HardOCP News
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This is totally shocking! Why would the maker of TurboTax be against free, simple filing? Oh...wait. 
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TurboTax Maker Campaigning Against Free, Simple Tax Filing
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dgingeri
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It's the government we're talking about here. They'll make a buggy, horribly unusable web site that'll leak your private data and get your identity stolen. They've already done this once before.
Colecoman1982
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Yes, because there absolutely NO way a private corporation (like Intuit, TurboTax or H&R Block) could EVER make a website that has a security flaw and releases user data. Corporations just don't make those kinds of mistakes. That almost as absurd as suggesting that a huge company like Target could have their point of sale systems hacked... /s
Such preposterous twaddle. Flat tax or Fair tax. Either make life a hell of a lot easier on everyone.
Also, if you want something to become vastly more expensive, slow, unwieldy, leak security like an open hydrant, not work, and basically change it's rules on an almost daily basis, then yes, let the government create and run it.
Also, if you want something to become vastly more expensive, slow, unwieldy, leak security like an open hydrant, not work, and basically change it's rules on an almost daily basis, then yes, let the government create and run it.
dgingeri
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Well, corporations have money and jobs at stake, so they do it the best they can in the time they have. Government never cares about the money or time spent on it, so they lazily plug along and do it all wrong. The bureaucracy is out of reach of the people. They can't just vote out the head of the IRS if it's done wrong. Even if enough political pressure is put on to make someone resign over it, they just retire with a nice pension and never have to worry about money again. I would think the recent Obamacare web site issues would show this well enough.
sfsuphysics
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Then wait for thousands of CPAs and their collective worth which exceeds most countries GDPs to lobby against how unfair a fair tax is to their livelihood
Then wait for thousands of CPAs and their collective worth which exceeds most countries GDPs to lobby against how unfair a fair tax is to their livelihood
Oh that's true enough. I've heard my CPA tell me as much and then I tell him, fuck you, get back to work getting me more of my money. Thank you.
LarsonLake
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Everything you just said exactly correlates to the private section too:
- CEOs of large corporations can't be voted out by the general public and they retire with golden parachutes not matter how badly they screw up.
- Plugging along and doing a poor job is definitely not limited to the public sector.
- There are thousands of poorly designed and unsafe commercial websites.
This is all very simple. Let the government compete against the private sector. If the government does a terrible job then they will be no threat.
No, they do it as cheaply as they can, hence security breaches. The gov't has no vested interest in doing things half-assed, because as you indicate they have unlimited supply chain to get it right. A corporation's motivation is going to be greed, and to seek whatever opportunity they can to screw their customers over, i.e. lobbying to block bills that hurt their business. You can pretty much assume any time a corporation wants to do something in the interest of the public, that the exact opposite is true.
Yes, because there absolutely NO way a private corporation (like Intuit, TurboTax or H&R Block) could EVER make a website that has a security flaw and releases user data. Corporations just don't make those kinds of mistakes. That almost as absurd as suggesting that a huge company like Target could have their point of sale systems hacked... /s
I believe Intuit's Turbotax website was also affected by the heartbleed fiasco.
No...I'm pretty sure we're talking about corporate greed here. Just more trash from gool ol corporate 'merika.
D
Deleted member 93354
Guest
Well I won't be using turbo tax next year.
Posted to my Facebook page.
Posted to my Facebook page.
Then wait for thousands of CPAs and their collective worth which exceeds most countries GDPs to lobby against how unfair a fair tax is to their livelihood
This wont' affect CPA's. If you pay a CPA, you're not in the market for free tax filing. Hell, you're probably not in the market for Intuit Tax Software (or H&R Block or any of the others).
Only in the world of government does one have to figure out themselves how much they "owe" them (and I use "owe" in quotes because taxation is tantamount to armed robbery). If you went into Walmart to buy a product, and they made you fill out 20 pages of paperwork to figure out what your total at the cash register would be, you would refuse and take your business elsewhere.
I don't understand why most of you seem to be for pre-filled tax forms.
You actually think that they are going to be anywhere near accurate? This is the government we are talking about.
The same one who claims an absurdly low unemployment rate.
The same one who bails out corrupt banks and other companies that are "too big to fail" with your tax dollars.
The same one who claims that "Obamacare" is a success. The same one who brought you the joke of a webpage for "Obamacare".
The same one who wastes hundreds of billions of your tax dollars every year.
The same one where the IRS is used as a punishment tool.
How is pre-filled tax forms a good idea in any universe? Almost as bad as pre-filled ballots.
You actually think that they are going to be anywhere near accurate? This is the government we are talking about.
The same one who claims an absurdly low unemployment rate.
The same one who bails out corrupt banks and other companies that are "too big to fail" with your tax dollars.
The same one who claims that "Obamacare" is a success. The same one who brought you the joke of a webpage for "Obamacare".
The same one who wastes hundreds of billions of your tax dollars every year.
The same one where the IRS is used as a punishment tool.
How is pre-filled tax forms a good idea in any universe? Almost as bad as pre-filled ballots.
The best part is, the IRS already offers this "service" to low income people. You can go down to any IRS office and they will do your taxes for you if you make under $52,000 but I wouldn't trust them because there are documented cases of people getting fucked over with fines because the overpaid IRS agents preparing their taxes made mistakes (as usual, government never is held to account for its own actions). This is like Walmart fining you because their cashier undercharged you.
octoberasian
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A fair tax or flat tax is a bit more fair than what we currently have. I'm a tax preparer and myself and my old boss even agrees it's the best way to go in fixing our current tax system.
As for pre-filled tax returns, this would work for a small majority of tax returns with easy to acquire data. Those who are given W-2 and 1099 forms would be easily filled out in a 1040 automatically with information from prior year return. Those who have other documents that aren't so easily recorded in such forms, have extenuating circumstances, and/or have more complicated returns, this would not work for them.
For low income families, opposed to TurboTax's sentiments, this would be a godsend for them. It means that, one, they don't have to pay for a tax return, and, two, they don't have to argue with tax preparer on whether they can claim someone that shouldn't be claimed on their tax return.
As for pre-filled tax returns, this would work for a small majority of tax returns with easy to acquire data. Those who are given W-2 and 1099 forms would be easily filled out in a 1040 automatically with information from prior year return. Those who have other documents that aren't so easily recorded in such forms, have extenuating circumstances, and/or have more complicated returns, this would not work for them.
For low income families, opposed to TurboTax's sentiments, this would be a godsend for them. It means that, one, they don't have to pay for a tax return, and, two, they don't have to argue with tax preparer on whether they can claim someone that shouldn't be claimed on their tax return.
Parmenides
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I know former auditor who worked for a state, certificed fraud examiner. He's all for a simple tax system too. According to him, the tax code itself is broken into huge volumes that refer all over the place like spaghetti code. There are even circular references to section/volumes. It's a mess that no one can fully comprehend.
I'm sitting here laughing at the posts above questioning whether the IRS forms would be accurate or not...as if it matters!
How long have you been filing your taxes to wonder about that?
If there is a discrepancy between your figures and the IRS figures it doesn't matter whether you use their form or your own because the IRS figures are the ones that you better use unless you want to get a bill later with interest.
How long have you been filing your taxes to wonder about that?
If there is a discrepancy between your figures and the IRS figures it doesn't matter whether you use their form or your own because the IRS figures are the ones that you better use unless you want to get a bill later with interest.
Flat tax? Ha. People dream of something like 10 or maybe 15%. Nope, because that wouldn't come close to paying for our current gov't spending. If they ever pass a flat tax, it's gonna be about 40 to 50%, and it's not going to hit until you're making $35,000 or so. Then everyone will have a shit fit and complain about that kind of tax. Face it, no one's ever gonna be happy.
Thing is the IRS already has e-forms and you can e-file directly with them however its just the forms directly, not questions like Turbo Tax.. Turbo tax in a way is just a pretty face to this already-offered service of the IRS.
No, the IRS is not going to screw this up.. Turbo Tax did not create e-file and electronic tax forms, the IRS did, and it works and works for years.
No, the IRS is not going to screw this up.. Turbo Tax did not create e-file and electronic tax forms, the IRS did, and it works and works for years.
Disposed
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Making up percentages is fun.
I am a Tax lawyer and have been published in a major journal on tax policy. A few points:
1. The UK already does this. It works reasonably well, but it would require substantive tax reform.
2. A revenue neutral flat tax would result in the majority of taxpayers paying more and/or hit the upper middle class hard in favor of the wealthy (depending on exemption limits). A single rate flat tax would not significantly simplify things. The "fair tax" might.
Lest you suspect ulterior motives, I do corporate tax, so this would not directly affect me professionally.
1. The UK already does this. It works reasonably well, but it would require substantive tax reform.
2. A revenue neutral flat tax would result in the majority of taxpayers paying more and/or hit the upper middle class hard in favor of the wealthy (depending on exemption limits). A single rate flat tax would not significantly simplify things. The "fair tax" might.
Lest you suspect ulterior motives, I do corporate tax, so this would not directly affect me professionally.
dgz
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2. wouldn't "hit" anyone unless there's a ceiling of some kind, which sadly there always is. Flat = fair to me. Everyone pays equal percentage. Yes, that would hit the poorest which is why you don't tax them if they earn less than certain amount. Not entirely equal, but still better than everything I've seen so far. We use flat but the ceiling is so low it's embarrassing.
What I am saying is that it is a mathematical impossibility to impose a revenue-neutral tax with a single rate without increasing the taxes of the middle class. Consider that approximately half of taxpayer owe no federal income tax, while most of the tax burden is paid by the top 1/4 of earners. Since those top 1/4 earners currently pay a higher rate than average earners, you are going to have to raise the rates on the average earners to bring the high earners down to the single rate.
Also, arguing that every everyone should pay an "equal percentage" is begging the question (in the logic sense of that term). An equal percentage of what? You would probably say income, but the difficulty in defining what "income" should include is precisely why the tax code is complicated. A single rate does almost nothing to resolve complexity unless you are completely innumerate. Getting rid of tax preferences (i.e. various deductions and credits) does resolve some complexity, but there is no reason why that couldn't be done independently of a single-rate tax.
If you are not convinced, go ahead and keep advocating for that flat tax. It would save me a lot of money
weuntouchable
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How to fix the tax code in 7 easy steps:
1) Eliminate itemized deductions.
2) Raise the standard deduction to $15,000 per taxpayer ($30,000 for married filing jointly).
3) Raise personal exemptions to $5,000 per taxpayer.
4) Tax dividends and capital gains at ordinary rates.
5) Eliminate government subsidies (businesses survive or fail without government intervention).
6) Corporations doing business in the US pay a flat 20% tax on 100% of their income. No loopholes for overseas profits. Just like a US Citizen pays tax on all his earnings no matter where it came from, if you want to do business in the US you pay taxes on all your earnings.
7) Individuals subject to three income tax rates. Numbers below are for taxable income. ie. After standard deduction and personal exemptions. (double the numbers for married filing jointly):
$0 - $25,000 = 10%
$25,001 - $75,000 = 20%
$75,001 - Infinity Billion = 30%
A married couple with two children where the husband and wife make $100,000 combined would have a tax bill of $10,000. The current education, childcare, etc. credits would still exist to reduce the tax bill further. This protects the poor as the first $20,000 of income is tax free and doesn't overly burden the middle class or upper class. It really hits corporations, primarily those setup overseas to avoid taxes and works towards a market free of government intervention to keep unprofitable industries alive.
1) Eliminate itemized deductions.
2) Raise the standard deduction to $15,000 per taxpayer ($30,000 for married filing jointly).
3) Raise personal exemptions to $5,000 per taxpayer.
4) Tax dividends and capital gains at ordinary rates.
5) Eliminate government subsidies (businesses survive or fail without government intervention).
6) Corporations doing business in the US pay a flat 20% tax on 100% of their income. No loopholes for overseas profits. Just like a US Citizen pays tax on all his earnings no matter where it came from, if you want to do business in the US you pay taxes on all your earnings.
7) Individuals subject to three income tax rates. Numbers below are for taxable income. ie. After standard deduction and personal exemptions. (double the numbers for married filing jointly):
$0 - $25,000 = 10%
$25,001 - $75,000 = 20%
$75,001 - Infinity Billion = 30%
A married couple with two children where the husband and wife make $100,000 combined would have a tax bill of $10,000. The current education, childcare, etc. credits would still exist to reduce the tax bill further. This protects the poor as the first $20,000 of income is tax free and doesn't overly burden the middle class or upper class. It really hits corporations, primarily those setup overseas to avoid taxes and works towards a market free of government intervention to keep unprofitable industries alive.
Re #6: It would basically insta-bankrupt many companies that have real operations overseas. Keep in mind that doing business abroad involves paying taxes to foreign governments. How would an oil company drilling off the cost of Norway (which imposes tax at around 70%) make money with an additional 20% U.S. tax on top?
However, there are serious proposals to eliminate offshore deferral (including proposals by house ways and means committee members). They usually involve a current tax of much less than 20%.
I would add to my post below, that while some of the proposals are good, anybody who thinks the tax code can be fixed "easily" doesn't understand the tax code or its problems.
dgz
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What I am saying is that it is a mathematical impossibility to impose a revenue-neutral tax with a single rate without increasing the taxes of the middle class. Consider that approximately half of taxpayer owe no federal income tax, while most of the tax burden is paid by the top 1/4 of earners. Since those top 1/4 earners currently pay a higher rate than average earners, you are going to have to raise the rates on the average earners to bring the high earners down to the single rate.
Also, arguing that every everyone should pay an "equal percentage" is begging the question (in the logic sense of that term). An equal percentage of what? You would probably say income, but the difficulty in defining what "income" should include is precisely why the tax code is complicated. A single rate does almost nothing to resolve complexity unless you are completely innumerate. Getting rid of tax preferences (i.e. various deductions and credits) does resolve some complexity, but there is no reason why that couldn't be done independently of a single-rate tax.
If you are not convinced, go ahead and keep advocating for that flat tax. It would save me a lot of money
You talk about federal tax and "the tax system" as if the whole world is using the same one.
An equal percentage of what, you ask? Well, income of course. You don't to ask what is income. Income is what you make - no matter the source. If your goal is simplicity, there's no need for it to be complicated. Take off your accountant/lawyer glasses and think about it for a second.
weuntouchable
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I'm a licensed CPA with 8 tax seasons under my belt working with individual and business taxes. I agree that of course you can't fix the current voluminous tax code with 7 easy steps, but you can provide an excellent framework to greatly simplify the tax code. Eliminating special interest group benefits and itemized deductions will get rid of a considerable amount of the tax code.
weuntouchable
[H]ard|Gawd
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Just like with individual US Citizens, businesses paying a tax to another country would get credit for those taxes and pay the difference (if any) to the US.
Again, if you think the problem is simple, you don't understand it.What do you mean by "what you make"? If you run a small business, does that mean your gross income or net income? If you mean net income, what gets included in net income? If you mean gross, how do you account for high margin vs low margin businesses? A low margin business could end up taxed in excess of 100% of net income in a gross income based tax. Once you start taxing net income, you need complicated rules to decide what gets deducted.
For example: If you have a delivery van that you occasionally commute with, how do you determine what portion can get written off as an expense for your business? How do you keep people from abusing the deduction? Guess what, you need rules, which get complicated in order to avoid unfairness.
Sure, it's relatively easy if you are just a regular employee with nothing but W-2 reported wages. It's those types of people for whom you could eliminate the tax filing requirement without too much difficulty.
I am well aware that the world is not using the same tax system. My specialty is international corporate tax. There is in international network of tax treaties and common tax problems (i.e. transfer pricing) that do provide a certain commonality to the worldwide tax system. New compliance laws like FATCA further integrate the world wide tax system. However, since this article was on U.S. taxation, I was referring to the U.S. tax system.
Unabomber
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I'm going to go against the flow here...
Before I begin, I'm going to admit, that I've been a strong supporter of Turbotax throughout the years, and that I've certainly benefited from using Turbotax for Business for the last 10 years.
Turbotax already offers free federal tax services for people with simple needs, and they do a pretty good job of it. They also give such users a 5% bonus on top of it. In addition to this, they keep good records, and the system is exceptionally easy to use.
That being said, would there be any real reason to use the government-sponsored system if Turbotax already does it for free and gives you more?
Before I begin, I'm going to admit, that I've been a strong supporter of Turbotax throughout the years, and that I've certainly benefited from using Turbotax for Business for the last 10 years.
Turbotax already offers free federal tax services for people with simple needs, and they do a pretty good job of it. They also give such users a 5% bonus on top of it. In addition to this, they keep good records, and the system is exceptionally easy to use.
That being said, would there be any real reason to use the government-sponsored system if Turbotax already does it for free and gives you more?
Sorry, thought you were proposing the elimination of the foreign tax credit.
However, if you are talking about keeping the foreign tax credit, the problem of offshore deferral you are seeking to solve is the reason for numerous and extremely complicated parts of the tax code. For example, Subpart F, which dates to the Kennedy administration, was imposed precisely to prevent improper offshore deferral by eliminating deferral for passive income earned offshore. Foreign tax credit limitation rules exist for similar reasons. Those provisions keep getting more complicated as businesses think of new ways to get around them. It's a cat and mouse game.
Offshore income shifting strategies, such as those employed by many tech companies (i.e. Google's infamous Dutch sandwich) exist because it is exceedingly difficult to draft anti-avoidance provisions that are airtight in an international context.
I agree with much of the framework, but I don't think the framework really gets you very far. The devil is in the details.
Parja
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I know plenty of stupid people who have very simple tax returns but are too scared of doing it themselves and overpay a CPA or tax service to do their taxes.
Astral Abyss
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FACT: State and Federal Government already know how much you should be paying in taxes.
In fact, here in Arizona, you will get a form mailed to you stating what your income tax refund or bill is going to be. If you file your taxes and it doesn't match that, good luck.
I filed my Federal Income taxes this year and they said I used the wrong interest rate form because I got a letter from them stating that they adjusted my filing automatically. Good luck fighting that.
So in light of that, what difference does it really make? They already know how much you owe.
In fact, here in Arizona, you will get a form mailed to you stating what your income tax refund or bill is going to be. If you file your taxes and it doesn't match that, good luck.
I filed my Federal Income taxes this year and they said I used the wrong interest rate form because I got a letter from them stating that they adjusted my filing automatically. Good luck fighting that.
So in light of that, what difference does it really make? They already know how much you owe.
My favorite example of this was the Oregon State police a few years ago testifying before the legislature that ending the $10 fee/tax on background checks for gun buyers would impact the state economy greatly due to those OSP workers losing their jobs. Nevermind that all they do is send the data through the Fed system which is free (and paid for by fed taxes).