H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017)
propublica.org
propublica.org
It's Grover Norquist: https://www.huffingtonpost.com/grover-norquist/grover-norqui...
To give these folks something they don't deserve (an assumption of good faith, non-cynicism, benefit of the doubt, etc): they think "letting" the IRS do folks' taxes will lead to more taxes and poor, defenseless taxpayers simply won't have the courage to challenge a "bill" from the IRS.
Simple fix: let folks contest whatever final "pay this number and you're done" amount they get invoiced for & sear that into federal law. But you probably won't ever hear Grover and all the other looney tunes ever mention that.
They don't want easy, hassle-free IRS filing. It's an opportunity for people to be pissed (who wants to pay money for the government)
There's also talk about your taxes fitting on a postcard and that, as usual from the scumbags nominally in charge of our country, is bullshit too because it just conceals a ton of paperwork (source: https://www.accountingtoday.com/opinion/the-postcard-tax-ret...)
In the US, taxes are complexified to hide welfare for the rich[0] and put a burden on the non-rich people that they must fill out complicated tax forms correctly "or else." 0: This isn't idle rhetoric: That's what campaign financing buys: favorable treatment and tax law chicanery. Does anyone think it's right billionaires should pay less taxes than their secretaries?
Multiply that several times to do my US taxes and add some extra fees on top because I use tax prep software.
The really funny bit is I never owe anything in the US since I solely live and operate in Iceland so all that's covered by my Icelandic taxes, but as a US citizen I'm required to file regardless.
I wish we had raw data showing they paid less in the dollar amount. I believe this happens, I just wish we had a good idea of how common it is.
The scenario does arise when we're talking about percentages, because billionaires make much of their wealth from capital gains and the like. But it's hard for me to imagine how the actual dollar amount paid could be lower.
If you agree with the numbers you don't do anything at all.
The point never was "they do prefect tax returns for everyone." Everyone knows this isn't feasible.
The point is, they'll simply send you (web) forms prefilled with the information they already have, you go in and add information they don't have if something is missing. So even if they have incomplete information, you'll still benefit greatly. If youre feeling really upset about the whole concept, you can tbrow away everything they prefilled out and download a blank form and do it yourself from scratch and that would be perfectly fine too.
If the default bill sent by the IRS wouldn’t include all those things, then the result would be exactly what the Norquists of the world fear: a de facto tax increase.
Note also that the H&R Block/Intuit software are free for 70% households. The remaining households are the higher income ones that would most likely itemize anyway.
If you only have W-2 income, are single, have no children, and aren’t eligible for any education credits, then the IRS can probably do a good job estimating your taxes. But that probably describes 20% of folks. If the IRS sent a bill to the other 80% without those deductions, it would be an overestimate. And sure, those folks could file their own returns, but many would not. That would result in a de facto tax increase, which is exactly what Norquist doesn’t want.
For automated tax filing to be workable, it has to at least be accurate for nearly everyone. If it overstates taxes for most people, I think that's a big problem. In the U.S., I don't think you can achieve that level of accuracy without either changing the tax code, or having the federal government track a lot more information about people than it currently does. I owe the IRS money every year because my wife and I are subject to the marriage penalty. You can't calculate our correct taxes without knowing we are married to each other. And the IRS doesn't know that unless I put it on my returns.
Note that many countries track their citizens much more closely than does the U.S. For example, in Germany, you have to register with a Registration Office within one week whenever you move between cities.
Things like marriage records and children aren't currently kept private such that the Child Tax Credit and Joint Filing rules couldn't be automatically applied. It's not immediately apparent to me that vulnerable populations would necessarily be at a disadvantage.
(Basically, I figure that if I'm high-income, it's my problem to sort out my taxes to my greatest advantage, but it should be easy for folks who don't have the luxury of time or money.)
And even relatively high income people ($100,000+, which might just be a household of two teachers) might be hesitant to dispute a "bill" sent by the IRS.
As to applying these deductions automatically: the IRS simply lacks the information. There is simply no database (federal or state) tracking which children live with which adults (the credits are computed based on dependent children, not biological or legal children). There is no federal database of marriages, and while there are marriage certificates at the state level, it's unclear whether there are any easily accessible databases of married couples. There are no databases tracking which daycare you send your children to, what you spend in college tuition, etc.
We may just disagree on the size of the burden or the ability to ameliorate risks/downsides, but I'm having a hard time imagining that they cannot be addressed with _implementation_ choices on a pre-filed return.
I feel like this is important because it seems like we agree on the fundamentals: that the tax code should advantage the vulnerable, that filing should be as easy as possible, and that taxpayers should be able to discover and utilize all breaks available to them. The status quo does not seem _nearly_ good enough at these things to be worth preserving.
The main result of this would be the government stealing from poor and middle class people who should've spent less than $100 on a 3rd party tax preparer that is incentivized to act in the interest of the taxee.
For what it's worth, in the Netherlands it takes most people 5 to 10 minutes to flip through an app that has all your tax info filled in already. If you need to add anything that isn't already filled in, you get every chance to do so. It doesn't stop you from getting an accountant to do it for you either, if you'd prefer.
> How would you even know if it is right?
Because it's still the same tax system you had before they made it easier by filling it out for you already. It doesn't get automatically filed, you still have to check it yourself and approve it.
The sheer magnitude of the difference between the US and the Netherlands is crazy, and it is like comparing a house to a town.
Communism works on a small scale, the bigger the scale, the less you can just trust everyone is doing the right thing. The bureaucracy of the IRS has every incentive to maximize tax revenue, and that is what they will eventually do.
Most people in both the US and the Netherlands work for one employer, own or rent one house, have a few credit cards, and a car. In most cases they have no complicated investments or debts. So how does the simple fact that one population is larger than the other have any effect?
In a larger community you simply need proportionally more computer power to process proportionally more data, but the data types and business rules are the same for all the individuals.
Running a small business is not the same as a large business.
Ok, have you ever played civilization? In civilization corruption goes up as you build more cities and the farther those cities are from the capital. That is to reflect the reality of managing larger and larger groups of people.
Solutions that can work on the state level don't necessarily work on the federal level. The Netherlands are basically the size of a state with an extremely homogeneous population, and a far less cut throat culture than the US.
In small groups of 10-20 people communism works very well. It doesn't work in bigger groups though. The bigger the group the more perverse incentives are acted upon.
Even beyond that though the US is a cut throat competitive culture. Eventually the person in charge of treasury will want to show that the democrats/republicans before them did a bad job of collecting tax revenue. They will realize by not offering deductions a lot of people will just pay and this will end up with them looking like they did a really good job. Or maybe it will be someone lower on the totem pole that wants to move up and can show that they did a better job at collecting tax revenue.
Also, solutions that work in the US probably won't work in China or India because the population is so much larger that US solutions won't scale properly.
It's not that they can't. It's that eventually someone will be in charge that will decide they shouldn't.
Your statement could easily be flipped. Turbo Tax is incentivized to keep the tax code as complex as possible, the government is incentivized to do the opposite.
If they filled out a return with all that info, it would take just a couple of minutes to review it if it were already pre-filled out.
And worst case, you have other income and deductions, such that you've saved a bunch of time entering information the government already knows.
If anything, it would be the upper middle class who would lose out because they would just be lazy and click "ok" instead of doing their own taxes.
As someone who owns a business and has to make quarterly tax payments, paying taxes is painful. I know how much it costs me every time I write a check and I am very reticent to vote for any politician that thinks we should raise those taxes.
On the flip side, I have many friends whose taxes are just pulled out every paycheck. And at the end of the year, they get a tax refund. They act like the government is giving them money! Many don't even seem to realize that all they are getting is a repayment for an interest free loan they have been giving to one of the largest and wealthiest organization/government in the world.
I understand and agree that taxes are important, but if we make it too easy, we make people complacent and the next thing you know, we will wake up with a 75% tax rate.
This is the same reason I disagree with adding the tax in on product prices. People in other countries that do this don't realize how much of the price is going towards taxes - and to keep a government in check, information is key.
In the UK, for example, most employees do not have to file a tax return. The HMRC files it for them and sends them a letter every tax year with their calculation. It even comes with a nice chart to see how much tax you've paid and where it went to (https://secure.i.telegraph.co.uk/multimedia/archive/02871/ta...).
The tax brackets are also very straightfoward and everyone knows which bracket they are in. The same is true with tax on product prices. Everyone knows the tax rate on items because it's a simple number and there's a lot of public discussion whenever politicians decide on reducing/increasing it. If you ask anyone in the UK (or any other country other than the US with VAT) what the current VAT rate is, they will be able to tell you. Good luck getting an answer to such a question from someone in the US; you just pay what the cashier tells you to as VAT depends on so many factors.
> I guess that is why it is not included in the price by default
I hear that argument a lot but it does not really make sense to me. The place of purchase knowns what their tax rate is in their current location because the cash register has that information (and I assume this sales tax does not change very frequently?). So why not print out or display the prices with that tax included?
Edit: Ok I see, the "you" I had in my post was confusing. VAT is charged on the value added at each point of the chain, again unlike sales/use tax.
In Europe they have a 1 euro menu regardless of what country the burger was sold in (countries have different VAT rates). Some advertising is even shared between smaller countries that speak the same languages.
I really don't care, it's their problem not mine. All I want is for stores, fast food places, etc., to be honest about the price I am to pay.
In Europe, including the UK, it is illegal to advertise only tax-exclusive prices to end customers.
If you want to rail against hidden charges complain about the restaurant welfare system that allows employers to legally under pay and fire employees for not making the majority of their money from tips
Obviously it's beneficial to be able to advertise the lower price, these days assembling your own PC from components must be much less common than it was back then so I imagine even if the decision went in their favour back then that's changed since.
I think if you want to counter the poster, you need to give an example of a western country that has simple/automatic tax systems and have a lower tax rate than the US.
His/her complaint is primarily that if a system is too simple, it's much easier to raise taxes. You're giving exactly the example he/she is looking for - a country where it's easy and the tax is higher.
Now correct me if I am wrong, I have only filed tax in the US for a single tax year so I might be missing something. But for the median household income in California of around $66,529, you would be paying an effective tax rate of around 24%. (using this website: https://smartasset.com/taxes/california-tax-calculator#wWyPf...). And yes, I realize this is excluding deductions.
In the UK, the median household income is £27,300 and you would have an effective tax rate of around 19.6% (https://www.uktaxcalculators.co.uk/), also excluding deductions.
Of course higher salaries attract higher taxes in the UK, but if the above is correct, then the average person should be paying less tax in the UK than in California.
That's a big disclaimer.
I'm not going to argue for a hypothetical. I actually ran the numbers once. My state's income tax rate is high, but lower than CA's. For my income (above median), one year I actually calculated my tax for CA (as in actually got the forms and filled them out).[0] Despite the lower tax rate, the my state's income tax was higher. The reason? CA has a lot more deductions for people of my income or lower. CA can get you in all kinds of other taxes, but not income tax.
Also, just checked. Other than the deductions, for single people, you hit the second highest bracket at a little over $8K in my state. To get to that same bracket in CA, you have to earn over $50K. CA tax rates are low for lower income people.
[0] It's a long story why I did this - it was not fun at all.
My point was that taxes in countries where the tax return is automatically performed by the government aren't necessarily higher than in parts of the US. In other words, OP's comment above was nothing more than FUD.
Huh? But you said:
> [their] complaint is primarily that if a system is too simple, it's much easier to raise taxes.
which sounds pretty hypothetical to me! In fact this whole discussion is hypothetical!
> The reason? CA has a lot more deductions for people of my income or lower. CA can get you in all kinds of other taxes, but not income tax
To me, this sounds like a pretty good justification for a simpler tax system ...
In 2019 they will even have automatic taxation for small businesses based on the statistical average for the industry and various signals.
So basically taxation based on machine learning.
You can take it or leave it - it's up to you.
And this also shows that simpler taxation and higher taxation has no relation to each other.
How is a higher tax rate related to the government's ability to provide simple/automated tax returns?
Oh, right, it's not.
Sales tax where I am has similar characteristics - I think most people are perfectly well aware (as I am) that it is generally 8%, but I couldn't tell you exactly which items are exempt, or what the modification is for prepared food or whatever.
So I think you are exaggerating (as people like to do) the difference between the US and the UK.
[1]https://en.wikipedia.org/wiki/Value-added_tax_in_the_United_...
There's no excuse for the sticker price not matching in the US.
Ah, hmm, yes, they just don't realize. Those poor benighted fools.
Or maybe? Maybe they don't care. Take me, for example. I don't care. I've thought about it. I could spend more time screwing with my taxes to optimize my returns, or even go to no withholding whatsoever. Or I could enjoy my finite time on this planet, 'cause the amount of money we're talking about is marginal for me and I do pretty well for myself.
(And to make one thing very clear: the downright fearmongering about a "75% tax rate" are just that and are not worthy of further address. Even were there a salient point in the bottom of this well, this isn't it.)
If everybody just paid the taxes they were supposed to, then we wouldn't need high taxes.
This is simply not true.
This is a case where quite easily 80% of their constituency would applaud the change. But a minor set of companies with an ability to contribute large sums of money (for or against) is able to influence something like this passing.
Citizens United and similar SCOTUS cases have made it even that much more unlikely that the situation will be improved any time soon.
This is exactly how it works in Chile...since 2005!
If the taxpayer can relieve their obligation by filing a government provided return, with the option to correct it, that sounds great. But if the onus is on the taxpayer to correct mistakes by the government, then all that is really happening is free government provided tax prep which may have a value of zero or less.
It's automatic. Some system or human reviewer goes "Hey, this item is wrong" and then the machine re-calculates that and issues a new statement, but it also queues up any subsequent re-calculates and those may take a few days extra.
If they owe you money you get either a direct credit or cheque, if you owe them a small amount it's added to your next year of taxes, if you somehow owe a large amount you have to arrange how you'll pay.
For me the goal is to minimise paperwork, not minimise amount paid. I have money, I don't want to spend time doing paperwork (and no I don't want to hire somebody else to do it). So the US system would be intolerable.
I mean, it was a cheer-bringing cheque - but at the same time I found the timing somewhat sub-optimal...
Also the online tax forms are actually really good. The government has a web team that has radically simplified and unified all sorts of government web forms and made a huge difference.
Wrong thread, but so far as I’m aware, we don’t pay 75% tax in the UK.
If they realise you owe say £500 they just send you a new calculation saying here's why you owe £500, we wouldn't tax X amount of your income by law, so, Y = X - £500 now we won't tax the first Y next year.
Pay As You Earn means most ordinary workers in the UK have all their income taxes collected by their employer automatically. The employer doesn't know why you pay the taxes you do, they just get told a code signifying how much to charge.
There's a cute trick to let HMRC verify that payroll accounting is legit without snooping personal bank details of people who aren't suspected of tax fraud. Basically there is a field with a blinded cryptographic signature in it in electronic payroll feeds, all the signatures should tie up to tax records without revealing who exactly was paid how much.
For me, it's always been automatic. But that might be because I've been under PAYE (via an umbrella company) rather than anything more esoteric that requires me to submit a tax return.
Unfortunately, it's true of so many aspects of American society right now that are in desperate need of reform or rebuild - education, health, roads, public transport, safety, just to name a few.
There are so many hundreds of billions of private profits tied up in these things they will never be allowed to improve.
Or really, if you think of it, to any type of government. In every regime financial power translates to the ability to influence laws and government. Even direct democracies such as ancient athens were prone to the rich influencing or outright buying other voters
If your elected officials accept corporate PAC money, tell them to cut it out because you'll be supporting a primary challenger who refuses all corporate PAC donations...and then support a primary challenger who refuses all corporate PAC donations.
Having elected officials who reject all corporate PAC money isn't a panacea all on its own, but it's a great start.
See how Kevin McCarthy, House Minority Leader, raked in almost $8mm in the last election cycle? That's because he'd have been Speaker if Republicans had held the House. Those $8mm in donations would've bought companies like Goldman Sachs, MetLife, Altria, and others plenty of phone calls with McCarthy. https://www.opensecrets.org/members-of-congress/contributors...
If only news agencies did proper job highlighting these issues, companies wouldn't date to indulge in acts like these.
1) Even if your premises were true, which they are not (see below), your theory of causation is simply unworkable. Intuit and H&R Block spend a combined $5 million a year on lobbying. If that were enough to even significantly influence tax policy, we could crowd fund opposition, not to mention some altruistic millionaire. Or all the tons of companies who would benefit from simplified tax filing? You don’t think there are enough forces opposed to complicated tax filing that they couldn’t muster up a measly $5 million a year to hire some lobbyists? That’s completely not believable.
2) You’re mixing up lobbying and campaign contributions. Intuit and H&R Block are not able to “contribute large sums of money” to any politicians. Lobbying is different—hiring people to tell politicians why they should support one policy over another; arm them with data and arguments to use against their opponents; draft proposed legislation; etc.
3) Citizens United doesn’t have anything to do with lobbying. It’s about companies spending their own money to air political ads. If Intuit and H&R Block were running ads trying to convince people to vote for politicians who support complicated tax filing, then Citizens United would be relevant.
While this is true in the literal sense of what the case was about, I find it disingenuous to claim that this is the only impact it had. The rise of 'Super PACs' is correlated directly with the decision. Here's an extract from Wikipedia for instance:
>Certainly, the holding in Citizens United helped affirm the legal basis for super PACs by deciding that, for purposes of establishing a "compelling government interest" of corruption sufficient to justify government limitations on political speech, "independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption".
Surely you must be aware that Super PACs can agglomerate money from various sources that don't need to announce their participation at the end of every commercial. I do not know if this is the case for Intuit, but it would be supremely naive to believe that it isn't.
Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens
https://scholar.princeton.edu/sites/default/files/mgilens/fi...
TLDR version: https://www.youtube.com/watch?v=5tu32CCA_Ig
1) “Elites” and everyone else agree on policy the large majority of the time.
2) When there is disagreement, the policy tends to reflect the elites’ preferences.
However, they define “elite” as the top 10%. Basically, a typical HN reader. The study is often used to asset that the US is oligarchic. But there are numerous reasons why, in a representative democracy, there would be a thumb in the scale in favor of policies supported by the top 10%: professionals, business owners, property owners, etc.
Can you share some? Why doesn’t it exist to such extremes in other representative democrcies (France, Canada, Norway, Sweden, Australia, etc.)?
As to your first question, we can use VAT as an example. Why would European countries rely so heavily on a sort of tax that falls mainly upon the lower income brackets? There is a lot of economic literature showing that VATs are more efficient than income taxes. So even if the majority might prefer an income tax borne primarily by the rich, the country adopts a VAT instead.
More generally, actual voters skew wealthier than the whole population. The top 10% of people might be the top 15% of voters. Who are these people? Well, me. I’m a married professional with a house and two kids in school. If I’m unhappy, I’m going to make a hell of a lot more noise than, for example, a single college student who might not even vote in the next off-cycle election, and certainly won’t vote in the primary or any of the local elections. The top 15% is a proxy for the most engaged voters with the most skin in the game (children in school, own homes, own businesses, etc.).
Put differently, the rich have made sure that they collect so much of the country’s income That there isn’t much else left to tax. This is pretty clear in tables of income distribution.
Incidentally, tax policy (rich should pay higher taxes) is the only category you mention where a clear majority (75%) of Americans supports the view.
As to your other example, the view among voters is in fact mixed. When Obama passed ACA for example, polls found public opposition to single payer to outweigh support. (It flipped only since then.) And that’s polls—actual voters notably skew older, richer, and more conservative than the general public sampled by polling. Even today, with 53% of people supporting single payer, it’s not clear whether that would be a majority of actual voters: https://www.kff.org/health-reform/poll-finding/data-note-mod.... In particular, voters skew heavily older, and older folks are already covered by Medicare.
Also consider labor unions: https://news.gallup.com/poll/241679/labor-union-approval-ste.... Most Americans would prefer labor unions to have less influence than they do now or to maintain the status quo, by a large margin (see the second chart). Only 40% want expanded labor union influence. (See second chart.) And again, actual voters are more conservative than the general population.
As to minimum wage: https://www.google.com/url?sa=i&source=web&cd=&ved=2ahUKEwij....
Most polled support a minimum wage of $15, by a 52-46 margin. But it doesn’t break down along “elites” and “non-elites” but rather at the middle class. Support is very strong among those with household incomes below $30,000, but for those whose household incomes are 30,000-75,000, there is net opposition 52-46. And of course, that’s among people polled. Households with less than $30,000 in income vote at far lower rates than everyone else. So it’s likely that the majority of actual voters oppose a $15 minimum wage.
Finally, addressing paid leave. People support paid leave by a large margin: http://www.pewsocialtrends.org/2017/03/23/americans-widely-s.... But the public is basically split on whether the federal government should force employers to provide paid leave. 48% oppose, 51% favor. (Again, the majority of voters probably oppose.) And if you scroll down to what models of government intervention people support, many more supported a carrot method that gives employers choice (offering tax credits to those who offer leave), than support the model European countries use (payroll taxes to pay for leave).
So in the US there is only narrow public support, or outright public opposition, to many policies adopted in European countries. On top of that is the double whammy the Northwestern study completely ignored. First, as mentioned above, voters skew older, richer, and more conservative than the public. So a 51-48 majority among those polled in support of government-mandated paid parental leave is probably not a majority at all among actual voters. Second, any legislation has to be approved by the House and Senate, where some voters have much more representation than other voters. But if we want to enact government-mandated paid parental leave, we have to get through the Senate, where Wyoming has two Senators just as California or New York. So even if the policy was supported by a majority of voters, that doesn’t mean a majority of Congress supports the policy, even if each Congressman votes exactly according to voter preferences in her district or state. The study completely ignores that factor, even though it’s a dominant force in American politics. If we just went by polls, we’d never have a Republican President or Congress. But even though Americans overwhelmingly disapprove of the Republican President, Republicans just maintained control of the Senate.
Which is single-payer healthcare and has 77% favor-ability [1].
==Most Americans would prefer labor unions to have less influence than they do now or to maintain the status quo==
This is complete editorializing. You could just as easily say that more Americans prefer labor unions to have the same or more influence than they do now. The Chamber of Commerce, the country's largest pro-business lobby, has vowed to fight an single-payer initiatives [2]. This is what people typically mean by "elites", the owners of capital. They are typically the one's influencing policy, not high wage earners.
==But it doesn’t break down along “elites” and “non-elites” but rather at the middle class.==
You are completely missing the point here. Corporations are fighting increased minimum wages across the country [3].
==So it’s likely that the majority of actual voters oppose a $15 minimum wage.==
Here, you rely on the question asking specifically about $15/hr minimum wage. In reality, the minimum wage is $7.25 and there is a lot of daylight between that and $15/hr. If you ask about a different number, like $10/hr, you get a different result.
"the poll found that 71 percent of people surveyed support raising the minimum wage to at least $10 an hour." [4]
==But even though Americans overwhelmingly disapprove of the Republican President, Republicans just maintained control of the Senate.==
Only 35 of the 100 seats were up for election in 2018, so it doesn't stand to reason that the results would match public perception directly.
[1] https://www.cnbc.com/2015/07/16/medicare-medicaid-popularity...
[2] https://www.beckershospitalreview.com/hospital-management-ad...
[3] https://www.arktimes.com/ArkansasBlog/archives/2018/09/04/co...
[4] https://theintercept.com/2018/04/17/the-restaurant-industry-...
Medicare has broad public support (and has for decades) and there are no serious proposals for getting rid of it, notwithstanding the elites. That is why, when we talk about "single-payer" as a policy proposal, or as a point of comparison with other countries, we are talking about extending single-payer to everyone. And that does not have the same broad support that Medicare does.
At the time the ACA was enacted, a slight majority of those polled opposed single-payer healthcare for everyone: https://www.kff.org/slideshow/public-opinion-on-single-payer.... That has flipped in the last 10 years, with a significant majority now supporting single-payer (59-39).
Again, let's circle back to the question at hand: why does the U.S. lack single payer healthcare when many other developed countries have it? Is it because of "elites" overriding the public will? Or is it because the public itself only came to support it by a significant margin in the last few years, after the last major change in healthcare law?
> This is complete editorializing. You could just as easily say that more Americans prefer labor unions to have the same or more influence than they do now.
That would be answering the wrong question. We are comparing the U.S. to "other representative democracies" like "France, Canada, Norway, Sweden, [and] Australia" (these are your words). Why does the U.S. have weak labor unions, when many developed countries have stronger ones? Is it because of "elites" overriding the majority? Or is it because a large majority prefer the current, weak labor unions, or would weaken labor unions even further?
> The Chamber of Commerce, the country's largest pro-business lobby, has vowed to fight an single-payer initiatives [2]. This is what people typically mean by "elites", the owners of capital. They are typically the one's influencing policy, not high wage earners.
The Northwestern study we are talking about here--which is what people are citing for the premise that "elites" influence policy--didn't define "elites" as "capital owners." It defined them as the top 10% of income earners.
> Here, you rely on the question asking specifically about $15/hr minimum wage. In reality, the minimum wage is $7.25 and there is a lot of daylight between that and $15/hr. If you ask about a different number, like $10/hr, you get a different result.
Again, what are we trying to prove? Why are U.S. minimum wages lower than in say Canada (scheduled to rise to $15 in the next couple of years) or Australia ($18) or France (about $12, but in a country where wages overall are much less than the U.S.)? Is it "elites" or because public support for a minimum wage that high is borderline?
Yes, there is public support for a $10+ minimum wage, which is why states across the country are in the process of raising their minimum wages to $10+. That is so, notwithstanding the presence of "elites" in New York, California, Maryland, etc.
> Only 35 of the 100 seats were up for election in 2018, so it doesn't stand to reason that the results would match public perception directly.
Various statistics I've seen show that a Republican majority vote in the Senate (51 votes) can represent as little as 42-43% of the total population. That's really a huge margin when you think about it. Say polls show that a policy is supported by 58% of the population, and opposed by 42% of the population. If you adjust for the fact that voters are more conservative than the overall public, that might turn into say 54-46%. And those 46% of voters, in turn, might be represented by 51 Senators, who can kill any bill implementing that policy. You don't need "elites" to explain how that works, and the Northwestern study (astoundingly) doesn't account for that phenomenon at all.
I think you make important points throughout your posts. However, I believe the entire basis of your opinions stands on top of an assumption that polls reflect the unbiased opinions of people with full information.
Put another way, is it at least possible that "a large majority prefer the current, weak labor unions" exactly because they have been influenced by the elite to think that? If the elite own the media infrastructure and are the ones funding Super PACS, isn't it possible that polls only show the success or failure of their ability to influence?
If a Super PAC (or the media at-large) is able to turn a topic into a partisan issue, then it is much more predictable how the public will view it (generally, split). I think polls might be measuring the results after the fact as opposed to accounting for the very influence we are discussing.
If you want non-standard deductions, create a company and do normal accounting.
50-100 standard deductions can be handled centrally by the IRS with no issues. It's been done in other countries for decades.
Those are common, non-business cases where the IRS doesn’t have enough info to properly prepare a return. Small business returns (even simple Schedule C “hobby businesses”) definitely can’t be done correctly in an automated fashion.
Tax code is messy and complex, with tons of loop holes. And those loop holes mean most of the people pay much less anyway, but they get to feel good that they're getting a great deal. It's brilliant from psychology point of view.
I’m not sure which part of my reply you think is amenable to tax code changes (and I don’t want to erect a strawman). If it’s just ad valorem taxes, you might be able to compel every jurisdiction seeking to impose one to provide a data feed to the feds. I’m not sure I think that’s Constitutional. You could also block the deductibility of charitable giving and property taxes (and likely hurt charities who are currently struggling; the Gates Foundation will be fine; the local soup kitchen may suffer.) That still leaves Schedule C as unsolvable, Schedule D as only partially (though increasingly) solvable, and Schedule E as likely unsolvable [having many of the same complexities as Schedule C and then some additional ones around basis, depreciation, and some real estate specific taxes/expenses that are not necessarily reported to the IRS today].
For the record, I don’t think I’m getting a great deal at all despite having a quite complicated return.
How does one even file free taxes in the US? I’d love to do that. I used to do my own taxes in Australia.
I tried to do some googling around to no avail.
You just have to fill out and mail the IRS some forms. If you have income just from regular 9-5 wages it's very simple. If you have income from Options or RSUs it's more complicated and if you're an independent contractor or business owner it's very complex.
Here's an okay place to start: https://www.irs.com/articles/how-to-file-your-income-tax-ret...
The "optional pre-filled forms" scheme forces the governments hand (to show what it has on you) before you have to show your cards. In a way that reduces the IRS' power.
Each year either the state or federal come back to me saying I didnt pay what I fully owed them. Now with a pre-filled return from the fed I'd know.
Hopefully more TurboTax customers hear of this and boycott them as well!
The last year or two I just followed their arduous step by step process in filing. That also failed me and I had to pay back taxes.
Now I see this.. the most efficient and best way US taxes could be filed yet moneybags is holding us back from the most innovative/efficient system for filing.
If the fed and state sent me my return saying I owe X... ok here’s that money and I’m done til next year. No surprise IRS letters saying I owe back taxes.
You are painting it as if they were black box calculations: they are not, especially for "traditional" tax situations it's very feasible to follow the forms (automatically filled by turbotax) and understand where your return differs.
That being said, I agree with you that it would be nice if we were directly "billed" by the IRS, but what I wanted to understand from you, and reason of my question, was __exactly__ where TurboTax failed (e.g. exact line of the form or "Oh, I forgot to include a 1099INT via SnapTax that was reported to the IRS"), to get a better perspective of the specific issue.
I've been using TurboTax for 10 years with a fairly elaborate tax situation (W2, multiple 1099INT, multiple 1099B, AMT tax for startup equity, AMT credits, backdoor Roth IRA, ...) and I've always been able to get the number right to the point that I never received any further bills from IRS (though I might get audited in the future, obviously).
But yeah, in the US it would cause an uproar.
"Neither Warren’s bill [the good act] nor the Free File Act [the evil act] made it out of committee."
Sounds more like the do-nothing Congress at work.
With that said, I am absolutely "pro" automatic filing.
The IRS operates at scale.
I disagree that the IRS has an incentive to maximize taxes. They have an incentive not to lose time with disputes.
But even if you don't trust them, so what? You can still check the numbers yourself, and file your own if you disagree.
Prior to WW-II, everybody had to file quarterly income tax payments. It was during WW-II that withholding became a thing (maybe something to do with increasing monetary flow towards the government or something). It remained a thing afterwards.
Because of the withholding, most people are unaware of exactly how much they are actually paying in taxes, especially given the "windfall" every year of refunds. "Woo hoo! Gubment gave me money!" and all that.
It basically does everything that an individual could need to do, although you can go to an accountant if you want (if you can't be bothered, or have particularly complex things you need advice on).
I’ve always relied on family members and want to take a crack at it.
http://opentaxsolver.sourceforge.net/
Just noting it, not advising or recommending anything -- whether this is wise or not definitely depends on your own particular situation.
A much better job would be an open source modern website that is updated by the community and supports both federal and state taxes, importing tax documents, and highly secure to ensure a strong middle finger to these overbearing companies.
In general, I think online tools become worth their cost when you are claiming mutliple deductions and have income from various sources across more than one state. Otherwise, the 1040EZ is where you should start.
Don't do it, it's a massive waste of time and energy and the chance for human error is massive. I only did mine because Oracle and ADP issued me a completely incorrect W2 and TurboTax doesn't let you submit it with incorrect wages reported.
Luckily though I got all my money back in like 2 months
In Canada there are free options to file your taxes, and ability to pull in last year/ current info if signing into your CRA account.
I used to use studiotax, but last year started using simpletax.
Essentially I sign in, and then sign into my cra account, it has all my info prepoluated.
I don't understand why the govt cant just file my taxes for me when they already have the info
Her, Norway, and in the UK, most people never have to fill in anything.
Last year I tried out all the major offerings, and TurboTax was the only one that worked without any issues. TaxAct didn't even manage to fix their broken electronic import of broker data until some point in March or April.
I understand that I could have waited a little bit longer with filing my taxes. But the fact that key functionality is missing from a product doesn't give a lot of confidence in that they have enough resources to handle their job.
The only feature from TaxAct that I'm missing from the online version of TurboTax is attaching PDF files for transactions. With TaxAct I can report aggregated transaction data and just attach the PDF from my broker which is then automatically included with the efiled return. With TurboTax that's not possible yet and I'd need either list transactions individually (which is easy due to electronic import) or send the itemized broker statement by mail.
Not only this is an example of a broken system but also shows how fragile it is. You only need $5m to sabotage the advancement of the system and waste millions of productive man hours.
Most of the data already known to the IRS is available in an electronic format anyway. I fire up TurboTax, electronically import my W-2, the tax statements from my bank, etc. and I'm 90% done.
And the remaining items (various deductions, reporting my foreign bank accounts, etc.) are things that the IRS itself probably also wouldn't know right at the beginning of the year.
Also, a more practical reason. The government can't tell you all of the deductions you are entitled to.
Right, but its not the taxpayer making the laws, its the government. Right now, if you miss out on a few deductions and overpay, well too bad chump. If you miss some income and underpay, then you're getting audited. Making tax filing easier will make the government lose money from filers making mistakes, which is why they're resistant to change it.
I mean, if the pre-filled return were grossly wrong, and the IRS changed its mind later and wanted more money, that would be tolerable. But it would not be tolerable to treat it as evasion or negligence to file what they provide me. I am wondering how it works in other countries now.
While I don't support the reasoning in the GP, it does make sense, and in my experience, is largely true. Many people I interact with (coworkers, etc) have very little understanding of the tax system - precisely because they don't do their own taxes (they either pay a very expensive person, or use something like TurboTax). If the government gave them a prefilled form, I fully expect that most people will not understand taxes.
The reason I don't put much weight in the argument is that their feared scenario is already the current reality. Right now there is a burden to do taxes, and yet most people still have almost no understanding of it. They just pay someone to do it for them.
Because I clearly see: ah, this is my income, it goes here, and I pay this much; ah, this is my additional income, it goes here; ah, these are the deductions I'm eligible for and pre-filled etc.
I needed to correct the form only once to account for some stocks that were not reported for some reason. And I was warned about that by the bank handling my stocks. All I needed to do was to log in to the tax agency, go to my tax form, click on the "stocks and funds" tab and fill in the missing info.