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Comment by mnky9800n | Hacker News Reader

In the 8 years since I lived in the United States my income taxes in other countries have been almost unbelievably easy. Typically I look at the calculated amount provided by a government website, compare it to what I think it should be if there is done discrepancy, upload some receipts or whatever for deductions, then click submit.

It is beyond me why the experience should be any how different in the United States. And don't tell me, oh but there's 50 States which makes it complicated. I've lived in 5 countries in those years, four of which I had to pay taxes and every one was this easy.

View on HN

"And tax politics make strange bedfellows. Fighting alongside H&R Block and Intuit are anti-tax activist groups like Grover Norquist’s Americans for Tax Reform. H&R Block and Intuit love taxes—that’s how they make their money. Grover Norquist wants to cut taxes wherever possible. But on this issue, their interests are aligned. H&R Block and Intuit want to make it difficult for you to file on your own. The anti-tax activists think that if taxpaying is too easy, voters will be less likely to resist the federal government’s growth. Both want to make it as painful as possible for you to do your taxes yourself."

https://www.politico.com/agenda/story/2018/07/18/tax-filing-...

US taxes were pretty cumbersome before Intuit et al. Intuit wouldn't appear if not that. So your quote may partially explain resistance to change, but not causes.

Taxes weren’t particularly difficult if like most people you were overpaying before this software showed up.

The complexity was originally a way to effectively have different rules for people with accountants than regular citizens thus allowing politicians to shift the tax burden without making the carveouts obvious.

Now days we just blatantly tax people living off investments less, etc. Thus defeating the original purpose of that complexity.

And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway.

I'm all for simplifying tax filing but if you're just filing basic taxes and are willing to forgo any deductions you may be eligible for such as energy efficiency, it's pretty straightforward.

I think they should get rid of all deductions at the individual levels. They just cause confusion and hide true cost of things.

For example, I went to buy Jeep. 4xe version was $8000 more. But its battery lasts only 2-3 miles and it would have taken forever to breakeven. But dealership kept insisting that I will get $6000 in tax rebate/deductions so the actual cost is only $2000 more.

They had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer. I tried to have them issue give me discount now and claim my car on their taxes but, of course, that was not going to work. I ended up buying a cheaper model.

EDIT: Just checked the range, it is actually 21 miles on battery, which would have been enough for my usage. At that time, salesperson informed me that it was 3 miles or so. At 21 miles per charge, I may have bought 4xe. Math still doesn't workout, since I work from home I probably fill the gas tank once every 2-3 months. About $200-300 per year for gas. So it would have taken 7-10 years to breakeven after rebates.

>They just cause confusion and hide true cost of things.

Hiding the true cost is the point. Or rather, altering the true cost to incentivize something or other.

There are two limits on that deduction that are relevant. They can’t be applied to foreign built cars, and there is an income cap.

The Koreans (Kia, Hyundai) found a loophole: The restrictions do not apply to commercial fleets, including vehicles leased to consumers.

So, they offer lease incentives that are structured to give you $7500 off MSRP if you buy the vehicle out of a lease after the first month.

No IRS paperwork required, and no chances of finding some other gotcha when you file your taxes.

If the law hasn’t changed by the time I buy a new EV, I’m going to insist on this, regardless of whether it is domestic made.

The dealer wasn’t really lying just unclear. The car is not designed to stay fully electric until the battery hits zero because the ICE engine is only 150hp. Instead it’s optimized to be a hybrid that’s reserving battery power for acceleration, which lets the engine stay in more efficient and lower RPM ranges for much longer. You can press a button every time you get in to drain the battery but that’s really not the intended use.

Anyway, the subsidy is really designed to setup the used car pipeline. In 20 years someone with significantly less money is probably going to be driving your car and they aren’t going to be thrilled with having ~14mph.

> They had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer

This is the thing that always gets me. After having seen too many examples of this I soured on these incentivized deductions. The benefit always seems to go to the middle man.

Yep. I learned decades ago to ignore those types of incentives because they don't actually provide much (if any) benefit to me.

All they do is make everything more of a hassle.

And the 1040EZ is even easier to fill out and probably works for the majority of taxpayers. But the bigger issue isn't filling out the form ... it is on the data side. If the IRS were to send you an invoice, independent of how complex the calculations are, the work to validate their data is much different than starting from scratch.

1040EZ doesn't exist any longer. I tend to agree with the broader point--even if it would probably nudge some taxpayers to overlook deductions they're entitled to.

I think a lot of people who complain about the complexity of the US tax code and the "need" for TurboTax would benefit from directly filling out the 1040 by hand one year - most of them would have a pretty easy time doing it. For most people, all you need is a 4-function calculator, your W-2s/1099s, and a pencil, and it will take at most an hour or so.

Where the IRS's UX is really bad for the average taxpayer is all the other forms and instructions that Americans feel the need to read and think about despite none of them applying to your situation. However, I think this is mostly psychological, and Americans are wasting their time and money trying to get ahead by finding a "loophole" that applies to them.

>and it will take at most an hour or so.

And that's absolutely insane. That's tens of millions of man hours per year spent essentially on rote data entry of data that the IRS already has so that you can submit it to the IRS for them to check against their copy.

I would like to think that even if the IRS were to send me some numbers, I'd still spend an hour or so checking them against my own information.

I know that I wouldn't, because I don't want to. I'd just pay the amount the IRS says I should pay and call it good. I'd probably be paying more tax than absolutely necessary, but I honestly wouldn't mind that at all -- especially because I'd be saving money over doing the taxes myself (in the sense of time == money) or paying someone else to do them for me.

I mean, if the IRS was wrong about your income and you got audited, you would probably still be on the hook for penalties and back taxes. You're still going to want to spend some time checking that tax form pretty thoroughly.

True, but the same is also true if a tax preparer makes a mistake. Also, the IRS almost always waives penalties (and often interest) unless they think it wasn't an honest mistake.

I'm not bothered by this risk. If a mistake is made and I owe additional taxes, then I'll just pay what I owe. No biggie.

I mean, that is a hell of a life choice, but I guess if you assume that the government is always honest (see the Iraq war and many other things) and the IRS always interprets the documents they receive correctly (which they don't today - I have gotten letters from them which are blatantly wrong), that sounds good.

I understand that an hour is valuable, but that hour you spend checking your tax documents may be the highest-leverage hour of work you do that year.

> that is a hell of a life choice

This implies that I'm taking some huge risk or would be absurdly overpaying my taxes or something. I don't think either of those things are true. In the larger picture, this isn't really that big of a deal.

> I guess if you assume

I assume none of those things.

> that hour you spend checking your tax documents may be the highest-leverage hour of work you do that year.

It would be more than an hour, but the time isn't even the biggest issue. The biggest issue is the stress, worry, and hassle. It's just a basic cost/benefit calculation here, no different than other cases where I accept a level of increased expense or some risk because it costs more than I'm willing to pay to mitigate it. I have bigger fish to fry than this. Micromanaging this would reduce my overall happiness by adding an additional thing to worry about.

Everyone's cost/benefit calculation is different, of course, and if yours indicates that you'd be better off being more diligent about this stuff, that's entirely fair as well.

It shouldn't take nearly as long to verify if it's presented at all reasonably.

Frankly, this whole thread is evidence of that. There's been a meme since before Intuit existed that tax prep in the US is akin to performing brain surgery on yourself. I do have enough oddball schedules these days that having an accountant is almost certainly a good idea but, honestly, I piggybacked on my parents' accountant for many years when I probably didn't really have a good reason to.

A lot of people have just convinced themselves that getting a Turbotax update or going to the H&R Block booth at Walmart is just one of those annual rituals you have to do if you're sensible.

I used to do it with just the 1040 and a spreadsheet.

The problem with that is that there are literally 100 crazy-assed questions that I have to answer in order to fill out all the supplementary worksheets, etc.

For instance: I bought a used EV. Do I take the tax break? Is it a deduction or credit?

Figuring that out will take at least 10 minutes after you find the right IRS bulletin.

Also, we have a roboadvisor, which means we hit all the corner cases for investment income.

Even with turbotax, it takes about 8 hours for our moderately complicated taxes. Just getting the basic stuff that any homeowner with a family has to do takes 2-3.

On top of that, the first year I used turbotax, I found out I had been overpaying ~$200-500 the previous 4 years.

Filing amended returns wasn’t worth it, but paying the intuit mafia would have saved me time and money in the long run.

If I had my way, we would move to a UBI and a flat tax (on income and capital gains).

That reduces the tax code to a two variable equation of a line.

I’d take a scatterplot of the 30-90th percentile of the US’s effective tax rates, and fit the line to that data set with a linear regression.

In addition to creating basic income, this would ensure that the ultra wealthy actually pay taxes.

I would suggest that you are almost certainly in the top 5% on complexity of your tax situation between the roboadvisor, the house, and the EV, if not all of the other things that you are spending 8 hours on. You may be in the top 1% on number of pages in your federal tax return.

Personally, I would love a flat tax, although I would probably pay more under that system. It will never happen, though.

I think UBI and flat tax are fundamentally incompatible. Reasonable levels of UBI require high taxes, and doing so with entirely flat taxes will be quite punitive on the middle class. I think the vast majority of the population think there is a lot of merit to graduated tax rates as well, charging 50% tax on all of someone's income above $10,000,000 isn't as punitive to any sort of living standard as charging 50% tax on someone's first $30k of income.

If we want a UBI of $24,000/year ($2,000/month) for an adult population of 250 million we are talking 6 trillion dollars in additional government spending. Assume for a minute we can cut 2 trillion in spending so we are talking about a spending increase of 4 trillion. This would mean roughly doubling current government revenues. If you wanted to do so with a flat tax, you'd see rates near the top rate now on all income.

Are people ready for a world where you get $24,000/year from the government and pay something like a 40% tax on all your income? Compared to the current tax code you probably break even at roughly $75,000/year and for incomes above that you'd pay more in tax.

In an in a very high income bracket, as I imagine many here are.

I’ve also lived in “more socialist” countries where I paid higher taxes before moving to the US.

I would have little to no problem passing higher taxes if there was any reasonable assurance that those taxes would go to worthwhile purposes (infrastructure, healthcare, education), and not to the military or pork. Sadly, in America, land of the middleman, we know how unlikely that is.

I'm one of the people you're talking about. I tried it and it had the opposite effect.

I tried to do it with the plain forms once about 15 years ago. Somehow I ended up reporting the same input twice or something? I'm still not sure what I did wrong, but I ended up getting taxed for income that didn't exist. I didn't know how to correct it. I wrote letters and called the IRS probably dozens of times. I spent more than 50 hours poring through documents trying to figure it out. I tried to find an accountant that could understand what was happening. Eventually, it went away. I'm not sure what I did differently or if the IRS just got tired of dealing with me and waived it.

I was probably doing all of this incompetently, but I could not get a "foothold". I have somewhat of a tax phobia to this day.

The problem had something to do with some independent contracting I had done that year. I just resolved not to do that anymore.

Shoot, I accidentally reported the same income twice even with turbotax once because I didn't understand what non-covered shares were. (And in my defense, the broker also didn't show cost basis on the 1099-B either, I was just supposed to know)

I forget when the cost basis reporting requirements got firmed up but there were some point where I had options from a former employer that had gone through a couple rounds of acquisitions and when I eventually sold the shares I ended up throwing my hands up a plugged in some average cost basis that was somewhere in the ballpark and called it a day. It's all pretty automatic these days but it used to often be a real mess to try to do accurately.

Yea cost basis reporting from the broker to you is better now.

Cost basis reporting from the broker to the IRS is still blank for non-covered shares though, which leads to the other common case of "forgot a page of 1099, IRS thinks it's $0 cost basis, sends bill for $10k++, but actually you owe ~$0 if you send in the correct info".

I appreciate what you're trying to say, but:

This is a direct quote from 1040:

> 14 Add lines 12 and 13

> 15 Subtract line 14 from line 11.

Compared to a real system, that is insane.

You have to deliberately enter redundant information onto a form that should be handled automatically by a computer.

It feels like the only purpose is to catch you out in case you make a mistake.

Furthermore, the system should be set up so most people never even need to file.

You can quickly check in the UK if you need to file via https://www.gov.uk/check-if-you-need-tax-return/

( You don't need even to login to do that one, you can try it out yourself even if you're not in the UK to get a sense for the self-assessment requirements )

Most employed people don't have to file.

And even if you do need to file, you can do so online via another helpful form: https://www.gov.uk/log-in-file-self-assessment-tax-return

Functional online forms which actually take into account your answers and don't ask you to get out a calculator.

And keep in mind that the US tax system feels like it's set up to pretend you "owe" lots of tax, only for there to be a ton of reimbursements or allowances or refunds.

Which is then more forms to fill in (Form 2555 in my case ), each with their own cryptic instructions on where to write numbers and what to add to what:

> Subtract line 25 from line 24. Enter the result here and on line 27 on page 3.

Literally getting you to write it in twice because there's a page break?

Do you really think this is simple?

> 32 Multiply $49.10 by the number of days on line 31. If 365 is entered on line 31, enter $17,920 here

> 33 Subtract line 32 from line 30

> 34 Enter employer-provided amounts. See instructions

> 35 Divide line 34 by line 27. Enter the result as a decimal (rounded to at least three places), but don’t enter more than “1.000”

> 36 Housing exclusion. Multiply line 33 by line 35. Enter the result but don’t enter more than the amount on line 34. Also, complete Part VIII

That's a direct quote of 5 lines in a row from form 2555.

That's not a tax form that's a fucking arithmetic test.

Oh, and that "See Instructions" means a completely different booklet of guidance, in case anyone thought it was on the form itself.

You presumably own a calculator. Those questions are quite simple with one.

There's also an online spreadsheet version so a computer can do all the math for you without paying a dime to intuit.

Hard agree with this. Filling out your taxes by hand is actually very easy if all you have is the basics (which is most people). When I was doing my taxes for the first couple of years as an adult, I did it by hand and was pleasantly surprised how easy it was. The instructions are very clear and to the point.

Did you go to college?

I had a job on campus and a stipend, and that immediately tossed me into the deep end of “the tax code is actually ambiguous and the difference is three months rent”.

I did, although I wasn't in college at the time I started doing my taxes. I was a dependent on my parents' taxes while I was in college.

Maybe stating the obvious, but virtually everyone with one or more home loans should be itemizing their deductions to include that and their state sales or income tax. The standard deduction is very generous for non-homeowners (IMO), but it's easy to get a higher deduction just based on home loans and state tax, without even getting into all of the sketchy loopholes that some tax preparers will try to use.

That isn’t true anymore as of 2018 when the Trump administration made changes to the tax law. As a homeowner with a mortgage I used to itemize every year but now the standard deduction benefits me more.

https://smartasset.com/taxes/heres-how-the-trump-tax-plan-co...

The question with the trump era changes isn’t what percentage itemize in a given year.

The question to ask is what percentage should always itemize. and how long it takes for them to figure out if they should or not each year.

It is true that some people just won’t bother, but that’s just a hidden tax hike on the middle class. It doesn’t make sense for that group to bother to take the time to learn turbotax or hire an accountant in order to potentially save $1000.

Also, the Trump changes intentionally cause under-witholding, so now people have to fill out the “did I get fined for underpayment?” form, and the “do I need to file quarterly taxes?” form.

The change that intentionally broke the withholding formula was explicitly designed to make tax preparation more painful.

In the 90s, I filed by phone once.

>The anti-tax activists think that if taxpaying is too easy, voters will be less likely to resist the federal government’s growth. Both want to make it as painful as possible for you to do your taxes yourself.

This sounds a lot like the logic the US government uses with regards to normalizing relations with Cuba. They think that by keeping up an embargo, that the Cuban people will rise up and overthrow their communist government. It hasn't worked for over 60 years, but surely any day now it will...

Are you trying to tell me sanctions don't work? That's absurd. Clearly the war in Ukraine is due to sanctions working.

Sanctions haven't changed the regime in Cuba for over 60 years.

The big problem with sanctions is that they aren't applied completely. The US refuses trade with Cuba, but many other countries don't, so they aren't effective. The same is true with Russia: lots of countries (like China) still trade with them, and many more still buy their oil/gas.

Otherwise known as the "bootlegger and baptist" problem.

TIL:

> This theory was first put forward by economist Bruce Yandle in a 1983 article published in the American Enterprise Institute's magazine Regulation titled "Bootleggers and Baptists: The Education of a Regulatory Economist."[1] Yandle, at the time serving as executive director of the Federal Trade Commission, used the example of early 20th century Sunday closing laws restricting the sale of alcohol to illustrate his belief that "durable social regulation evolves when it is demanded by both of two distinctly different groups" - Baptists, who support a regulation for moral reasons, and bootleggers, who stand to gain economically from a regulation.[2]

* https://ballotpedia.org/Bootleggers_and_Baptists

* https://www.aei.org/articles/viewpoint-bootleggers-and-bapti...

* https://en.wikipedia.org/wiki/Bootleggers_and_Baptists

* https://www.goodreads.com/book/show/20544240-bootleggers-and...

* https://www.ced.org/blog/entry/bootleggers-and-baptistshow-c...

"Never invite just one baptist to go fishing with you or he'll drink all your beer."

Related?

that's a question actually: during prohibition were Americans allowed wine for mass?

Yes, sacramental wine was legal. Not only that, but the production of sacramental wine is what kept some wineries from going out of business during prohibition.

Religion is all about who you DON'T recognize..... Jews don't recognize Jesus as the son of God, Protestants don't recognize the Pope, and Baptists don't recognize each other in the liquor store.

> Grover Norquist’s Americans for Tax Reform

For those who don't know, Grover Norquist is a highly influential, batshit crazy right-wing ideologue who believes the estate tax is morally equivalent to the holocaust. Almost every Republican lawmaker on the national level signs a pledge he has written, swearing they will not raise taxes.

https://news.ycombinator.com/item?id=24037730

Grover is the figurehead, but he's got backing from plenty of other billionaires and other large tax-is-bad action group.

also directly sprung from Bush Sr. saying "read my lips: no new taxes" and then immediately going the other way. that ruffled a few feathers and took the "tax bad" lobby into the Tea Party / Norquist insanity we've seen.

It's funny. I would not ever want to paint Norquist as an ultra-powerful shot-caller. I just assume those are the guys who donate the money and the guys decide who gets the donations. When you think about it in those terms, he's perhaps more of a cultural artifact.

But wow, what an artifact! There has not been, to my knowledge, an instance of a newly elected US Senator publicly saying "signing this absurd thing is beneath the dignity of my office and of course I'm going to try to keep taxes low, the voters of xxx elected me because they know I'm a dedicated conservative, but it is impossible to guarantee that it will not be necessary to levy a new tax of some kind, so I am not going to promise that." Or something along those lines.

He doesn't get to decide who gets the donations, but he does get to administer the Kool-Aid, and it's powerful stuff.

(edit: it occurred to me that given the rules involving political donations, and PACs, and so on, he might be administering all kinds of money and the public wouldn't necessarily know about it, so... yeah...)

JW, how do these countries handle non-employement or self-reported income (e.g. capital gains of real estate, equity, or even selling products online)?

A lot of stuff has to be reported at source these days, e.g. in Belgium where I live, Airbnb reports your income from hosting to the revenue service, your bank reports how much you paid on your mortgage (deductible), if you're unemployed then the benefits agency will communicate that, so will child care (deductible), and so on. And as the parent said, you can always add/edit amounts as necessary, which indeed will often be necessary for things like equity.

In Sweden, certain things are reported to the government and others are not. Your task is to validate the prefilled tax forms and add missing income (above thresholds in place to allow for hobbyist level incomes) and deduct missing deductibles.

The typical process is to just approve it, but when you’re for example selling real estate you’ll have to append it with information about your capital gains minus deductible costs (broker’s fee, certain renovation costs, …).

The tax agency is famous for having excellent customer service and they operate under the principle “it should be easy to do right”. It hasn’t always been that way, but there was a mental shift similar to what direct-file advocates in the US seem to ask for in the 90s and that has worked out well.

If you’re curious, this is the English instructions for filing taxes over here: https://skatteverket.se/servicelankar/otherlanguages/inengli...

Taxes in Sweden are generally effortless. Deductions, investments and benefits are often generous and easy to file. Unfortunately if you are more modest the story is a bit different.

It is great if you are established. You might have a big house, high maintenance costs, use cleaning services, invest a lot in the stock market and other things that comes with all that. Because not only is it easy but you get a lot of public benefits as well like health care, affordable student loans and mortgages, cost-free education and kindergarten, sick leave and affordable private additions to many of those. You can even use the ease of that to do things like start a company on the side.

For us that are more modest and don't have a lot of assets but mostly want work, get health care and do something else once in a while, it is still a good system. I once checked and approved my taxes in the middle of the night, from a bar, in China. But overall there isn't as much benefit. If I don't want to pay a higher tax rate than those who use all those deductions and want some flexibility in how I use my income (which I honestly rather wouldn't) I need to start a company. But then I would have to file much more complicated taxes and therefor get much less enjoyment from taxes being easy for personal income. Still by not doing so I am giving up tens of thousands of dollars a year.

So while I am in no way suggesting that the US system is better or even comparable, the Swedish tax system today have many of the same overall problems. And that is unfortunately more and more true of other systems as well.

You actually benefit indirectly.

By having a transparent semi-automatic system and making it easier to do "the right thing", Sweden (and neighbours) collect more taxes that pay for health care, education and other benefits that you have used.

You're comparing the tax system, but the main topic is simply the act of filing your taxes.

Which is indeed extremely easy here in Sweden comparatively.

I am not really comparing tax system, or at least that isn't the intention. The Swedish tax system is easy as long as you stick to those accounted for benefits.

Say if you make a $100k a year and you pay social security for public pension among other things but public pension only gives you credit up to $50k a year. Now if you have a big house you can deduct renovations so your income is for tax purposes is, say, $75k.

If you don't have a big house and your income is a $100k you still get the same public pension but are taxed on the full amount. Now if you started a company and hired yourself through that you could lower your personal income and instead take out dividend so you are also taxed on $75k. But to do that you now have to file much more complicated taxes, with actual accounts and often accountants.

In reality it is even worse because many do the first thing but then also have a company. So they pay themselves $50k a year and then use deductions on that to lower the effective amount even more. So I am out here paying on a $100k so they can have a nice life. (The numbers are made up, salaries and individual benefits are usually less than that and the example might not be entirely accurate but the overall point stands).

None of this really relates to the US tax system, but it is a similar problem in that if I want the best financial situation (by a decent margin) I need to file complicated taxes and a lot of people do exactly that mainly for tax purposes. Swedish sentiments just haven't caught up yet.

Tax deduction for renovations is $5k per year ($7.5k next year). Or well, less now that 1 USD is 11 SEK instead of 10.

You make it sound like you can just start a company and hire yourself, and the biggest drawback would be more complicated taxes... No, the biggest drawback is that you're starting a business and taking a (much) larger risk than being employed. Hiring an accountant to help with the bookkeeping is a minor thing in comparison.

> then I would have to file much more complicated taxes and therefor get much less enjoyment from taxes being easy for personal income. Still by not doing so I am giving up tens of thousands of dollars a year.

For tens of thousands of dollars per year, surely some tax/company admin service exists that could offload the vast majority of the tedium from you, leaving you with perhaps 10-20 hours of effort/personal attention per year. Even if they take half of the $20+K savings as their fee, that leaves you with $10+K to put in your pocket for a little over a day of total effort. That's $500-$1000 or more per hour of effort (all tax-free).

That seems like a huge overlay for you.

So does that mean that literally everyone who sends in tax information other than accepting the government's calculations is a huge audit target?

Nah, they do some risk analysis etc.

Me and my SO has had to change ours for many, many years because the banks can only report interest paid on our loan on one of us. So one has to reduce the other has to add this entry. Every year. Never had an audit nor heard anyone else who's had it.

In Australia there is a long form with each type and you type the numbers in. Pretty easy.

They don’t check upfront but there is always a chance you can get audited.

of you do that seriously you'd incorporate the llc equivalent, which has its own reporting.

in Denmark, if you are a hobbyist (less than 50.000 DKK) then you report the aggregate income (b indkomst) and it is being added to your regular income.

> non-employement

trust that your accountant won't fiddle your books for you (plus occasional audits)

> capital gains of real estate

in the UK all transactions go through the land registry and they can reconcile

> equity, or even selling products online

for these categories: generous allowances to almost all regular people from taxation

at the point it's more than this then it's fair to call it a business, at which point the penalties are severe for fiddling

UK: no CGT on your home, only investment properties. https://www.gov.uk/tax-sell-home (in some ways this is a pretty big middle class giveaway, but it also hugely simplifies things)

UK equity: smart people use an ISA wrapper https://www.gov.uk/individual-savings-accounts/how-isas-work or a pension, both of which are tax free for people with normal incomes and wealth.

Selling online: after £1000 you're a "trader" and have to pay tax. https://www.gov.uk/government/publications/selling-online-an...

That takes care of almost everything. My employer paid me a bonus in RSUs and doing so was also automatically accounted for in PAYE. However, this discussion has reminded me to sell the vested stock and move it to an ISA rather than leave it in a US ETrade account, to simplify future taxes.

My wife, a UK national resident in the UK, sells ebooks on Amazon as a side gig. She has to file notice to the _US_ tax authorities for exemption, because Amazon assume everyone is American for tax purposes.

Another great example of how the UK handles things differently in a way that shifts the filing burden off the taxpayer is charitable tax deductions.

In the US taxpayers track their charitable giving and use it to reduce their taxable income at filing time.

In the UK when you donate to a charity you attest to that charity that you are a UK taxpayer and that the donation is therefore gift aid eligible, and the charity just goes to the tax office and collects an extra 25% on top of the donation.

So in the US, say, you earn $150, pay $50 in tax withholding, then donate $100 to a charity, then claim the donation to the IRS to say you shouldn’t be taxed on $100 of your earnings, so you should only have paid $30 in taxes, and you claim back $20. You have $20, charity has $100, taxman has $30.

In the UK you earn £150, pay £50 in PAYE, then give £80 to a charity, keeping £20 and telling the charity they can giftaid it. Charity goes to the taxman and asks for another £20. End result, you have £20, charity has £100, taxman has £30.

Essentially the same outcome - charity donations are tax advantaged - but the paperwork for taxpayers is much simpler.

In the US, that assumes they exceed the standard deduction--which absent a large mortgage deduction or quite high charitable giving most people won't for routine modest donations.

A lot of places you just report things. But there might be at most 10 categories of things. A hell of a lot less random tax credit systems involved.

I think it's understated how much of the tax mess in the US is also linked to "policy through tax credit and deductibles".

In Mexico we have a quasi-blockchain quasi-smart_contract that gets signed and sent to the taxman every time an invoice is created.

This “contracts” are in xml format, require a private key to be signed, and are incredibly rich in catalogs and features.

They are massive: just last year, over 10^10 generated documents were reported.

Sure there is still a lot of informality, but in a matter of years not only will tax returns be automatically calculated for you to pay (this is already happening), but also p&l’s and balance sheets of small and big companies.

This all happens on almost real time, by the way.

I think it is deliberately made difficult as a backdoor way to raise more money through penalties and interest fees. Additionally, since the odds are so high that the average person making above $200K has made an error, it can be used as blackmail.

On a global scale, complex taxes are actually not uncommon and the US fares well. I'd like to see a comparison of government corruption with tax complexity. For example, it seems that most South American countries are considered to have very complex taxes.

> I think it is deliberately made difficult as a backdoor way to raise more money through penalties and interest fees.

No, you have it backwards. Politicians don't want to make it difficult, they want a simple, stable revenue stream. But in the attempt to do so, commercial interests carve out convoluted exceptions for themselves to preserve revenue and make it more difficult for incumbents to challenge them. The lobby that ensues skews political incentives, and that's why it gets convoluted.

> they want a simple, stable revenue stream

I don't buy this. The IRS collected tens of billions in just one year in civil penalties. https://www.irs.gov/statistics/collections-activities-penalt.... Politicians asked for more money for the IRS to increase revenue. I don't buy that this is because all that revenue is from criminal cases especially if lobbying can easily change the tax code.

In Brazil step number one of paying your taxes is: "Install the Java JRE"

(it is a desktop Java application made ~20 years ago)

and from all I hear it is still MUCH better than doing your US taxes

(to be fair the application is actually decent, just using outdated tech)

There is nobody in the developed world as opposed to the government raising revenue as Americans are. That part is bipartisan, which is why Biden hasn’t meaningfully raised taxes. But Republicans go a step further and want you to suffer once a year so you don’t get complacent about the tax rates.

In the x years I lived in the United States my income taxes in other countries have been almost unbelievably easy. They just didn't exist, as long as I didn't live there.

How have you forgotten the most important thing ever? It’s Freedom.

Because, Freedom. And, because America.

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