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Comment by zxcmx | Hacker News Reader

Systemically, threatening letters, while practically free for the government to send - cause a lot of stress for people. Both those who owe tax and those who have to prove they don't.

It's hard to know where to draw the line but you could reasonably argue that chasing low income people for small amounts is net negative societal utility, even when you get them to pay up.

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I completely agree. I was pretty terrified until I opened the letter and saw a check. I assumed it was an audit.

The thing that is often ignored, unknown, or forgotten, is that it doesn’t have to work this way. Some countries send you an end of year report on how much they collected from you and you can audit them as well. It’s less laborious than our system. I am blissfully unaware of the complications of such a system but I’d like to think that it works better. I’d like to think the people of the IRS would prefer that too.

The problem with this approach is that if you actually have income they don't see they've basically told you they don't know about it and aren't likely to catch you if you don't tell them.

I hate to get any sort of "thin" envelope from the IRS..

No wonder there is an increasing income inequality of the middle-class and below when they can't catch a break while the rich are mostly left unimpeded with tax evasion.

Humans are notoriously good at ignoring externalities when they're not held to account for them.

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