Ongoing software projects require periodic refactoring to reduce complexity and increase comprehension - why would the law be any different?
Having citizens exposed directly to the mechanics of it during the filing process is a policy choice and the way to fix that is to change the policy, not try to reinvent the tax code from first principles.
This is a complex set of laws yes but it is also detailed multi-generational documentation of all the shit people have tried to pull. You don't just throw that out because it has grown complex. Like all necessary complexity, you isolate and manage it, not spray it all over the end user.
The IRS has no way to know which of your expenditures are tax-deductible.
A whole lot of preparing a tax return is plugging in numbers from forms that are sent to you and the IRS. It would be simpler (but perhaps less timely) if the IRS sent the taxpayer the return and if you disagreed, you could send in an ammended form with any documentation, or just pay the bill/cash the check.
Pretending the IRS "knows exactly what you owe and could just tell you" is just as disingenuous. In both cases, it's more complicated than that.
This is true often, but not always. Examples just off the top of my head:
* Had large medical bills compared to your AGI? How does the IRS know that?
* Paid for college tuition? How does the IRS know that?
* Deducting state sales taxes? How does the IRS know what those were for you?
* Paid for daycare? How does the IRS know how much?
I'm sure I could find more examples if I went and looked at the actual tax forms right now. And while these are all things that don't affect everyone every year, they do affect a large fraction of people at some point in their lives. They certainly affect everyone who pays for college or has kids.
Note that this is not getting into anything too esoteric here, and completely ignoring anything involving self-employment or consulting, or running a small business or whatever. I _think_ those are rarer than having kids anyway.
Now could we have a more streamlined filing process that did the easy bits when possible and asked more directed questions to find out whether people might be in edge cases that might need more handholding or professional help? Absolutely. Could we get rid of the edge cases I listed above with a simpler tax code? Perhaps.
That said, neither daycare nor college tuition are itemized deductions. You can take the standard deduction and get credits/deductions for those at the same time.
Or the EITC: That one depends on who lived with you during the year, which the IRS also does not know. But it could ask that one question and then compute it for you...
Handling of stock transactions is the _easy_ case here, assuming the brokerages correctly track basis, because they already report all the relevant info to the IRS.
> I’m willing to wager that for the vast majority of U. S. residents for the vast majority of their lives, their deductions will not exceed the standard deduction.
That is a very sure bet, but not that relevant to whether the IRS can compute one's taxes because our tax code as currently structured has a bunch of credits and deductions that are not part of Schedule A that matter to quite a number of people.
To put numbers to this, per https://www.eitc.irs.gov/eitc-central/statistics-for-tax-ret... in 2020 25 million tax returns had EITC. Per https://www.irs.gov/statistics/returns-filed-taxes-collected... in that same year there were about 150 million total "individual, estate, and trust" tax returns. So at least 1/6 of individual tax returns (more to the extent that trusts exist) could not have been correctly done with the information the IRS has.
And as I said, the vast majority of people who paid for child care would need to correct whatever number the IRS came up with for that.
Now I agree there are lots of people (healthy retirees, young college grads with no kids) who probably _could_ have their taxes done by the IRS entirely. And I'm all in favor of that happening, as long as we're clear that this is not going to reach everyone, and will generally benefit the people who are in the best position to navigate the current system already....
Which brings us back to reducing the underlying complexity, so the IRS could handle more cases itself.
I must admit I've always sort of blindly believed the same thing, but here I am year after year accumulating and submitting my own absurd set of turbo-tax button smashes.
Honestly I have trouble figuring out how much I owe myself. I would believe that they have some core set of data linked to my SSN, and every time I submit they run some sort of markov-chain statistical model that says - "meh, looks pretty close. No need for further review. Please pay the refund to the latest identity scam." or "red flag for actual review".
100% chance the IRS is understaffed, running legacy spaghetti, managed by folks just trying not to be the next scape-goat so they can go home to their family and watch the next episode of what everyone at work is talking about.
Who says that complexity is necessary?
Most of that complexity just grew out of other complexity.
If you have a simpler tax code to begin with, you don't need to patch all the work-arounds people found.
Of course, that's much easier said that politically done. Simpler taxes are popular as an idea, but rarely when you get into the specifics.
I've never heard this claimed before; I'm interested to see your evidence, because it's also not obviously true.
> Glossing over this, and instead trumpeting some canard like number of pages, or number or words, is simply a rhetorical device to mask different objective.
There's no "glossing over" - it's pretty clear that even though there are "a lot" of special cases, that there are reasonable (and unreasonable) amounts of complexity of the tax code relative to the distribution of circumstances. It sure sounds like you have another objective that you're masking yourself.
Do I care about the ins and outs of alimony and child support? Nope! I am not divorced.
Do I care about the ins and outs of how to deprecate the cost of my car as a business expense? Nope! I’m not self-employed.
How about foreign investment income? Nope!
How about income from farms? Oil wells on government land? Military income while serving overseas? Nope! Nope! Nope!
Do I care about the Earned Income Tax Credit? Yup! Do I understand it? Nope! Has the IRS sent me a letter after I filed saying that I qualified for the EIC, and they amended my 1040 to claim it? Yup!
The point is, if the special cases aren’t applicable, it’s the same as if they don’t exist.
Why do you care about inapplicable parts of the tax code?
Let’s be honest here. Most people have a W2, and that’s pretty much it. If they have a mortgage, their lender has already submitted a 1090 on their behalf. That’s it. You spend your day literally just copying numbers from forms and then subtracting. There’s no point to a person doing this.
Isn't this the fantasy of clean sheet software? 'We'll get rid of all this cruft and make it clean and simple.' But it turns out that the cruft is needed to deal with reality, which is messy rather than the abstract clean-room requirements of our imaginations.
I can't see how the tax code can be short, having to deal with such a wide range of situations. Has anyone every successfully used a tax code like the short, simple ones that people fantasize about?
The fantasy is that the software can be made completely clean and simple because there are no edge cases. The reality is that it can be made less terrible by reworking complex parts of the design that were slowly hacked into place over time, and by eliminating technical debt. The fact that the ideal is unobtainable is irrelevant to the fact that there are still concrete, worthwhile, and necessary improvements to be made.
If your perspective on taxes were applied to software engineering, then most large projects would have collapsed by now.
> I can't see how the tax code can be short, having to deal with such a wide range of situations.
Not "short", but short-er than the 74,000 pages that it currently is. And, it's already dealing with a wide range of situations by simply compressing the feature-space down a lot, so one way of making it simpler is to compress it down even more. For instance, you could eliminate a bunch of individual rules that reduce effective taxes for low-income earners, and then just reduce the tax rate at that bracket.