Some states offer direct electronic filing where I just have to enter in the numbers I have. It's great since I'll have fewer arithmetic errors and be able to file without giving my personal information to a third party. It works when I don't have a complicated tax situation, and I don't see why we couldn't have something similar for federal taxes. As it stands, I have to do everything by hand, if I'm concerned about my privacy.
This doesn't even have to be a question of whether it will be beneficial for the government to send out pre-filled forms.
Third party = tax prep companies that I'm forced to use. (Accountants technically might count, but people have to actively choose to go to them, so there's no point complaining there.) I don't find the privacy from the _government_ argument convincing, for the reason you mentioned.
I'm going to plug the current Canadian system for online tax filing, as I think it is a really good compromise (and a excellent system in general).
The Canada Revenue Agency acts as a repository of information. An individual uses a private provider for online filing (I use Intuit, it costs about $20). At the start of the process, you connect to the CRA through the provider and download all the tax slips filed with them. Then you verify the information and go through the filing process, correcting and adding information as necessary.
The provider often offers suggestions on how you can increase your refund (which is usually "put more money in your retirement savings plan"), and has warnings, etc. Then when you're happy with your filing, you contact the CRA through the provider and file your return.
I think this is a good system because it keeps the individual in control of the process. It simplifies the CRA's job to something that they pretty much already do. The private providers compete for customers with features and price and have large incentives to do things correctly.
As well, this system allows you to check that all the info is correct. For example, this year when I was doing my taxes, something felt off. At the end of the process, the provider showed me a year-over-year comparison with the last couple of years, and some fields didn't have values, even though I didn't really do anything different this year. I double-checked with my bank, and it turned out that the CRA information was missing one tax form. I added that form manually, and the new numbers looked good.
I think that divorcing individuals entirely from the taxation process is a bad idea. Employer withholding is bad enough, but letting the individual ignore tax filing all together?
In UK and Singapore (some of the systems I have experience with), you don't need to do anything, if you just get your income from a single job and make less than six figures or so.
In Singapore it stays simple for quite a lot longer. Even when running a company. They don't do personal income tax withholding either. They send employees the tax bill at the end of the year. (Pension contributions are withheld, though.)
I do like that there are (almost) no refunds in Singapore. They just have low rates with no exceptions in the first place.
Genuinely curious, in the US why is 'filing your taxes' a thing you have to do manually every year, and why is it so complicated that you need software? Is it just a declaration of how much you've paid over the course of the year, or do you have a tax debit/credit you need to settle?
Ha! It's so funny to me to think that other countries have simplified this.
Basically, the software works like this (and this will explain US tax code a little): first you import a form that was given to you by your employer. It lists your total earnings, then lists the various taxes that we automatically deducted from your paycheck over the year: your federal taxes, state taxes, Medicare, and social security taxes.
Then you get asked a series of questions about things you can possibly deduct: did you buy a home? Did you make or lose money in the stock market? Do you have particular assets that have depreciated in value? Do you pay for your car for work? Do you but school supplies as a teacher? Did you make profit or Los from farm income? Basically all this really specific stuff. Did you contribute to one of two kinds of personal retirement plans?
Then it asks you to import healthcare info - what was your monthly premium? Did you buy it on the Obamacare exchange? Did you receive a subsidy.
All of this (and more) gets calculated and then you give it whether or not you owe more taxes or will be receiving a refund.
This is the free, easy version for people who have ordinary jobs. If you freelance, or are a contractor, or own your own business you have to do an even more extensive accounting of your Income versus deductions with receipts and notes etc.
If you are incorporated or own a corporation that's a whole other set of laws.
Basically you have to fill ask this stuff out to avoid paying as many taxes as possible.
It's confusing precisely for that reason, there's a deduction for every lobbied entity and you are trying to figure out if one of then applies to your situation.
I am in my 40's an I have never filled in tax form in my life. I get sent a summary each year showing my taxable income and how much I've paid but it's all done by my employer as PAYE, always has.
Boggles my mind how Americans put up with this.
In the case of tax preparation there are a large number of tax accountants who stand to see their livelihoods threatened if tax filing was easier and whose votes exert much more influence than the donations of money.
Yes. And the flipside is that the complicated tax system costs even more people lots of time and hassle. All easy to understand.
This is just a counterexample to people who suggest that money rules politics.
> The question is not 'why is there so much money in politics?', but 'why is there so little?'
Because if people could coordinate at a level where they could produce bribes that proportionately represented their own interests, they wouldn't need a government to solve coordination problems in the first place.
To a certain extent.
But it seems like with the sums involved eg Larry Page or Bill Gates could just spend a pittance, and solve the problem for everyone.
I assume that direct money in politics is not as important as often claimed.
(Ie if Bill Gates were to shell out, he still wouldn't get his way just by outspending the other lobbyists.)
This sound suspiciously like some of David Friedman's work. His stuff is great, if for no other reason than that you realize the mechanisms he proposes would be perfectly attuned to what we *say* we want, but they would almost certainly fail because of what we actually want.
The bill extends the original agreement in 2002 which prevents the IRS from providing their own FreeFile service as competition to the existing services provided by the private sector.
During the term of this Agreement, the IRS will not compete with the Consortium in providing free, on-line tax return preparation and filing services to taxpayers.
IRS FreeFile as it did before the bill passed was through 3rd party vendors like TurboTax and FreeTaxUSA, the bill codifies that IRS FreeFile will continue to remain as it is: a free commercial-type online service.
It's fun to play a little game. When the article says "the corporations are at fault," you know it's a Democrat proposing the bill. When the article says "the Republicans are at fault," well, you know who's at fault.
All 5 tax forms I had to submit were completely free (fed, state, interest income, stock/capital gains, and a form for a $600 prize I won from a radio station). You can also submit independant contractor forms for free as well. Turbo Tax wanted to charge for everything but fed.
Well yeah? I mean thats kinda the deal you make in the private sector. You can pay with your dollars or you can pay with your info - I think the point is that credit karma is the least abusive of the options (eg doesn't wait two hours before telling you to pay them $70 or else start over again with someone else, while also keeping all of that sweet sweet info)
At the very least, credit karma is pretty transparant about what they're doing.
There's a big tax software company in Kennessaw. they handle a ton of efiles for the fed through their servers. I'm sure them and intuit have some kind of give / take deal with the fed that says "we will put up the tech if you do XYZ"
I've been using CreditKarma's free tax filing service for the last couple of years. It doesn't seem to have requirements like earning less than such and so salary to qualify to use it for free. They probably make it available for free by setting their terms and conditions to record your income tax information into their database and sell it to the highest bidder, but I'm pretty sure all the tax preparer companies do the same whether free or not. So I'm not sure why the upset that the IRS will be disallowed to offer their own tax software. The credit karma free tax software doesn't have a bunch of advertisements or upsells while using it unlike other tax software that has troubling and confusing upsells through out it's software.
The point is the government should be able to offer people the ability to file their taxes online like a civilized country. Banning them to make money for middle-men is a grotesque abuse of the legislature. I don't care if it is functionally just as easy to do it for 'free' with one of those middle-men, principles mean something.
>Banning them to make money for middle-men is a grotesque abuse of the legislature.
This is yet another reason NOT to give government functions to corporations. It makes the US a fascist nation. Giving power to corporations over that of any government is what was so objectionable about TPP.
>The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or by any other controlling private power.
— President Franklin D. Roosevelt, April 1938
>Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.
— Benito Mussolini
Last week, the House Ways and Means Committee, led by Rep. Richard Neal, D-Mass., passed the Taxpayer First Act, a wide-ranging bill making several administrative changes to the IRS that is sponsored by Reps. John Lewis, D-Ga., and Mike Kelly, R-Pa.
In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing.
Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system.
If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry’s profits.