Hacker News Reader

Comment by brezelnbitte | Hacker News Reader

The reason your taxes are simpler though is because the Dutch government doesn’t use the tax system to implement policy like the US does. The US Congress uses the tax system to influence social policy as well as to deliver benefits for specific groups and industries. And over time all of these legislative additions have turned a simple revenue raising system into a complex mess of deductions and credits.

Now I am not defending turbo tax’s predatory actions in the past but it’s not complicating the tax system just taking advantage of it being complicated.

View on HN

To add to this even further:

In europe we just directly regulate behaviour either by directly taxing it or making it illegal.

In the US they set tax levels much higher and then offer breaks as incentives.

The latter has the philosophical virtue of making behaviour "expensive but not illegal" (ie., in europe you cannot legally avoid the tax).

However it dramatically complicates government and makes US citizens dramatically "overtaxed" absent these breaks. What we in europe often miss is that the US anti-tax lobby is reacting to a very different tax environment that is, on paper, very extreme.

Aren't like >70% of the populations taxes extremely simple tho? Most people are just taking the standard deduction and not much else.

Most of the complications in tax policy are affecting a small minority of people and corporations.

Yeah if you work a W-2 job and the company is making tax deductions from your paycheck, your taxes are pretty simple. If you have a mortgage, you can deduct the interest. I think most people are in this category. Taxes just start getting complicated proportionate to the creative compensation some jobs offer - deferred stock purchase programs, etc., - or if you have some complicated deduction or third-party income sources.

> If you have a mortgage, you can deduct the interest. I think most people are in this category

That's true, but you need to have other deductions or a fairly large mortgage for it to be worth taking that deduction instead of the standard deduction. Most people are better off with the standard deduction.

This is true, especially after the standard deduction nearly doubled for most in 2017.

Sweden uses tax policy to influence things and our taxes are just as easy. The state knows most stuff and then we just go in and adjust the default.

So, no, the reason is that they have all the information already and for most people just need you to verify it. In the US, the tax companies are lobbying the government to keep it difficult. The subject has been covered on HN every year during tax season.

What does neutral social policy taxation look like? Which countries should the USA emulate?

Reply on news.ycombinator.com