You can't actually use the word "corrupt" to describe what the legislators are doing, that's painting them unfairly.

All they're doing is lining their own pockets with millions from TurboTax et. al to make sure laws are favourable for those big companies. But because it's perfectly legal, and there are no thugs with guns or drugs or "bad members of society", it's absolutely not corruption.

/s

Absolutely. And with the tax companies, it turns out that it's very cheap to corrupt a US congressperson.

The economist's answer:

If that were so, there wouldn't be so much money spent on lobbyists by companies.

I guess there's a reason they call it "the dismal science."

ha

Yes. They really are. Here is just some over the table stuff: https://www.motherjones.com/politics/2010/10/congress-corpor...

Legislators are basically doing triage, responding to perceived consensus. Kinda like a product manager. Think attention economy. There's 10,000s of bills filed every year. No one has the resources or bandwidth to handle that.

Any given legislator has 1 maybe 2 issues that they care about, for which they will advocate an agenda. The rest, they rely on what they're hearing.

Intuit's lobbying effectively drowns out alternative view points. Assuming that anyone anywhere is consistently advocating for something like free auto-filing.

Source: Have lobbied. Know legislators and their staff. Also read many books about legislation. Most legislators would LOVE to hear from their constituents; will bounce out pro lobbyists to give their own people an audience.

They can ignore the lobbyists, but they like the money, and they like not having to campaign against the lobbyist's marketing. Enough to make it difficult to pass reforms.

They usually claim that if people didn’t have to file their own taxes, they would not be aware of how much they are getting taxed. In their view, this would eventually make it very easy for the government to increase taxes without significant protests from the public.

Maybe it's "bull pucky" to you, but I have vivid memories of my parents agonizing over taxes as a child. The agony they went through is much ameliorated now due to advances in technology.

And thank you for the link, but this news segment basically is big on opinion, low on specifics. Feel free to link me to a detailed article on how non-U.S. countries handle self-employment or dependent tax issues and whether/how those things are easier elsewhere.

Sure, but that would require a significant shift away from our current deduction-based approach.

Good luck prying that out of the cold dead hands of boomers (and eventually Gen X)

Yes, those docs are filed with the IRS, but charitable contributions, child status (are they dependents or not this year?), expenses (home office, side hustle, property management etc), and many other things aren't.

If all your tax returns reference are the handful of items you mention, your tax return can be done in a matter of minutes on a short form.

Yes, it could be better, but it's a fantasy to think it should be as simple as getting a bill from the IRS at the end of the year.

>- stock sales (your broker may not know your basis)

This used to be a real nightmare especially when there were acquisitions in stock, splits, etc. There were a couple times over the years when I just said F' it and put down a reasonable number.

But these days, unless you have some pretty old investments, the brokerages generally track your basis.

Adding a perspective from Germany, where the tax code is definitely not simple, a major difference I see is that filing is optional for the simple cases because you can only ever get money back. There are some default deductibles already applied to your payroll tax so the tax office doesn't have to deal with super small cases. The big advantage is that Joe Average won't risk getting into a lot of trouble for not filing.

Just to illustrate, let's go through your examples and how it'd work in Germany:

> side-hustle contracting (IRS doesn't know what expenditures are for the business)

You'll have to mandatory file income taxes since the income from contracting is not salary and there are no payroll taxes deducted from it. Not sure how common it is in the US but in Germany the vast majority of people don't have side hustles like this (for a variety of reasons; certainly a bad thing)

> stock sales (your broker may not know your basis)

There's a default tax rate on capital gains (25%) with a 800€ allowance. You assign how you want to split the allowance between your various banks and other capital gains generating accounts (you're responsibility to not exceed them) and the banks will report your cap gains with your tax ID to the tax office. If you did pay taxes it's often worth filing to make sure the allowance evens out. Also, if you want to carry forward a loss you have to file (but you got 5 years to do so)

> home improvements eligible for tax deductions

You'll probably want to file but you don't _have to_. You just won't get the deduction.

> sold a home (IRS won't know your basis or selling price)

If it was the home you lived in, you don't have to file (it's tax free). If it was a house you rented you'll have to file but you'll have to do that anyway for the rental income.

> did you move for a job? IRS won't know whether you are eligible for tax deductions.

Same as with the other deductions, it's in your best interest to file but you don't have to. No (legal) consequences if you don't.

> crypto gains/losses

This gets tricky but if you owned the coins for more than a year (to the day) they're tax free and you don't have to report them. But you better have documentation on this if you ever get audited.

> inheritances (basis again)

This one is actually interesting as it's a completely separate tax and thus separate process from income tax. There's an allowance based on your relationship to the deceased (500k€ for spouses, 400k€ for children, etc.), if the inheritance exceeds that you'll get a letter from the tax office asking you to file a declaration for inheritance tax. At that point there's not much software that'll help you and you'll better hire a tax advisor :)

They don't already know. Sometimes they have suspicions, and then perform an audit, or request more information about a particular detail, by which they get the information they might need.

Only then do they actually know.

For example, you yourself may have filed with the status, "Married, filing separately", but the other person in your relationship may have filed with the status, "Single".

The IRS has no idea who is right without actually talking to the two of you. And because they don't know which status is correct, they don't know how much each of you owe.

Because of Grover Norquist and his organization (ironically named Americans for Tax Reform). Their "Taxpayer Protection Pledge" taken by most Republican lawmakers (95% before 2012), locks them into supporting his policies. The problem is that he views any attempt to simplify tax filing just like a tax increase (presumably since people will be less upset about paying their taxes), and uses his influence to lobby against reforms like this.

It's true that the Democratic caucuses, both federal and state level, are much harder to hold together. Every year there's a bill in my state to reign in pay day lenders. Basically banning usury level interest rates on loans. Overwhelming popular support (~80%) and editorial support.

And every year there's a "blue dog" Democrat living in a purple district which bends to the pro pay day loan lobbyists.

Vetocracy is a tough problem. Our civic legacy is to fear the mob, tyranny of the majority. (Thanks Plato.) So it's rare that mere popular support ( >60%) is sufficient to attain progress.

So, to your point, mere 50% + 1 vote ain't ever enough.

>Democrats had filibuster proof majority when Obama was president.

For 2 years. And spent basically the entire time barely getting ACA through. Not a lot of "political capital" leftover for battling to have free tax filing.

This is exactly how South Korea does the taxation. Employeers are required to report employees' incomes and also deduct the tentative tax. The final tax is set by the year-end settlement where you can put documents for income deduction and tax credit to the National Tax Service. Common documents (e.g. credit card expenses count towards income deduction) are electronically available in one place and it is not very hard to get hold of other documents if you are an employee. In the end you pay or get the delta between the tentative tax and the settled tax.

The higher cost of administration is the part that makes me bug-eyed.

Auto-filing and simplification would be so much cheaper.

> and much of your deduction information

No, no they don't. At most they have your mortgage interest deduction - side hustle expenses, charitable contributions, etc. are not reported to the IRS automatically.

The IRS doesn’t have your deductions, but at the same time most people don’t have enough to itemize anyway, especially since Trump increased the standard deduction for individuals and families.

I think simplifying the tax code first requires trading in our deduction system for a flat tax or lower taxes across the board. Then you could get to a simple postcard bill every year. Too many special interests to let that happen though.

Depends how intricate your taxes are. Perhaps 30 million people file Schedule C, which covers freelance income, gig income, etc.

The IRS will (mostly) know your gross income, but it won't know the exact details about claimable deductions such as business travel, business meals, supplies, etc.

The only way it could know that would be to peer inside your credit-card statements, bank statements, etc. and make judgments about what was work related and what wasn't.

I'd rather do the tallying myself -- which is a chore -- rather than have IRS software make guesses that are a) awfully nosy and b) bound to disadvantage me.

> Your employer pays the tax on your behalf directly from your salary and updates the tax office as to how much you make. In turn, the tax office tells your employer how much tax to pay from your salary, without any input required from yourself.

Same thing happens in the US. When most people file their taxes here, they get money back because they already overpaid.

For example I spent a few thousand trying to launch a business this year, and that is all tax deductible. So I'll file that with my tax form that my employer sends me (with the salary info prefilled), and I'll end up getting some money back because my taxable income is lower than what the gov't expected.