The IRS is already doing your taxes in the first place. That is how they know when you didn't include a job etc. They run the numbers to check against. There is no reason that this can't be the default for 95% of citizens. Want to amend the numbers the IRS came up with? Just file your own taxes that year.
There's an argument that: If the IRS does not show all it's cards up front, people might disclose additional income the IRS were not aware of. If you think of filing taxes like a negotiation, there's benefit to "not being the first to name a number".
With that said, I am absolutely "pro" automatic filing.
I doubt that the "pro" argument is worth the lost economic productivity of taxpayers, or the time spent double-checking the average citizen's math. In public policy you should always be aware that you are not optimizing for rule compliance alone. You optimize for the healthiest society, which typically contains a small amount of cheating. Random tax audits of the middle class probably don't make enough income to justify their existence-- but they scare enough people into compliance.
Even if we offered the IRS the choice, though, I doubt they'd would choose the current system. It's easier to check someone else's diffs on your own (systematically generated) work than to check everyone's individually.
That's exactly what I have been telling my friends for so long! They already have all of my income and expenditure details. Why don't they just fill it themselves and let me one click approve?
Actually, you'd be surprised how little of your life's information is on-hand compared to the eligibility requirements for certain tax credits and benefits. The biggest example is deduction of gambling losses. IRS knows how much you've won (receipt of Form W-2G) but unless you give it an accounting of how much you've lost it has no clue at all.
Then why do people get tax refunds? Clearly the government and your employer get withholding wrong, so why would we trust them to calculate our bill? They have absolutely no incentive to minimize your taxes and every incentive to maximize them.
You write as if withholding was an error in calculation. Maybe it is, don't know how it works in the US, but here withholding follows a different, very simple formula, since it's impossible to know the real amount ahead of time anyway.
I disagree that the IRS has an incentive to maximize taxes. They have an incentive not to lose time with disputes.
But even if you don't trust them, so what? You can still check the numbers yourself, and file your own if you disagree.
There's a form the employee fills out detailing how much to withhold during the year. Most people use the default, which is to withhold the most, thus those that get a refund are overpaying their taxes over the year.
Prior to WW-II, everybody had to file quarterly income tax payments. It was during WW-II that withholding became a thing (maybe something to do with increasing monetary flow towards the government or something). It remained a thing afterwards.
Because of the withholding, most people are unaware of exactly how much they are actually paying in taxes, especially given the "windfall" every year of refunds. "Woo hoo! Gubment gave me money!" and all that.
It's right most of the time. Most people do not get refunds. It's when abnormal payroll events occur. Everyone's job here is to absolutely pay the correct amount of tax. If either side get it wrong, they must correct it (with the appropriate interest).
