The real kicker of course is that if you don't file your taxes, they actually do calculate your taxes for you, and send you a bill. It just includes the non-payment penalty and doesn't include donations.
The fact that they are capable of doing that implies how much time we all have to waste doing our taxes.
For most people, taxes are more than the next 3 biggest expenses.
If you want people to visually see where their money goes and when taxes are increased, you do a better job breaking down where it goes when described on a paycheque. Think "$0.82 for military spending; $0.05 for road maintenance" instead of "Federal tax: $317.02"
If you want the people to misunderstand and hate the government, then you make the people do math every month with numbers that change throughout the year and have financial penalties for getting wrong.
EITC eligibility, for example, depends on the aggregate employment and spending patterns of your household. The IRS does not (and shouldn’t) track when you moved in with your boyfriend.
The home mortgage interest deduction depends on your primary residence; if you have more than one, that means tracking how much time you spend at each.
Although you're wrong about the mortgage interest deduction, that is reported by the bank per address, and you have the list your primary address with your state tax authority, which the IRS gets a copy of.
I think you’re seriously underestimating the amount of data the IRS would have to proactively collect. “We get your tax obligation right 80% of the time!” isn’t an acceptable SLA. Kids are born, houses (and electric cars!) are bought and sold, community college classes are enrolled in, …
Re: Primary residence: Uhh, OK, so I report to my state tax authority who reports to the Feds. I thought the point of this thread was that somebody else would do all this for me, but for the evils of Grover Norquist and Intuit?
There is a reason TurboTax is popular -- because it's a better interface for asking those questions.
But look at other countries. They don't ask you to fill out a form. They send you a bill and ask if they missed anything. For 80% of taxpayers, they would send the bill and the taxpayer would say, "yep, that's right". And your taxes would be done.
The rest could keep doing it the old way.
> Kids are born, houses (and electric cars!) are bought and sold, community college classes are enrolled in
All things they already know about! Because when you claim those things on your taxes, they cross check that to try and catch you in a lie.
When the IRS audits you, they don’t come with their own evidence beyond the basic income reporting that yes, they could pre-fill into forms. It’s up to you to produce documentation that justifies your filing.
Our tax code is complicated. It relies on voluntary (but potentially audited) reporting and compliance. If you want to argue for a simpler tax code, great, but at the end of the day, either the IRS needs to collect a lot more data or we’re stuck with self-reporting.
So for 80% of people, they would never have to fill out a tax form at all. They could just get the tax bill and have it auto-pay (or more likely auto-refund).
And for the next 10% of people, who only take a small set of deductions that you can take on top of the standard deduction, you don't need even a two page form, you just need a wizard that asks a few questions like TurboTax.
And then for the rest they can opt to fill out the regular forms if they don't agree with how the IRS calculated their bill. This is how it works in pretty much every other civilized country (and a lot of uncivilized ones too).
Taxes are in hindsight so you've already made whatever donations you did by the time you paid taxes.
Donations either lower your tax bill or have no effect on it. So, by not filling taxes (_and getting caught_) you're just increasing your tax bill.
...but then tax you on the interest they paid you if you claim it.
Do you have a source handy? My Google-fu is failing and only bringing up interest on unpaid taxes.
As a non-American whose country break out the VAT into a separate line item, with the explicit intent to inform consumers how much tax they are paying, and who has shopped in countries where they roll it all into one, I can say that this 'claim' is absolutely what happens in practice.
Meanwhile, you can simply check "VAT rate 20xx" and find that. It saves time doing the math for your state sales tax and then doing mental math to figure out what you leave the store with.
Pretty much everyone does, of course, know that the VAT rate is 20%, but still you always get people complaining that we’re being ripped off when something which costs $1000 ends up being sold here at £950.