(I am being somewhat facetious here, as I'm aware there's always vastly more complexity to anything being done by a bureaucracy the size of the federal government than meets the eye, but still.)
This is a common misconception, especially on HN. For the average tax payer this might be truthy, but only insofar as the IRS is aware of certain tax events. If you had a kid, the IRS might be able to correlate that you and someone had a child, and they might, depending on the county registrar, be able to determine you're married. This gets even more complicated with business interests and finance in the small business realm.
That's to say, the system you described probably isn't ever going to materialize. The IRS is not some omnipotent entity. They're going to need something akin to TurboTax that asks you a bunch of questions and juxtaposes that with things they know for certain like your net income and net losses that are reported throughout the year. That system also needs to be able to read and adapt to evolving tax code as time goes on.
This is roughly what the UK does.
It's probably important to note there's many different camps here:
1. People who want a simpler tax code (eg: flat tax)
2. People who don't want to have to pay tax processors
3. People who don't want the IRS submission to be an exercise in hedging
Personally, I'm more in camp 2, because I recognize our tax code is full of levers we use, that change and adapt, to incentivize activity in the economy.
I wouldn't care if I over pay. After paying someone hundreds in fees to do my taxes I don't usually get much of any money back. I'd rather let the government keep $400 than give it to a tax company that probably won't actually help me in an audit.
1. Final price including tax
2. Fiber to the home
3. Optional tax returns
4. High speed rail
5. Unarmed alternatives to police
Of those, the following have (despite being impossible to do though already done) managed to find themselves unimpossibled:
1. Fiber to the home (I had it)
2. High speed rail (Acela)
3. Unarmed alternatives to police (Camden, NJ)
The fascinating thing about the Internet is all these things that just are so impossible to do (usually in the US) but are somehow already done elsewhere and then, given time, the impossible is done. At the rate of impossibilities, I think we might actually be the case that dS<0 is possible globally.
Business taxes are different. That's fine. Accountants are a cost of doing business.
Some people have very simple taxes, no doubt, but I wouldn't design a system as important as tax collection that would purposefully over charge a large portion of the population.
Looks like 84% are left unless you want to peel off a few more.
> I wouldn't design a system as important as tax collection that would purposefully over charge a large portion of the population.
Nobody is asking you to. I would absolutely do work for 100% of people that only 84% would be able to fully use. Imagine not building roads because only 84% of people drive.
If your concern is that business owners blindly pay bills without reading bold text that says something along the lines of "if you have additional deductions to report, file your taxes, find more information at https://..." then those business owners weren't going to last a year anyway.
Only perhaps if you have a single job and no other income. How would one employer know what you (or your spouse) earned at other jobs during the year? They can't deduct the correct amount without knowing your full year result, which is obviously impossible to implement with pay period withholding.
The child tax credit and other tax credits are bad examples. The IRS isn't going to bust your front door open because you didn't take a tax credit. What would end up happening under the push tax system is:
IRS: "We think you owe $4,200.69 in taxes"
Parents: "Not so fast! We had quadruplets this year, we're taking a credit!"
IRS: "Yikes, we'll give you $2,000 this year as a refund, good luck."
(I obviously have no idea what the tax credit for quadruplets is, this is not tax advice.)
It just doesn't make sense that we need to ask these questions every tax year: "Did you have kids? Did you get married? How much money did you make according to the W2 your employer already sent us? What other income did you make according to the 1099s we were already sent by other institutions?"
All of this just so a small group of people can be... checks notes... reminded to take a child tax credit? They can always just put a cute little reminder about the various tax credits on the bill.
The only other examples are highly-regulated or people who are already operating under the table (in which case the IRS already doesn't know and the IRS will continue to not know). Business tax returns are almost always going to have to continue as the IRS pulling the information, but for normal people, tax returns should not be a burden.
It's sad that the IRS can't prefile taxes. The information is there.
In countries that do auto withholding/filing, you still need to tell the tax authority about any tax events, but for most workers, most years don’t require you to take any action.
It's completely true for most people. "And a new paper estimates that at least 41 percent of American households — some 62 million tax filing units — could have their entire tax returns handled this way with no further intervention necessary." https://www.vox.com/23055489/irs-automatic-filing-prepopulat...
Even if that's too high of an estimate, there are absolutely 10s of millions of people for whom the IRS already has the correct amount of taxes calculated based on the forms they receive from other entities. Sure, you might have to ask people a few questions, but my statement is accurate for an enormous percent of the population.
The IRS doesn't have to have facts on your marriage and children; all w2 employees already keep a w4 up to date with this information - or at least are legally bound to.
https://www.propublica.org/article/inside-turbotax-20-year-f...
Here's an interesting and relevant news story.
https://news.yahoo.com/irs-urges-millions-taxpayers-delay-15...
If even the IRS doesn't know what their own rules are within the many pages of vague, complicated, and contradictory rules, what chance does an average person have to not mess up at least one thing in their taxes? The immense complexity of the tax code and the chance for getting something wrong gives them power to theoretically try and ruin anybody they want to go after, or at least have them have a lot of influence over peoples lives.
Governments want power and influence, and the IRS isn't going to vote to give away their own power. Having everybody being afraid of the IRS and making people jump through hoops gives them power and influence. This type of power isn't something that will go away with a fight.
I'm not sure who you think is concerned about the feelings of the IRS, or its victimization. You've got the victims all topsy-turvy. Congress, an unbroken chain of bipartisan administrations, and their IRS are the perpetrators. The corporate cash is literally the only reason they care.
> the IRS isn't going to vote to give away their own power.
The IRS doesn't vote. Your theories of power are weird.
The IRS isn't exactly mute and helpless.
If the IRS came out at some inquiry and loudly said "Millionaires and billionaires can hire a tax firm to deal with these piles of paperwork we make people fill out, but it's a disgrace that normal people have to spend a great deal of time/money and life stress dealing with their taxes, when we already very likely know exactly what the upper theoretical bound of their tax payment is."
> The corporate cash is literally the only reason they care.
The reason for anything complicated cannot usually only be attributed to one reason. Money is always big influence, but so is power, and probably other variables.
> The IRS doesn't vote.
They're not literally voting, but they're choosing what benefits them the most, right?
Are you familiar with an exploratory task force or committee being where ideas are sent to be killed?
> Your theories of power are weird.
My theories of power are literally the standard throughout all of human history.
People very rarely voluntarily give up power that exists that benefits them.
Giving up power is so rare that the very few examples of it we have in human history, such as George Washington declining power, are heavily celebrated.
What the IRS wants as an org is ultimately irrelevant, they're beholden to elected officials, who are in turn beholden to their voters and donors -- with a strong emphasis on the latter.
It’s amazing how much whining there is about these forms. A smart high schooler could do even a moderately complicated tax return. It’s when you own a business of some kind (including investment properties) that things get hard.
There are a few cases (some crypto 1099s) where they tell you the basis on the statement, but don't actually send that to the IRS since it's not a security. In that case, you'd copy
There are a few scenarios where the brokerage doesn't know the right basis though--examples would be a wash sale across two different accounts.
That the US makes it a labyrinthine game of special exceptions and complexity belies the obvious gamification geared towards the rich and to frustrate everyone that goes well past any excuse of bureaucracy. It's not a conspiracy theory, it's obvious wealth transfer from everyone not obscenely rich or obscenely poor disproportionately excluding centamillionaires and billionaires.
I don't think I want a system where my employer could financially ruin me by misreporting income to the government.
In one year I had some "extra income" besides my job and had to file a return and pay some extra money.
The next year they asked me what my "extra income" was for that year and when the letter got lost by me they just assumed the same amount as the prior year and sent me the bill for that.
After the initial shock and beating myself up for that mistake, I could simply file a correction and got it fixed with no problem.
I faintly recall being able to do it online but there is a fair chance that I missremember.