I disagree on one point. Block and Intuit are also lobbyists against all sorts of code simplification programs. Anything that makes the filing process easier, and having fewer deductions and penalties available makes it easer, they are against.

The business of H&R Block and Intuit came about in response to tax code complexity, they did not create it.

Boeing didn't create the Air Force, either. Comcast didn't invent TV, cable TV, or the Internet. MADD didn't invent cars, alcohol, or DUIs. The DEA didn't invent drugs. Ruger didn't invent firearms. GM didn't invent the automobile. The UAW didn't invent factories or employment agreements.

I fail to see what being interested in the state of continued being of something has to do with having been the inventor.

The point is that they are a symptom. The problem is the government and their inability to keep anything simple. And in reference to the original topic, taxes for people with one W2 and no other income are not complicated. You can complete a 1040EZ on paper in 5 or 10 minutes.

They were created to treat a symptom, not address the cause. Now that a viable way to eliminate the cause exists, they advocate the keep the root problem.

The 1040EZ doesn't allow one to deduct home mortgage interest. You need a 1098 and a Schedule A and the long-form 1040. That has nothing to do with whether you're filing from a single W2 or multiple 1099 forms.

IIRC you can't deduct relocation expenses, wardrobe for work, books and training materials, or a whole bunch of other stuff on a 1040 EZ.

So sure, as long as you want to overpay your taxes you can file in about 45 seconds.

In Europe, I have a pre-filled tax report. Of course, it includes only my employee's income and all the banks interest & dividends and deductions they can automatically get (wrt known family situation, loan interest, etc.).

For the rest, it is still up to me to declare additional incomes (e.g. rental properties) or deductions (e.g. donations). It does simplify though the process, especially for "W-2" employees.

The original article was talking about simple tax returns. In fact, the 1040EZ is relatively new. Much newer than the existence of H&R Block. So evidently their efforts to keep taxes complicated aren't entirely successful.

Even a 1040 "long form" (2 pages) with itemized deductions for mortgage interest isn't that complicated.

I file about a 10 page return, 1040 with schedule A, schedule C, self-employment and various others and I always do it myself on paper.

If you are at the point where you think you need TurboTax, you're probably better off just hiring a local CPA firm to do your taxes.

Of course, you also need to pay one of the tax prep companies just to file your return online (if you're above an income threshold), because you can't do that directly as an individual, either. Also due to their lobbying.

For free e-filing for anyone who can fill out the form themselves: https://www.freefilefillableforms.com/

For free worksheets to do the calculations, http://www.excel1040.com/

Filing the state return electronically is different by state, but often either doable or you can mail it in.

They're a symptom that has just successfully lobbied to keep the disease going. At this point it's reasonable to say that they're actively helping to cause it.

They WERE a symptom, but now they actively work to protect their existence via lobbying against any simplifications and common sense changes to tax code. So I don't personally have any issue with how and why they came to exist in the first place, but I find it despicable that they actively work against larger society now. It's well-known that they lobby against simplification efforts, and why they do this.

In other words they rely on tax code being complex or their reason to exist ceases.

They didn't need to create it too perpetuate it for their own self interest.

And the prison lobby came about because we have prisons.

In new zealand, we got rid of having to do tax returns for salaried/wage earners a number of years ago. Makes life easy for a vast majority of people. You can still do a return if you want to though. For the tax department it cuts down on how much infrastructure they need.

Similar in Norway. You receive a pre-filled-out tax return in your digital inbox (Altinn.no). All the fields are filled out from wages, bank accounts, charities etc., numbers which have been reported to the government. You don't need to do anything with the tax return unless you want to make changes or attach additional forms. If you do nothing at all, it will be automatically submitted.

In India also we get form from employer with information on tax paid in that financial year. You just need to copy paste the values to tax dept. website and submit. So simple.

I think that's optimizing the wrong thing; people should be aware of the amount they are paying in taxes.

In the UK each pay-as-you-earn taxpayer ( I.e. tax calculated automatically and deducted from net income ) receives an annual statement of their tax and figuratively how it was spent e.g. £800 on health, £105 on defence etc

Whereas in the US most people don't pay any attention to where their tax dollars go. Meanwhile, President Trump raised our already ludicrous defense budget another $50 billion.

We're still absolutely aware of how much we pay (it's on your payslip). There's just no end of year filing process.

Painfully aware one might say, given how insanely high they are.

They at least usually shield the daylight robbery GST from us. Probably so we can sleep at night.

As a Kiwi living in California at the moment, income taxes as a proportion of income are much higher here than in New Zealand. Effective NZ income taxes are way down the low end for the OECD, lower than the US, the UK, Australia, the list goes on. IIRC only Chile is lower, though I may not recall correctly.

GST is a pain, but no capital gains tax is also a big win for many (and many states in the US, including California, have one of those too.)

The UK does the same thing as NZ, no tax returns.

At the end of the tax year you get a P60 form that tells you how much tax you paid over the last year.

Instead of opting for the deductibles route, goods are subsidised at point of sale, so e.g. if you're buying solar panels, you don't need to cover the whole thing up front, or whatever financing deal you get, then claim money back in your tax return; instead the price you buy the panel at already has the subsidy baked in.

There is a slight difference between the UK and US, though, in that there is no per-state/county income taxes. Only UK wide. Individual counties use property tax to raise what revenues they need (counties are also responsible for a lot less things than States)

> There is a slight difference between the UK and US, though, in that there is no per-state/county income taxes. Only UK wide.

Not completely true. Scotland has for several years now had the power to set higher or lower income tax rates than the rest of the UK, but until this year they've never actually used that power. But now this year, Scottish income tax rates are actually being set slightly higher than the rest of the UK – http://www.telegraph.co.uk/news/2017/02/02/middle-class-scot...

I agree. In fact, withholding should be done away entirely. Try taking money from people in a non-transparent way and see how well that goes.

It's amazing how quickly someone's feeling on taxation can flip once tax season means writing a check instead of getting a refund.

Of course, that's exactly why the system is set up the way it is; a number on a pay slip feels much less real than dollars that you have to fork over, so people hardly realize the extent to which the government is fleecing them.

I think people would freak out because many would forget to keep money aside to pay for taxes at the end of the year. If it were phased in or there was a large public education campaign to remind people to put money aside I bet there would be less anger.

Why?

I am not sure I see what you mean with "merely" it's quite a big thing not to have to deal with it every year.

In Denmark and many other countries this is a non-issue. The US should be too but too many interest from the lobbying of people like Intuit.

This is the correct answer to American's "That won't work because ..." on this thread. Turn your head to the right and take a look at Europe where it is plainly working just fine. Turn your head back left and look at how F'd up taxes are in the U.S. and it's pretty clear that objectively we have no excuse other than "some small minority of people are profiting from a broken system and are going to keep it that way."

First, what works in Europe is not necessarily portable. We could just as easily pick things that are better about the U.S. and badger Europeans about why they're not doing it that way when "it is plainly working fine".

Second, everyone attempts to cast every policy decision they dislike as evidence of corruption, chicanery, etc., but I don't think that's typically the case. The fact that a corporation and an elected representative agree regarding some policies does not immediately invalidate the position, nor should it immediately implicate the representative in accusations of malfeasance.

People have spent significant time in this thread discussing the pros and cons of such a policy, yet you insist that the only possible reason it would fail with the people's representatives is that "a small minority are profiting from a broken system". I guess since an advocate carried around a binder full of positive reviews, we assume that must be the universal sentiment of the people?

Is it not plausible that, as seen throughout this thread, many people simply don't agree that this would be a positive change?

Im not badgering anyone i just know as a european luving in the us that it doesent have to be that difficult.

And the pilot actually proved that it was workable in California, as well.

Interesting objection. To me simplify taxes == simplify filing taxes. "I'm doing my taxes" does not mean I'm doing my tax code, but I am preparing and filing my taxes.

As a lawyer and tax accountant, do you see a flaw in the professor's approach? Any domain expert insight here?

Depends on what you mean by "preparing." If the tax code is simpler, that means that there are less lines to fill out and fewer pieces of supporting documentation to find and attach. When people talk about making filing simpler, they mean that the lines are pre-filled, and the supporting documentation is either easier to obtain or somehow not necessary.

How is the proposal different than California's current online filing?

https://www.ftb.ca.gov/online/calfile/index.asp

CalFile morphed from Ready Return. The Tax Franchise Board created CalFile since they did not need permission to do it.

This is a good point. I think a real solution to the 'tax problem' requires both a) having the gubment send us an itemized invoice instead of making us file and b) having a transparent, simple to grok code so that we can validate the bill.

edit: this is obviously a huge huge problem to tackle, but dont we all feel a lot of energy around this during tax season? :)

The entire tax-prep industry generates about the same revenues as Dunkin Donuts. The idea that it is a significant causal factor in keeping taxes complicated is preposterous.

From what I'm seeing, that's not right, and Dunkin Brands[1] makes roughly 20% of Intuit's[2] income. Regardless, the amount a company is willing to spend on lobbying is not only dictated by their income, but also by how much they stand to gain or lose. I think Intuit may see legislation that makes taxes easier for many people as the beginnings of a trend that could be an existential crises for them. Even if they were on par with a Dunkin Donuts, I could see how they would be much more willing to spend any potential profits to fight this.

1: http://amigobulls.com/stocks/DNKN/income-stament/annual

2: http://amigobulls.com/stocks/INTU/income-statement/annual

What's preposterous about it? You can buy a lot of influence for a couple million a year. Are you saying they're wasting their money and might as well just redistribute it to shareholders? If not, then presumably they think it a worthwhile expense or they wouldn't spend it.

The Chamber of Commerce has been lobbying for a simpler tax code (including flat taxes) for decades. They can direct vastly more lobbying dollars to the problem than can Intuit or H&R Block. If it was just a matter of lobbying dollars, the 0.5% of the economy that benefits from more complicated taxes could not possibly out-lobby the 99.5% of the economy that benefits from simpler taxes (all else being equal).

The thing is, there are a lot of people and industries lobbying to keep the tax system complicated: real eatate agents and home builders want the mortgage deduction, oil and gas industries want the depletion allowance, hedge funds want carried interest, et cetera ad libitum. It's nowhere near 0.5% of the influential people in the economy, plus the people it benefits, it benefits a lot, while everybody else, it grinds away a few percent of their welfare.

EDIT to add: plus the incentives for lawmakers are to keep the system complicated, so all the contributions keep rolling in.

Turns out that people want to pay less tax. You say this like it's unexpected.

Most people are not going to have personal concerns over a pre-filled return as long as they are confident that they can modify it without repercussions. They may oppose it ideologically, on the basis that the government should experience as much friction as possible in its efforts to fleece the populace. Such an ideological position is a valid reason to oppose this change.

> They may oppose it ideologically, on the basis that the government should experience as much friction as possible in its efforts to fleece the populace. Such an ideological position is a valid reason to oppose this change.

Tax evasion is not a valid ideological policy. Tax minimization, fine, everyone is entitled to deduct as much as the tax code allows. Tax evasion is crossing the line into crime. That's literally always where the line has been drawn on taxes - "pay unto Caesar what is Caesar's".

If you don't like the tax policy, leave. It's part of the social contract - find somewhere to live where you agree with the social contract.

(and yes expatriation should be easier)

It's not tax evasion. People comply with the law, they just want it to be as difficult/expensive as possible for the government to continue the program.

>If you don't like the tax policy, leave. It's part of the social contract - find somewhere to live where you agree with the social contract.

lol? This attitude is the antithesis of democracy. In democracies, we say, "If you don't like it, contact your representatives and organize some peaceful, lawful opposition, and you may convince enough people to change it."

And indeed, it appears that's exactly what the people of California did when they didn't like this proposal, and of course, rather than admit defeat, the other side blames a corporation that dared to exercise its rights.

I don't know what it is with HN lately, but a lot of these really vapid, myopic memes have been invading the political threads here. I didn't make it to HN until right after Obama was elected, so maybe this is just how it is when Republicans are in power? The "threat" becomes more credible, resentment becomes more palpable, and it's get taken out on the users on the board?

> I don't know what it is with HN lately, but a lot of these really vapid, myopic memes have been invading the political threads here.

White noise response, nice. "How dare you post about XYZ".

Don't do this. If you don't have a point to make, then don't post. Internet bytes are cheap, you are not a mod who gets to flag posts.

You're not the first person to come up with the idea of passive-aggressive responses to things you don't like. And if you want to play the "malicious compliance" game then be my guest... but don't be surprised when an IRS agent or a judge pushes your shit in over it.

A lot of libertarians think that judges are beep-boop robots and will drop their spaghetti all over the floor when you whip out the one secret legal maneuver that attorneys don't want you to know about (judges hate him!).

This is very much not the case, at every level that you will ever reach the law is interpreted in a strongly "common law" view towards actual justice that doesn't really care for your strict textualism. The judge is going to take quite a dim view of you whipping out your clever trick and you are going to suffer for it.

Some don't, SCOTUS is notoriously partisan and the East Texas courts are notoriously friendly to patent law (although SCOTUS has repeatedly slapped down their interpretations). But anywhere you're going to get, don't expect your "the flag has a fringe!" arguments to fly.

By and large, the law will still be interpreted with the context of basic human decency. If you try and be a dick and stall the government with baseless legal maneuvering, the human being on the other side of the stand is going to recognize that and you're going to have a real bad time.

"simpler tax code" = "fewer loopholes".

That 0.5% of the economy hires 95% of the lobbyists. Corporate lobbying to save or add loopholes dwarfs all other tax-related lobbying efforts.

http://www.huffingtonpost.com/2013/06/18/companies-lobbying-...

> If it was just a matter of lobbying dollars, the 0.5% of the economy that benefits from more complicated taxes could not possibly out-lobby the 99.5% of the economy that benefits from simpler taxes (all else being equal).

This is a laughably oversimplified way to think about, so much so that there's even a term for how wrong this is: diffuse benefits, concentrated costs (and its inverse, obviously).

But all else is not equal. And the argument is not that the tax prep companies are out to complicate the tax code, qua liability and subsidy, but that they have frustrated efforts to allow the IRS to offer a simpler filing experience to the public. The usual argument is that if the IRS were to simplify the submission of taxes and offer its own tax prep app, it would be perversely incentivized to maximize its take rather than minimizing taxpayer liability.

Of course, Congress could just pass a law mandating that the IRS take as little as legally required, but as you are surely aware the instant conservative view is that administrative agencies are rapacious out-of-control behemoths restrained only by the heroic efforts of a few valiant champions of liberty etc. etc.