They can for the majority of Americans. Congress also has the ability to mandate more reporting, and more reporting from more agencies would pretty much have to be part of a 'simple tax return' bill.

The point never was "they do prefect tax returns for everyone." Everyone knows this isn't feasible.

The point is, they'll simply send you (web) forms prefilled with the information they already have, you go in and add information they don't have if something is missing. So even if they have incomplete information, you'll still benefit greatly. If youre feeling really upset about the whole concept, you can tbrow away everything they prefilled out and download a blank form and do it yourself from scratch and that would be perfectly fine too.

If you have a W-2 and no other income/expenses they can get pretty close. The idea of simple taxes almost always includes the ability to still do them in detail if you'd like. The idea is that the government would send you a bill (or a refund) and you can pay it (or accept it) and be done or reject it and do your own taxes like you currently do.

30% of people choose to itemize, mainly people who own real property. And out of those who don’t, many still can claim credits for child care expenses, health care expenses, and education expenses.

If the default bill sent by the IRS wouldn’t include all those things, then the result would be exactly what the Norquists of the world fear: a de facto tax increase.

Note also that the H&R Block/Intuit software are free for 70% households. The remaining households are the higher income ones that would most likely itemize anyway.

If you think you pay to much, file your own return. For majority of people it's just a waste of time, and I think IRS would nail the numbers pretty accurately for at least 60-80% of folks.

I think your assumption just isn’t true. About 20% of filers use the mortgage interest deduction, which the IRS has no idea about. Then there is a ton of other stuff. For example, the IRS doesn’t even automatically know how many dependents you have. If you get divorced and one parent gets custody, the IRS has no idea. There is no federal tracking of who lives with who. The IRS also has no idea whether it should apply married rates or single rates. Again, there is no tracking of marriages at the federal level.

If you only have W-2 income, are single, have no children, and aren’t eligible for any education credits, then the IRS can probably do a good job estimating your taxes. But that probably describes 20% of folks. If the IRS sent a bill to the other 80% without those deductions, it would be an overestimate. And sure, those folks could file their own returns, but many would not. That would result in a de facto tax increase, which is exactly what Norquist doesn’t want.

Doesn't this imply that simplifying/automating the return harms no one (folks can still file individually if they choose), while helping those who would otherwise have to take time or invest money in tax prep? How is this not an un-alloyed good?

It would hurt a lot of people if they end up paying more taxes than they owe because they don't realize they can pay less by filing their own return. It can be scary receiving a "bill" from the government, and many people might not try to contest the IRS's calculation.

For automated tax filing to be workable, it has to at least be accurate for nearly everyone. If it overstates taxes for most people, I think that's a big problem. In the U.S., I don't think you can achieve that level of accuracy without either changing the tax code, or having the federal government track a lot more information about people than it currently does. I owe the IRS money every year because my wife and I are subject to the marriage penalty. You can't calculate our correct taxes without knowing we are married to each other. And the IRS doesn't know that unless I put it on my returns.

Note that many countries track their citizens much more closely than does the U.S. For example, in Germany, you have to register with a Registration Office within one week whenever you move between cities.

Thanks for the dialogue! Just to try to simplify things, it sounds like you are worried about tax filing being regressive - causing under-privileged, low-income, and other disadvantaged people to pay more taxes than they owe. Isn't it true, though, that tax filings typically increase in complexity alongside income?

Things like marriage records and children aren't currently kept private such that the Child Tax Credit and Joint Filing rules couldn't be automatically applied. It's not immediately apparent to me that vulnerable populations would necessarily be at a disadvantage.

(Basically, I figure that if I'm high-income, it's my problem to sort out my taxes to my greatest advantage, but it should be easy for folks who don't have the luxury of time or money.)

We're not talking about "high-income" people. The biggest tax benefit for low-income people is the Earned Income Tax credit, which is calculated based on number of dependent children. Then there are all sorts of middle-class credits and deductions even for people who do not itemize: child credits, child care credits, child care deductions, teaching supply deductions, etc. And large numbers of middle class people use the mortgage interest deduction.

And even relatively high income people ($100,000+, which might just be a household of two teachers) might be hesitant to dispute a "bill" sent by the IRS.

As to applying these deductions automatically: the IRS simply lacks the information. There is simply no database (federal or state) tracking which children live with which adults (the credits are computed based on dependent children, not biological or legal children). There is no federal database of marriages, and while there are marriage certificates at the state level, it's unclear whether there are any easily accessible databases of married couples. There are no databases tracking which daycare you send your children to, what you spend in college tuition, etc.

Currently people seeking the EITC and Mortgage Interest Deduction have to file. This wouldn't change that. Nor is there a prohibition against the IRS sending a nice note encouraging folks to file if they want to take advantage of these benefits. It doesn't have to look like a bill.

We may just disagree on the size of the burden or the ability to ameliorate risks/downsides, but I'm having a hard time imagining that they cannot be addressed with _implementation_ choices on a pre-filed return.

I feel like this is important because it seems like we agree on the fundamentals: that the tax code should advantage the vulnerable, that filing should be as easy as possible, and that taxpayers should be able to discover and utilize all breaks available to them. The status quo does not seem _nearly_ good enough at these things to be worth preserving.

Most of the large deductions the government already knows about. If all taxes were was itemizing the deductions they missed that would be great.

This is going to go way down this year with higher standard deduction.

That would be reason #122132098 to get rid of the mortgage interest deduction.

Not anymore. The primary effect of the Trump tax bill was in fact to massively increase the number of people who will claim the standard deduction, due in part to a large increase in the deduction itself as well as the introduction of the SALT deduction cap.

How would you even know if it is right? This is such an obvious fox guarding the henhouse situation. The government would have a clear incentive to not offer you the deductions you are eligible for, and taxes are complex, so it would be easy to hide the deductions. It would only be a matter of time before the perverse incentives of the government would take over the process.

The main result of this would be the government stealing from poor and middle class people who should've spent less than $100 on a 3rd party tax preparer that is incentivized to act in the interest of the taxee.

The whole idea of the government stealing from people makes no sense to me. You live in a democracy, the people choose their government and it does what it's elected to do. If the government starts actively stealing money from its people, the problem isn't the way in which you file your taxes. The problem is that the government brought by your democracy isn't working as intended.

For what it's worth, in the Netherlands it takes most people 5 to 10 minutes to flip through an app that has all your tax info filled in already. If you need to add anything that isn't already filled in, you get every chance to do so. It doesn't stop you from getting an accountant to do it for you either, if you'd prefer.

> How would you even know if it is right?

Because it's still the same tax system you had before they made it easier by filling it out for you already. It doesn't get automatically filed, you still have to check it yourself and approve it.

It doesn't make any sense to compare the Netherlands to the US on any metric. The Netherlands doesn't have the population or gdp of just Texas or California by themselves.

The sheer magnitude of the difference between the US and the Netherlands is crazy, and it is like comparing a house to a town.

Communism works on a small scale, the bigger the scale, the less you can just trust everyone is doing the right thing. The bureaucracy of the IRS has every incentive to maximize tax revenue, and that is what they will eventually do.

I see this sort of sentiment repeated over and over in different contexts both here and on Quora; but the poster never explains why scale is relevant.

Most people in both the US and the Netherlands work for one employer, own or rent one house, have a few credit cards, and a car. In most cases they have no complicated investments or debts. So how does the simple fact that one population is larger than the other have any effect?

In a larger community you simply need proportionally more computer power to process proportionally more data, but the data types and business rules are the same for all the individuals.

It isn't about the person. It is about the scale of government.

Running a small business is not the same as a large business.

Ok, have you ever played civilization? In civilization corruption goes up as you build more cities and the farther those cities are from the capital. That is to reflect the reality of managing larger and larger groups of people.

Solutions that can work on the state level don't necessarily work on the federal level. The Netherlands are basically the size of a state with an extremely homogeneous population, and a far less cut throat culture than the US.

In small groups of 10-20 people communism works very well. It doesn't work in bigger groups though. The bigger the group the more perverse incentives are acted upon.

Even beyond that though the US is a cut throat competitive culture. Eventually the person in charge of treasury will want to show that the democrats/republicans before them did a bad job of collecting tax revenue. They will realize by not offering deductions a lot of people will just pay and this will end up with them looking like they did a really good job. Or maybe it will be someone lower on the totem pole that wants to move up and can show that they did a better job at collecting tax revenue.

Also, solutions that work in the US probably won't work in China or India because the population is so much larger that US solutions won't scale properly.

Indian tax system largely resembles British and Brazilian systems. Chinese tax system is simpler, but they compensate by tighter population control (which is unfavorable in the US).

True, the size difference would mean the time/effort saved would be tremendous. I detest the hours and hours of my life I've given to the IRS simply because they are stuck in a time warp. My UK tax return took me under 2 hours last night (and only because they keep getting the student loan wrong - but it's simple to correct). But yes, it does require investing in a suitable computer system. I seem to be giving them the benefit of the doubt and attributing it to an infrastructure issue but that's probably not the real problem, is it.

Bizarre to see this type of comment on a technology-focused site. Turbo Tax can figure it out, but the government can’t?

Turbo Tax is incentivized to maximize your savings. The government is incentivized to do the opposite.

It's not that they can't. It's that eventually someone will be in charge that will decide they shouldn't.

This might be true if you view the government as adversarial. If you view the government as a service provider for citizens I don’t think it holds water.

Your statement could easily be flipped. Turbo Tax is incentivized to keep the tax code as complex as possible, the government is incentivized to do the opposite.

Most filers in the US have a single income from a single employer that is reported on a W2, and then take the standard deduction. And a lot after that have maybe a bit of income via 1099 forms and a mortgage deduction. All of those the government already has.

If they filled out a return with all that info, it would take just a couple of minutes to review it if it were already pre-filled out.

And worst case, you have other income and deductions, such that you've saved a bunch of time entering information the government already knows.

If anything, it would be the upper middle class who would lose out because they would just be lazy and click "ok" instead of doing their own taxes.

It works fine in many other countries (UK, Norway, etc.).