I have never looked into why the US hasn't moved towards government prepared taxes like many other countries. I just want to say fuck Intuit! Wasting thousands of hours of time for corporate profit. Absolutely disgusting.
There's no way for the government to know what your work expenses were, what you donated to charity, and so on and so forth through many of the deductions. If you don't want to maximize your return, you can be done in less than 15 minutes.
Even making more than 100k, with stocks through multiple brokers, a 401k, interest from multiple accounts, a house, student loans, and probably a few others I forgot to mention, it took me an hour and a half to do my taxes and cost me under $20 on freetaxusa (whatever the price for the state taxes they charged was low enough where I didn't care to figure it out on my own).
The tax code is one of those boogeymen items that everyone attacks, but in reality isn't nearly as bad as people make it out to be.
For federal taxes, the government takes your W2 and 1099s, and prepares a tax return, with the standard deduction. If you either know you have a complicated federal situation (and people know if they do), or think you can do better with itemizing your deductions, then you have the option to do it differently.
Then, iterate every year to make it a little better, until 96% of people don't have to think about it.
How long does it take to understand that it's all you have to do?
> There's no way for the government to know what your work expenses were
What? That makes no sense.
> what you donated to charity
Same. This makes no sense.
> it took me an hour and a half to do my taxes and cost me under $20 on freetaxusa
wow. I guess you are used to filling your taxes so you're fast.
In the US, you can deduct your work expenses if you so choose (such as required clothes, for instance). Since you did this on your personal card, how would the government have any idea that you bought that suit for work? And the same goes for donations to non profits.
Because your work tells the IRS. I have expensed a shit ton of stuff and I don't say anything about that to the IRS when I file my taxes. I'm hopping that the W2 says enough.
Edit: Not sure why I have negative points here, I was just saying that the process of implementing a system to actually get people their taxes and accommodating all the edge cases and ensuring everything is perfect enough that people literally don't have to do anything is probably not worth it compared to doing a check of submissions against the IRS own findings. Feel free to tell me why I'm wrong, I'm all ears and not super knowledgeable on the system (obviously)
EDIT2: Also, not implying that it can't be done, just that it's not worth it to the IRS to do something like that. Seems like otherwise it already would have been done?
It’s asinine to think the IRS should not be in the business of calculating your tax liability and providing you a friendly way to square up, free of charge, when they’re already doing most of the effort required (and have spent the government funds to do so).
I'm just spit balling here, I don't have a strong opinion on it either way.
There is no 1040EZ anymore, with the change to the postcard^W (at least one) full 8x11 sheet of paper that's similar to the EZ but that everyone begins by filling out.
As others have mentioned, I do think there should be transparency. So, for example, the employer portions of payroll taxes (in the U.S.) is not usually visible to the employee on who's behalf it is paid; an employee doesn't see the full weight of taxes that ultimately derives from their labor... that to me is hiding, in a fashion, what my real gross pay is and what amount of my earnings is being taken.
I’m in the pro tax camp and I kind of like it. I enjoy paying my taxes, but I don’t think the government should take half of peoples’ paychecks without people having to think consciously about it every year.
So I now get to spend hours that I could otherwise be productive with, or spend on leisure activities, on the problem of understanding what is being taken from me. As I said, I agree with you that people should be conscious of what is taken from them. People should make conscious informed decisions in many, many areas of their life. But to take that half their earnings and then insist that they spend hours of their own time (true even if they hire tax preparation services) just to be sure they don't lose more than they're legally required to is kinda rubbing salt in the wound isn't it? Of course you could hire accountants to deal with those issues, but now you're just changing that cost in time to cost in money.
To put it another way, I'm not sure how much tax filing achieves your stated goal that wouldn't be achieved by an annual letter sent to taxpayers, accompanied by their refund.
Be careful with this line of reasoning... you might give someone the idea that there should be 100% withholding of earnings and that filing tax returns should be more an application for the privilege receive some of the money you've earned. Then it would look more like it was the government paying all your wages!
...with socialism being all the rage these days, I wouldn't be so surprised to see this sort of thing endorsed....
I want to tax income above 100x the federal minimum wage (per hour minimum wage * 2000 or about $3M at $15 an hour) at 90%.
I also want an absolute end to all tax credits and deductions besides the standard deduction. Say no to charitable deductions. No to first time home buyer credit. No to everything. Cut it all out. Yes, no credit or deductions for saving money toward your child's college or toward your retirement. Get rid of it all. That is my platform.
Edit: I think it is incredibly Lazy to try to effect change in public behavior through taxes.
“I couldn’t afford not to!”
States will adjust their income tax brackets if we make taxes at the federal level reasonable. Perhaps, reasonable people will prevail and it well end state and local income taxes (and increase property taxes to a reasonable level instead).
What we really need are land taxes and progressive consumption taxes.
As for taxing wealth, I think the best bet is a Paris Hilton tax of 90% for inheritance exceeding a certain value (I propose 100x yearly minimum wage or $3M at $15/hour). So if you inherit more than $3M over your life time, all additional inheritance will be subject to 90% inheritance tax.
These are not "income taxes".
Also, I tire of the constant politically motivated attempts to inflate the usage of words to try to attach awful connotations to relatively innocuous things. Please stop.
Edit: None of these replies really captures of the gravity of the situation IMHO.
In US when I go shopping the price on display is net price, and then, when I get to register, they add sales tax to it, which is irritating, but it makes it painfully obvious who's to blame for that difference (i.e. government).
One thing that would make people hate taxes even more is if we got rid of tax witholding by employers. Let every employee receive full, gross salary to their bank account, and then make wire transfer to IRS by themselves.
Another funny thing: here in California, when I go to arestaurant there's often a disclaimer at the bottom of the menu: "To support minimum wage increase we add 3% surcharge to each bill"
In San Diego it only seems to be at the more expensive end of the restaurant business. They put a sob-story on the menu explaining how they are going to add 3% to my check or else the minimum wage law will drive them out of business. Unfortunately it has the opposite effect for me and makes me think twice about supporting a business who will charge me $40+ for an entree but admit to not paying their staff a living wage.
if the menu lists a price for a dish, how is it legal to tack on an extra 3% because the owner doesn't like the minimum wage in SF?
I'm all for more transparency of taxes for the end-payer, but I'm curious about this from a legal perspective.
> Intuit argues that allowing the IRS to act as a tax preparer could result in taxpayers paying more money.
Self-serving Intuit aside, I can't help but think this would be true.
It would just continue what was started with automatic withholding, where the general population is psychologically disconnected with how much they actually pay in taxes.
They got used to not having their money and being able to beg some of it back makes them happy when they get some.
Too bad people thought Ron Paul was crazy when he talked about abolishing personal income ta.