One challenge of mine is a self-hosted AI doing my full tax return, without errors that would get me in trouble. Bonus points if it exploits legal loopholes.
I want AI to replace me in my chores, not in my enjoyable activities.
I want AI to replace me in my chores, not in my enjoyable activities.
They don't do this in this country because (a) it's a political project to make people to sympathize with the rich by feeling their pain (b) it's a great scheme for legalized corruption by creating incentives to build companies around a fake problem.
They not only do that —saving you so many worries— but then you get to be medieval about it and say: no, I challenge the tax authority to a duel.
The Earned Income Tax Credit is one of the most important transfers embedded in the tax code. It provides about $70B to low-income workers every year.
Take a look at the eligibility criteria:
https://www.irs.gov/credits-deductions/individuals/earned-in...
You can claim the EITC if you are married, not filing a joint return, had a qualifying child who lived with you for more than half of the tax year and either of the following apply.
- You lived apart from your spouse for the last 6 months of tax year, or
- You were legally separated according to your state law under a written separation agreement, or a decree of separate maintenance and you didn't live in the same household as your spouse at the end of the tax year.
…
You can claim the head of household filing status if you're not married, had a qualifying child living with you more than half the year, and you paid more than half the costs of keeping up your home.
No, the government can’t derive this all “automatically”.
The government absolutely should know enough to apply this reasonably accurately, and things that they can't correctly derive (like 'paid more than half the costs of keeping up the home') should simply not be part of tax law, or should be a checkbox when registering your address of "I am head of household" so the government knows.
The US government can't derive all this, but they should update it so they can.
Heck, with the NSA's hooks into banks and cell phone companies, there's a non-zero chance they actually could derive this all now if they wanted.
The American mind cannot handle such invasions of privacy.
In most situations where you paid significantly more than half deriving this information should be easy.
Obviously edge cases where someone paid 55% would not be easily derived, but probably most people wouldn't care too much about that.
“No, they can’t.”
“But they should be able to!”
Personally, I don’t want a battered wife fleeing her husband to have to file a form with the IRS for tax purposes, but mostly I’m just tired of this kind of hn thread.
If you're working a W2 job or contracting for a big company, the government is probably aware of your income and that's where we should be focused on automating tax returns but if your income comes from regular people, they likely have no idea.
Unless you turn the entire national security apparatus around to surveil citizens' income, I don't think it's ever possible for the government to know everything.
How it should work is that the government should show you everything they already know and prompt you to fill out anything they don't and then you submit it. The majority of people would immediately benefit from this. They don't do this for a few reasons: number one being the tax prep lobby that wants to make doing your taxes a burden such that even regular people feel the need to spend money or have their personal financial information gathered by private companies. The second reason is that if the government is already aware of how much you've made, chances are you've already paid your taxes and would either be looking at a refund or other tax credits, the government is effectively spending money to make it easier for you to take money away from it.
For 90% of the population, taxes are automatic, and the few people who do side-jobs or have lemonade stands or deal drugs have to file their own taxes separately.
I'm not opposed to that, I just want the 90% case of "single or normal family + W2 employer(s)" to be covered automatically.
You can just ask the IRS for your "tax transcripts" and do the data entry. People don't do this because it leaves tons of money on the table.
Now you might say that a tax game that rewards skilled play is bad. But are you sure about that? Because everyone with influence over the system (who all happen to be skilled players) happens to be quite fond of the game, observably speaking.
In my country I literally got a letter from the government if I could please file my taxes, because they believe the automatic deductions are too high so I am likely owed a back payment. In a previous year (I am not very good with non-timing-critical paperwork) they even called me on my personal cell to inform me about something similar.
The slogan of our tax collection agency is "we can't make it more enjoyable, we can only make it easier". If you're a regular employee and your taxes - deductibles or not - are a hassle, then that's 100% a political choice.
In other countries, you can still do it yourself, you just don't have to do it if it's simple.
It's worse than that. Nobody is actually sympathizing with Mark Zuckerberg, the reason US taxes are complicated is so Congress can confuse people about how they really work.
One of the examples in this thread is the complexity of the EITC. The EITC is one of the most "efficient" tax credits -- it's much better to give people money (or not take it from them to begin with) than having systems of complicated vouchers for some specific thing or another with a bunch of strings attached and bureaucratic paperwork. But that same efficiency means that if it was working as it was supposed do, most of the lower middle class would be getting a piece of it. So why is it so complicated?
First, to hide this part of it: The end of the phase out range for an individual with no dependents, i.e. the most money they can make and still receive it, is $19,540. Which is to say, is less than what you make by working a full time job at the minimum wage in 30 states. None of those people get any of it. Neither do the people who are unemployed, because you also don't get it if you don't have any earned income. The primary way to receive any of it is to have a child -- but not too many of them, because you get no additional credit for having more than three. Moreover, the caps for married couples are only a little higher than they are for single people, so a married couple in California with two incomes gets nothing even if they have three children because the credit is fully phased out by making their state's minimum wage.
And second, because if they make it complicated enough then even some of the people who are eligible for it won't notice.
The combination of these is the reason a credit that should be going to a significant percentage of the population is somehow only ~1% of the federal budget. Because then Congress gets to pretend to be helping people while minimizing the amount of helping people they actually do.
But realize that changing it is a policy debate not a “this should be going to a significant percentage of the population [but isn’t because of tax code complexity]” debate point.
(I happen to agree with you that this type of credit is highly beneficial.)
But that's a different matter than pretending to have it while disguising the fact that it's structured to make sure hardly anybody actually gets it beneath a layer of impenetrable complexity.
If EITC increases are capped at 3 children, it's because the policy that was passed made that choice. If we want to debate whether that cutoff should be 2 or 4, that's a valid policy debate.
If EITC credits are capped at just under $20K of income, that's perhaps because the policy targeted the very lowest income working poor and by policy did not allocate funds for the next tiers of income earners. Again, that's a policy debate to be had.
The issue is that Congress is making the details of the second type of policy complicated on purpose to conceal the fact that they're not really doing the first one, while making it seem like they are to mollify the people who want something like that.
That wasn't the framing of the EITC when introduced. The framing when introduced was in opposition to basic income proposed by Nixon and instead to offer a temporary stimulus via refundable credits to the working poor that would roughly offset their social security taxation, to ensure that "work pays more than welfare," and to try to stimulate the economy to exit the severe recession of 1974.
It had nothing to do with supporting working people in the 4th and 5th decile of income. Getting that policy agreed to is a policy debate that hasn't been had.
I have a relatively straightforward tax return and still found significant mistakes on 3 out of the last 4 years of returns filed by CPAs.
It beats the tax advisor we hired two years ago, who made a significant mistake.
The German tax system is one of the most complicated one in the world.