Again, this is just for the sake of argument.
Great example of that today is that most americans believe the trump tax reform didnt help them (only 17% believe it helped them) but it literally and factually increased the income for 80%. At least one reason for that is that withholding was reduced, but refunds were reduced as well. Availability bias makes people remember refunds, but not their monthly payments.
> The law creates a single corporate tax rate of 21%, beginning in 2018, and repeals the corporate alternative minimum tax. Unlike tax breaks for individuals, these provisions do not expire [in 2025].
https://www.investopedia.com/taxes/trumps-tax-reform-plan-ex...
> My bet is that within the first year of this taxes would be massively reduced.
Making the filing and paying of taxes difficult and painful won't change a person's tax liability, it'll just irritate every citizen until we collectively demand an easier process. If you can't pay, you get penalties and a payment plan. Don't forget that the IRS is a government entity capable of legally charging, suing, etc. with the force of law. Why would having to travel to a payment center reduce someone's tax liability?
I guess I want to know more of the argument, for the sake of argument, because the argument doesn't make sense to me as presented.
OP is acknowledging the inverse is also true, and that if "automatic" aspects of the system were removed, people would become much more aware of what taxes they are paying, which would lead to public support for reducing the amount.
It's not about reducing liability at all right now, it's about making more people anti-tax.
Economists will always say that the tax should be explicit, and it should be placed for the people that ultimately pay for it. But pro-taxes people, mainly the government, want higher revenues first, which means putting a tax wherever you can, and that is about what is politically feasible, not about what is economically sound.
The end result is a hybrid of both interests. For example, San Francisco charges sales taxes, known to be regressive and punishing to poor people, but at least you know you are paying them on a ticket. Other countries, like europe, hide the VAT taxes, so it looks like you are not paying taxes at all. VAT reaches 10~20%, sales taxes in SF is around 6%.
Making it explicity DEFINITELY reduces it.
That is not true at all. In all European countries that I can think of you get to see the whole price, including VAT so that, you know, you can actually tell how much the product is going to cost you. The composition of that price is then shown, often in smaller font. This is true of price stickers, receipts and invoices.
I do not find it the least bit misleading, and would be rather annoyed if a cashier told me to pay more money than the price sticker indicates.
The claim was that the tax caused price increase is hidden in the overall price.
And while the reasons for that can be plentiful (even consumer protection, if wanted) one effect is certainly and obviously that it hides the amount of sales tax you pay.
The VAT is usually declared somewhere in the bill.
A pretty lame forced savings plan that nets you zero interest. I'd rather park the money I expect to need to pay in taxes in at least a high-yield savings account and get a couple percent rather than let the gov't have it.
But this ignores the fact that the US income tax system is actually a pay-as-you-go system, not a "you owe your taxes every April" system. You'll note that if you fill out a W-4 form such that your employer doesn't do much or any withholding, you'll find you owe late-payment penalties come April.
My guess is within the first year, they'd be reformed on administration to put less needless pain on taxpayers. My guess is also that with the needless administrative headaches so visible, it would actually make it politically feasible to pass tax increases that would otherwise be impossible, so long as you also deal with the needless administrative headaches.
Plus, I'd guess that even before that, every single politician attached in any way to creating the administrative headaches would be hounded out of office, or worse.