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Comment by bpodgursky | Hacker News Reader

This would just paper over the fact that the US tax code is an abomination of deductions and credits. It would not simplify any of the magic math; it would just make most people think they are getting the right credits.

Would it actually give people all the deductions and credits they could get through a detailed analysis? I highly doubt it. TurboTax doesn't ask 1000 questions for fun; most of them matter because of the insanity of our tax code.

It would probably put turbo-tax out of business though, this is true. The default, free, option is going to win against a paid product.

All this will accomplish is making sure that tax preparation is back where it was two decades ago -- where the Actually Wealthy hire a person to do their taxes and get the right deductions, and everyone else gets stuck with an opaque bill which they can't afford to assess for accuracy. This is a far more regressive system than what we have now.

Don't accuse me of being a TurboTax shill. I have nothing to do with them, besides doing many hours of complex taxes which would have cost far more in-person than with TurboTax (and no, I'm not under any circumstances blindly entrusting the IRS with correctly calculating ISO AMT nonsense.)

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> This would just paper over the fact that the US tax code is an abomination of deductions and credits.

I understand the point you're making and it's a valid one, but that sentence really isn't actually true for most people.

If you get your income from one job during the year there's an excellent chance you have almost no variables to work with. Maybe owning one piece of real estate or a dependent or two, but the standard deduction tends to wash out almost everything else for most people.

What you're saying is somewhat true for most people who itemize deductions, but most people don't and have no reason to itemize deductions.

~ 1/3 of people itemize. And this doesn't mean it's the richest 1/3 -- it's the 1/3 who have homes, children, and other real responsibilities which get credits. Middle class.

The people who don't itemize have almost no burden right now; you can fill out a 1040EZ or use TurboTax free edition.

The middle class is who is going to get screwed out of deductions.

It's still an annoying process. As someone who didn't itemize but had some weird tax situations (PhD student) it was always a pain.

Also even if you have a drop dead simple tax situation, it's still navigating and filling out a form that reads like the worst spaghetti code. "Go to line 31 on form XYZ". Even if it cost people 30 minutes, that's still less than just writing a check and putting it in the envelope.

This is only accurate for those earning W2 income only. Anyone who contracts at all or has any investment income cannot use EZ or Free.

As a college student- doing odd-jobs, collecting weird scholarships, in strange living arrangements- it was extremely annoying and a pain every single time tax season came around and I had to go around collecting tax slips from various sources.

Young me wants this so badly.

So 2/3 of people would benefit from this system? And the 1/3 who do benefit from itemizing would just hire someone or use TurboTax like they do now?

> or use TurboTax free edition.

Who do you think is subsidizing the free edition?

It's time to kill third party tax products.

Have you ever filled out a 1040EZ? Its easy as pie. Seriously.

https://www.irs.gov/pub/irs-pdf/f1040ez.pdf

Its literally one page. The 2nd page is for the simplified instructions (full instructions / documentation is a lot more complicated... but if you qualify for the 1040EZ its a very very simple form)

If the IRS could put the 1040EZ online on a free website, that'd be great. I think I can support this Senate bill that is more or less suggesting that.

Unfortunately, I now own stocks, bonds, and am claiming deductions on mortgages and church contributions. So... I no longer qualify for the 1040EZ and have to use the more complicated form. But I bet a lot of normal people will benefit from the 1040EZ Form.

I haven't. My point is, the IRS should be able to tax on as much tax preparation software as they want, without for-profit companies preventing them from doing so.

Intuit is simply rent-seeking, plain and simple.

> Unfortunately, I now own stocks, bonds, and am claiming deductions on mortgages and church contributions.

There is _no reason_ the IRS couldn't handle this data as well.

Intuit is actually a hell-of-a-lot better than the average situation, where most people pay $200 to get their taxes prepared by unregulated tax-preparers at H&R Block or whatever.

Paid tax preparers make a mistake on roughly 60% of the returns, while the typical person only makes a mistake on 50% of their returns.

So... yeah. In any case, I use $20 TaxACT but do miss Intuit's integration with ADP's payroll system and a lot of their databases.

In any case, the $20 to $50 you spend on tax-preparation software is honestly a serious improvement to the status-quo... of paying an unregulated, mistake-heavy part-time tax preparer to do the job for you at roughly $200+.

If we can switch everyone towards doing their own taxes with TurboTax Deluxe edition at $50, that would actually be an improvement. That's the sad state of tax preparation in the USA.

Why do you keep suggesting a third part company is the solution versus the IRS providing the functionality directly?

Because the 3rd party company already exists and will provide integration (ie: ADP integration) that the IRS will not be able to provide... not without a few years of development or some sort of coercion.

At $50 for TurboTax (which is still more than the $20 I pay for TaxAct), its still an adequate solution that beats the current status quo.

--------

So my question to you is: do you not realize how bad the status quo actually is? The average preparation cost is $200 according to the IRS, which is very far above "TurboTax Deluxe edition", and far far above any of the other 3rd party tax solutions.

If people would prepare their own taxes with TurboTax, life would in fact be better than the current state. Period.

---------

Now we can imagine the IRS creating a website and everything will be Rainbows and Unicorns, but lets not forget about the Obamacare website. Turns out that competent web-developers are expensive, that government employees aren't competent web-developers, and finally aren't even that competent at figuring out contractors.

I can imagine a future where the US Government raises wages for once, builds out some competent project managers, retains talent, attracts talent, finds a contractor who can help them develop this hypothetical website, and then hope that the next $500-million+ web-project is actually successful.

Or... you know. I can just recommend people to use TurboTax (or TaxAct). Which already works, and is better than the status quo.

> Because the 3rd party company already exists and will provide integration (ie: ADP integration) that the IRS will not be able to provide... not without a few years of development or some sort of coercion.

You do realize that the IRS already gets a copy of your W2, 1099s, 1098s, etc, right? You can order up a transcript of the data that the IRS has on your file for a given year and they have a pretty complete set of data from all the various mandatory forms.

What they don't have (and can't have, because only you have them) is data you'd need for schedules C and E and much of the deductions for schedule A. Guess what? Intuit and your local "tax guy" don't have those either, unless you give it to them.

The IRS is not set up to provide people with their data during tax season. ADP can provide your year-end tax information before your W-2 is sent to you or the IRS. So, while I agree the IRS has the potential to use the data they already receive, the transformation of how they receive and use it is large enough that they can't be considered to have an existing solution in place.

Agreed they don't have a solution in place that can do the calculations by mid-April. They do have a solution in place that could do it by late summer, so if people just opted-in (even online), the IRS could take it from there, and send a refund or a bill by Labor Day. For people with simple tax situations (not me, alas), that would be a boon to people.

I worry more about the tax law changes that might come if people started paying EVEN LESS attention than today about how their taxes are calculated than I do about the IRS ability to execute this.

Clicking a webform and getting a bill or direct deposit divorces people from the fact that this is real money in play.

I'll give you that point.

But at the same time, the IRS has no real competitive alternative to something like TurboTax. Sponsoring the creation of yet another tax-preparation software feels like XKCD Comic number 927

http://xkcd.com/927/

who would you trust to write you a spiffy new tax app, CGI Federal or Facebook/Google? Has CGI every written anything remotely functional. They exist to be good at government paperwork and compliance, and then contract out the work. The process doesnt scream good software.

Given how damn good turbotax is, do you really trust the government to write something better?

Now if the government pledged to standardize API access between state and federal, and made it easy for startup companies to light a fire under incumbents, you get competition and government action/improvement.

> Given how damn good turbotax is, do you really trust the government to write something better?

Yes.

https://www.whitehouse.gov/digital/united-states-digital-ser...

https://18f.gsa.gov/

EDIT: I both know people at the USDS, and have interviewed with them. They are passionate about getting tech in government fixed. I believe (if Congress doesn't defund them), they'll deliver.

I know people in the government too. They're all passionate and loyal workers, often taking a job because they believe in the greater good as opposed to making money.

But 18f is a relatively small project (~100 employees), and overall USDS is relatively new. Veteran's Affairs for example STILL isn't digitized and is almost entirely a paper-run system. USDS is likely going to focus on that as opposed to building out a new website for the IRS.

Just realistically speaking, the kind of project you are proposing will take years to deliver version 1.0, and there's no guarantee that the USDS team will even handle it as there are definitely higher-priority tasks.

You are grossly overestimating the US Government's capabilities. I'm not lying when I say that the US Government needs to

1. Create a budget (we're still under continuing resolutions here. A budget hasn't been passed since like 2012)

2. Raise wages for once to attract talent (it has almost been a decade without wage growth, very bad for morale). FYI: the government shutdown threats (ie: federal employees / contractors don't get paid randomly) aren't helping.

3. Build up the IT teams, and I mean more than just a single 100-man team at 18F. The entirety of 18F, as good as they are, are way too small to handle a project on the scale of "Recreate Turbotax for All Americans... for free".

4. Build up project managers in the meantime who can handle contractors.

5. Hire competent contractors to build things out.

6. Execute all the above while Congress continues to refuse to pass a budget and the Republican half of America seems like they're going to lynch "greedy" Federal Workers who don't actually have great pension plans anymore (only the older Federal Workers have the crazy-good pension plan. Any millenial / college age kid who gets hired by the Feds don't really see as many benefits)

There are some fundamental problems here that need to be fixed before the US Government can tackle a project like you say successfully.

EDIT: one of the leading Presidential Candidates (Ted Cruz) is on the record for wanting to "Abolish" the IRS. People in general don't like Federal Workers, and that harms recruitment efforts. Which harms the kinds of project you want to start up. Its partially a self-fulfilling prophecy at this point.

I can't share details, because it was part of my interview process to be on the USDS team within the IRS, but the IRS has extensive modernization projects currently.

> Raise wages for once to attract talent (it has almost been a decade without wage growth, very bad for morale). FYI: the government shutdown threats (ie: federal employees / contractors don't get paid randomly) aren't helping.

This is hard to be fair. If you want to work in the USDS, you need to undergo a drug test (which is inconvenient even if you're not a drug user), an extensive security background check, and you can still be drummed out if they find something they don't like after you've already been working there for a bit (I asked). Compensation was fair though (~$132K/year, full medical benefits and TSP retirement plan access).

The tech industry is always going to be able to attract top talent better than government in this regard.

I agree with the rest of your post.

I think many are skeptical of the government getting into large-scale software development after the Obamacare website failures and the recent admission that the TSA spent millions on an iPad app that consisted of an arrow pointing left or right.

TSA paid $47,000 for the app, not millions. $47,000 may still be too much, but it's not millions. http://www.zdnet.com/article/tsa-contracted-ibm-47k-for-ipad...

> If the IRS could put the 1040EZ online on a free website, that'd be great.

It has: https://www.irs.gov/uac/Before-Starting-Free-File-Fillable-F...

I have relatively simple taxes but I did hire someone for a few years because I was receiving a 1099 for some part time work. I had no idea what to do to pay for this self-employment.

This bill would have made that process easier and free for me. My 1099s and all of that relevant documentation are provided to the government. If the government had estimated my taxes and sent them to me before I was required to file them, it would have given me a much better idea of where to start, while still leaving me the option of hiring a 3rd party if I thought it in my best interest.

"The people who don't itemize have almost no burden right now; you can fill out a 1040EZ or use TurboTax free edition."

Which, by the way, is ridiculous.

There is a very large swath of the US population (people like this, using 1040EZ) that should not file taxes at all.

The government already knows what you made, it already knows what it withheld, and it already knows your (most likely) net refund. It's a pointless, stupid, almost spiteful waste of time to make people go through these motions - almost daring them to get the numbers wrong ... the numbers that the IRS already knows.

Any substantive, meaningful tax reform needs to remove filing requirements for this type of taxpayer.

"~ 1/3 of people itemize"

"The middle class is who is going to get screwed out of deductions."

I don't want to pick on you, but these two sentiments said so closely together proves that "middle class" means whatever the speaker wants it to mean.

Sure it's the richest 1/3. I can't imagine anyone in, say, the top 5% who DON'T itemize.

Less-wealthy property owners might own property in a low-enough cost-of-living and low-enough-tax state (or have bought long enough ago) that their mortgage interest and property tax is still less than the standard deduction.

That's very easy to imagine:

  - Have a job that pays enough to get you in the top 5%
  - Don't own a house
  - Live in one of the 7 states without an income tax

Boom. You probably don't itemize.

- Have a job that pays enough to get you in the top 5% - Don't own a house

That's going to be a very small set of frequent-travelling professionals. Also, having a top 5% income but no savings/investment income from previous years of saved top 5% income seems unlikely.

That's going to be a very small set of frequent-travelling professionals.

No it's not. It's a huge swath of technology workers (and other professionals) that live in cities with expensive housing. Many of the commenters on HN fall into this exact category!

You're right about savings & investment income, but that won't have anything to do with your deduction status for most people.

Not a lot of cities with expensive housing are in no-tax states though.

Exactly. Simpilifying the tax code basically jusy means less power over our own money.

Once again, we are giving away more of our power for convenience.

I wonder if there are any statistics on which deductions are used by what percentage of people? I don't think any of them apply to me, as far as I can tell from the million questions the tax software asks.

I'd love to find some of those too, but brief searching didn't yield anything.

In general though, it seems some of the most popular itemized deductions are:

1.) Deduct state income tax 2.) Mortgage interest 3.) Child-oriented tax credits

Most deductions seem to favor homeowners and families.

If you are working as a programmer in Silicon Valley your income is most likely high enough to itemize to deduct your state taxes from the Federal Adjusted Gross Income. Your deduction would exceed the standard deduction. Unless you know you can itemize your state taxes you are going to end up paying more in taxes.

The default is to go with the standard deduction which would be throwing away money.

IANAL but as per the text of the bill you won't be "eligible" if you itemize.

I think your comment completely misses the target of the Bill. From the staff report linked in the article:

" “During the term of this agreement,” the contract read, “the IRS will not compete with the Consortium in providing free, on-line tax return preparation and filing services to taxpayers.”10 The IRS would reaffirm its pledge to avoid developing tax preparation services in the 2005, 2009, 2014, and 2015 Free File renewal agreements.1 ... Today, fewer than 3% of eligible taxpayers participate in Free File, in large part because the program’s maze of eligibility requirements and product offerings are so difficult to navigate."

The problem being targeted is the backdoor deal where private companies (TurboTax) _prevent_ the IRS from providing free filing services. They then turn around and obscure features and promote their paid services so that less than 3% of Americans who could and should use the "Free" tier end up paying for the paid product anyway.

This legislation is two parts:

First, it requires the IRS to develop free filing services to allow Americans to file taxes without having to use third-party services. This is to reduce the requirement that Americans have to share their personal information with third-party corporations in order to pay their _Federal_ taxes. It will also bring some much needed competition to the market where products like TurboTax can't just lock features required by certain users behind paywalls by creating a Federal, free base-line.

Second, it _explicitly_ prohibits the IRS from entering into agreements with corporations which restrict itself from providing goods and services (specifically, "provide free online tax preparation or filing services"). The fact that corporations were able to do so in the past is disturbing, so this is a much needed change. The IRS is a governmental body for the people, it shouldn't be entering into agreements that benefit corporations and place burdens on the governed.

Tax code is still going to be a mess, especially for the more complicated cases, but this has nothing to do with the focus of this bill.

The tax code is this way because in practice everyone wants it to be this way. We spend through the tax code instead of directly paying for things because it's a lot easier to sell politically. People say some variation of, "Make my tax code simpler, but don't get rid of that deduction over there, it's important to me." There are literally billions of dollars spent making sure deductions stay exactly where they are every single year.

Given that complexity and what I firmly believe to be its intractability, this is a hacky but OK solution to make taxes less awful for most people.

Also, the tax code is this way because software companies that produce tax filing software like Intuit lobby for it [0].

[0] http://techcrunch.com/2013/03/27/turbotax-maker-funnels-mill...

This is the Grover Norquist / Tea Party position: it's important to keep tax preparation horrible so that people have a healthy hatred of paying taxes. I consider this an extremely ideological stance. Simplifying the tax code is an intractable problem. The tax code becomes complicated because of the very nature of congress, and I would say it is because of the very nature of taxes. The US is not the only country with a complex tax code!

What is the likelihood that we would get some sort of sweeping reforms like the ones you're looking for? What is the likelihood that the reforms you are imagining are even possible at all? (If you're a self-critical type, how certain are you that the reforms in your imagination would really help people that much?) Passing a bill like this would be a boon for hundreds of millions of people. It is certain, it is immediate, it is politically achievable.

This is an example of the perfect being an enemy of good. This won't solve all problems, but for a large section of people, it will eliminate the needless guesswork.

It has already been implemented in some European countries.

That was the main reason for the submission. Time and again, I had read discussions here with admiration on how many European countries reduce the filing burden on citizens with simple requirements. AFAIK, this was the first time I had seen such an attempt in the US.

> All this will accomplish is making sure that tax preparation is back where it was two decades ago

Nonsense. The tax preparation software did fine in the 80's and 90's when doing your taxes on your computer was a niche thing.

Propping up a tax software industry for the benefit of the few people who benefit from it is a drag on society. Why should I subsidize the R&D of the software to handle your complex taxes?

> The default, free, option is going to win against a paid product.

I think you're really oversimplifying things. A free option is great, but a paid option can still exist and thrive as long as it provides some kind of added value.

In fact a free option can actually increase the market for a paid option as more people get frustrated by limitations of the free option and discover value in the paid option.

It already costs about $200 to do my taxes and deductions aren't worth the time it would cost me to itemize them.

I'd much rather the government just give me a tax bill and then I could only worry about doing taxes myself if and only if it was actually worthwhile to do so.

> This would just paper over the fact that the US tax code is an abomination of deductions and credits. It would not simplify any of the magic math; it would just make most people think they are getting the right credits.

> It would probably put turbo-tax out of business though, this is true. The default, free, option is going to win against a paid product.

That is largely what this is:

https://turbotax.intuit.com/personal-taxes/online/free-editi...

"All this will accomplish is making sure that tax preparation is back where it was two decades ago -- where the Actually Wealthy hire a person to do their taxes and get the right deductions, and everyone else gets stuck with an opaque bill which they can't afford to assess for accuracy. This is a far more regressive system than what we have now."

This is where it is now - plus the non wealthy end up paying TurboTax $200. This bill would save them the $200.

A lot of fairly high income people pay for TurboTax. Billionaires of course have tax preparers -- but TurboTax moves the bar a LOT higher.

> This bill would save them the $200.

First, most people pay turbotax $50-100. $200 would be deluxe + 3 states, which is highly uncommon.

And it's highly likely it would cost them MORE than $200 in credits they are not automatically given by the IRS. The IRS does not know what you donated to charity, properties you own which get credits for, educational tax credits etc.

It will spit out a number with a refund, sure. But this change will take more from the lower-income and middle-income proportionately than from the wealthy.

> The IRS does not know what you donated to charity, properties you own which get credits for, educational tax credits etc.

But it could if provided with the data.

I thought the charities reported donations over $X to the IRS. Am I mistaken?

It would also provide a additional small incentive to the IRS to lobby harder to get the code simplified. Now they have to update another set of systems for each crazy change.

They are only handling the simple cases for the free filing system. Basically only if you qualify for 1040EZ.

I think the average $200 figure is for folks paying a tax preparation service, not using HR Block software or TurboTax (both cost around $49 and give free fed e-files and usually 4 "free" state-files.)

If you're paying TurboTax $200 a year to do your taxes, you're doing something seriously wrong.

TurboTax and this proposal are just a consequence of a complex, manual process that needs simplification. I'm not sure how the government would make a better product than TurboTax without spending at least as much as they have. Subsidizing private tax software would probably only succeed in widening their profit margins. It seems like the only sane way to move forward is to simplify the tax code and process.

> The default, free, option is going to win against a paid product.

In some cases, free federal filing already exists!

https://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for...

>US tax code is an abomination of deductions and credits

Funny, I thought the part where they take your money was the evil part.

The problem is the complexity and inherent unfairness of the tax code (in the US anyway).

Until we resolve that root cause anything else is like applying a bandaid to a severed vein.

There are /many/ discussion threads about what such a resolution might be, some of which include Basic Income Guarantee / Universal Basic Income.

Inherent unfairness? I'd love to see that argument laid out. The US has an extremely progressive tax code.

The top 1% receives 19% of all income and pays 49% of all income taxes. The top 10% pays 82% of all income taxes. What exactly do you plan to do, to make it more fair?

Most other developed countries have dramatically higher income taxes on their middle classes and have less progressive income tax distribution in terms of who pays. Which is why the US has roughly 50% higher median household disposable income than what Sweden, Britain, or Germany do: it's thanks to much lower taxes on the middle class (in those countries it's used for eg healthcare; in the US, people have a choice as to what they do with that disposable income).

http://taxprof.typepad.com/taxprof_blog/2015/03/joint-tax-co...

And in Europe and other western countries with national healthcare, people don't go bankrupt from unplanned medical emergencies.

Absolutely correct. And that has nothing to do with the tax system, nor how progressive the US tax code is, and that problem can be legislated out of existence at any time by the US Government.

A valid, but technocratic defence. The overall justice of the socioeconomic system and the policy themes it actively promulgates is certainly a valid question, and it encapsulates both issues.

That is to say: for the marginally lower taxes we pay in the US relative to other developed countries, what do we get? With healthcare, it turns out: not much! Not only do we have to pay our healthcare ourselves, on top of our tax burden, but we pay hyperinflated prices at that. Our insurers operate like cost-plus defence contractors that take the spiraling provider costs and just pass them on to the policyholders.

For paying ever so slightly higher taxes, our W. European/AUS/NZ/Canadian brethren get a lot more social safety and peace of mind for their money. We mostly get a military-industrial complex and corporate welfare.

This is relevant to the question of how we implement taxation and how we distribute the tax burden.

It's inherently linked, and you even mention that in your previous post.

It is a logical fallacy and disingenuous to compare how much in absolute dollars how much the top/middle/bottom income earners pay in absolute dollars rather than in their relative (per income earned) tax rate.

If you have money to pay for experts in knowing all of the loopholes to exploit, and the types of investments / 'responsibilities' that special interests have had written in as possible deductions (the top n%) then the effective tax rate (per unit of currency) paid is less.

Edit, adding this:

I suppose you've also asked what I would consider fair. I find it easier to reach a stance of agreement that the current system is /unfair/ and needs a fresh start, so I hadn't elaborated on the outcome I'd like to see from such a process.

I would find a system with a simple, preferably automated, process to be more fair.

I would find a system where the more you make, the more you take home, to be fair.

I would find a system where the more you make, the higher your relative rate of being taxed to be fair. (Is anyone REALLY worth 100 other people? 1000? At what point to you reach the true value of life: priceless (free)?)

The best approach that I've seen so far mentioned is to tax assets. Property, objects, financial instruments (dollars to contracts of various sorts) all have a market value. You are not directly taxed on your income, but your net worth. Obviously there would be some forms of shelter (deferred net worth, like for retirement. Insurance buffers, etc).

In fact it's not disingenuous at all, nor a logical fallacy. You can derive those rough specs from the absolute numbers very easily.

If the top 10% earn 45% of all income and pay 82% of all income taxes, that means the bottom 90% are earning 55% of all income and paying 18% of all income taxes. Which is another way of saying, the bottom 90% are paying a very low tax rate.

And in fact, another important thing is extremely obvious as a connection to this:

The bottom ~50% in the US pay nothing net in income taxes. This is a pretty well known tax fact.

That means the bracket between 50% and 10%, that 40% group, is paying an increasingly very low rate as you go down the income scale, as the 10% to 20% bracket is carrying a high share of that remaining 18% income tax revenue base just as the top 10% group is. Put a very simple way: the bottom ~70% of income earners in the US, pay an extraordinarily small share of all income taxes, and inherently must have a low tax rate given their share of the income base (but that's also another trivially easy stat to retrieve).

Explain to me again how anything I said is incorrect or disingenuous, and or how the rich aren't paying their fair share of income taxes. The sole argument you have left that I can see, is to claim that the top 10% should go from paying 82% of all income taxes on their 45% income share, to paying 100% of all income taxes off of that 45% share of national income.

I can't seem to locate a graph (within my time constraints) that shows, by percent (not by grouping higher/lower) how much, relatively /each percent/ or each income bucket pays in taxes.

This however comes close.

https://en.wikipedia.org/wiki/Progressivity_in_United_States...

A fair tax system would not have a hump, or a ramp that then levels off, but would instead be a slowly rising graph with a continuously accelerating rate of being taxed, such that past some arbitrary point that extra return for every unit earned is virtually nothing (reflecting the stratospheric difference that already exists).

I say that would be fair because I believe that even a truly exceptional person, let us say that they are unquestionably a genius instead of merely someone particularly good at business, is not worth 1000s of times or more what someone else is worth.

If you're earning more than 1000s of peoples worth of taxes, you should be /paying/ like you're 1000s of people (without the per person tax credit).

> Which is another way of saying, the bottom 90% are paying a very low tax rate.

In absolute terms yes. Individually, and as a proportion of their total income the bottom 90% are paying more than the top 10%.

Why do you say that? To me, it seems disingenuous to discount the fact that they pay more by using a relative percentage instead of an absolute amount.

I may be in the minority but I believe governments shouldn't discriminate based on income for the same reason they shouldn't discriminate based on gender, race, religion, sexual orientation, etc. All people should be treated equal in the eyes of the law.

Taking your treating people equally to the logical conclusion, does that not also mean that everyone should have the same chance of success, the same opportunity to live and work in nice areas, the same pay for the job they work?

While I do think that there is room for individuality and competition, I don't think that it's logical that someone can be three orders of (base 10) magnitude better than average. Any such level of compensation / wealth is surely an irregularity that should be corrected by tax (law).

No. There's a subtle yet important difference between treating people equally and making people equal.

What you are talking about is equality of outcome.

I'm talking about equality before the law.

They are 2 different things.

https://en.wikipedia.org/wiki/Equality_before_the_law

I'm not sure what you mean by better but it's perfectly logical to me that someone can provide 3 orders of magnitude more economic value than someone else. The more leverage there is the more the differences between people will be exaggerated. By leverage I mean capital, education, technology, outsourcing, etc. I find it perfectly reasonable that someone who builds a product that enriches millions of lives should be paid orders of magnitude more than someone like a waiter who only services 1 person at a time.

It doesn't make sense to me that someone providing more value to society should be forced to pay more. That seems unfair to me.

> I believe governments shouldn't discriminate based on income for the same reason they shouldn't discriminate based on gender, race, religion, sexual orientation, etc.

HN: the place to go to hear rich people described with a straight face as an oppressed class.

> I would find a system with a simple, preferably automated, process to be more fair.

> The best approach that I've seen so far mentioned is to tax assets.

How do you propose to automate the taxing of assets? I have a piece of artwork. How much is that worth? I have a fairly complete set of mechanic's tools. I have computing equipment. I have... I'm in favor of taxing consumption (as proxied by a VAT), but taxing assets seems like a senseless boondoggle, especially if that now means there's a database of what people own sitting out there.

I fail to see how UBI will decrease the complexity of the tax code. It might help with the unfairness, but not the complexity.

Part of the reason the tax code is so complex is the goal of a progressive tax system where wealthier people pay a higher share of their income. A flat tax, while simpler, is regressive- everyone pays the same percentage. Couple a flat tax with an unconditional lump sum grant, however, and you get both progressivity and simplicity.

> Part of the reason the tax code is so complex is the goal of a progressive tax system where wealthier people pay a higher share of their income.

This is false.

Almost none of the complexity of the tax code comes from this. The complexity comes from counting up how much income you have. After that it's a trivial calculation to determine your tax owed.

Yes, if you change to a flat tax when you go to UBI. It would make sense, but... Congress.

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