Sadly there is a whole branch of people working on this, without any interest to make it easier..
The tax authorities also have a duty to calculate the taxes in the way that benefits you most.
Most workers don't need to do anything to get their overpaid tax back thanks to the Lohnsteuerjahresausgleich.
They need to work on their marketing though.
We've been happily using it to file our German taxes for years.
Keep that in mind when reading stories about the US government, and it all makes a lot more sense.
What happens in the real world is that the doctors aggregate (AMA, ADA) and then the patients aggregate (insurance companies) but it never quite gets to a complete single buyer/payer on both sides without government action.
There is also the argument for how many jobs will be lost in X industry if we replace it with a more efficient solution. Here is a recent video of a famous paleoconservative debating it with a famous neoconservative in the US: https://m.youtube.com/watch?v=YFMcq0Vzsb4
Usually the solution is social democracy - letting the private markets operate but having the government run a single payer system for the basic level of service so sellers compete and buyer’s don’t, and everyone is entitled to the basic level.
Single payer can achieve far lower prices, as can eliminating IP protection. But after a while this may have a deleterious effect on R&D (unless you eliminate the IP protection).
I see a couple of ways in which it might not be as favorable:
1. It costs more than $100 per tax payer per year to implement (about the cost of Turbotax). However the flat $100 or so that most people pay to Turbotax can be seen as a kind of regressive tax.
2. It is less effective at finding the biggest possible return.
The question is valid, but the numbers do not add up. TT asks ~$50 for federal return. If everyone in US used the service, the cost would amount to over 16 billion dollars. That is more than the entire IRS budget[1] right now.
The better question is how much it costs TT to operate returns, and how much of that $50 is profit-taking.
There is no way an e-File system run by IRS would costs additional 9 billion dollars per year. They already do most of the calculation internally.
Anyway, the government needs to collect and verify all information anyway. So, the sum total of TurboTaxes value is creating screens to collect information. If they can do a better job than the government then let them charge for it. But, by banning the free option they are saying they don’t actually create value.
That's a great point. IRS already has most of the information and infrastructure to fill out your taxes. Third-party solutions have to build large chunks of the same thing from scratch.
Eventually. Not necessarily by the time you file, and not necessarily on every return. Remember, the IRS only audits a small fraction of returns for accuracy. Auditing every return would be a much bigger job than they currently do.
I'm not saying they shouldn't, but it isn't as trivial as a lot of people here seem to think.
The idea that some business gets to ban the government from offering a service and some people argue that it's good for eveyone is totally absurd to me.. from a country where I log in to our version of the IRS, where my salary information is pre-filled, I only need to add stuff if I had some other income.. and the system is totally free to use for everyone, and most people just spend about 5 minutes once a year to declare their taxes.
It needs to be able to (eventually), but it doesn't. Setting up a system where this was possible requires some significant changes to the tax code, process, and the IRS itself. Of course, this shouldn't stop us from trying.
https://www.theatlantic.com/magazine/archive/2019/04/why-ame...
I wonder what extent this is decided by how we vote. As long as voters pick the politician who prioritizes the middle man and gets their campaign contribution is selected over the politician who prioritizes the public but whose opponent gets the middleman's campaign contribution we will continue to see this behavior. The moral of the story is to look at the voters' actions and not their words. They select candidates based on oftentimes harmful criteria.
How much does someone want something if they aren't willing to change their behavior to increase the chance of getting it?
Second, I was just addressing the claim that politicians pass these laws in response to broad support, by questioning whether such broad support actually exists, even if it doesn't translate into lobbying (since the implicit model i that politicians will still care about it).
I think you're falsely equating (as do the Norquist types)
a) "the financial burden of the tax should be explicit" (which is fair) and
b) "the paperwork should be unnecessarily burdensome" (which is sadistic).
If you have no changes then you don't need to do anything at all.
In the US, the IRS supported an e-file system that basically allowed electronic versions of forms to be submitted, but it was arcane enough that a cottage industry developed to assist users in prepping documents for e-file.
How does Finland support tax preparation services; what sort of facilities do they offer for people filing on behalf of others?
Even if the US went to an IRS-pre-filled return, there would still be room for third-party tax software that improved on the user experience, so I think if the IRS supported direct filing of taxes it would also be good to preserve the ability for software or designated parties to submit information on the taxpayer's behalf.
The taxation has been pretty automated for a long time.
As a regular taxpayer nowadays I just get a paper form that describes the precalculated taxes, and if they are fine, I don't have to return anything. There are some pre-deducted things, and if I have anything add to that, I'll then just either fill in the paper form or the electronic equivalent.
So yes, there was a basic "semi automated" scheme that has been steadily improving and now the tax authority has just added a web based interface for feeding data into it.
About filling the taxes on behalf of someone else -
There really is no need for tax preparation services unless you are business entity (in which case you likely already have your own accountant doing it) or the wealth is considerable enough to merit actual tax planning. Otherwise the tax code is so straightforward and simple that anyone can do it. If there are some questions, you can always contact the tax services and they will usually offer helpful and professional advice on how to proceed.
So there is no market for that kind of thing in the large. The "defaults" provided by government help in this regard as well.
I kinda understand the adverserial positioning of "people vs. the government" in the US - it just sounds to an outsider the main reason not to make things easier is because that would eradicate business from turbo tax. Kinda like the government mandated you need to own a useless dead parrot, that you can only buy from Parrot Co, that needs to be kept in the refridgerator in an exact position mandated by the law.
The "tax return suggestion" was introduced in 1996. So it predates all electronic filing.
Filling tax returns via a web service became available in 2008.
The first (non-web) electronic tax filings were made in 1997, but those were for corporate returns. Not sure when it became available for income tax returns (that use case is rare here).
Source: Finnish Tax Administration https://www.vero.fi/contentassets/09b6f07e61dd490ab0caabba8e... (Finnish PDF)
> How does Finland support tax preparation services; what sort of facilities do they offer for people filing on behalf of others?
Electronic tax filing using files is available: https://www.ilmoitin.fi/webtamo/sivut/Esittelysivu?kieli=en
You can use an online service to authorize another person to file your taxes: https://www.vero.fi/en/About-us/contact-us/efil/authorisatio...
The other person can then file using paper, file, or web.
In the UK, most people don't have to submit a tax return at all. Not sure the actual cost of this, but the convenience is unparalleled.
As long as your PAYE is like Ireland's (ROI) PAYE, then the American's system is far-removed from it.
Even though their tax revenue office gets the reports from businesses for how much they were paid and how much taxes they paid, the Americans still need to fill out a tax form - every year - to repeat the same information (it's an added benefit for the prison system, in that mistakes on tax forms can equate to jail time). They get a form from their employer (which their tax office also has), that contains all of this information.
>In the UK, most people don't have to submit a tax return at all. Not sure the actual cost of this, but the convenience is unparalleled.
Aye, it's the same in Ireland (ROI). You can just call-up or email Revenue and they check if you've overpaid, by how much, and they just send you the money. No forms. No bullshit. No threats of jail time. It's pretty deadly[0].
You want nothing to do with the Yanks' tax system, trust me.
You seem quite ignorant of the U.S. tax system. There are no criminal penalties for mistakes on your tax form. (the IRS doesn't even have prosecution authority--all it can do is collect evidence of a crime, and refer the case to the Department of Justice.)
And your tax return doesn't just "repeat the same information" as your W-2s. For example, the W-2 reports income on an individual basis, while married couples file a return as a single unit. The amount of tax owed will generally be different for married couples versus the amount of tax withheld. (And there is no federal government database of marriages the IRS can use to match up things on the back end.) The IRS also has no idea how many children you have living with you, and can't give you the appropriate credits for that.
Odd, I thought you faced the penalty of perjury[0]?
[0] - https://www.forbes.com/sites/robertwood/2017/02/15/fudging-y...
> All of those tax credits you mention are given by our respective tax agencies when we become employed and/or we change status with the tax agency and/or we obtain a new job (depending on how you avail of tax credits).
There are many tax credits in the U.S. that aren't tied to changes in job status. Every year, I have to dig up receipts for what we spent on daycare, what we spent out of our HSA accounts, etc. The government doesn't track any of that.
> Odd, I thought you faced the penalty of perjury[0]?
Perjury requires willful (i.e. knowing and purposeful) false statements in your tax return. I guarantee you that if you make false statements using Ireland's online system for claiming tax credits, you're under penalty of perjury as well.
Aside from the daycare costs (as an aside, creche in Ireland is quite decent[0]), isn't all of that is still reported to the IRS? Your HSA isn't sitting in some dark corner that the government doesn't know about, ever since the Patriot Act, yeah?
I'm fairly certain it is reported to the IRS because Americans find getting bank accounts overseas quite cumbersome because your government strong-arms agreements that demand that Americans' overseas bank accounts are reported to the IRS. Surely, more domestic reporting shouldn't come as a surprise or shock.
>I guarantee you that if you make false statements using Ireland's online system for claiming tax credits, you're under penalty of perjury as well.
What do I get for a broken guarantee[1]? :)
This batering back and forth really only arrives at the conclusion that I originally posited:
Those of us in the PAYE system[s] would abhor having to do things the American way and this wasn't meant as an affront (and I apologise if anyone may have taken it that way).
Our tax agencies are responsible for keeping track of these things and the only things we're responsible for is reporting status changes and/or providing receipts for other proofs of burden (such as Independent Contractors who file as Directors of Umbrella Corporations and need to write-off business expenses).
[0] - https://www.citizensinformation.ie/en/education/pre_school_e...
[1] - https://www.revenue.ie/en/personal-tax-credits-reliefs-and-e...
You can reasonably assume that the IRS can use subpoena power to compel a US financial institution or foreign financial institution to surrender records to it. This is an oppositional process and they use it relatively rarely next to the total universe of taxpayers and accounts, generally only after they already have evidence of hinkiness and want to quantify unsurveilled amounts and/or locate assets.
These are not secret facts about the world; the operations of the IRS are exhaustively public (trust me, I have weird hobbies). People on a programmer-dense message board should have more weight for "While I understand that X would be accomplishable via an API if it existed, it is possible that that API does not factually exist" than they often do.
Also, the number of times someone in the financial industry typed in git commit -m "tldr Patriot Act compliance" is orders of magnitude below the number that HN comments routinely predict.
Tax returns really do take a huge majority of repeat information and a tiny amount of additional metadata.
There's no reason for the vast majority of Americans this couldn't be automated.
Alphabet Taxes doesn’t sound too bad.
My tax filing is as easy as: Login, verify, click a button.
I think you put it just right. Health and Education are the two areas this is bought up, but the taxes are a good example.
The database will be hacked and all records leaked within the fist 18 months of operation
You know, the same information they need for most people's taxes is already in the IRS database.
I'd also like to say that I've had automatic filing for my Norwegian taxes since moving here to Norway, and always have to file American taxes manually. The emails get sent to a secure email system which you can check. Letters get lost and stolen as well, by the way. The system doesn't have to go down either - I don't even have to interact. I just get the email telling me I can check taxes, but it is not required that I do. (Safer to do so in case of owing). They tell me I'll get my money in a 3-month timeframe. It goes to the same place paychecks go to, though I imagine if anyone gets checks they take longer, as do the people that manually file.
I'm also pretty sure that the reason it would be expensive is that the government isn't exactly known to keep the IRS fairly current and the government isn't really set up to handle the digital age well. But then again, the records are already there. They already plan on getting refunds. And easier filing means more people do tax returns... and it catches more people that owe. Oh, and you won't need as many people working at the call centers because fewer people will need to actually calculate their taxes. I'm gonna guess it would be a net benefit and profit within a very short amount of time.
The main people that do badly with this sort of system are the tax filing companies along with, I'm guessing, some accountants.
Weak security: [1]
Cost overrun: [2]
Inability to design a highly available website From [3]: > The basic architecture of the site, built by federal contractors overseen by the Department of Health and Human Services, was flawed in design, poorly tested and ultimately not functional.
[1] https://arstechnica.com/information-technology/2015/06/epic-... [2] https://www.theatlantic.com/politics/archive/2014/07/obamaca... [3] http://swampland.time.com/2013/10/24/traffic-didnt-crash-the...
I'll grant that voting works only sometimes. And when it does change things, it's often not everything we want changed, and definitively not fast enough. But it can change things. If it didn't, voter suppression would not exist[1]. (One of the ways of suppressing vote is promoting voter apathy, by the way).
The only sure guarantee is that not voting doesn't work.
> peaceably
Even something as seemingly mundane as voting carries a lot of risk of physical violence in some places. That's how voting was in the US in the 1870s[2], if you were black. It might sound like a far away past for certain US citizen, but I (an European) own a house older than that.
[1] https://en.wikipedia.org/wiki/Voter_suppression_in_the_Unite... [2] https://en.wikipedia.org/wiki/Disenfranchisement_after_the_R...