Hacker News Reader

Comment by mannykannot | Hacker News Reader

The US individual tax reporting process is an annual reminder to voters of what they pay in taxes, that cannot be easily ignored. I am sure that fiscally conservative politicians see this as an advantage to their cause, though they are unlikely to publicly say so.

View on HN

Someone else said that elsewhere in the thread, and I disagreed there, too... it's funny how people can look at the same situation and come to completely opposite conclusions. But to me it looks as though the entire system is designed to hide how much people pay in taxes. Almost everybody pays via automatic withholding so they never see the money in the first place; the defaults are designed so that people over-withhold by a small amount and get a refund; and even that's not enough so we have some taxes that are partially "paid by the employer" to even hide it from a deduction line on the paycheck. As I said in the other thread, if "we" wanted to make sure voters couldn't ignore their tax burden, we'd end automatic withholding.

You have a point - it could be worse, but automatic withholding is not likely to go away, because the government needs the cash flow, and even most fiscally conservative politicians tacitly recognize this.

I think the the emotional impact is important: preparing a return is still burdensome, even if not as bad as it could be, and that adds to and reinforces the pile of negative emotions associated with taxation.

Automatic withholding is also really important for taxpayers, as few people are fiscally responsible enough to save up the money throughout the year on their own. People end up living paycheck to paycheck regardless as to whether they're earning 20k/yr, 50k/yr, or 100k/yr, so sudden expense of several thousand dollars, even one they knew was coming, would be seriously damaging to their financial stability.

I've tried telling people to save even just $50/mo. until they've built up a three month cushion, and they insist they can't afford that. You wanna try convincing them to also set aside a few hundred bucks a month for taxes?

Why wouldn't an IRS-prepared return do the same? You'd still have to look at the numbers and handle your payment/refund.

If people were perfectly rational, this might be the case, but I don't think receiving a statement has the same emotional impact, and is not as attention-grabbing and drawn-out, as going through the process of preparing a return - especially if, as for many people, you get a refund.

My guess is that relatively few people, of those who currently prepare their own returns, would invest as much time and effort into verifying an IRS-prepared return as they do in preparing one. I would also guess that a majority of swing voters prepare their own returns (I know, that's a fair amount of supposition on my part...)

Reply on news.ycombinator.com