I first used Credit Karma in college, which made me aware of my credit score. Credit Karma had a credit simulator at that time, which I would play around with to see what was the best course of action to get my score up up in a very short amount of time. I got to where I want and will maintain it.
Credit Karma's tax solution is the best I have ever used for my case! I still use Mint, but it is in maintenance mode. I can only hope that the CK's tax solution stays intact in not a transition to TurboTax.
Well one landlord asked for a printout of the Credit Report and Credit Karma was cited as one source of report. :) Credit Score is applicable to many places.
Their Credit Alerts feature did alert my to fraudulent activity almost immediately At this point if CK had offered a subscription side, I would have bought in.
I had 5 screening pulls this year because of all the things involving an interstate move and changing jobs with different layers of background checks. In the process of getting financing for a house and I had to provide explanation and documentation that i wasn't hiding debt for each of them. It may not affect your various 'scores' but its still a pain in the ass.
Some landlords charge application fees for dozens of applicants but they only run the credit check/screening for the first few. Also the amount of personal information requested is ridiculous.
I'd much rather use one of those systems where you get your own report from a reputable company and share the report id. Instead of paying an overpriced application fee to a bunch of places.
I user cozy.co to manage my properties. They have all background checks built in and ready to go out the box and emails your tenants links to proceed and accept payment.
Many credit card companies do give you your real FICO score monthly.
But I find everything else about Credit Karma well worth the tradeoff - free access to two of your credit reports, a summary of all of your debt (without entering your bank credentials into random third party services), credit alerts etc.
It’s not really privacy invasive. Lenders already have the ability to get the same summary of your credit information without your consent.
This. My main credit card offers this as a service (check your credit score every 30 days) and my experience has been that its the same number people who want to check on my credit worthiness get when they inquire (sample set 3 car purchases, two type specific credit card applications)
There are different scoring systems (FICO vs VantageScore) with different versions, and the variations in calculation can easily create a 100 point difference.
CreditKarma uses VantageScore 3.0 so any lender using the same system and version should see the same number, but most older lenders and bigger loans use FICO.
I don't find the credit karma tax UX to be quite as good as TurboTax, although I very happily used it this year because it's free. I suspect Intuit will not maintain a free alternative to one of their main products :/
Three people start a credit website because they want free access to their information. 11 years later they sell it to a company who actively tries to squash free access. Is there a German word for companies that grow and then exit this way?
* "Human"? Almost everyone is ambitious and idealistic when young. But people change, 11 years is a long time. Mortgages, college savings and retirement pull those dreams to conservative ground. Depending on your obligations, turning down 2.3B USD could be irresponsible.
Your phrasing implies this is unexpected, but I find this almost basic to humanity, though sobering.
* or the German translation, if you wish
---
ninja edit: I regret this comment as soon as I submitted it :( but will let it stand. I come to HN to find exactly this idealism that runs counter to the human nature of money-above-all. No, it should not be normal to "sell-out" and the participants I find on this site are the ones I hope will counter that tendency. Continue being disappointed in those who settle!
There’s an English phrase for it “a company that takes VC funding”.
But honestly, there are only a few tech companies that I see were really started with the idea of being a “lifestyle business” without the eventual goal of being acquired. Yes going public is another option but relatively few tech startups ever go public.
Batman is apparently heavily inspired by the philosophy of Nietzche. The quote is probably a more polished version of this one from Beyond Good and Evil: "He who fights monsters should see to it that he himself does not become a monster. And if you gaze for long into an abyss, the abyss gazes also into you."
Nothing is "free" - you give Credit Karma perpetual access to your credit report and in exchange it gives them rich data to target loan products to you for which they make big referral fees from.
It's not a loss leader. Yes, they pay the bureaus for access, but you're giving them rich data about you (I'd argue credit data is even richer than what FB has on you) to use to target financial products to you.
It's exactly these types of deals that regulators should look at if they want to prevent more monopolies in tech. You have what amounts to an entrenched business maintained by millions of lobbying dollars [1], buying a younger player offering the same service for free.
I was surprised that the FTC actually blocked the Harry's shaving acquisition because it would be anti-competitive, and the Fitbit acquisition is still on the block as well. Not clear yet that this will be approved, though I wouldn't say TurboTax + Credit Karma have a monopoly on tax filing...
Did you pitch for a t-ball team, because thanks for that sweet setup!
We would have more sound business plans and ideas. Startup culture would be more about creating entities that can exist on their own (adults) vs a danger to be let loose into an existing market. The later is a shakedown, but lets not conflate the shakedown with our own goals of seeing outmoded businesses getting replaced.
If we had free standing startups that can function on their own, they have the ability to replace existing players by being able to function long term and respond to changes.
If we create startups that are then sold to the incumbents, we perpetuate their hegemony. These large corporations are effectively buying organs to stay alive.
And I wish I could take credit for thinking about the consequences of making it harder for companies to be acquired, but I got the idea from Ben Thompson’s (Of Stratechery fame) Exponent podcast.
(This link will take you to a website at the time stamp of the podcast if you don’t have Overcast installed)
> Another extremely strong network effect is proprietary chat systems like ICQ or AOL Instant Messenger. If you want to chat with people, you have to go where they are, and ICQ and AOL have the most people by far. Chances are, your friends are using one of those services, not one of the smaller ones like MSN Instant Messenger. With all of Microsoft’s muscle, money, and marketing skill, they are just not going to be able to break into auctions or instant messaging, because the network effects there are so strong.
I think it's basically true though? the way I remember it, AIM only died once Facebook messenger rolled out. Facebook messenger was only viable because Facebook already had a huge number of users. if you were already "friends" with someone, it was even easier to message them there than it was to ask for their AIM username.
Doesn’t that kind of argue the point though that you don’t need government to interfere with tech to avoid monopolies and anticompetitive behavior? The market took care of that.
ICQ and AOL basically died.
While Microsoft bought Skype and basically morphed it into new-MSN.
So Microsoft's slow growth, long-term strategy succeeded, while it shouldn't have (?).
I don't think this is really a counterexample. skype was already a widely used product when microsoft bought it. joel isn't arguing that you can't have enough money to just buy a product that already has a large network of users. also (iirc), skype only took market share from aol in the first place because it had a killer feature aol lacked: video chat. network effects mean you can't be replaced by a similar service, not that you can't be disrupted by a new product with a unique feature that people actually want.
Harder to acquire, not impossible. And nothing I outlined the prevention of a huge capital outlay. Uber and Lyft could be entirely congruent with my statement, they aren't looking to get acquired (at least it doesn't appear to look like it).
There are clearly startups whose sole purpose is to appear to threaten an incumbent and then get purchased by either the incumbent or a rising competitor. Those startups are never design to operate in the long term or on their own. They might force small movements by the entrenched corps, but they don't transform industries.
I think there were a bunch of other great replies to this, but just to chime in: I think there are positive and negative impacts on "startup culture".
The negative:
- added friction to building a startup, since one exit path is harder.
The positive:
- more focus on profitable companies, as opposed to ones that will only be viable if acquired.
- a more competitive market, which might be better in the long run for start-ups
I don't think the question we should be asking, though, if the effect on startup culture. I think what we should be asking is: what is the effect on users/consumers?
To that end, imagine if the online ecosystem today included Instagram, WhatsApp, DoubleClick, Zappos, YouTube, Waze, just to name a few. Yes maybe some of them wouldn't have survived, but maybe that would have been the right thing to do.
And I think that's the question regulators should be asking too. Whenever a large company is acquiring a smaller one: is this clearly good for consumers or not? I mean, if Intuit can make a good, believable case that this is good for users (ie "Once we buy Credit Karma we can give all our users free tax filing) or something like that, by all means, that's great... but I doubt that's what's happening here.
How many of the companies below would have ever brought a product to market if Apple hadn’t acquired them? Are consumers worse off for Apple acquiring them?
How would regulators know whether Apple acquiring the 100+ companies it acquired would be bad for consumers in advance?
Do you really trust regulators to be both competent and apolitical?
The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups
That would probably exclude every single YC backed company.
Only two have gone public - DropBox and PagerDuty - and DropBox has never been profitable. I doubt any of them have ever been profitable.
It did lose money in 2019, but because of preIPO marketing and advertising. Marketplaces have great network effects and profit margins, seems like a very viable self sustaining standalone company.
https://www.fastcompany.com/90418766/report-not-even-airbnb-...
Oh I'm not defending YC or claiming anything about its companies (I didn't pull them into the conversation at all).
I was just arguing that providing some rules around acquisition of smaller competitors by larger companies with monopolies could push startups towards more viable business models.
I’m using YC as a stand in for “VC backed tech companies” because it’s the one that people on HN are probably the most familiar with. The same could be said about the other VCs.
I think I'm missing something. Yes, the VC industry has massively funded many companies. Some of those are not profitable. Some of those are even not viable. That's not a good thing. Maybe we would all be better off if funding was generally better allocated towards viable companies.
I’m using Apple as an example here because I am most familiar with their acquisitions and the products that came from them.
Why is it important for the end users of the companies are viable and not the products?
Would consumers have been better off if most of the companies that Apple acquired, integrated into billions of devices and sold to consumers didn’t exist because they couldn’t foresee a viable business model outside of an acquisition?
For Apple specifically, I'm not sure which products you're referring to, but Apple does wield a lot of monopolistic power. And maybe some acquisitions there made sense, but there could have been alternative paths (for instance, maybe if some of those companies had stayed independent, they would have been integrated into Apple as well as other manufacturers via a different business model, like licensing, being part of the supply chain, etc). In general, a viable product should lead to a viable business, since the company making the product should be able to capture the value it's delivering... but yes, there are some exceptions where you need products to be really tightly integrated and acquisitions make sense. In fact, I'd argue that with _less_ M&A we'd be more likely to live in a world where (viable product) == (viable company), because the market would be more efficient.
Anyway, my argument for more regulatory oversight doesn't depend on ALL acquisitions being bad, so finding evidence that some were good for consumers doesn't necessarily negate it.
I feel like what we would end up disagreeing on though is whether we can trust regulatory oversight to do a good job of making that decision. I don't trust regulation in general, but in this case specifically, I'd trust it more than giving large companies free reign.
Just some examples Next, SoundJam (iTunes), PA Semi (processors), AuthenTec (finger print sensor), Apple Music (Beats), Siri, etc.
Knowing Apple what is more likely, they would license tech or just create it in house? How do smaller companies prevent that? Patent trolling? What if the companies wanted to be acquired by Apple? Does the government step in and say you aren’t allowed to sell your business? Instead of acquiring the company what’s to stop Apple from doing an acqui-hire? Are you going to tell them they can’t work for Apple?
Government intervention in businesses unless there is a severe negative externality is almost universally bad.
So now we are suppose to discourage companies from getting big? Everytine a company gets big do we really want the government to step in? Do your trust your government? Wouid you trust your government if it was the “other” party?
It amazes me that people on HN willingly want to give up their agency to the government.
Huh? Where did anyone say anything about companies getting big? At this case you're just making strawman arguments.
What I (and I think others) are against is anti-competitive behavior. I don't trust the government a whole lot (even my party) but I trust it more than I would a company behaving monopolistically.
By HN standards, Apple (with a 40% market share) and Amazon (10% of all retail sales) is a monopoly.
The difference is that the government has the power of law to compel me to do something. A company doesn’t. Given that choice, a government with less power is better.
Almost every VC backed startup’s goal is to get acquired. Any company that wanted to acquire it would still be considered “anti-trust” by HN “standards”.
I think this statement ^ is very generic. Google acquiring Credit Karma would have been okay-ish.
Intuit acquiring gives them a monopoly on tax filing software. They’ve already done a fair amount of lobbying for anti-consumer practices.
Basically if America is just a bunch of really large corporations, it makes life worse and doesn’t let us produce more innovative solutions to our problems. Because monopolies are rent seekers and they love to milk their cash cows.
There are only two outcomes of Google acquiring CreditKarma and neither of them are good.
A) Google shuts it down or neglects it like it has done with so many other products
B) Google now has more information on users to target advertising and now has an even larger part of the duopoly on advertising and has more information about users - including social security numbers and credit information.
If Intuit's strategy is to spend billions to kill free tax products, then that would suggest that there's a huge reward for the next organization that can replicate Credit Karma's success. Is it really that difficult to build tax software?
It depends. There’s 1 federal return (albeit with many different forms) and 50 states (each with their own system). TurboTax, H&R Block, and CreditKarma keep track of all the changes for you.
And if you make a mistake in your software and the user gets audited, you can bet you’ll be sued by the user eventually.
It is recurring investment though, every year tax codes keep changing, you need to keep it all updated . That’s an enormous cost and relatively unique to this kind of application.
I suppose the solution is to just keep donating to and enabling candidates running for federal office who support providing the IRS with the legislation and technology support to do their job (streamline tax processing) and break Intuit’s pseudo monopoly.
On the plus side, it’s a lot harder to buy someone with morals than a VC backed startup.
I don't know about "enormous cost"... if we're assuming that you can handle taxes this year, the changes to support next year have to be comparatively minor. It's definitely true that you need to keep current or the value of your service crashes to zero. But nobody is arguing that governments shouldn't update their tax codes.
Good April was a competing product years ago that was acquired by Intuit. They did a lot of of the early tax returns manually for their users under the covers.
Yes. Partly due to Intuit (and others) spending money to keep tax filing complex.
You of course also have to build out distribution channels to acquire users which is also very costly.
EDIT: Changed "keep the tax code complex" to "keep tax filing complex", since someone asked for (and I couldn't provide) evidence of keeping the tax code itself complex.
Can you point to a specific rule in the tax code that is overly complex because of intuit lobbying and not because of the interests of one of the two main political parties in the US?
It's slightly different I guess. But since a lot of the paperwork you have to feed into turbotax is already known to the IRS, it's possible the IRS having their own product would have really simplified things. Then again, gov websites are pretty hit and miss.
Literally no one is proposing that the tax system be changed so that you get a bill that you have to pay, every proposal is that the government should send you forms prepared with the information they have, and you can file different forms if have additional information.
You gotta complain about it being unfair for people in cash businesses to get that information or something, the lack of incentive alignment is not even close to a real problem with the idea.
"Each year, Americans pay billions of dollars to Intuit, the corporate owner of TurboTax, to help them navigate the byzantine nightmare of filing a tax return. And each year, Intuit reinvests a small sliver of that revenue into political contributions and lobbying efforts to keep taxes pointlessly complicated."
Your logic is backwards. The tax code is already complex. Intuit lobbies against simplifying it. You can't point to lines in bills, because they lobby to make sure changes don't go into the bills
I don't have an exact form, deduction or rule. The articles include broad statements but no exact details.
Anyway, I edited my comment to read "keep tax filing complex", which is much better documented in the articles, though I don't think it would change opinions or arguments, but in the spirit of being as exact as possible.
Most people take the standard deduction. For most people, the complexity of filing is relatively low.
The W2 and 1099 forms that people get contain just about 95% of the information needed to file their taxes.
The current process involves getting those forms, which the IRS gets anyway, and re-entering the information into a privately run tax website. If you do this on IRS free fillable forms, you’ll have to do a significant amount of extra effort (for example, TurboTax can automatically pull in your W2 with partial information while the IRS system requires that you enter in every value manually).
Just entering the W2 is a lot of the effort for people on the IRS Free Fillable Form system.
Let’s continue in the workflow. You’ve got your wage information entered. The main questions to answer are:
- What’s your filing status
- Did you do things that could
be deductions (tuition costs, mortgage payments, etc)
- Are you poor enough or have special circumstances to get tax credits?
For a huge percentage of people, the IRS wouldn’t even have to ask your address to get this done. They could simply verify your filing status and ask the same kinds of questions that TurboTax does to determine which forms get filled out. They would even have to ask for fewer pieces of information because, unlike TurboTax, they already have your W2 and 1099 forms and many others like bank interest and retirement/HSA distributions on file. Again, most of the effort in TurboTax is just entering in the data from the forms and answering a question or two.
Taxes are only truly complex for a very small percentage of Americans who have built up enough wealth to have complex tax situations. For everyone else, they’re using free tax services, but are unnecessarily providing data to third party private companies and being upsold on unneeded add-ons constantly. Half of the time it takes to run through TurboTax is just declining all the unrelenting offers to pay them money.
Essentially, the problem here is that the IRS could literally copy the best tax software and just use that for everyone. Instead their offering (free fillable forms) is artificially terrible and functions as literal digital representations of paper forms instead of abstracting away the complexity.
Even for paper filling, the IRS could even have an advantage over TurboTax. Here’s how the workflow would work:
- The IRS receives wage and other tax forms from employers and financial institutions as they already do now.
- The IRS then prints out a customized form (automatically generated) that asks questions related to those forms they received. This would essentially be like TurboTax on paper.
- The form is mailed to each taxpayer.
- The taxpayer answers the questions and returns it with either payment/refund information or the IRS uses those answers to send you a bill.
- Taxpayers with additional deductions above the standard deduction could either be provided with a follow-up or be asked/opt to file some additional forms.
None of this is difficult to implement, especially compared to the alternative of dozens of tax filing firms implementing all of this separately.
It is certainly true that the IRS could hypothetically implement a better version of TurboTax. But it is quite a leap to conclude that the tax preparation industry's relatively small amount of lobbying is the main reason they have not done that.
The IRS is severely and chronically underfunded (a situation that gets worse every year) and can't even perform its basic tax collection functions at this point. Even if it were allocated the budget to make a TurboTax competitor (the complexity of which I think you severely underestimate) I am extremely skeptical that the resulting product would actually be as good as TurboTax. The net result could easily be us all paying (in the form of taxes) for software that no one uses anyway.
I think "IRS makes a better TurboTax" is basically a fantasy, and Intuit is a convenient villain to blame for that fantasy not coming true. They appear to be taking steps to discourage it, but I highly doubt they, or they plus all other lobbyists combined, are a but-for cause of the fact that filing taxes is difficult.
I'm not talking about IRS provided tax software. I'm talking about "tax code complexity." Things like all of our complicated deductions, or the AMT, or the NIIT or all the new goofy rules around S corps. Things like that.
That doesn't sound like a terribly convincing reason why a complex tax code made possible only by for-profit services is desirable, unless you only evaluate it from the perspective of an $INTU/$V/$BAC... shareholder.
In Belgium, most people's taxes are a postcard that says "here's what we think you owe, do nothing if you agree". Before that it was about the work of a single 1099-EZ. (Belgium is not unique in this.)
The biggest source of tax complexity for Americans is our multi level government. Everyone has to file a Federal and State return. Many have to file returns in multiple states and some have taxes at the city level as well.
This is mostly due to the size of the country (compared to, say, Switzerland) and doesn't have anything to do with for-profit tax software.
You're telling me -- I file estimated taxes quarterly in three states plus federally!
Anyway: both Switzerland (your example) and Belgium (my example) have multi-layered governments. Belgium's one is particularly complex, with "communities" which are language unions and "regions" that largely overlap but not quite, as well as province-level and city-level taxes. Each of these has their own institutions and most incur taxes. The multi-layered government is far more complex than the US, but this does not result in comparable complexity to my US filing. (I'd also argue it's far more sensitive: secession has been a possible outcome in my lifetime in a way that it really has not been in the US.)
Meanwhile: the IRS has simply agreed not to provide free tax filing software. Why is that good for taxpayers?
I suppose I don't really know much about Switzerland[1] or Belgium's tax codes. My working assumption is that the population differences (both are the size of US states) leads to simplicity. But I'm perfectly willing to admit I might be wrong here. I really don't know.
I do know that there are weird and frustrating intertwinings of US Federal and State tax codes and I wish I didn't have to deal with that. Kill the SALT deduction!
1. Er, not sure why I brought another small European country into the discussion. I meant to replicate your example but brainfarted.
English-language Wikipedia does not have a great article on Belgian taxation complexity, but it has a great article on structural complexity that highlights the weird "almost-entirely-overlaps" structure:
https://en.wikipedia.org/wiki/Communities,_regions_and_langu...
Mind you that this does not even anything at city level.
Imagine if Illinois was mostly part of the Midwest Region (a governmental entity that transcends states but is not federal and also has a tax authority), but not including Chicago. That'd be close. Also the largest party in its government wants the Midwest to secede from the Union.
Only when they get it right. Years ago, I got an “amended” return from NYS where they claimed I’d lived in Yonkers at the time. Took way too many hours of my time to clear that up.
Lets not forget to note that these companies in the USA have actively lobbied against simplifying taxes for citizens. So yes the size of the country adds complexity but our nasty capitalism makes it worse.
People say this, but it's not really clear to me if this is true. When I look at my (more complex than average) tax return I see a lot of ways to simplify things but most of them would involve going against a major interest of one of the two parties.
Consider, for example, the deductibility of state and local taxes. This is a source of significant tax code complexity, but various constituencies have howled quite loudly about even reducing the amount of the deduction. I am doubtful that it can be eliminated completely.
Most people are solidly in standard deduction territory after TCJA.
If your income is entirely W2 (any stocks sales if any are in tax advantaged accounts) and you take the standard deduction, generally your taxes can be automated easily. That covers most people. Honestly, the only thing that even makes my taxes complicated are investments (made worse by CA diverging from the federal government in matters like HSAs) -- even then, until recently, most of that could be automated from 1099b filings.
Turbotax if anything makes taxes more complex than they have to. There are so many things in their "step by step" for deductions that are completely irrelevant if you are taking the standard deduction. It would be a huge improvement for them to simply pose a question:
"Is there any chance the sum of the stuff below is going to exceed $14k? YES -- itemize. No -- skip"
I suspect they don't do this though to keep convincing users of the need for complex, pricey software.
So true on useless questions in turbo tax. I used credit karma this year and it was way easier than turbo tax simply because i didn't have to answer a million questions.
Yeah, no. That TCJA (aka Trump's tax cut), moved me from solidly in deductions to just under standard deductions. I guess financially it's slightly better, but it doesn't simplify my taxes. Because now I'm just on the limit, so I have to do the itemization work anyway. I do use TT, and did all my itemizing (an evening of work), just for it to say "you get the standard deduction now!"
So I do agree, TT could be much better by explaining the deductions (standard vs itemized) up front and asking if you think you want to answer all the detailed questions.
Mortgage interest was always the big one, so all new homeowners would have to itemize. But mortgage interest goes down over time, so you have to keep doing it every year just to see when it's not enough to qualify.
You can also deduct your home office, as a percentage of the surface of your home and share of the utilities. That's one that might apply to a lot of tech people.
Another big one is charitable donations. Some people give up to $1000 (and more), which could put you over the standard limit.
I think the deductions are really what make US tax complicated for the regular person (businesses are another can of worms). It's like saying: you could pay less tax if you can find of all the ways that the tax code has said you can deduct from your income.
There are two points worth separating here: tax code complexity and for-profit filing. The two are obviously interrelated, but different: Intuit wants for-profit filing so TurboTax makes money, and Intuit also wants tax code complexity to increase the barrier to entry.
But the IRS gets to bear the brunt of any complexity in the tax code, and they've already suggested free filing. They also clearly already know what to expect in significant detail anyway, since they adjusted my return last year.
This was part of my point with Belgium elsewhere in the tread: Belgium has tremendously intricate (and sensitive) governmental structure, but that hasn't prevented them from making tax filing a postcard for virtually everyone. The actual tax code is a lot more complex than the postcard (though still far less complex than the US' tax code), but the tax authority does the math, suggests a number, and if you have some reason to dispute it you go file a "proper" return. So: yes, maybe we can make the tax code simpler, but that should not preclude us from making _filing_ simpler regardless of how complex the tax code is.
Incidentally, the harryh plan for simplifying US taxes:
1. eliminate all deductions in favor of the standard deduction
2. once 1 is done you can actually eliminate the standard deduction as well and make it a part of the tax tables with a 0% rate up to various income levels.
3. eliminate the AMT and the NIIT
4. move all FICA taxes to the employee side (which is where the incidence actually is anyways) and thus eliminate the self-employment tax.
5. roll back all the crap about S corps that got introduced in the 2017 tax bill
6. standardize all 50 state tax forms (the rates can be different but the structure should be the same)
My favorite one that I usually keep to myself because it makes me sound like a loon since it's so far out of the Overton window (but quite popular with economists): abolish corporate income tax.
Corporate income tax is regressive, because AmaGooBookSoft is much better at not paying taxes than a mom and pop grocery store. But I think you've lost most of the constituents that think that's a good thing after saying you're gonna slash corporate taxes to literally zero.
I'd love to see land tax too, but I appreciate that the Constitution doesn't make that easy. But damnit, if we somehow outlawed liquor, we can outlaw inefficient tax strategies.
You're absolutely correct on these IMHO. There is, at least, a multi decade trend of reducing corporate income taxes. Unfortunately all the complexity is still there even if the bills being paid are smaller.
And yes, Georgist taxes on the value of unimproved land would have so many benefits.
Can we get a carbon tax & dividend while we're at it? Dare to dream!
I generally agree on this working out well. As nits though:
1. This simplifies things like crazy, but could have all sorts of spill-over effects. (most notably reduction in charitable giving)
3. AMT, yes. NIIT is only another tax bracket though?
6. This would help dramatically, but I'm not sure how to execute it. CA nonconformity to all sorts of federal tax rules is a huge pain point (HSA being the worse one for the regular person), but it seems CA could care less about the complexity that hits its citizens.
I'm skeptical that much progress can really be made on the latter (for-profit filing) without significant work on the former (code complexity). Perhaps I am wrong though.
Maybe I'll go read about the Belgian tax code. Sounds like some light reading for a Sunday afternoon. ;-)
Can you think of an argument that would be convincing? The IRS already saying they can do it (when they obviously already do the work internally) as well as other countries with more complex governmental structure pulling it off seems like it would be convincing.
Can you point to where the IRS has said that they can prepare returns for taxpayers?
As far as I know they can correct isolated pieces of information (e.g. wrong numbers from a W-2) but do not have the ability to prepare a return from scratch.
Edit: I mean, they can obviously put all the pieces of information they know about you onto one return and do the calculations. But there will be many pieces they don't know, and I think you are unlikely to get an accurate return without them (or based on guessing). But if the IRS says otherwise I would like to know.
Sure: the ProPublica article linked elsewhere in the thread about how the IRS keeps saying "we should just do Free File soup to nuts", Intuit does a bunch of lobbying, and the IRS goes "oh okay I guess we won't do Free File for a while".
You're of course correct that they do not have every document to prepare a return from scratch: but they do have the vast majority of them (in the cartesian product set of (Person x Document)), and certainly a similar to what other industrial nations who have reduced taxes to a postcard notice have--so the assertion also seems credible to me.
Sorry, I'm still not clear what you're referring to. There are multiple ProPublica articles linked in this thread and I'm not sure what statement you're paraphrasing with your "soup to nuts" quote. Are you referring to this article[0], which says the OMB suggested in 2002 that the IRS develop a free option, and the IRS opposed it then and consistently since?
Regarding your second point: the IRS has a lot of documents but it is dwarfed by the total amount of information needed to prepare a return. Even just to determine who your dependents are is a complex flowchart[1] for which there are no official documents in existence that can provide the answers. These kinds of things come up all the time when doing ordinary people's taxes, not just in esoteric situations. (I know because I used to volunteer to do it.)
Yes, I've read that before. I think there is some truth that Intuit has had some role in limiting tax software rollouts by the IRS. However I think it's probably overstated. There is a ton of complexity in the US tax code due to various political interests of the DEMs or GOPs. It's this complexity that is really the source of most of the problems.
Unfortunately there just isn't much of a constituency in the US for eliminating tax code complexity.
No matter how complicated the tax code, the government know in advance how much you should pay.
(Imagine the code was so complicated that they didn’t know, and they relied on your honesty. How well would that work?)
In all the countries I’ve lived, the government simply tells you that number. You can dispute it if you think it wrong.
In the US, you have to tell them that number, and you had better have added it up right because they can trivially check. Oh, and you pay for this privilege?
No matter how complicated the tax code, the government know in advance how much you should pay.
This is not true. Just as an example, I have various business expenses that I incurred while consulting last year. The government has no way of knowing in advance what those expenses are.
Yes. This is normal in all those countries with free easy tax filing.
I regularly adjust the number, claiming various expenses etc.
I have been audited twice, which was actually a lot less scary than it sounds.
This is normal, easy and doesn’t cost and doesn’t even need complicated software. I have filled in forms, but I believe you can also do it online in the country I’m talking about now.
I used CK's free filing this year and already got the returns back. I was happy that there's finally a good free option I can use but now I hear this, I am kind of sad.
In Canada I use https://simpletax.ca. Their software is super easy to use (even easier than TT) ...and it's pay what you want. Needless to say my "donation" to them has been increasing over the years.
In Canada, we have some good free—really free—tax programs. Studio Tax is another one if you prefer to have everything on your computer instead of in the cloud.
I think the reason good free tax filing exists in Canada, but not in the US, is partly because US tax code is too complicated, and partly because there there are dozens of them: federal, 50 states, and a couple of territories, each with their own tax rules.
In Canada, you have one federal and 13 provincial and territorial tax codes; and you only have to file taxes to two agencies: CRA/ARC and Revenu Québec. It is orders of magnitude easier to make a tax software for Canada, thus giving it away for free is possible. For many years, SimpleTax/ImpôtSimple was a three-person operation. Their team has grown to 12 people now [0]. I imagine if they want to extend their services to US, they need to increase their headcount by a factor of ten or more. And at that point, not charging for use would no longer be an option.
This was my first thought as well, although I’m having a hard time judging the value proposition of TurboTax right now. I was going to test out credit karmas tax filing this year but TurboTax definitely has a lot more thorough integrations. I could definitely get my taxes done in credit karma and save some cash but its pretty clear there is a fair time vs. money proposition at play.
That said this experiment may come to an early end with this acquisition ;-).
I suspect you're right, that's a shame, I've used Credit Karma tax 2 years now, it's been very easy because they haven't over-complicated the UI, it's mostly just a simpler, gently guided interface to enter the values you see on your tax forms.
I'm sure there will continue to be plenty of free ways to file my taxes - I usually owe a little bit every year so I'm not very keen on paying even more to file - but the sites I used before Credit Karma were all just more complicated and took longer to file.
One thing that's usually hard to find is the form to enter my mortgage credit certificate. Since it's not the most common thing (a program for first-time homebuyers / buyers in targeted areas administered on a state level) I've usually had to go through some wizard and answer the questions just right (e.g. lie and say I bought a house within the past year) to get it to offer me that form, rather than just picking it from a long list of options.
Agreed. I’d pull the trigger myself. The tax code is far too complex. And the fact that these companies have gone out of their way to thwart free tax returns should be illegal.
> 100% this is to squash Credit Karma’s free tax product.
100% to get credit karma's valuable user data.
Intuit also has free tax product ( fed and state ). Their for-profit tax product is for more complex tax preparation ( home sales, stock sales, etc ) or people with higher income.
Well shit. They’re going to give it the Mint treatment, starting with the free tax software. I can’t blame the founders for selling out but this one stings.
Credit Karma recently opened a decent sized office in my city and is continuing to expand. There are still 26+ engineering roles posted. I visit the office frequently and know a lot of the director levels and up working there. They aren't going anywhere or stopping anything they are doing.
Don't they still have pieces of their website that rely on Adobe Flash? I haven't personally used them in years, but I distinctly recall reading this on a very recent criticism of their service. If that's true, then that's a sure sign of stagnation.
Because it’s true, it’s a terrible piece of software. The account sync is unreliable, the automatic tagging of expenses is horribly off most of the time and on top of all they sell your data to creditors and other third parties. No, thank you. Look at Copilot if you want to do all of this but much better!
The tax code is very complex. It takes a legion of programmers (most of whom also have tax accounting and/or tax law training) just to translate the tax code into computer code.
You're unlikely to find enough volunteers to maintain that.
Also, TurboTax is an entity you can sue if they get it wrong and you get audited because of the error. An OSS project would be a magic black box.
I wouldn't use an OSS tax prep software because I have no way of knowing if it's correct, nor is there anyone to take responsibility if it isn't.
Apparently the IRS was almost done finishing the mainframe to Java conversion of one of their modules and the programmer’s (a PRC national) contract which his visa was tied to expired
Looks like this is the story [1], though it seems the reason is actually some kind of funding-related issue:
Wang was working under streamlined critical pay authority the agency has had since its landmark 1998 restructuring. It gave the IRS 40 slots under which it could pay temporary, full-time employees higher than GS rates. Former Commissioner John Koskinen pointed out Congress did not re-up this authority in 2013, despite his entreaties to former Congressman Jason Chaffetz’s Committee on Oversight and Government Reform.
“The last one ran out this past summer,” Koskinen said. The departures included Wang. He says he applied to become a GS-15 or Senior Executive Service member so he could see through the assembler-to-Java project. But his approval didn’t come through until a week before his employment authority expired. By then he’d accepted another job. Wang says he had a house to pay for, kids to educate. Koskinen confirms the agency wanted to convert Wang. But the process of approval from Treasury headquarters and the Office of Personnel Management simply took too long.
And here's a follow-up from this year [2] which also describes the patent that came out of that work [3].
The question I'd like to ask any company that has a mission and compromises it in a controlling-stake sale is: "What justified you selling-out or was your mission just a ploy?"
$7B is no small change, but I bet they could have come up with another scenario that would have allowed them to make still substantive and life-altering sums of money without compromising.
Jeez man their mission wasn’t to solve world hunger or bring peace to the Middle East. It was a credit app that refered people to credit products. They sold to a financial company. Seems pretty consistent.
I'm not judging (at least not really in this scenario because, yeah, they're not doing world-altering stuff), just scientifically wondering where a line might be and why it would be put there in the first place.
They acquired Mint years ago on the premise that a free consumer app selling financial products would make a great return. That didn’t work. This smells similar, with a dose of consolidation of the tax software market.
(Pocketsmith investor)
I used TurboTax again this year. I tried using a free alternative called "FreeFillableForms" or something similar. It was like the site was made by someone who was just trying to push something out that worked but was not very intuitive. At some point I got to a point where I needed clarification and just could not find it so I went back to TT.
After using TT, I clicked on one of the promotions and installed an app called Turbo. It was a CreditKarma clone that gave me horrible scores that didn't seem to mesh with any other source I could find. I think CreditKarm is just going to be rebranded as Turbo.
I'm starting to get the feeling that I'm paying protection money to Turbotax to have them ward off the gaze of what IRS auditors still exist. I'm not sure it is even possible to file a return that they couldn't nail you to the wall on something if they wanted to.
But... it took me an hour to do my taxes, and my refund was direct deposited in a little over a week. So at least it works.
FYI, Credit Karma has their own tax filing tool [0], which I'm using this year after using TT the last two years, and I find it more understandable for my simple returns.
Honestly, what I'm worried about is that CK's tool disappears.
I wonder if this would affect their UK product which gives free credit reports, I was moved over to them after Credit Karma US/CA acquired Noddle [0] and they rebranded. It was a little frustrating that they gave no opt-out to move customers and their data over to Credit Karma.
They spends a bunch of money making taxes harder so we depend on them. Then they buy out all their competitors. Intuit is a shit company. The government needs to step in and break that up.
They offer your score(s), but they don’t offer you information about your trade lines or specific information about those trade lines when changes occur.
Genuine question - what do they do? I thought they just offer credit checking and monitoring services that look scammy a little bit. Didn’t realize there is so much money in this, no wonder we see so many of these pop up.
I’m not trying to be pedantic, but it’s important to be clear about the issue before you start proposing solutions.
If the government passed a law tomorrow saying that companies couldn’t share user data with third parties, it wouldn’t change anything about Facebook, Google’s or Credit Karma’s business model.
Not that I’m saying we need government intervention.
Affiliate revenue. Lenders, like lending club pays them $200-$400 for each loan it funds as a result of a referral. Credit card companies (chase) pays $500+ for each approved credit application.
For the tax payer who uses a free file option or one of the lower tiers of a product like Turbo Tax, I consider it a crime that the government doesn’t do the tax calc for those people and simply send out either a bill or a refund.
The government has all the information they need to do this, and over time the gaps can be filled by requiring additional paperwork from tax entities like employers, non-profits, financial institutions, etc. There is way less paperwork this way and instead of filing a return one would simply file a dispute with documentation or else accept the government’s numbers. For the vast majority of Americans the math is dead simple.
For those of us who run a business and pass through as ordinary income, we should really only have to file the business return, not both business and personal.
A certain political party who shall go unnamed views making taxes simple is the same as raising them. They would argue that if all you got in the mail was a postcard the government could raise taxes and you’d never notice.
Take that however you want, but that is why we don’t have easy taxes in the US.
Intuit has had a path into the government and has been screwing customers since Clinton. This is not about one party or the other - but it shows up there - it’s about the ability of corporations to affect the agencies themselves and then turn to xo grass as a last resort.
And the other major political party consistently adds complexities to the tax code either as a form of social welfare or to extract revenue to pay for their projects. The EITC, the AMT, the NIIT, all sorts of deductions.
Unfortunately, there is not really a constituency in either party for simplified taxes.
You talk of entitlements and welfare. The political party difference isn't in whether those should exist, it's in which people or entities should receive them, and what form they take.
Given the comment it was in reply to, I think that when spookthesunset said "simple" it was in reference to the filing process, not the underlying rules themselves.
Any tax code likely to be passed if that other major political party achieved majorities in both houses of Congress and either the Presidency or a veto-proof super-majority in Congress, would still be one under which filing could be made free and nearly trivial for most individual taxpayers.
It is the party that spookthesunset left unnamed that wants the process of filing itself to be irritating, which is why what we file largely contains (and in the case of most individual taxpayers) only contains, information that the IRS already knows.
CreditKarma was far from privacy focused, their T&C + Privacy policy gave them lots of grounds to mine and sell user data.
Personal income information about users is generally 3rd party estimates for ads/marketing industry, but by offering a free Tax service, CK was able gather information on actual income about users, which is extremely valuable data.
This would be very lucrative for data-brokers or sold as targetable and proprietary 'audience data', which can be combined with other data-sources to support marketing activities.
The whole idea that companies like Facebook, Google or Credit Karma “sell user data” is a misnomer. Companies don’t sell user data, they sell access to you based on the data they have. The distinction is important. They don’t give third parties a list of users that meet a certain criteria, companies tell them that they want to advertise to users who meet a certain criteria.
I first used Credit Karma in college, which made me aware of my credit score. Credit Karma had a credit simulator at that time, which I would play around with to see what was the best course of action to get my score up up in a very short amount of time. I got to where I want and will maintain it.
Credit Karma's tax solution is the best I have ever used for my case! I still use Mint, but it is in maintenance mode. I can only hope that the CK's tax solution stays intact in not a transition to TurboTax.
The for-profit tax companies already screwed up with the IRS revamping the agreement, so as to compete with them: https://www.propublica.org/article/turbotax-is-still-trickin.... I hope the government will take good advantage of this opportunity.