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Comment by smabie | Hacker News Reader

But they're not paying the least, they are paying the most (of course, not as much as they are legally obligated to pay).

Moreover correctly paying your taxes starts to get really difficult the more and more money you make: income starts to come from many different sources and figuring it all out is super difficult.

If we drastically simplified the tax code, I think the IRS would collect more taxes, people would pay more taxes, and high earners could easily calculate their tax burden without hiring very expensive professionals. This would unequivocally be a net win, though entrenched interests would never allow it to happen.

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A simpler tax code would likely make for fewer unintended loopholes so revenue may very well go up but I don't find "oopsie" to be a remotely plausible explanation for this state of affairs.

The wealthy have wealth managers who know exactly what they are doing.

I don't think so, engineers than earn over 500k/year are in the top 1%, do they all have wealth managers?

Just because you are in the top 1% doesn't mean you have people aggressively managing your finances and investments.

You started at so complicated that tax avoidance happens by accident and now you're talking about finances so simple you could drop it off at HR Block.

I feel like I should probably chime in here. I’m an expat, working remotely with several income sources. Some of them can be taxed in the US, some can’t (because it’s tax exempt income) but is taxed where I reside — corona relief cough. It gets really dicey, really fast, once you throw in FBARs and accountants trying to follow various tax laws, etc. It’s really easy to miss one in the EOY shuffle. For example, last year I almost nearly forgot I had a TransferWise account and all the fees were tax exempt (where I reside). I thought my accountant was going to have a conniption since it was the final draft before submitting it.

Yeah, it’s all “really simple” but it’s simple, as in “distributed systems are made of simple things, how can it be complicated?” It gets complicated, quickly, and with enough bank accounts in enough countries, it is easy to forget one or two.

So you are really trying to portray that top earners don't pay their fair share because "figuring it all out is super difficult"?

You are being disingenuous and a distraction from the actual conversation.

I don’t think the person you responded to is being disingenuous, and I didn’t sense that they were advocating for top earners to avoid paying because of complexity. Far from it. They were mentioning how incredibly complicated tax returns become once income becomes significant and diverse. A myriad of loopholes and accounting tricks make determining their “fair share” very difficult. The poster is asserting that a much more simple tax code would help alleviate this.

I think you got it backward (though OP can chime in). I think he means that complicated tax laws makes it very difficult for tax authorities to figure out and trace their tax bill. If say, the rich guy has 250 complications that each require 20 man hours, that'll cost 5.000 man hours. It's not clear if the study that's promising 7-6 bucks for each buck spent on the IRS is taking that into account. It's not clear, also, if investigating these complicated setups will require more experienced professionals.

People in the top 1% don't have an issue paying a CPA to make sure their taxes are correct. That being said the tax code and filling process is made purposely obtuse due to lobbying for tax prep companies.

The tax code is also heavily influenced by the very wealthy allowing for massive tax relief through various tax havens, shell companies and loopholes. Of course that all takes a team of high power accountants to figure out.

A CPA only knows what you tell them and ultimately relies on you remembering to tell them about a new bank account, invoices, etc. If one is forgotten or missed, the CPA won’t add it the books.

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