Why does the US have a tax prep industry in the first place?
In every other country in the world, taxes are handled by their respective financial authorities.
Why must every service and thing in the US must be a private profit making thing?
In every other country in the world, taxes are handled by their respective financial authorities.
Why must every service and thing in the US must be a private profit making thing?
1) How the welfare state is administered - as an example, the US does a child tax credit as part of the tax code, other countries have agencies that are setup to give parents money directly. We are trying to do _more_ with our taxes.
2) State taxes - the fact that there are multiple agencies that have their own rules and procedures makes things more complicated. Many localities have their own laws which can be hard to deal with. Efile has improved this since there are fewer ways for states to ask for new information
3) A lack of political will to simply. For the purposes of taxes, the us have multiple definitions of "are you 65" (were you 65 on Jan 1, were you 65 on Dec 31, etc). This makes taxes more complicated than they need to be
4) Conflicts between making things simple and incentivizing a behavior things like no taxes on tips or an EV tax credit both make filling taxes more complicated with the way that the tax code works right now. With better systems, this could all be taken care of for the taxpayer but right now it would require a more complex tax filing process
Direct File was able to solve some of these problems, even automatically using data the government had already where possible. Ultimately I think it is possible to make taxes automatic in the US but the data flows required for it are probably more complex than in other countries due to the fragmented nature of the US government.
Yes. When there's a negative behavior that the free market incentivizes, tax code updates can address it without sounding as scary as "More Industry Regulations". Same with social policy and other goals.
A lot of Americans are against the idea of "big government", which incentivizes government to use the tax code and other low-visibility means to accomplish larger goals.
It seems to me that there are many conflicting interests. We want simple taxes but we also want special protections and carve-outs.
> their pet things that are obviously worth complicating the tax code to do
I agree that this is at the root of the problem but I think that can be addressed by making it easier to file taxes or by reducing the complexity of the tax code. The child tax credit is a relatively common type of benefit across rich countries. The tax code could be simplified by administering this benefit via direct cash transfers through a different government agency. I think from this perspective, the IRS is _extremely_ efficient at benefit administration.
My personal opinion is that the tax code is not always a bad way to administer benefits but the paperwork burden is the problem and the experience of filing taxes needs to be made easier.
That's why all the covid stimulus checks were done via the IRS and the PPP loans were done through commercial banks.
I'd also add the color that one of the main reasons for that complexity is political itself: In our zero-trust zero-confidence in government world today, even the notion of two .gov entities sharing data freely with one another terrifies people on any side of the political spectrum. Leftists freak out that say, their HUD application data could end up with ICE and allow a criminal immigrant who lives with them to get deported, while rightists freak out about their financials being shared with IRS to allow IRS to guarantee all taxes owed are paid.
Lobbying corrupts this a bit. However they are not lobbying to suppress private competitors only government-run competition that has no profit motive or competition. When the government runs it we still pay for it, except now people who don’t use it also pay. Also wealthy people pay a disproportionate share as compared to their use due to progressive income tax.
In theory anyone can start a company if they have a better or more efficient product or offering and get the profits instead.
Thats the rationale in a nutshell.
If you look at it as a practical or technical challenge, you're addressing the wrong question.
But there is a profit (or rather income generation) motive: taxation is what funds the government. Parceling this work to a private 3rd party means paying a bunch of salaries that are much higher than what government employees get paid, generating profit for the company that gets taken out of the tax revenue, which increases the cost of the service for end users or the government receiving income.
Some politicians argue that government is inept and wasteful, and sponsoring no-nonsense projects that reduce middlemen in this process interferes with that narrative. If you got into office screaming that the government is your enemy, you’re not going to support projects that make it easier for citizens to interact with the government.
This does not apply to government / public work that has to be done anyways. Nor to any public service in general for that matter.
Your take is the classic economist's "it works in practice, but does it work in theory?". Obviously tax filing works better when it's maintained by the government. You're severly underestimating the harmfulness of profiteering monopolies lobbying against any improvements and buying out the competition. Also, look at DOGE, with all the ruckus they made they just couldn't find that many inefficiencies. And for such "simple" software projects as a tax-filing platform, I just don't buy that private is better than public.
How would they know now?
These examples are silly, most people are not selling a car privately all the time and they can handle any reporting or changes when you transfer the ownership.
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That being said, my Dad worked for a few years at the IRS part-time before he finally retired. He loved it. (My Dad is one of those people who enjoys taxes and finds them soothing.) I concluded that the IRS is a white-collar make-work program. It also leaks a lot of confidential social information, because he got to see all kinds of tax returns from all slices of economic status.
For more complex cases where you have more deduction and income sources the government doesn't really know all the individual setups you may or may not qualify for and they only audit a small percentage of filers every year.
The reason it's been blocked is a mess of ideological and economic. Ideological from people who interested that want to make taxes more annoying so people are generally more anti tax and then they get elected and make cuts to the top percentages/businesses permanent while the tax cuts for the majority of citizens are temporary. This sets up a debt crisis when those 'temporary' cuts are also extended they can use to leverage for government cuts. On the economic side there's a huge amount of money made each year by preparing taxes for people too intimidated by the complexity to DIY it. So they ally with the generically antitax side to keep their business going.
[0] https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-...
The US is special because the process of writing the tax code is corrupt. (Not uniquely corrupt, but certainly near an extreme among major countries.)
The US is also special because it has 50 states, all of which have their own thoughts about taxes.
But I don't have the articles at hand, and don't feel like an internet debate today, left as an exersize to the reader!
https://www.irs.gov/businesses/small-businesses-self-employe...
Taxes are simple if you live in one place and only receive income from your employer. If you have multiple sources of income, connections to multiple countries, etc., things can get very complicated very fast. That's why the tax prep industry exists - and not just in the US.
That being said, the Internal Revenue Service could prepare the taxes of most Americans. A simple system of, "Here's what we think you owe, based on the information we have on hand - sign and submit if you agree" would work for most people.
Whereas I guess American Exceptionism (tm) means you all have to pay a rent seeking company to file taxes…?
It is not that rare at all for Europeans to have other sources of income, and thus to have to file their own taxes.
In the US, if you just have wage/salary income and an investment account, and you lived the entire year in one state, your taxes are also very simple. You can fill everything out yourself in one evening, or pay $100 to do it with tax preparation software.
But things can rapidly get complicated. Did you move from one state to another during the year? Do you live in one state but work for an employer in a different state? Are there any credits or deductions you're eligible for? Or god forbid you live abroad, at which point you're dealing with double-taxation treaties and the like.
Here in Australia everyone must fill in an annual return, but it’s a fairly well automated online system and they’re probably already already have most of the fields filled in, you just need to add anything more complicated or any deductions you think you’re owed.
In both systems you can have an accountant file for you, or use other software, but you don't need to and most British people will never file a single return in their lives.
They already do that -- if you calculate your taxes wrong, they will send the adjustment (they will do it both ways, pay you back or ask for the remainder). I guess they might not be aware of all the deductions, but standard deduction beats itemized one for the majority, so they can 100% automate this whole process if they decide to. For complex cases and businesses, sure, you are on your own, but at least most W2 should be covered.
Presumably much less if one pays more than the IRS calculates is owed.
Essentially both the IRS and tax filers verify correctness of the tax filer's return and the tax filer can be prosecuted if they make a mistake according to the IRS.
How is this an issue? Why would it be different under another system?
I see you posting a lot of what I think are pro-tax-prep messages but they don't seem to have any substance. Please try to take them to the conclusion of an argument. (That is, finish by connecting the facts you are posting with some assertion about the desirability of the current system, or some assertion the parent has made.)
What I mean to highlight is that although a mistake in filing may lead to the IRS rectifying the mistake by sending/requesting the error balance, there are other possible effects, including civil and criminal liabilities.
This is undesirable. As mentioned in many comments here, the vast majority of filers, especially those with one employer and no substantial investment income, should not be required to file their taxes and instead the IRS should communicate the calculation result and ask if the filer disagrees.
This is a classic problem related to the "you slice, I choose" false dichotomy[0]. Essentially, even assuming it costs zero time to fill out and file a tax return, any mistake at all could lead to a negative consequence to filer.
As an aside, always choose to choose and not to cut the cake :)
Failing to report income or reporting false information for financial gain can lead to extra tax or prosecution for tax fraud where I live. I'd definitely be careful to report all income if I had income from sources that don't automatically withhold taxes, especially if it were significant.
I don't think they'll drag you to criminal court if you make a small mistake, though. But if you fail to report thousands of euros of income and the authorities get wind of it, sure, especially if it seems intentional.
I don't know if the risk of prosecution or other legal consequences is somehow greater in the US.
At the end of the year you file online and put in your deductions, which hopefully cover any other taxable income (capital gains, dividends, interest, etc.) if you didn't give your employer a higher figure. Then you pay if you're owing or get a refund if not.
You're still responsible.
Tell each company how much to withhold.
If they take too much, you get it back when you file taxes.
If they don't take enough, you pay a penalty for having too large of a bill when you file.
The issues you mention exist regardless of how many employers you have, because you can have income that does not come from an employer (e.g. stock dividends).
What's the big difference? You don't need a tax preparer to do your taxes in the US, and if all you have is a normal W-2 income and a bit of bank interest its a pretty simple couple of forms to file.
The simplest cases, however, don't really require filing forms at all. The withholding process sounds similar, and when the time for filing taxes comes, you get a pre-filled return sheet with withheld taxes and your pre-calculated actual tax based on the information the tax office has.
Employers directly report income to the tax office, so that information is already included. Banks also automatically withhold taxes on the interest they pay and report it to the tax office. I think banks and broker companies usually report sales of stocks etc. made through them as well.
The same pre-filled return sheet includes national and local income taxes that have been automatically calculated based on your place of residence. (I assume this is more complex in the US due to different state legislations; here the tax legislation is the same everywhere even though local tax rates vary.)
If you don't want to add deductions (in addition to standard ones) and you don't have any corrections to make, you don't need to file any forms. The only things you need to do are to pay the difference if you owe something or to report your account number for a refund if they don't have it already. Otherwise filing in a simple case is a no-op.
If you do want to file for deductions or make corrections, you can do that with an online form.
And of course you still do want to check that the pre-calculated information is correct and whether there are any non-automatic deductions for which you're eligible.
More complex cases are, well, more complex. If you've got income from renting an apartment, for example, you do need to report that information yourself. But it's still a relatively simple online form.
Real estate tax is handled separately from income tax. You get sent a bill with a pre-calculated sum based on property registered in your name. If you have no corrections to make, you just pay the bill.
In contrast, I think even small businesses commonly hire accountants since for them the process is probably more complex with all the deductibles etc.
If the simple cases are similarly simple in the US and making corrections is a relatively straightforward form away, I wonder why there always seems to be such a big fuss in the US about filing taxes. Because of state/local differences in tax code? Just overall complex legislation? Or maybe it's just more common to have income from a variety of sources so more people need to deal with the more complex cases? Is the filing process paper-only and the only way to do simple online filing with automatic calculation to go through commercial tax-filing software?
In Australia, you probably need to tell the companies about the other income sources, and they will attempt to withhold at the appropriate rate. Then at the end of financial year, you go to your pre-filled online tax return which has all the figures reported by each company you work for already present and sums up whether there’s a refund or payment due. This is also where you enter any deductions.
That implies the government would know significantly more about my life and my day to day affairs. That sounds like it would be a privacy nightmare.
They're suggesting letting the irs actually use the resources they already have to automate the vast majority of the people's taxes to save everyone time and money.
It doesn't have to be perfect to be a huge improvement.
(Also it’s rather ironic that people who think like you have been voting for the party which is currently enabling Palantir to build Chinese-style surveillance in America. But as long as the data is owned by billionaires and they promise to only use it against the “others”, I guess it’s fine.)
That would be simple enough for most people (1 job, 1 home, maybe some kids) and it doesn’t require the government to know anything additional.
In that most common scenario no tax accounting service should be needed. Honestly a 1040 isn’t that complicated in that scenario either, but is still too difficult for a good number of people and it’s just unnecessary.
And if all you have is a W-2 you don't experience most of the complexity of filing as it stands now anyway.
IRS Direct File[1] did exactly this. It apparently worked really well, and people liked using it, netting ~$20 billion in savings to the Americans that used it (roughly half of that came out of the pockets of the tax-prep industry).
Then, DOGE got to it and the new administration's IRS commissioner killed the program.
(Did you know that most of the public transport in the UK is owned by German and Dutch companies? They can rack up prices with little consequence.)
The US has gotten more expensive to be sure, but IMO most of our high-cost problems stem from consolidated industries with regulatory capture (healthcare, farming+food+pesticide, tax prep, etc.) and low wages for the bottom 50%, not fees.
Culture
That said, the lobbying is really bad of course, probably also prevents cheaper or FOSS alternatives.
But if it's private enterprise, their incentive is to lower your taxes as much as they can, while you pay them a small fee.
Not saying that this mentality or assumptions are good / correct, but that's basically the rationale I've heard too many times.
There's this deeply, deeply ingrained idea that the government wants to rob you blind, no mater what.
Whereas a for-profit company's explicitly stated goal is to make as much money off you as they can.
> Why must every service and thing in the US must be a private profit making thing?
It isn't. There are roughly 2 million nonprofits. "Nonprofit organizations play a significant role in the US economy. In 2022, there were 1.97 million nonprofits operating in the US"
And there are endless government programs and millions of government employees. The federal government alone spends over $6 trillion of our money, and money we don't have, per year, and most of it is on mandatory social programs.
"About 60% of all federal spending is categorized as mandatory spending — which amounted to $3.8 trillion last year. This spending is essentially on autopilot because it funds programs whose eligibility rules and benefit formulas are set in law. This consists mostly of programs like Social Security, Medicare, Medicaid and Veterans care."
In the US, some believe that it's better to replace a government function that costs X with a private entity that charges X. The reasoning is that the efficient free market will drive down X, leading to better prices for everyone.
In reality, my city's parking meters now charge a $0.50 minimum with a service fee of $0.25 to the private company that now runs them. I've tried competing by setting up my own lower-priced meters, but that's not working out so well.
1. If the government is in charge of deciding the tax policy and collecting the taxes, it creates a potential conflict of interest if they are also in charge of telling you how much you owe. In theory, they could charge you more than they're legally allowed to, but how would you know unless you (or someone else) also calculated your taxes? A common suggestion to this is to have the government give a return that shows what they _think_ is owed, but this creates a conflict if the government accidentally underbills you, since you're not likely to correct the mistake. In order to ensure compliance on both sides, both the government and individual need to prepare the tax return. Otherwise, one party risks being overcharged/underpaid.
2. Tax evasion is an effective law enforcement tool for catching criminals, so by putting the burden on the individual to report taxes, you add another tool in the law enforcement toolkit. From the state's perspective, it is more compelling to tell a jury "this person owed $5 but only paid $1" than "this person owed $5, but only paid $1 because we told them they only owed $1." Tax evasion is how famous gangsters like Al Capone and other shady-characters have historically been caught[0]
The tax prep industry is lucrative largely because of lobbying and consumer ignorance. There are plenty of free-file options for folks below certain income thresholds, as well as non-profits who will do your taxes for free. There are also lots of free tax-prep sites, but they are being drowned out by the advertising and lobbying of the for-profit tax-prep industry.
To add my own 2-cents: if your income comes from investments, 1099, or W2, you likely can do your own taxes in about an hour. I personally use TaxHawk [1] since it's free for federal and $16 per state return, and has the same kind of interface as turbotax and the like. If you want to save on that $16, you could use TaxSlayer [2] instead -- I've used all of them, and personally prefer TaxHawk. Just remember to decline any of the upselling they do just before you submit your refund. You probably don't need the premium service, a dedicated tax pro, nor audit protection.
Source: am a CPA
[0] https://en.wikipedia.org/wiki/Al_Capone#Tax_evasion
#2 isn't a strong enough reason to justify the significant out-of-pocket costs and lost productivity of the US tax system. If the tax collector is regularly finding only $1 of $5 tax obligations, that seems better solved by improving the collector's record-keeping, not hanging civil and criminal penalties over the heads of 350 million citizens.
I'll posit a hypothesis: Scale and morality interpretation differences.
I've yet to have a > $1000 restaurant bill (not even close), and the experience I got and the reciprocity instincts in me compel me to correct it if say they were to forget to charge me for my guac or give me more change than i was owed.
Whereas in the Gov't there is scale that tempts people to choose immoral paths, and also there's a morality of efff the government in a lot of people's minds. It's an abstracted entity of which we mostly do not enjoy the experience and cannot treat humanely (it's not a person).
Suppose your friendly neighborhood restaurant stopped giving you the check at the end of the meal, and instead had a stern sign on the table saying "Pay what you owe. Underpay and we call the cops."
Would you still feel that warm reciprocity?
https://healthjournalism.org/blog/2024/09/report-u-s-spends-...
I can’t find it on mobile right now, but the associated graph is very illustrative
It is not cheaper to pay a private company.
In Germany tax-prep industry is huge, there is a huge network of tax consultants plus paid online services like taxfix and smartsteuer.
The only countries I lived which didn't require you to declare the taxes were Russia and Georgia, mostly because 13% and 20% flat tax rate respectively.
Any country which does have complicated progressive tax system would require you to declare taxes at least at some cases.
For me not worth to use it having extremely good tools like the offering from WISO.
In my opinion a complicated tax law is a direct attack from the State against low and middle income population. If you have low income and poor education you will not be able to make use of the tax law to increase your available income, something that high income citizens do daily.
In this case we have to thank the free market to provide really easy tools for less than €30 so middle and low income citizens can start at least to take advantage of the tax law.
I’ve lived in multiple countries and always did my tax report myself. And the German situation is so blatantly designed, compared to other countries, to benefit only a very small portion of the population.
Not only that, If the amount of man/hours that the whole country of Germany spends doing taxes would be spent on productivity gains or just normal work, the country would become immediately the richest country in the world. Instead, it’s just wasted effort and work.
"extremely complicated to use" well, that is something that you hear often from Tax advisors or tools for less than €30. Same FUD tactics.
In France you have to declare taxes, but everything known to the tax authorities is pre-filled, leaving you to add any special incomes/deductions that didn't come trough regular channels that get automatically reported.
You still have tax consultants to help you optimise if there are higher revenues, but it's a very niche service.
In other countries the regulation and culture is less business friendly so people don’t do it. Or they operate illegally,
I think that a lot of immigrants have to adjust to how seriously tax regulations are taken where they may have been able to ignore them before.
The short answer is central banks are not setup to offer services directly to the public.
This is different to the tax office in that people already need to interact directly with it! Anyone in the UK can fill out a Self Assessment, for example, however it's optional for almost everyone, because Pay As You Earn takes the tax off your employer instead.
Receiving government assistance? Some kinds are taxable, some aren’t.
Moved states? You have multiple state filings now.
Got married? divorced? Splitting custody or property? Special tax forms to fill.
Native American? Veteran with disability? Senior? Student with loans? Bankruptcy? Freelance income? Etc.
Normal life events turn into tax complexity consequences. And without expert help, it’s hard to know if you’re doing your taxes correctly, which adds stress and time.
One would think that the government should know what government assistance you're getting. In any case, taxable benefits get reported to the IRS automatically on form 1099-G.
> Moved states? You have multiple state filings now.
Arguably irrelevant. You can change how filings work federally without changing how state filings work. Perfect is the enemy of good, etc.
> Got married? divorced? Splitting custody or property? Special tax forms to fill.
Sure. Sometimes you have life events that happen where you'll need to make adjustments. Such possible events can be mentioned in the letter / email you get from the IRS, with details as to how to adjust the filing. This is typically how it's been done in other countries with automatic filing.
> Native American? Veteran with disability? Senior? Student with loans? Bankruptcy? Freelance income? Etc.
Income typically gets reported to the IRS on a 1099 or a W-2.
Loan interest gets reported to the IRS on 1098-E, so the deduction could be automatically calculated.
Presumably the IRS would know if you previously filed a tax exemption and could assume that hasn't changed if it's based on things like having registered membership in a federally recognized tribe. Even if you haven't filed that exemption before, presumably the government would know that you registered the membership.
The government knows your birth date so presumably they'd be able to calculate when you become a senior, where that's relevant.
Bankruptcy is one of those special cases that I'd expect would be an exception case where you'd need to adjust the filing (and your trustee would probably help with that).
Most people don't have special cases that require changes. The IRS already has a shockingly large amount of data on people. I encourage you to try getting your tax transcript some time[1], it should be illuminating.
Vs. public services and public servants? Not so much.
And obviously the draft usually assumes that you will have to pay more tax, since there’s a perverse incentive given it’s the government who fills it for you.
I wonder if the explanation actually had to do with these people who used to do the job 15 years ago influencing the process to ensure they remain relevant. Kind of like in the US actually.
You can also just not file your taxes, if you don't owe anything (and as I said, jobs always err on the side of overpaying) they won't bother you, but most people end up eligible for the tax refund, so it is more beneficial to pay for that service.
One thing I can say for sure: doing taxes with a computer takes me longer than filling out the paper forms by hand! There are so many delays while "calculated" (as if a ghz computer can't add numbers fast), and loading question pages that I can obviously skip (I never worked for the rail road, I'm not blind...) but take extra time because of how they setup the UI.
From the IRS website:
>Who must file >Most U.S. citizens or permanent residents who work in the U.S. have to file a tax return. >Generally, you need to file if: > Your income is over the filing requirement > You have over $400 in net earnings from self-employment (side jobs or other independent work) > You had other situations that require you to file
Not sure if your intent was to discourage filing, but it read that way to me.
OTOH it would be a pretty dumb move since the chances that the amount taken out of your checks was exactly right is very small, and you’d be leaving hundreds or thousands of dollars in refunds unclaimed.
The spreadsheet downloadable at https://sites.google.com/view/incometaxspreadsheet/home (no affiliation) is helpful to avoid math errors and get the entries from the various schedules into the proper place on the main forms.
Even this is overselling it.
Most people have ZERO deductions to deal with. You put in your W2 pay, you take the standard deduction, and you file and get your money back.
Next time you use something like turbotax, download the forms it generates and look at them. There's zero complexity. Turbotax doesn't do anything. It's literally filling in 14 rows of numbers that come directly from your W2.
Hell, turbotax purposely runs fake animations and makes you waste a ton of time saying "Oh we are looking for all these deductions" but it's all a lie. None of the animations actually do anything. Most of the deductions it is supposedly checking for would Never apply to someone with a normal job. They want you to think it's complicated. They will ask you questions they know the answer to just to waste your time. Every single year, TurboTax asks me if I'm eligible for the earned income tax credit, and every single year, TurboTax knows from the previous questions that I cannot possibly be eligible. They ask me anyway, because it seems like a complicated credit so it makes taxes seem more complicated.
Taxes could take less than 15 minutes for nearly all Americans. Turbotax's bullshit, even disregarding the stupid tax they are charging the whole country just to copy some numbers from column a to column b literally wastes everyone's time every year.
People who insist that taxes are complicated are flat out wrong. If you run a small business, you absolutely have the choice to just file extremely simple taxes and pay a higher tax rate. It is a choice to attempt to take every possible deduction. Each and every one of those deductions is a handout to business owners. They bitch and moan about how bad taxes are, but their taxes are complicated so that they can make more profit.
Guess what? Nobody forces you to run a business, which again, is a handout to capital owners. A few hundred dollars in permits or registration every year is a perfectly valid cost to enable you to take advantage of the insane benefit of "you can literally cause hundreds of deaths but as long as you weren't obviously grossly negligent you are in the clear". Nobody forced you to attempt to take every single handout offered every single year. Nobody forced you to be your own boss, to own capital, to profit off of the labor of others.
Such entitlement. These same people will turn around and cry about "freeloaders" and "welfare queens" and "handouts"
If you're an ordinary citizen of most countries and work under a company, the company is obliged to track it for you. What you get is a very simplified form asking if you have more income sources than from your work, and the local tax system means that most of them legally do not have any (for example, banks collect the taxes for the interest you have received, not the arcane American system where you're the one responsible for that).
In a PAYE system, merely being a foreigner isn't _usually_ an issue, provided that you're domiciled and don't have foreign income. The exception, as you mention, would be a US citizen; the US's approach to foreign income of its citizens is sufficiently weird that they'll generally have annoying tax situations.
> What you get is a very simplified form asking if you have more income sources than from your work, and the local tax system means that most of them legally do not have any
If even that. In Ireland, and I believe the UK, you only have to fill out that form if you actually _do_ have non-employment income which is not deducted at source. Most peoples' only interaction with Irish Revenue would be to claim tax credits on rent/mortgage/medical expenditure/whatever.
So a W-2?
>for example, banks collect the taxes for the interest you have received, not the arcane American system where you're the one responsible for that).
So a 1099?
I gotta be honest it sounds like you don't really understand the American tax system very well.
When people say they are “paying their taxes”, really what they’re doing is checking whether the automatic tax deduction out of each paycheck was properly calculated over the whole year, and whether any special circumstances make them eligible for a refund (or whether they’ve had other income they need to pay tax on).
For other things, I can go to a "Virtual Tax Office" with my browser or my mobile banking application and pay with cash or credit card, sometimes with zero interest installments, even.
The reason this topic continually comes up is that people in the US are stupid and bad at math, and the IRS is very heavy-handed and issues penalties for minor tax errors, so people are afraid to interact with the process without a trusted intermediary.
I enter my credit card number, and pay. That's all.
Same for other stuff like housing tax, too.
For most people in the US, filing their taxes is a very simple process, which is why it's so annoying that Intuit has successfully lobbied to integrate themselves into the process.
The irs is neither heavy handed nor particularly quick to issue penalties.
There is an extremely effective and powerful alliance between certain republican politicians and tax industry corporations that work to convince people taxes are hard and the gov can't do them and they need an agent.
It works.
Then they do that... again. At some point they probably put your name on some kind of list of Bad Taxpayers but unless we're talking millions here they probably aren't sending agents after you in specific.
The tax code is a behemoth. Plenty of loopholes to find to save money.
Also, most of the tax prep companies are thinly disguised payday loan companies.
It should be the case that all your basic taxes get calculated for you and taken at the point you're paid by your employer. Anything exceptional should be able to be claimed back via a web portal somewhere.
So it's not like 160m tax returns NEED to be filed. That's just how it is today.
In the 1950s the common person couldn't take advantage of most loopholes (I'm not old enough to remember, but I'd guess mortgage interest was the only useful one, the rest where $100 here and there but it never added up to much for the common person)
(This particular situation is an alliance between the tax preparers, who have the obvious interest, and republicans who are ideogically comitted to inefficient/ineffective governments)
This is a side-effect of the Protestant Work Ethic. Weber coined the term in 1905 as a way to explain why the Northern European countries (who were predominantly Protestants) were wealthy while the Southern European countries (who were predominantly Catholic) were poor. Prior to the election of JFK as US President, anti-Catholic sentiments were widespread throughout the US (which explains why Irish & Italians were not considered "white" until the early 20th Century). Even today, many Evangelicals do not consider Catholics to be Christians.
> Calvin taught that all men must work, even the rich, because to work was the will of God. It was the duty of men to serve as God's instruments here on earth, to reshape the world in the fashion of the Kingdom of God, and to become a part of the continuing process of His creation (Braude, 1975). Men were not to lust after wealth, possessions, or easy living, but were to reinvest the profits of their labor into financing further ventures. Earnings were thus to be reinvested over and over again, ad infinitum, or to the end of time (Lipset, 1990). Using profits to help others rise from a lessor level of subsistence violated God's will since persons could only demonstrate that they were among the Elect through their own labor (Lipset, 1990).
> Selection of an occupation and pursuing it to achieve the greatest profit possible was considered by Calvinists to be a religious duty. Not only condoning, but encouraging the pursuit of unlimited profit was a radical departure from the Christian beliefs of the middle ages. In addition, unlike Luther, Calvin considered it appropriate to seek an occupation which would provide the greatest earnings possible. If that meant abandoning the family trade or profession, the change was not only allowed, but it was considered to be one's religious duty (Tilgher, 1930).
These 2 paragraphs also explain why many in the US have such an utter hatred for any sort of social safety net for poor people - those people are damned in the Biblical sense and therefore it is a sin to give them any sort of money, food or healthcare.
[0] - https://en.wikipedia.org/wiki/Protestant_work_ethic
[1] - History of it: http://workethic.coe.uga.edu/hpro.html
[2] - https://en.wikipedia.org/wiki/Anti-Catholicism_in_the_United...
During the Cold War, one criticism of socialists/communists was that they were taking orders from Moscow. Likewise, Catholics were presumed to be taking orders from Rome.
> Supporters of the Know Nothing movement believed that an alleged "Romanist" conspiracy to subvert civil and religious liberty in the United States was being hatched by Catholics. Therefore, they sought to politically organize native-born Protestants in defense of their traditional religious and political values.
https://en.wikipedia.org/wiki/Know_Nothing
During the later 1800s, many "charity hospitals" would abduct children of Catholic women and then sell them as orphans that other people could adopt. The Klu Klux Klan would also attack Catholics - not just burning crosses and lynching black people.
https://en.wikipedia.org/wiki/Orphan_Train https://orphantraindepot.org/history/opposition-to-the-orpha...
https://en.wikipedia.org/wiki/Definitions_of_whiteness_in_th...
> Not only were Irish immigrants viewed as interlopers by many white Americans (an irony, considering the historical treatment of Native Americans), but these immigrants were Catholics in a primarily Protestant land. It was a religious difference that widened the divide, as did the fact that many Irish immigrants didn't speak English. As strange as may it may sound today, Irish immigrants were not considered "white" and were sometimes referred to "negroes turned inside out."
https://history.howstuffworks.com/historical-events/when-iri...
The history site covers how people perceive the value of work has changed over the centuries.
Index of the history of the ethics of work/labor: http://workethic.coe.uga.edu/history.htm
Home page of this mini-site: http://workethic.coe.uga.edu/index.html
The Wikipedia page has lots of links and references about PWE.
> In 1998, the International Sociological Association listed this work as the fourth most important sociological book of the 20th century, after Weber's Economy and Society, C. Wright Mills' The Sociological Imagination, and Robert K. Merton's Social Theory and Social Structure.[3] It is the eighth most cited book in the social sciences published before 1950.
https://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_S...
It also means its hard for Democrats to improve as well since removing any improvements in filing are some of the first things Republicans push to undo when the come into power.