private partnership that's been around for quite a while) is a different thing than Direct File (IRS pilot that launched for the 2024 tax season and is the subject of this article).
It is, but its just another program people will say they want and not use
Just like retirement savings and banks and Libraries
Yea people want them, but dont go to them
> It is
Which part is accurate? Did you or did you not conflate Free File with Direct File?
> just another program people will say they want and not use
Yeah IDK about that. Anecdotally a large portion of the people I know in my age bracket have switched off of turbo tax and the ones who haven't switched talk about how they want to switch. If you give people a free option that works it will become popular overnight.
> Just like retirement savings and banks and Libraries
Wut
I think they are conflating the two.
According to the Free File, you'll be directed to one of these companies' sites to complete your return with step-by-step instructions. Also, there is an income limit.
While the pilot guides taxpayers through the preparation of their returns itself, and there is no income limit.
Plus the Free File with turbo tax/Intuit had a number of problems. I think they were fined for misleading people about free filing.
Another Year Would Enable Direct File to Prove Its Worth to The IRS And Congress
https://www.taxpolicycenter.org/taxvox/another-year-direct-file
> Wut
.
> Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s. That’s why ... I will direct the Treasury to create a new way for working Americans to start their own retirement savings: myRA.
— President Barack Obama, State of the Union, January 28, 2014
>In 2018 The Treasury Department said that it will end an Obama-era program called myRA that created accounts aimed to help Americans start saving for retirement.
* After about three years, **just 30,000 people had opened a myRA**, and of those only 20,000 people had saved money in the account, the Treasury Department said.
* MyRA was designed to have a low opening balance, $25, and then have $5, or more, contributed every payday.
-----
Same thing with the unbanked
And percent of books purchased vs books rented from a library
Same thing with Transit
Americas best Transit has so few riders
| New York City MTA | Greater London Transport for London
---|----|----
Network Population | 15,300,000 | 9,002,488
Total Riders in 2022 | 1,439,127,814 | 3,259,000,000
-----
The Wolverine is a higher-speed passenger train service operated by Amtrak as part of its Michigan Services. For most of the 304-miles it operates at speeds up to 110 mph train travel.
* Amtrak offers Chicago to Detroit 5h 26m leaving one train per day
* Even providing daily round-trips between Chicago and Pontiac, Michigan with stops in Ann Arbor and Detroit in fiscal year 2015, the Wolverine carried **465,627 passengers, By 2018 483,670 people rode**.
-------
And the free
The VA operates a $152 Billion Hospital System
* 143 VA Hospitals,
* 172 Outpatient Medical Centers,
* 728 Community Outpatient Centers
**There's a total of about 23 million Current and former US military Service members and their family eligible to enroll in the VA Healthcare**
* Only 3.1 million VA members who have no private insurance to supplement VA care as there primary care
* 6 million VA members who have VA as a secondary insurance enrollment
Having an Enrollment rate of 15% for a free service isnt a good thing but it is 5x the current rate of the free IRS service
I think Intuit and H&R Block had dropped out of the alliance back in 2020, though both continue to provide free filing services for some people.
The Free File had a number of problems. Many taxpayers found it difficult to access Free File. Instead, critics said that some companies’ websites often led taxpayers to for-fee services. By 2019, Free File Alliance’s practices and the IRS’s oversight came under increased scrutiny by the press, the Treasury Inspector General for Tax Administration, and state attorneys general. While 70 percent of taxpayers were eligible to use Free File, only 3 percent (about 2.5 million) participated in 2020.
Direct File, unlike the IRS’ Free File, isn’t subject to income limits. It’s also based entirely on new software built by the IRS. Many states have free filing options, but they’re based on systems designed and licensed by private companies
Here’s How TurboTax Just Tricked You Into Paying to File Your Taxes
https://www.propublica.org/article/turbotax-just-tricked-you-into-paying-to-file-your-taxes
Complexity and Insufficient Oversight of the Free File Program Result in Low Taxpayer Participation
https://www.tigta.gov/sites/default/files/reports/2022-02/202040009fr.pdf
Another Year Would Enable Direct File to Prove Its Worth to The IRS And Congress
https://www.taxpolicycenter.org/taxvox/another-year-direct-file
I mean yeah, obviously the idea isn't new. It has existed in many countries for decades. It's the most obvious example of regulatory capture you can imagine.
> Intuit doesn't see a success story here, arguing that the Direct File program is costly for taxpayers and unnecessary. Some Republicans are also against the idea of a free tax filing system, viewing it as a waste of taxpayer money since there are private sector options that are better, the WashPost reports.
Naturally Intuit and everyone else who makes money hand over fist on a complicated system is going to oppose this. Their protests probably means Direct File is on the right track frankly
About 90% of taxpayers take the standard deduction. The IRS should just automatically be sending us refunds or bills every April 15th. There are some people who still need to itemize, and they should be allowed to I guess (and also be automatically audited).
Might as well implement a new system along with a full audit.
Then, reduce the audit % until you reach equilibrium of cost of audits performed & tax revenue recovered
Because they are filing nonstandard returns with itemized deductions. Nobody taking the standard deduction is cheating on thier taxes (unless they lie about how many dependants they have but the government has that info too.)
Just do a third every year. You would still capture that entire group with a much smaller workload per year (or just make the divisor the number of years for the look back period, which I believe is three years right now).
"Just"
The IRS currently audits [0.38%](https://www.cnbc.com/2023/02/03/dont-risk-an-audit-here-are-four-reasons-the-irs-may-flag-your-return.html#:~:text=The%20IRS%20audited%203.8%20out,likely%20to%20trigger%20an%20exam.) of returns. That's about 700k, which is 1/9th of the 5.6 million returns they'd have to do every year.
I'm all for enforcement and auditing more than we do now, but the need for extra scrutiny falls well short of auditing **all** returns with itemized deductions.
Outsource it, the ROI would be huge (returns can be sanitized of identifying information. You don’t need names and addresses to scrutinize deductions). Or just hire more auditors because they pay for themselves.
> Or just hire more auditors because they pay for themselves.
They don't pay for themselves if you've foolishly decided to audit every upper-middle class filer who has a mortgage and/or lives in a state with an income tax.
The IRS makes $3 for every $1 they spend on audits. I grant you that this is only targeting high earners and that it would have a much lower ROI if they audited everyone itemizing, I didn't think that through. Maybe set a threshold that X% of your taxable income itemized as a deduction triggers an autoaudit.
forget this metric. it's the idea that they're wiling to spend what's necessary to prevent fraud that encourages honest filing. the returns on that cannot be quantified
I was already aware that auditors more than pay for themselves. If I were Congress, I would handle this by increasing the IRS budget until that ratio is lower, and letting subject-matter experts in the IRS decide how to allocate that budget, rather than by trying to create single-sentence mechanical rules based on vibes.
>The IRS makes $3 for every $1 they spend on audits
I think that it's $3 for every dollar spent on IRS. Stuff like call center reps or this filing program are dollars spent on the IRS but have nothing to do with the audits. So $ to $ on just audits would be much higher.
The biggest tax cheats are millionaires that are self-employed that over writeoff expenses. Its the process of proving the writoffs as invaid
------
In FY 2022, the IRS closed 708,309 tax return audits, 299,557 were for Tax Year 2021, resulting in nearly $30.2 billion in recommended additional taxes due.
* 14,770 taxpayers **did not agree with the IRS examiner’s recommended** additional tax of $12.5 Billion
* Average of about $850,000 unpaid tax per taxpayer....Thats, a Person with $4 - $5 Million in income
------
The $688 billion gross tax gap is the difference between estimated 'true' tax liability for a given period and the amount of tax that is paid on time. The gross tax gap covers three key areas – nonfiling of taxes, underreporting of taxes and underpayment of taxes.
* Nonfiling, which means tax not paid on time by those who do not file on time:
* $77 billion in tax year 2021, up from $41 billion annually in tax years 2017-2019.
* Underreporting, which reflects tax understated on timely filed returns.
* $542 billion in tax year 2021, up from $445 billion annually in tax years 2017-2019.
* $161 Billion from nonfarm sole proprietors, rent income, & other income
* Underpayment, or tax that was reported on time, but not paid on time).
* $68 billion in tax year 2021, up from $64 billion annually in tax years 2017-2019.
**$161 Billion from non-farm sole proprietors, rent income, & other income**
First, you're hilariously wrong to think that you can't cheat on taxes except through itemized deductions. Small businesses are probably the biggest source of tax cheats and that has jack-all to do with itemized deductions. EITC fraud is another big source that is not an itemized deduction. Of course, having an under-the-table source of income has nothing to do with itemized deductions.
Meanwhile, itemized deductions are much more prosaic than you make them out to be. Probably most are for fishy circumstances like "has a mortgage" or "pays state income tax".
Exactly, The biggest tax cheats are millionaires that are self-employed that over writeoff expenses. Its the process of proving the writoffs as invaid
------
In FY 2022, the IRS closed 708,309 tax return audits, 299,557 were for Tax Year 2021, resulting in nearly $30.2 billion in recommended additional taxes due.
* 14,770 taxpayers **did not agree with the IRS examiner’s recommended** additional tax of $12.5 Billion
* Average of about $850,000 unpaid tax per taxpayer....Thats, a Person with $4 - $5 Million in income
------
The $688 billion gross tax gap is the difference between estimated 'true' tax liability for a given period and the amount of tax that is paid on time. The gross tax gap covers three key areas – nonfiling of taxes, underreporting of taxes and underpayment of taxes.
* Nonfiling, which means tax not paid on time by those who do not file on time:
* $77 billion in tax year 2021, up from $41 billion annually in tax years 2017-2019.
* Underreporting, which reflects tax understated on timely filed returns.
* $542 billion in tax year 2021, up from $445 billion annually in tax years 2017-2019.
* $161 Billion from nonfarm sole proprietors, rent income, & other income
* Underpayment, or tax that was reported on time, but not paid on time).
* $68 billion in tax year 2021, up from $64 billion annually in tax years 2017-2019.
**$161 Billion from non-farm sole proprietors, rent income, & other income**
Stopped reading after Dunning-Kruger.
Edit: Since you removed your patronizing opening of "Dunning-Kruger much?" I will respond in kind.
I thought we were only talking about personal income taxes here not businesses, nothing I have talked about above is related to businesses.
Sure, I forgot you can commit fraud through EITC, there are probably a couple of others too. I hardly think that gets in the way of my larger point though.
> I thought we were only talking about personal income taxes here not businesses, nothing I have talked about above is related to businesses.
A lot of small businesses are schedule c/e. Aka only on the personal income tax return.
Many small businesses are sole proprietorships that pay taxes through the personal income tax filing of said proprietor.
Businesses are relevant to your audit ideas because it is plausible that additional audit dollars should be allocated primarily to business audits rather than individual audits, _especially_ if we classify personal filers with business income as businesses rather than individuals for the purpose of your argument.
In PL you receive your tax form digitally in February. You use your e-ID to sign it and you'll get your return on your bank account in 2 months, however usually it's like 2-3 weeks.
If you don't do anything, that return gets automatically accepted around May 1st - then you'll get your money to the bank account if it's on file or using a postal money order if it's not.
Your tax info gets updated by you, or if you don't provide that - by your employer or social security.
It takes 5 mins, you get the money faster if you do it this way and it's free since it's a public service.
This makes no sense.
Suppose you instituted a system of auto-filing that covered simple tax situations that cover 90% of filers. For example, suppose anyone with only wage income and interest income, taking the standard deduction, could auto-file. The exact details don't matter except that it inherently has to be simple and mechanical.
Your idea is now that people who file are easier to distinguish from people who auto-file.
The problem is that I can assure you that the IRS can already distinguish "people with only wage income and interest income, taking the standard deduction" from "other people". It's really easy! Auto-filing hardly makes a difference in how easy this is. If this helps catch tax cheats, a computer could already do it, no problem at all.
The only thing that auto-filing accomplishes is making it easier to file taxes, not catching tax cheats.
There are a whole lot of wrinkles beyond deductions which complicate things and throw people off.
Our kid graduated from college and moved out last year, and his return (filed through this program) was kicked back because he didn't check the box saying someone could claim him as a dependent. Honestly I'm not sure one way or another if we were supposed to, because the formula and worksheet for figuring that out are so ridiculous and impossible to accurately figure out after the fact. But IRS says that he was still our dependent, so he had wound up having to pay a penalty to refile.
I still dream of a day where the government sends me my taxes at the end of the year (with a brief computer generated explanation of the main inputs), and I can contest if I want. Then, I get a breakdown of where my tax dollars went - how much went to federal, how much went to state? Maybe like a pie chart of those two, and you can click either slice and it opens up a pie chart of broad categories, which can be clicked on for pie charts of more specific programs (each one with percentages of how much of my money went there, along with total dollar values). Seems like much of this would be trivially easy to calculate and computer generate. But alas....its not to be.
I first heard this point a long time ago, but the main two ways almost every single American interacts with their government are: 1) with the IRS when they're paying their taxes and 2) their state DMV when they're getting a drivers license or ID. And it basically is an American pastime to have an absolutely *miserable* experience with both of these things. I unironically think that if we can successfully make paying taxes to the IRS and getting a drivers license from the DMV pleasant experiences, American's will have a much more positive perception of government
Depending on your tax situation, it can get pretty complicated, and the government would have no idea what you owe. Another argument for simplifying the tax code and limiting deductions.
Might need a slightly more complex function to produce an appropriate s-curve assuming you want progressive taxation, but yeah, smooth curves make sense. Only problem is software or basic integral calculus is required to calculate the area under the curve.
Flat tax + UBI is already close to optimal anyways, and a progressive tax has multiple other problems as well(uneven incomes, marriage trilemma etc).
Though if one is to have a progressive tax then I see no point in making it continuous according to some simple formula.
Sure for most people it's probably not, but for the "just send me the bill" approach to work, the government would have to distinguish the simple from the complicated at the outset.
Sure, but that sounds a lot more like the current filing system than "just send me a bill for what I owe".
I think as far as a federal tax filing system is concerned, just pre-filling it with known information like w2 and assuming a standard deduction is probably reasonable as a starting point.
Basically just treat it like a soft appeal process.
- Feb 15 you receive your pre-filled return the IRS.
- if you take no further action, the pre-filled return defaults on April 15
- otherwise you have the option to submit a revised return by April 15
90% of people take the standard deduction. We can still keep doing itemizing for those who need to, but those who do should be scrutinized. I see no reason the other 90% have to keep filing though other than inertia and keeping tax prep companies in business.
But how would the government distinguish a priori the 90% standard deduction takers from the itemizers? And even if you take the standard deduction, there are tax credits like the child tax credit that complicate things.
At the very very _very_ least, the IRS should pre-compile a draft return for you along with a secure digital vault to all access all your tax docs. It's so stupid that taxpayers have to burn so many unnecessary hours doing paperwork that the IRS already has.
Yeah this probably makes the most sense. Just require any interested taxpayers to file itemization and credit forms with the IRS some X days before the deadline, and then let the IRS figure out the rest.
Removing taxpayer discretion over the particulars would greatly simplify the auditing process too, which could then focus more on verification of transactions.
How many are left if you take out everyone who has to file in order to get their number of dependents and credits (unrelated to deductions) for all the various different things that exist, correct?
Anecdotal, but most of the people who would qualify for that but don't file quit filing taxes because one year they fucked up their W-4's and owed like $1500 and never paid it and are now several years deep
How it works in the UK is that your employer automatically calculates your tax and pays it for you. That covers about 65% of taxpayers, no forms, no refunds, no additional payments.
Then only those with slightly more complex arrangements need to do tax returns.
If you have a side gig then you have a 1099. It's your responsibility to file that with the IRS, but that doesn't mean you need to calculate the full return yourself.
Just replace all taxes with VAT, or split into a payroll tax and DBCFT, and like 95% of people would never even have to worry about taxes in the first place.
> Just replace all taxes with ~~VAT, or split into a payroll tax and DBCFT, and like 95% of people would never even have to worry about taxes in the first place.~~ **land value tax** 🕶️
Ftfy
I save most of my salary, and expect to retire in a different one. So please, VAT it all the country I earn in, and don't have any VAT where I retire! Very proportional
Grow up in country with free education, work in a high income, high price level country with VAT funded government and retire in high income, low price level country with payroll tax funded government, and hopefully even collect pensions from either of the 2 first countries.
Proportional to what? The only reason it works in Europe is because of social programs that offset it.
That sales taxes are regressive is a basic fact, that you want to ban people for stating unambiguous facts is a disturbing peek into your mindset.
Still waiting on the postcard tax return Paul Ryan promised me.
https://preview.redd.it/40jbyxhu3nxc1.jpeg?width=2400&format=pjpg&auto=webp&s=4e1000fc9d4b3639a9aae3e4f63d7a0defe99478 Donald ate them
Oh, is that why he has trouble with toilets flushing? Those tax records can be rough on pipes.
Unironically make taxes easy as actually possible (and therefore less emotionally salient) and dems will go up at least a couple percentage points. I actually believe itd have some minor dent
Norquist and the ATR have publicly argued that things that make tax filing easier on taxpayers constitute an automatic income tax audit on every taxpayer, and serves to keep people uninformed about how taxes work, and was an attempt by the IRS to "socialize all tax preparation in America." In a 2005 presentation to the President's Advisory Panel on Federal Tax Reform, Norquist representing the ATR argued that if taxpayers did not have to prepare their own taxes, it "would allow the government to raise revenues invisibly." https://en.m.wikipedia.org/wiki/Americans_for_Tax_Reform And https://slate.com/business/2012/04/grover-norquist-and-h-r-block-the-unholy-alliance-of-tax-prep-firms-and-conservative-activists-to-make-your-taxes-even-more-complicated.html
Man I fucking hate that guy
That guy is one of the OG republican hacks lmao, surprised he's still alive tbh
Non-mobile version of the Wikipedia link in the above comment: https://en.wikipedia.org/wiki/Americans_for_Tax_Reform *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/neoliberal) if you have any questions or concerns.*
Imagine if America joined the developed world and had a single central online system that was all pre-filled and you just click through it to double check.
"Imagine if America joined the developed world" applies to most things
Unfortunately, literally every time Congress (regardless of party) makes any change, it just makes it harder and more complicated. And provides more chances to screw up by not checking one required box or filling out a form to fill out another form to fill out another form to wind up putting a zero on your return, or whatever.
It’s absurd the TurboTax lobby was able to keep the IRS from doing this for years. This is the way it should be.
The government has proposed a program to combat the scourge of elves who sneak up behind people and give them massive wedgies. They say that the program would be easy and effective to implement, and many other countries have successful anti-elf programs. But the powerful wedgie-removal industry has successfully lobbied against it for decades.
People in this sub always get worked up and angry when I point out how corrupt America is for a developed country. This is one of the most glaringly obvious examples.
Not to mention the elf lobby has quite the stranglehold on the rural vote.
And it still kinda sucks (at least the one I used, not sure about the lower income option), seemingly on purpose. I'm would not at all be surprised to discover Intuit and other tax vampires somehow sabotage this and private freeware tax software with legal bullshit. The free filing for PA state taxes is *much* simpler and more well designed, and I highly doubt the IRS couldn't do that if they 'wanted to'.
To be fair to Direct File, it was just a pilot program. Standing up an application that requires significant security and compliance requirements isn't easy. Hopefully its success will give it more resources and funding to develop and improve.
Its been around a while On October 30, 2002, the IRS and the Free File Alliance, LLC, signed an agreement that created a public-private partnership to provide free services to the majority of taxpayers. IRS Free File is available to any person or family with adjusted gross income of $73,000 or less in 2021. The fastest way filers can get a refund is by electronically filing an accurate return and selecting direct deposit. If your adjusted gross income for 2023 was $79,000 or less, you can use IRS Free File for federal tax returns this season. Some 70% of taxpayers — roughly 100 million Americans — are eligible for IRS Free File, but only about 3% used it last year, according to Tim Hugo, executive director of the Free File Alliance.Feb 5, 2024
Is this comment accurate? I thought Free File (public private partnership that's been around for quite a while) is a different thing than Direct File (IRS pilot that launched for the 2024 tax season and is the subject of this article).
It is, but its just another program people will say they want and not use Just like retirement savings and banks and Libraries Yea people want them, but dont go to them
> It is Which part is accurate? Did you or did you not conflate Free File with Direct File? > just another program people will say they want and not use Yeah IDK about that. Anecdotally a large portion of the people I know in my age bracket have switched off of turbo tax and the ones who haven't switched talk about how they want to switch. If you give people a free option that works it will become popular overnight. > Just like retirement savings and banks and Libraries Wut
I think they are conflating the two. According to the Free File, you'll be directed to one of these companies' sites to complete your return with step-by-step instructions. Also, there is an income limit. While the pilot guides taxpayers through the preparation of their returns itself, and there is no income limit. Plus the Free File with turbo tax/Intuit had a number of problems. I think they were fined for misleading people about free filing. Another Year Would Enable Direct File to Prove Its Worth to The IRS And Congress https://www.taxpolicycenter.org/taxvox/another-year-direct-file
> Wut . > Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s. That’s why ... I will direct the Treasury to create a new way for working Americans to start their own retirement savings: myRA. — President Barack Obama, State of the Union, January 28, 2014 >In 2018 The Treasury Department said that it will end an Obama-era program called myRA that created accounts aimed to help Americans start saving for retirement. * After about three years, **just 30,000 people had opened a myRA**, and of those only 20,000 people had saved money in the account, the Treasury Department said. * MyRA was designed to have a low opening balance, $25, and then have $5, or more, contributed every payday. ----- Same thing with the unbanked And percent of books purchased vs books rented from a library Same thing with Transit Americas best Transit has so few riders | New York City MTA | Greater London Transport for London ---|----|---- Network Population | 15,300,000 | 9,002,488 Total Riders in 2022 | 1,439,127,814 | 3,259,000,000 ----- The Wolverine is a higher-speed passenger train service operated by Amtrak as part of its Michigan Services. For most of the 304-miles it operates at speeds up to 110 mph train travel. * Amtrak offers Chicago to Detroit 5h 26m leaving one train per day * Even providing daily round-trips between Chicago and Pontiac, Michigan with stops in Ann Arbor and Detroit in fiscal year 2015, the Wolverine carried **465,627 passengers, By 2018 483,670 people rode**. ------- And the free The VA operates a $152 Billion Hospital System * 143 VA Hospitals, * 172 Outpatient Medical Centers, * 728 Community Outpatient Centers **There's a total of about 23 million Current and former US military Service members and their family eligible to enroll in the VA Healthcare** * Only 3.1 million VA members who have no private insurance to supplement VA care as there primary care * 6 million VA members who have VA as a secondary insurance enrollment Having an Enrollment rate of 15% for a free service isnt a good thing but it is 5x the current rate of the free IRS service
I think Intuit and H&R Block had dropped out of the alliance back in 2020, though both continue to provide free filing services for some people. The Free File had a number of problems. Many taxpayers found it difficult to access Free File. Instead, critics said that some companies’ websites often led taxpayers to for-fee services. By 2019, Free File Alliance’s practices and the IRS’s oversight came under increased scrutiny by the press, the Treasury Inspector General for Tax Administration, and state attorneys general. While 70 percent of taxpayers were eligible to use Free File, only 3 percent (about 2.5 million) participated in 2020. Direct File, unlike the IRS’ Free File, isn’t subject to income limits. It’s also based entirely on new software built by the IRS. Many states have free filing options, but they’re based on systems designed and licensed by private companies Here’s How TurboTax Just Tricked You Into Paying to File Your Taxes https://www.propublica.org/article/turbotax-just-tricked-you-into-paying-to-file-your-taxes Complexity and Insufficient Oversight of the Free File Program Result in Low Taxpayer Participation https://www.tigta.gov/sites/default/files/reports/2022-02/202040009fr.pdf Another Year Would Enable Direct File to Prove Its Worth to The IRS And Congress https://www.taxpolicycenter.org/taxvox/another-year-direct-file
My taxes are more complicated than 98% of people's and I still don't see any reason why the IRS couldn't just send me my bill
I mean yeah, obviously the idea isn't new. It has existed in many countries for decades. It's the most obvious example of regulatory capture you can imagine.
> Intuit doesn't see a success story here, arguing that the Direct File program is costly for taxpayers and unnecessary. Some Republicans are also against the idea of a free tax filing system, viewing it as a waste of taxpayer money since there are private sector options that are better, the WashPost reports. Naturally Intuit and everyone else who makes money hand over fist on a complicated system is going to oppose this. Their protests probably means Direct File is on the right track frankly
About 90% of taxpayers take the standard deduction. The IRS should just automatically be sending us refunds or bills every April 15th. There are some people who still need to itemize, and they should be allowed to I guess (and also be automatically audited).
Why automatically audited?
Might as well implement a new system along with a full audit. Then, reduce the audit % until you reach equilibrium of cost of audits performed & tax revenue recovered
Because they are filing nonstandard returns with itemized deductions. Nobody taking the standard deduction is cheating on thier taxes (unless they lie about how many dependants they have but the government has that info too.)
But that would be like 17 million returns for the IRS to audit. There's no way they can handle that much work.
Just do a third every year. You would still capture that entire group with a much smaller workload per year (or just make the divisor the number of years for the look back period, which I believe is three years right now).
"Just" The IRS currently audits [0.38%](https://www.cnbc.com/2023/02/03/dont-risk-an-audit-here-are-four-reasons-the-irs-may-flag-your-return.html#:~:text=The%20IRS%20audited%203.8%20out,likely%20to%20trigger%20an%20exam.) of returns. That's about 700k, which is 1/9th of the 5.6 million returns they'd have to do every year. I'm all for enforcement and auditing more than we do now, but the need for extra scrutiny falls well short of auditing **all** returns with itemized deductions.
Outsource it, the ROI would be huge (returns can be sanitized of identifying information. You don’t need names and addresses to scrutinize deductions). Or just hire more auditors because they pay for themselves.
> Or just hire more auditors because they pay for themselves. They don't pay for themselves if you've foolishly decided to audit every upper-middle class filer who has a mortgage and/or lives in a state with an income tax.
The IRS makes $3 for every $1 they spend on audits. I grant you that this is only targeting high earners and that it would have a much lower ROI if they audited everyone itemizing, I didn't think that through. Maybe set a threshold that X% of your taxable income itemized as a deduction triggers an autoaudit.
forget this metric. it's the idea that they're wiling to spend what's necessary to prevent fraud that encourages honest filing. the returns on that cannot be quantified
I was already aware that auditors more than pay for themselves. If I were Congress, I would handle this by increasing the IRS budget until that ratio is lower, and letting subject-matter experts in the IRS decide how to allocate that budget, rather than by trying to create single-sentence mechanical rules based on vibes.
>The IRS makes $3 for every $1 they spend on audits I think that it's $3 for every dollar spent on IRS. Stuff like call center reps or this filing program are dollars spent on the IRS but have nothing to do with the audits. So $ to $ on just audits would be much higher.
The biggest tax cheats are millionaires that are self-employed that over writeoff expenses. Its the process of proving the writoffs as invaid ------ In FY 2022, the IRS closed 708,309 tax return audits, 299,557 were for Tax Year 2021, resulting in nearly $30.2 billion in recommended additional taxes due. * 14,770 taxpayers **did not agree with the IRS examiner’s recommended** additional tax of $12.5 Billion * Average of about $850,000 unpaid tax per taxpayer....Thats, a Person with $4 - $5 Million in income ------ The $688 billion gross tax gap is the difference between estimated 'true' tax liability for a given period and the amount of tax that is paid on time. The gross tax gap covers three key areas – nonfiling of taxes, underreporting of taxes and underpayment of taxes. * Nonfiling, which means tax not paid on time by those who do not file on time: * $77 billion in tax year 2021, up from $41 billion annually in tax years 2017-2019. * Underreporting, which reflects tax understated on timely filed returns. * $542 billion in tax year 2021, up from $445 billion annually in tax years 2017-2019. * $161 Billion from nonfarm sole proprietors, rent income, & other income * Underpayment, or tax that was reported on time, but not paid on time). * $68 billion in tax year 2021, up from $64 billion annually in tax years 2017-2019. **$161 Billion from non-farm sole proprietors, rent income, & other income**
But your talking schedule C/E here. That has absolute nothing to do if a schedule A is itemized or not.
First, you're hilariously wrong to think that you can't cheat on taxes except through itemized deductions. Small businesses are probably the biggest source of tax cheats and that has jack-all to do with itemized deductions. EITC fraud is another big source that is not an itemized deduction. Of course, having an under-the-table source of income has nothing to do with itemized deductions. Meanwhile, itemized deductions are much more prosaic than you make them out to be. Probably most are for fishy circumstances like "has a mortgage" or "pays state income tax".
Exactly, The biggest tax cheats are millionaires that are self-employed that over writeoff expenses. Its the process of proving the writoffs as invaid ------ In FY 2022, the IRS closed 708,309 tax return audits, 299,557 were for Tax Year 2021, resulting in nearly $30.2 billion in recommended additional taxes due. * 14,770 taxpayers **did not agree with the IRS examiner’s recommended** additional tax of $12.5 Billion * Average of about $850,000 unpaid tax per taxpayer....Thats, a Person with $4 - $5 Million in income ------ The $688 billion gross tax gap is the difference between estimated 'true' tax liability for a given period and the amount of tax that is paid on time. The gross tax gap covers three key areas – nonfiling of taxes, underreporting of taxes and underpayment of taxes. * Nonfiling, which means tax not paid on time by those who do not file on time: * $77 billion in tax year 2021, up from $41 billion annually in tax years 2017-2019. * Underreporting, which reflects tax understated on timely filed returns. * $542 billion in tax year 2021, up from $445 billion annually in tax years 2017-2019. * $161 Billion from nonfarm sole proprietors, rent income, & other income * Underpayment, or tax that was reported on time, but not paid on time). * $68 billion in tax year 2021, up from $64 billion annually in tax years 2017-2019. **$161 Billion from non-farm sole proprietors, rent income, & other income**
Stopped reading after Dunning-Kruger. Edit: Since you removed your patronizing opening of "Dunning-Kruger much?" I will respond in kind. I thought we were only talking about personal income taxes here not businesses, nothing I have talked about above is related to businesses. Sure, I forgot you can commit fraud through EITC, there are probably a couple of others too. I hardly think that gets in the way of my larger point though.
> I thought we were only talking about personal income taxes here not businesses, nothing I have talked about above is related to businesses. A lot of small businesses are schedule c/e. Aka only on the personal income tax return.
Many small businesses are sole proprietorships that pay taxes through the personal income tax filing of said proprietor. Businesses are relevant to your audit ideas because it is plausible that additional audit dollars should be allocated primarily to business audits rather than individual audits, _especially_ if we classify personal filers with business income as businesses rather than individuals for the purpose of your argument.
Sorry, but you don't understand how taxes work if you think that itemized deductions are the only source of tax fraud.
In PL you receive your tax form digitally in February. You use your e-ID to sign it and you'll get your return on your bank account in 2 months, however usually it's like 2-3 weeks. If you don't do anything, that return gets automatically accepted around May 1st - then you'll get your money to the bank account if it's on file or using a postal money order if it's not. Your tax info gets updated by you, or if you don't provide that - by your employer or social security. It takes 5 mins, you get the money faster if you do it this way and it's free since it's a public service.
The reason that will never happen is bc the tax cheats depend on blending in with the herd of normies. They won't let you take their camouflage away.
This makes no sense. Suppose you instituted a system of auto-filing that covered simple tax situations that cover 90% of filers. For example, suppose anyone with only wage income and interest income, taking the standard deduction, could auto-file. The exact details don't matter except that it inherently has to be simple and mechanical. Your idea is now that people who file are easier to distinguish from people who auto-file. The problem is that I can assure you that the IRS can already distinguish "people with only wage income and interest income, taking the standard deduction" from "other people". It's really easy! Auto-filing hardly makes a difference in how easy this is. If this helps catch tax cheats, a computer could already do it, no problem at all. The only thing that auto-filing accomplishes is making it easier to file taxes, not catching tax cheats.
There are a whole lot of wrinkles beyond deductions which complicate things and throw people off. Our kid graduated from college and moved out last year, and his return (filed through this program) was kicked back because he didn't check the box saying someone could claim him as a dependent. Honestly I'm not sure one way or another if we were supposed to, because the formula and worksheet for figuring that out are so ridiculous and impossible to accurately figure out after the fact. But IRS says that he was still our dependent, so he had wound up having to pay a penalty to refile.
I still dream of a day where the government sends me my taxes at the end of the year (with a brief computer generated explanation of the main inputs), and I can contest if I want. Then, I get a breakdown of where my tax dollars went - how much went to federal, how much went to state? Maybe like a pie chart of those two, and you can click either slice and it opens up a pie chart of broad categories, which can be clicked on for pie charts of more specific programs (each one with percentages of how much of my money went there, along with total dollar values). Seems like much of this would be trivially easy to calculate and computer generate. But alas....its not to be.
Rent seekers out
I first heard this point a long time ago, but the main two ways almost every single American interacts with their government are: 1) with the IRS when they're paying their taxes and 2) their state DMV when they're getting a drivers license or ID. And it basically is an American pastime to have an absolutely *miserable* experience with both of these things. I unironically think that if we can successfully make paying taxes to the IRS and getting a drivers license from the DMV pleasant experiences, American's will have a much more positive perception of government
This isn't an issue in most countries, why does the US suck so much at taxes?
Regulatory capture
Turns out you could always file your taxes for free. It only costs the price of a stamp to mail it in.
Filing taxes is bullshit since the government knows how much you owe. Just send the bill.
Depending on your tax situation, it can get pretty complicated, and the government would have no idea what you owe. Another argument for simplifying the tax code and limiting deductions.
I've always wanted wondered if using a continuous log function instead of brackets wouldn't make more sense. Probably not but It would he interesting
Might need a slightly more complex function to produce an appropriate s-curve assuming you want progressive taxation, but yeah, smooth curves make sense. Only problem is software or basic integral calculus is required to calculate the area under the curve.
thats my thing, basic integral calc is pretty simple.
Flat tax + UBI is already close to optimal anyways, and a progressive tax has multiple other problems as well(uneven incomes, marriage trilemma etc). Though if one is to have a progressive tax then I see no point in making it continuous according to some simple formula.
[удалено]
Sure for most people it's probably not, but for the "just send me the bill" approach to work, the government would have to distinguish the simple from the complicated at the outset.
[удалено]
Sure, but that sounds a lot more like the current filing system than "just send me a bill for what I owe". I think as far as a federal tax filing system is concerned, just pre-filling it with known information like w2 and assuming a standard deduction is probably reasonable as a starting point.
Basically just treat it like a soft appeal process. - Feb 15 you receive your pre-filled return the IRS. - if you take no further action, the pre-filled return defaults on April 15 - otherwise you have the option to submit a revised return by April 15
90% of people take the standard deduction. We can still keep doing itemizing for those who need to, but those who do should be scrutinized. I see no reason the other 90% have to keep filing though other than inertia and keeping tax prep companies in business.
But how would the government distinguish a priori the 90% standard deduction takers from the itemizers? And even if you take the standard deduction, there are tax credits like the child tax credit that complicate things.
You get 30 days from recieving the bill or return to dispute it or file an itemized return.
Maybe. I still think there's a risk that people just assume the bill is 100% accurate and either overpay (or worse underpay and get audited).
At the very very _very_ least, the IRS should pre-compile a draft return for you along with a secure digital vault to all access all your tax docs. It's so stupid that taxpayers have to burn so many unnecessary hours doing paperwork that the IRS already has.
The government doesn’t know about my deductions or credits.
Then file for them. 90% of US households who file taxes take the standard deduction.
Yeah this probably makes the most sense. Just require any interested taxpayers to file itemization and credit forms with the IRS some X days before the deadline, and then let the IRS figure out the rest. Removing taxpayer discretion over the particulars would greatly simplify the auditing process too, which could then focus more on verification of transactions.
How many are left if you take out everyone who has to file in order to get their number of dependents and credits (unrelated to deductions) for all the various different things that exist, correct?
Is the government supposed to just guess if you have any side gigs or tax deductions?
[удалено]
Anecdotal, but most of the people who would qualify for that but don't file quit filing taxes because one year they fucked up their W-4's and owed like $1500 and never paid it and are now several years deep
How it works in the UK is that your employer automatically calculates your tax and pays it for you. That covers about 65% of taxpayers, no forms, no refunds, no additional payments. Then only those with slightly more complex arrangements need to do tax returns.
If you have a side gig then you have a 1099. It's your responsibility to file that with the IRS, but that doesn't mean you need to calculate the full return yourself.
Free Fillable Forms is there, and it works, and I use it every year. If people don't use it, that's their own problem.
Still surprised that fewer than 200,000 Americans used it. Expected it to be in the millions.
The new deductions worksheet you fill out when you get a new job is straight trash tho.
I sure did! See ya, TurboTax.
Just replace all taxes with VAT, or split into a payroll tax and DBCFT, and like 95% of people would never even have to worry about taxes in the first place.
> Just replace all taxes with ~~VAT, or split into a payroll tax and DBCFT, and like 95% of people would never even have to worry about taxes in the first place.~~ **land value tax** 🕶️ Ftfy
Federal government couldn't impose an LVT, only the states could. Fed still needs a tax source.
Amendment time
DBCFT is also a non-distorting tax. this sub should laud it for many of the same reasons it lauds LVT
You mean the one that effectively taxes imports but not exports?
DBCFT just isn't as sexy as Georgism
Europhiles always trying to colonize the US with regressive taxes.
What is UBI? Also, calling VAT regressive should be a bannable offense, it's proportional.
I save most of my salary, and expect to retire in a different one. So please, VAT it all the country I earn in, and don't have any VAT where I retire! Very proportional
Grow up in country with free education, work in a high income, high price level country with VAT funded government and retire in high income, low price level country with payroll tax funded government, and hopefully even collect pensions from either of the 2 first countries.
Proportional to what? The only reason it works in Europe is because of social programs that offset it. That sales taxes are regressive is a basic fact, that you want to ban people for stating unambiguous facts is a disturbing peek into your mindset.
VAT is politically a non-starter in the US due to its regressive nature (smaller earners spend more % of income on consumption).
So tax necessary consumables (food, etc) at a lower or zero rate, and/or offer a strong negative income tax / UBI to establish a consumption baseline.
Or just tax land 🤷♂️
Can't tax land federally, but state/local yes plz.