
Filing Your Taxes Is an Expensive Time Sink. That’s Not an Accident - scottie_m
https://www.theatlantic.com/ideas/archive/2019/04/american-tax-returns-dont-need-be-painful/586369/
======
jasonshen
Andrew Yang, who was the 1st declared Democratic presidential candidate for
2020, has a whole policy around the strange aspects of US taxation, including
automatic filing and getting a breakdown of where your money went.

>> Instruct the IRS to implement a system whereby any American can opt into a
program to have their taxes filed automatically.

>> Instruct the IRS to coordinate with the Treasury to prepare a report on
federal spending, and send each taxpayer a rundown of the actual amount of
their taxes that went to each major spending area (e.g., domestic programs,
foreign aid, military, etc).

>> Increase the budget of the IRS by 50% to $16.2 billion and modernize it
with the latest technology. Money spent on the IRS will almost certainly pay
for itself many times over via better tax compliance and less wasted time of
citizens. Running the country like a business means both taking care of
constituents and collecting revenue as seamlessly and efficiently as possible.

[https://www.yang2020.com/policies/filing-income-
taxes/](https://www.yang2020.com/policies/filing-income-taxes/)

~~~
TheHypnotist
I'm not sure many people even think about how possible this is. What are the
drawbacks? Aside from funding, what's stopping this from happening?

I can already automatically import most forms from banks/financials/payroll
companies into TurboTax. Why not skip the middle man?

~~~
guelo
Many Republicans don't want filing taxes to be easy so that they can continue
to use it as an attack on taxes in general.

~~~
chc
This might sound like one of those "the people I disagree with are evil" kind
of exaggerations, but it is not. This is a real position that is fairly common
among Republican thought leaders. For example, Ronald Reagan literally said
"Taxes should hurt."

The basic logic is that if filing taxes is too easy, people will not have a
good grasp on how much the government is asking of them and will accept tax
rates that would irritate them in a system with more direct participation. (On
the flip side, this seems to assume that the taxes are being used to create a
good enough quality of life that people are generally satisfied and not poor,
so if that's happening, it might actually be a more realistic perspective than
if people focused on the tax rate more.)

~~~
bunderbunder
> The basic logic is that if filing taxes is too easy, people will not have a
> good grasp on how much the government is asking of them

This basic idea seem patently ridiculous to me.

I've more-or-less made a career of doing math and managing complicated
procedures, yet still, I find the current tax prep process to be such a mind-
numbing grind that, by the time we get to the point where I've calculated how
much tax I actually owe, I've long since quit caring to calculate what
percentage of my income that is. By that point, the only number I care to see
is how much I owe or will be refunded, so that I can just be _done_ with the
whole mess.

It's hard to imagine that someone who's got a more typical level of comfort
with math is going to be any more prepared to do that one extra calculation.

If the GOP really wanted me to be aware of how much tax I'm paying, they'd
reduce the whole process to a simple report they send me, with everything
already calculated, that has "your calculated income tax in dollars" and "your
calculated income tax as a % of net income" listed in big bold print at the
very top.

It seems much more parsimonious to me to suppose that the logic is, "If we
make income tax a hateful process, people will come to hate income tax."

(Which, incidentally, is a line of reasoning that would play very well to the
position of those who want to get rid of progressive taxation. Most other
forms of tax we have in the USA are either flat or regressive.)

------
jwr
If you live in the US and you think your taxes are bad, you haven't seen
anything yet. The IRS starts to really make your life miserable once you move
out of the country and live as an expat. The reporting requirements (FBAR and
FATCA) border on ridiculous. As an example you need to report all your
financial accounts, interest on them with no minimums, you have to know the
maximum amount in each account over the course of a year, and BTW, if you are
a shareholder in a non-public company, that company's statement goes into your
tax filing, too. Preparing your tax return becomes a major project that you do
once a year, and you really have to pay a specialized company to do it for
you, because there are so many pitfalls.

The part that I found most surprising is that in the US there is basically no
way for an individual to read the law and follow it. The law is way too
complex and murky. As a contrast to that, in most countries that adopted
German law principles, it is perfectly normal for a person to go read the law
if in doubt.

~~~
lukeqsee
This.

I've spent at least $2000 this year to figure out how to make this work—and
I'm going to spend more to actually fill and send the forms off. . .

The additional requirements of the recent tax legislation which make it
effectively impossible to own a foreign corporation (as an American living in
said foreign country) and retain earnings according to the corporation's
"home" country's tax laws is even more ridiculous. The IRS demands 10-20% by
fiat disregarding all international tax law.

------
skizm
The worst part about taxes is that I never know if I did them correctly since
the feedback loop is up to 3 years. Just shoot them off into the ether and
cross your fingers you don't get a giant bill next year.

The first time I filed, I had not updated my W4 soon enough after moving and
owed NYC like $4k in taxes which came up around 18 months after I filed. The
following year the software I was using said I owed around $10k in taxes,
which I was pretty sure was wrong, so I went to an accountant and they did it
for me and said I owed nothing. Even after all that, there is no way to know
who is right until 3 years from now (IRS theoretically doesn't look back more
than 3 years for individual returns).

~~~
jraines
Idle NY tax thought -- it's wild that you have to file a NY return just
because the company you work for is based there -- seems weird that other
states put up with that (not that it takes revenues away, but seems like it
forces an additional paperwork/accounting burden on them)

~~~
jmole
you don't have to file a NY return if you didn't live in NY during the tax
year.

~~~
rhcom2
I don't think that's true. I've never lived in NY but commuted in from NJ for
multiple years and always had to file both states.

~~~
WkndTriathlete
I don't know if it's true for NY, but many people live in western Wisconsin
and commute to St. Paul / Minneapolis in Minnesota, and none of those people
are required to file income tax returns in Minnesota. They file only Wisconsin
returns.

------
Reedx
It's crazy we still don't get a pre-filled out form that you can simply verify
and sign. Done. Amend if needed.

Bonus: An option to indicate where ~5% of your taxes goes to.

~~~
moviuro
1\. That's how it's done in France AFAICT. In April/May we get the pre-filled
form on our tax site [0,1] and make sure it's ok, then tick a box.

2\. We also have a website for that (though it's probably just a glorified
multiplication and graph) [2]

[0]
[https://www.impots.gouv.fr/portail/particulier](https://www.impots.gouv.fr/portail/particulier)

[1] it looks like
[https://www3.impots.gouv.fr/simulateur/calcul_impot/2019/sim...](https://www3.impots.gouv.fr/simulateur/calcul_impot/2019/simplifie/index.htm)

[2]
[https://aquoiserventmesimpots.gouv.fr/](https://aquoiserventmesimpots.gouv.fr/)

~~~
gambiting
In UK there is not even a box to tick. Vast majority of people don't ever file
a tax return themselves, I've recently had a discussion with someone who has
worked in the UK for 15 years and he was surprised to hear that tax returns
are even a thing - it's so automatic that he has never even thought about it.

~~~
moviuro
There are still some things I had to fix, for instance: support payments from
my parents, which are tax-deductible for them, and that I have to declare; the
fact I got in a PACS [0].

If I moved abroad, I'd be worried some things like that get missed for
whatever reason ;)

[0]
[https://en.wikipedia.org/wiki/Civil_solidarity_pact](https://en.wikipedia.org/wiki/Civil_solidarity_pact)

~~~
gambiting
Yes, of course there's loads of circumstances that require you to fill a tax
return manually. But even then the sections about your employment are filled
automatically based on the returns submitted by your employer.

The thing is that if you are a British resident who only works one job and
doesn't receive money from any other source, then such person would literally
never have to think about their tax return - it will be done fully
automatically without any input from them whatsoever.

------
clausok
The Planet Money podcast just had an episode on this topic ("Joe Bankman,
professor at Stanford, figured out a way to make filing your taxes easy and
painless. Then the tax lobby found out about it.")

[https://www.npr.org/sections/money/2017/03/22/521132960/epis...](https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-
hero)

~~~
mixmastamyk
A professor figured it out? It's obvious, and what dozens of civilized
countries do.

------
jostmey
The screwed up taxes is a symptom of a dysfunctional government.

The fix is to address the root cause--reducing excessive lobbying that seems
to control the government and implementing a direct democracy that puts the
government better under the people's control (it's time to replace the
electoral college).

~~~
mxschumacher
I'm not sure it as simple as blaming lobbyism or the electoral college. In
France and Germany filing taxes is also an insanely painful procedure.

There are massive bureaucratic institutions and processes that need to be
changed, huge IT systems to be created and maintained (doesn't the IRS use
magnetic tape??) and laws to be adjusted.

Making complex things simple is one of the hardest jobs out there.

~~~
zaphod4prez
The above comment by moviuro, who seems to be from France, directly
contradicts your claim.

"1\. That's how it's done in France AFAICT. In April/May we get the pre-filled
form on our tax site [0,1] and make sure it's ok, then tick a box.

2\. We also have a website for that (though it's probably just a glorified
multiplication and graph) [2]

[0]
[https://www.impots.gouv.fr/portail/particulier](https://www.impots.gouv.fr/portail/particulier)

[1] it looks like
[https://www3.impots.gouv.fr/simulateur/calcul_impot/2019/sim...](https://www3.impots.gouv.fr/simulateur/calcul_impot/2019/sim..).

[2]
[https://aquoiserventmesimpots.gouv.fr/"](https://aquoiserventmesimpots.gouv.fr/")

~~~
mxschumacher
I'm a German citizen working and living in France, I think I have a pretty
good perspective on how hard it is to file taxes in both countries. There is
the theory of how to go through the process and then there are the countless
small obstacles that make it hard in practice. You don't get a thriving
personal tax industry and millions of people complaining (it really is cliché
at this point in France) because a trivial web-form takes care of everything.

------
cjslep
This was my first year doing my own Swiss taxes (US citizen in CH). Even
though I only know German to an A2 level, the free software provided by the
Canton and the instructions on how to fill out the return completely guided me
with no problems, even through the additional forms. In addition, as a side
effect I have accurate numbers for my income, my interest payments, my wealth,
and my debts.

The US side of things has been... not the same experience.

~~~
lukeqsee
I’m in the exact same position as you (first year filing taxes in CH as a US
citizen). I filed for an extension because I’m waiting for AHV to be resolved
due to some ambiguities in my tax status (employed vs self employed), but I’ve
read the paper form and it’s so straightforward. My friends here are so
confused when I talk about US taxes and ask questions from that perspective—my
questions make no sense because it’s just obvious how to do here vs the US
where you have to hunt for every tiny little detail.

If you ever want to meet up and compare notes as a US expat in CH, let me
know! Email in profile.

------
jkingsbery
"...and Republicans’ long anti-tax crusade."

That seems like an uncharitable characterization of a group that has argued
for a simpler tax code with generally fewer loop holes (as opposed to an
elaborate tax code that no one can understand, with a pre-filled form that in
theory one could double check but in practice few would check).

~~~
newhotelowner
Poor taxpayers spend 200+ dollars to file their taxes. Every single one of my
employees goes to H&R block or some tax guy to pay taxes. Almost all of them
have 1 job. Most of them 1 or 2 W2s and most don't houses.

A pre-filled form will help every single one them to save money.

And you can still have your pre-filled form verify by an accountant or H&R
Block. No one is stopping you from that.

You should listen to the latest Planet Money Podcast - Tax hero. Republican
don't support this because having complicated form will make people oppose
taxes in general. That is the republican motto.

~~~
mikestew
_Poor taxpayers spend 200+ dollars to file their taxes. Every single one of my
employees goes to H &R block or some tax guy to pay taxes. Almost all of them
have 1 job. Most of them 1 or 2 W2s and most don't houses._

We own a house, two high-tech incomes, and loads of 1099Bs to deal with. IOW,
I can't imagine the tax situation of your employees is any more complicated
than mine. In previous years, I could whip it out on a Saturday morning. This
year, it was an hour of importing forms electronically, if that (umm, thanks,
higher standard deduction?).

I'm not trying to take away from your point, I'm still chafed each year that I
have to give money to TaxAct (at least they don't lobby for complicated taxes,
AFAICT). But taxes aren't _that_ complicated for simple situations. Maybe have
an hour brownbag or something on "here's how to enter the control # off a W2
and import it. Import from Fidelity. Sorted."?

~~~
fwip
In my experience, it's less the effort required to do it, and more about the
risk of getting it wrong.

There's a lot of domain-specific knowledge that goes into filing your taxes,
and it's easy to be afraid that you're gonna mess it up and be on the hook for
thousands of dollars.

------
grigjd3
I was particularly entertained by the tax forms this year. The 1040 is now
only half a page, but there are several other required forms that didn't exist
last year.

------
dec0dedab0de
I hate filing taxes so much. I wish we would switch to purely sales tax and
corporate tax. I know the arguments against them, but I just don't want to do
paper work.

~~~
mikeash
It would put a crushing burden on those people who could least withstand it,
but as long as you can avoid paperwork....

~~~
dec0dedab0de
Right, it was a flippant remark meant to express exasperation in one
particular thing. Not a well thought out policy proposal.

Although, when you say "a crushing burden on those people who could least
withstand it" are you assuming I am suggesting a flat sales tax?

It is possible to have a federal sales tax that has categories, with different
percentage scales. So maybe a bag of rice has 0%, pork fried rice from the
local Chinese food place has a %5 sales tax, and Lobster risotto from a fancy
restaurant has a %50 sales tax.

All I am suggesting is the burden of filing taxes should be pushed to
businesses who already have to deal with accountants and lawyers and whatnot.

------
ams6110
This story is disingenuous. For people with "simple" tax situations (no
itemized deductions, etc) the forms are already very simple.

The scenario they paint with chasing down form after form simply does not
happen for most people. For most people it's one page.

But the idea that your taxes can be pre-computed by the IRS is fantasy beyond
that, unless the tax code is significantly changed.

Sure they know your W2 income and some other standard stuff. How do they know
your self-employment or business income? How much you gave to charity? How do
they know what unreimbursed expenses you had? How do they know how many kids
you have? How do they know your marital status?

I guess most of that could be addressed by just eliminating all deductions and
allowances but even at that there are a lot of things they simply cannot
possibly know until you, the taxpayer, tell them.

~~~
dragonwriter
> How do they know your self-employment or business income?

If it's 1099 income, they know it for the reason that the 1099 gets filed with
the IRS, as well as a copy going to you.

> How do they know how many kids you have?

That doesn't change very often, and there is interaction with the federal
government which easily could be, if it isn't already, shared with IRS for the
most common reason for changes in the positive direction.

> How do they know your marital status?

Again, that doesn't change frequently, so mostly they have a good basis for it
by assuming whatever it was he previous year.(For this and the preceding, and
a lot of similar status issues, it would be easy enough to move the data
collection to a pre-filed form—for regular workers you could collect it, or
changes to it, as part of the W-4—instead of the equivalent of the current
retrospective tax return, expanding the accuracy of precomputed taxes and
reducing the need for supplemental retrospective filing.

But, yeah, you'll probably always need an option for at least supplemental
filing for information that differs from information the IRS has from other
sources or is outside of it.

~~~
vonmoltke
> If it's 1099 income, they know it for the reason that the 1099 gets filed
> with the IRS, as well as a copy going to you.

1099s have the wrong cost basis information for ESPP and vested RSU shares, so
the IRS does not know what the correct tax is when those are involved.

------
1123581321
Taxes are extracted during payroll and that’s a very easy process for
individuals. The tax return is just an adjustment. It’s an annoying process to
get a direct deposit for at least as many people as it is an annoying process
to send a check.

If I were a strategist in charge in making taxes hurt, I would try to help
people understand how much bigger their paychecks could be. Please read this
comment as politically neutral.

~~~
parthdesai
I look at it, and my monthly income tax is as much as my rent. It hurts :(

~~~
cr0sh
You probably know this, but it is possible to set things up so that zero taxes
are taken out of your paycheck. Now, come April 15th, you will owe those
taxes, but if you have an idea or know what that amount will be (in theory,
you should be able to know it exactly), then...

...you can elect to not take those taxes out, and instead via your bank or
employer have that percentage of your check put into a savings account of some
sort. Then you can let that money sit and accrue interest (and laugh at the
small return), or use it to invest (which has a greater risk, because if you
invest wrong, now you've lost that money and you still need to pay it back at
the end of the tax year).

If this sounds interesting to you, then (unless you already have the
experience) I would look into some form of small time investing, or other
financial instruments for wealth accumulation from which you can still
withdraw an amount at the time you need to pay your taxes.

Assuming you can find something with a decent return over a year's period.
Which is probably the most difficult part of it all.

~~~
javagram
This is bad advice. The IRS will fine you if you adjust your withholding to be
significantly less than the tax owed. You can’t just hold onto the money until
April 15.

The best strategy for withholding that conforms to the law is to use the IRS
online withholding calculator to set your exemptions and aim for a
payment/refund of around $0

~~~
amanaplanacanal
Yeah, you have to pay at least quarterly. Annually won't cut it.

------
CodeSheikh
Filing taxes is a complicated process. Not showing where the tax money is
spent is a simple process -- they just don't tell you.

------
emptybits
It's painful here in Canada, too. I read passages like this about civilized
countries, also heavily socialized like my country, and am envious:

> "Netherlands, the procedure is simple ... Dutch citizens can file their
> taxes in minutes ... in Sweden, 72 percent of taxpayers say filing taxes is
> easy"

I enjoy what I receive from paying my taxes. Please make it easier.

~~~
cpncrunch
If you use software such as ufile, it is pretty easy in Canada.

~~~
emptybits
Thanks. I generally use an accountant because with some investments and side
businesses I am (overly?) concerned about making an error. I'm considering
SimpleTax this year.[0] No affiliation but I'm a sucker for a scrappy startup.

[0] [https://simpletax.ca](https://simpletax.ca)

------
jpttsn
It's cheaper to offer a 10% gift voucher than a 10% discount.

Where I live, most people approve a pre-filled statement. This boosts tax
revenue, because people don't think twice about deductions that are not pre-
filled.

It's more convenient not to do your own math, if you trust the actor who does
the math for you.

------
andbberger
Just one more tax on the poor

edit: 'tax', I am not being literal

~~~
ratsmack
If the US went to a flat tax, would the "poor" still be taxed unfairly?

~~~
tstrimple
Yes. Fair doesn't necessarily mean equal. A 10% tax could eat up literally all
the disposable income of someone who is barely scraping by, but is hardly
noticed by a person who is bringing in hundreds of thousands of dollars a
year.

~~~
jniedrauer
In a fair society, it would become more and more challenging to move up the
economic ladder as you reach higher levels.

In our society, life gets easier as you move up. Beyond a certain threshold,
you can set up a self-maintaining rent seeking empire and stop working
entirely, while your wealth accumulation continues to accelerate.

------
deeg
Is there any reason we don't require the government to create software that
largely does the taxes for us? They have the W2s, etc. and it seems like they
could fill most of the forms out. We'd just need to set the deductions.

~~~
dguo
Tax prep companies lobby strongly against it. See
[https://www.propublica.org/article/filing-taxes-could-be-
fre...](https://www.propublica.org/article/filing-taxes-could-be-free-simple-
hr-block-intuit-lobbying-against-it)

The argument they try to make is that the government could take advantage of
its citizens. As in, it wouldn't be in their interest to reduce our taxes as
much as possible.

~~~
amanaplanacanal
> it wouldn't be in their interest to reduce our taxes as much as possible

The thing is,that's the exact reason most private tax preparers say not to us
H&R block. They only take the most conservative deductions, etc.

------
Taniwha
Here in NZ most people do not need to file - the tax system is deliberately
simple, there are essentially no deductions/etc.

Most people who have a single regular income will find that their employer has
paid the exact correct amount of PAYE on their behalf, people who have
multiple employers may receive a tax refund, they can file for it by filling
out a 2 page online return (I think this year the IRD will start doing this
for you, you'll just get a cheque in the mail)

As an employer filing monthly PAYE is equally trivial, it can be done with 1
line in a spreadsheet - I spend 30 minutes a month paying bills/taxes/etc for
my company

------
robomartin
A fair tax system would be one where you are sent a bill every month and you
allocate your money as you want it to be soent. Some baseline auto-allocation
should be a part of this. Perhaps you control 75% and the rest is automatic.
No tax filings and the IRS is reduced rather than grown into a larger monster.

People don’t revolt about taxation because they never see the money. If people
had to pay the bill themselves every month there would be riots in every city
within a year or less.

~~~
webninja
Monthly? Crazy talk. Once a year is plenty difficult and painful enough. (If
you’re like me and got involved with bitcoins and shitcoins)

~~~
robomartin
I agree with you. My point is that people need to wake up and understand just
how much they are giving up and what for. If they had to pay it as a monthly
bill they would be compelled to question it.

------
JustSomeNobody
Well, unless you're poor, at least you likely don't have to worry about being
audited. The IRS is too busy auditing the poor and minorities to worry about
anyone else.

[https://www.vox.com/future-perfect/2019/4/3/18292741/irs-
tax...](https://www.vox.com/future-perfect/2019/4/3/18292741/irs-tax-audit-
eitc-black-belt)

I really wish, as a country, we could stop beating up on the poor.

~~~
throwawaymath
I'm not saying that conclusion is incorrect, but I'm not convinced by the
article's preemptive rebuttal to the population heatmap counterargument. To
its credit the article mentions it:

 _> The sociologist Kieran Healy has joked that most data visualization maps
of the US show one of two things: population density or the percentage of the
population that’s black. This is decidedly one of the latter maps, with the
notable additions of heavily Latino counties in southern Texas and Indian
reservations in South Dakota and Montana._

However...statistics are pernicious. This is an extraordinary accusation, and
before I accept it as true I'd like to see more due diligence to ensure there
isn't (for example) a stray, superfluous correlation between population
density and Hispanic/Black demographics at play here.

With that aside, this looks like something that should definitely be
investigated more thoroughly. Even if this is ultimately a side effect of
minority groups being correlated with greater population density (and I don't
know if that's true, to be clear), the ultimate consequence looks pretty
negative.

------
RickJWagner
I've long wondered why the government doesn't do the calculation first, then
you have the right to appeal if you want a change. If they have the data to
check the calculations you make, they have the data to do the calculation.

I am deeply disappointed in the gratuitous attack on Republicans at the bottom
of the article. Low for even the Atlantic, it shows this is _not_ an unbiased
source but rather a politically biased one.

------
Causality1
Filing your taxes is an expensive time sink if you're wealthy with a lot of
assets. I'm not, and it takes me about ten minutes to file mine on the free
website. Fill in my W-2, answer about ten questions, hit the "File" button,
done.

------
timwaagh
the article uses the netherlands as an example of how its supposed to be done.
the problem in the netherlands is that there are some things you are legally
entitled to, but that aren't on your tax app. like 'averaging' in case of
varying income. Dutch tax law is not so simple as implied. also i'm supposed
to be paying wealth tax over the part of the property i'm not using as my own
living space (i rent out part of it). right now it is impossible to do this.
saves me a bit but it could land me in trouble as well.

------
josteink
Many countries have more or less fully automated tax-systems. They are not
time sinks, and that is by design.

I’m happy with the local “IRS” using the newest technology to save me time and
the country money.

------
mrhappyunhappy
Tax prep lobbying at work. I’d love to know how much H&R and TurboTax spend on
keeping things as is.

~~~
locklock
A couple million dollars a year [1]. It's always interesting to me how
relatively little money it takes to make life objectively worse for everyone
else in the country while making a small number of people richer. For the cost
of a nice house or a low-budget indie film you can make sure taxes are
difficult to file for everyone. Of course there's more to the influence these
companies have than the dollar value they spend per year but still, it ain't
that much money.

[1] [https://www.propublica.org/article/filing-taxes-could-be-
fre...](https://www.propublica.org/article/filing-taxes-could-be-free-simple-
hr-block-intuit-lobbying-against-it)

~~~
tumblen
That makes me wonder if there could be a model of some sort of "People's
Lobby" where one could set up a fund that individuals could contribute to in
order to lobby for/against something.

Probably more complicated than that and corporations would respond in kind.
But it does seem like giving citizens the ability to compete in the lobbying
space only makes sense.

~~~
mikeash
Isn’t that more or less what donor-funded political organizations like the
ACLU and the NRA do?

