The 10-Second Tax Return

[HardOCP News]

Thanks in large part to technology, we could easily have a "10 second tax return," but it will probably never happen. Why? Because, without major changes, our government simply isn't willing to do it.


In the United States, the third choice sounds like a fantasy. But the excruciating pain of tax season is just another example of negative American exceptionalism. In fact, about one-half of American taxpayers earn all their income from one employer’s wages (which the IRS can see) and interest from one bank (which the IRS can find out without much effort). The IRS could easily send tens of millions of individuals their nearly completed taxes by mail—or even, by text.

 

[chili dog]

I do not support this idea. I also don't support tax withholdings. For one thing, it's an interest-free loan to the government, but more importantly, paying your taxes should be excruciatingly painful. Nobody should celebrate getting a tax refund, which was their money to begin with. They should instead feel pissed off because they have to write a big ass check every year. The more time it takes, the more time you have to consider all the ways the government is wasting your money.

 

[Armenius]

I do not support this idea. I also don't support tax withholdings. For one thing, it's an interest-free loan to the government, but more importantly, paying your taxes should be excruciatingly painful. Nobody should celebrate getting a tax refund, which was their money to begin with. They should instead feel pissed off because they have to write a big ass check every year. The more time it takes, the more time you have to consider all the ways the government is wasting your money.

Yeah, I make sure my W-4 gets updated at least twice a year because I don't like the idea of loaning money to the government. A small to zero refund every year makes me smile.

 

[ShagnWagn]

How about make it a 0-second tax return? Flat tax. I even wanted flat tax when I worked for a major tax preparation company.

 

[lcpiper]

I do not support this idea. I also don't support tax withholdings. For one thing, it's an interest-free loan to the government, but more importantly, paying your taxes should be excruciatingly painful. Nobody should celebrate getting a tax refund, which was their money to begin with. They should instead feel pissed off because they have to write a big ass check every year. The more time it takes, the more time you have to consider all the ways the government is wasting your money.

You and I are pretty much eye to eye on this one. You should never want a refund. Instead keep as much as they will allow you to keep for as long as you can keep it, then settle up.

Don't give them an interest free revolving line of credit because they sure won't give one to you.

 

[Youn]

#neverforget

 

[amddragonpc]

There's no money in it for the government if they were to do our tax returns. With people doing their own taxes, if they make a mistake, those people get fined. That fine is income to the government. With tax preparers, they generate income from preparing other peoples tax returns and the income derived from that activity is taxed by the government. Cha-ching. More income for the government. As long the money keeps moving, the government can operate.

 

[jojo69]

bugs the shit out of me how many people overpay all year because the lack the discipline to save any other way

 

[Derfnofred]

There's no money in it for the government if they were to do our tax returns. With people doing their own taxes, if they make a mistake, those people get fined. That fine is income to the government. With tax preparers, they generate income from preparing other peoples tax returns and the income derived from that activity is taxed by the government. Cha-ching. More income for the government. As long the money keeps moving, the government can operate.

Minus the whole drag on the economy factor of preparing taxes, which is utterly gigantic... Guvments in general like to smear their happily moving along economies in other guvment's faces. Also, how much $$ do they actually make with fines/compliance versus the labor of investigating/prosecuting said fines/compliance?

Don't answer, you're just going to tell me that the government's sole purpose is to propagate more government.

 

[Shmee]

Is filing taxes that hard? I own a house, have kids, and donate to charity and the whole thing takes maybe an hour. I get my money back in less than a week. Like what most people are doing in this forum, I try my best to keep my return to a minimum every year, so it is not like I am waiting around for a huge check anyway.

 

[tetris42]

Because, without major changes, our government simply isn't willing to do it.

I think it's less about the government being unwilling and more about there being so many loopholes put there by lobbyists, that they're practically being paid NOT to simplify it.

How about make it a 0-second tax return? Flat tax. I even wanted flat tax when I worked for a major tax preparation company.

The problem with that is that it acts regressively as the poor get punished by it. Food and rent are much larger percentages of a poor person's income than to the wealthy. Those percentages can make or break some households.

 

[Damar]

Thanks in large part to technology, we could easily have a "10 second tax return," but it will probably never happen. Why? Because, Intuit (maker of TurboTax keeps lobbying against any changes, (and spending millions of $$$ on that lobbying to make sure it happens).

That's closer to the reality of it. Money talks, and Intuit doesn't want to see something that will affect its $4+ billion a year income from tax software sales.

 

[JayteeBates]

A flat tax is not a punishment to poor people. Everyone has to pair in a fair share. If a flat tax of 10% meant you could not buy groceries you need to reprioritize your spending because likely they are already on EBT. When people in front of me buy $120+ bucks in seafood (crab legs) with their EBT card I just grind my teeth. Then the place told me sorry we don't take credit/debit only cash and EBT. That's another story though.

 

[Retronym]

Thanks in part to technology, soon people may not bother paying taxes.

 

[i960]

How about make it a 0-second tax return? Flat tax. I even wanted flat tax when I worked for a major tax preparation company.

A flat tax would not change the time it takes to do a tax return, not even a little bit. The progressive tax structure is the easiest part of the tax code to figure out. It's all of the deductions that complicate things. And you will never get rid of deductions, nor should you. They are used to encourage specific behaviors.

 

[Kor]

How about make it a 0-second tax return? Flat tax. I even wanted flat tax when I worked for a major tax preparation company.

Move to Russia, enjoy all that hot flat tax action.

 

[i960]

A flat tax is not a punishment to poor people. Everyone has to pair in a fair share. If a flat tax of 10% meant you could not buy groceries you need to reprioritize your spending because likely they are already on EBT. When people in front of me buy $120+ bucks in seafood (crab legs) with their EBT card I just grind my teeth. Then the place told me sorry we don't take credit/debit only cash and EBT. That's another story though.

Yes, it actually is. Progressive taxation is a proven method to strengthen the middle class. Flat taxes only benefit one specific group, the very very wealthy. The people who DO NOT pay their fair share. The people who take in orders of magnitude more "welfare" than the poor. The people who use their massive wealth gained from the productivity of other people to influence laws in their favor.

Not regarding the whole EBT and crab legs thing, that is largely a myth and disproven a long time ago along with the "welfare queen" myth. It is exceptionally rare to find anyone on food stamps blowing money on shit like that. Most people collecting food stamps actually work and do not waste money. And really, who cares if they do? They get a fixed amount each month. If they spend it all on steak and lobster the first week, then they starve for the rest of the month and won't make that mistake again. Trying to go after a tiny amount of poor people who might be abusing the system is a massive waste of time and money when there are much bigger things to tackle first.

 

[Betaboy1983]

A flat tax is not a punishment to poor people. Everyone has to pair in a fair share. If a flat tax of 10% meant you could not buy groceries you need to reprioritize your spending because likely they are already on EBT. When people in front of me buy $120+ bucks in seafood (crab legs) with their EBT card I just grind my teeth. Then the place told me sorry we don't take credit/debit only cash and EBT. That's another story though.

Why concern yourself with this? Don't worry, if they spend this way then they will be eating ramen noodles the last 2 weeks of the month anyway. Maybe that person buying crab legs was buying a 6 month supply, who knows, they are full of omega 3's and good for you. Beats $120 of pop and chips if you think of it that way.

Not regarding the whole EBT and crab legs thing, that is largely a myth and disproven a long time ago along with the "welfare queen" myth. It is exceptionally rare to find anyone on food stamps blowing money on shit like that. Most people collecting food stamps actually work and do not waste money. And really, who cares if they do? They get a fixed amount each month. If they spend it all on steak and lobster the first week, then they starve for the rest of the month and won't make that mistake again. Trying to go after a tiny amount of poor people who might be abusing the system is a massive waste of time and money when there are much bigger things to tackle first.

Yes! Sanity!

 

[sfsuphysics]

I do not support this idea. I also don't support tax withholdings. For one thing, it's an interest-free loan to the government, but more importantly, paying your taxes should be excruciatingly painful. Nobody should celebrate getting a tax refund, which was their money to begin with. They should instead feel pissed off because they have to write a big ass check every year. The more time it takes, the more time you have to consider all the ways the government is wasting your money.

Yeah, and what happens when the vast majority of Americans end up not having money to taxes at the end of the year because they've been spending what they have willy nilly? Now I know you say "well fuck them" but forget them, what about the government? They don't have that money.

Withholdings are a necessary evil, because the government doesn't get an influx of all it's available money in one lump sum once a year (or 4 times a year for estimate taxes) it needs to have this constant influx of money, kind of like people, people (in the general sense) could not survive on 1 check of their entire salary once per year, they simply are too stupid not to budget or they splurge.

Granted something like a flat tax would make things super quick and painless, but it penalizes the poor and rewards the rich.

That said, by all means take my interest free loan, the last time I looked interest rates at many banks were in the range of one tenth of one percent, so sorry you didn't get your $1.17 for the year in interest, but I'm sure you can survive.

 

[tetris42]

A flat tax is not a punishment to poor people. Everyone has to pair in a fair share. If a flat tax of 10% meant you could not buy groceries you need to reprioritize your spending because likely they are already on EBT. When people in front of me buy $120+ bucks in seafood (crab legs) with their EBT card I just grind my teeth. Then the place told me sorry we don't take credit/debit only cash and EBT. That's another story though.

Well for the record, I was thinking of the 99% of poor people who are NOT buying crab legs. But your sentence suggest you don't know what it's like to be poor. 10% of income can make a world of difference. How do you reprioritize your budget when all you're spending money on is rent in the slums, food, and bus tickets to get to work (with no money leftover for emergencies)?

 

[JayteeBates]

Flat tax does not hurt people. Everyone should contribute. The guy making 400 a week pays 40 bucks. The guy making 4000 a week pays 400. That's fair. I have lived in the poorest areas in the country. Welfare fraud was massively rampant. People collecting in multiple states at the same time. Scamming the system to get smokes and things on welfare dime. I'm not going to go on but there should be lifetime time limits on welfare. It's a safety net meant to help when the world around you crashes not a hammock to get comfortable in "just getting by".

 

[chili dog]

Yeah, and what happens when the vast majority of Americans end up not having money to taxes at the end of the year because they've been spending what they have willy nilly? Now I know you say "well fuck them" but forget them, what about the government? They don't have that money.

Withholdings are a necessary evil, because the government doesn't get an influx of all it's available money in one lump sum once a year (or 4 times a year for estimate taxes) it needs to have this constant influx of money, kind of like people, people (in the general sense) could not survive on 1 check of their entire salary once per year, they simply are too stupid not to budget or they splurge.

Granted something like a flat tax would make things super quick and painless, but it penalizes the poor and rewards the rich.

That said, by all means take my interest free loan, the last time I looked interest rates at many banks were in the range of one tenth of one percent, so sorry you didn't get your $1.17 for the year in interest, but I'm sure you can survive.

Income tax was introduced in 1913 and used withholdings until 1916. They were reintroduced in 1943. The government got by during that time, surely it can now with the Fed's printing policy. Or maybe, as you say, the government would have to learn how to budget.

 

[bigdogchris]

All of your information about your income and taxes paid is already sent to the government. If we got rid of all the tax deductions and other bloat, we could have a simple system that we just accept and confirm with a few clicks and be done.

 

[donald_k]

Canada is very very close to the 10s return... more like 2 mins. Most CRA certified tax programs support auto-fill if one has a MyCRA web account - although when I tried it with SimpleTax, it listed the T-forms but failed to populate the data - still a work in progress. If I had a simple return, and the autofill worked... I could have had it done in under 2 mins dealing with the yes/no dialogs and the pop-up web browser that is required for the security portions - 20 mins to add in the wife's T2125s for the SMB direct-selling she does. Unlike Sweden's version, Canada's version still keeps the possibility of keeping the commercial tax preparation industry alive. I expect a couple years before the bugs are works out because simultaneously Canada's internal government systems are going thru some massive re-working with two ERP upgrades rolling out (PeopleSoft for HR, SAP for everything else).

For the USA I can't speak of what the IRS is doing... a quick look at IRS.gov implies its a farse.

 

[JayteeBates]

The tax code here in the U.S. is nuts. I agree, way to complex.

 

[illram]

I don't understand why folks would not want this. You could still try and pay as little taxes as possible or withhold as little as possible, the point is though whatever info the IRS already has, you don't need to simply repeat it for them on a useless form.

I own my own business so I'd never benefit from this but when I was a wage earner I would have really welcomed something like this.

 

[nilepez]

I do not support this idea. I also don't support tax withholdings. For one thing, it's an interest-free loan to the government, but more importantly, paying your taxes should be excruciatingly painful. Nobody should celebrate getting a tax refund, which was their money to begin with. They should instead feel pissed off because they have to write a big ass check every year. The more time it takes, the more time you have to consider all the ways the government is wasting your money.

If you don't want a refund, just add a withholding. Of course if you owe too much, then you'll need to make it up by adding something (let's say 100 bucks/month).

I don't see this as a bad thing. It probably wouldn't save me that much time, but it would save me time. I'm almost certain I wouldn't be done in 10 minutes, but there was a time I would have been.

 

[pothb]

Yes, it actually is. Progressive taxation is a proven method to strengthen the middle class. Flat taxes only benefit one specific group, the very very wealthy. The people who DO NOT pay their fair share. The people who take in orders of magnitude more "welfare" than the poor. The people who use their massive wealth gained from the productivity of other people to influence laws in their favor.

I'm a bit lost at this....

How would a flat tax system benefit the wealthy more than the poor? First time I've heard the term progressive taxation, but I'm going to guess that it means the more you get the bigger the percent you pay? (the system we have now) I think the flat tax system would work well because it would put everyone on the same field with the same rules. When you separate like you currently do, it tends to create groups who'll then do things to benefit only their group. It also creates the sense that because you're more successful, you have to pay out more. And when you feel like you're being attacked, naturally you start to think you're singled out and so find ways to subvert it.

 

[Derfnofred]

Flat Tax wrt affecting lower income vs. higher income, think about this simple question: using your present cost of living (all in) with no behavioral modification, how much %age would you have left over making post-tax 50k a year? How much would you have left over making post-tax 100k a year? This is a math question, not a political/philosophical one.

Yes, progressive tax rates = higher %age of income for higher earners.

 

[pothb]

Yea, but that's like saying we're hitting the other guys harder than we hit you. It's not really beneficial to you, it's just hitting someone else harder.

 

[Derfnofred]

Someone ultimately has to pay the services/goods of the government, no? That money has to come from somewhere!

 

[nutzo]

I do not support this idea. I also don't support tax withholdings. For one thing, it's an interest-free loan to the government, but more importantly, paying your taxes should be excruciatingly painful. Nobody should celebrate getting a tax refund, which was their money to begin with. They should instead feel pissed off because they have to write a big ass check every year. The more time it takes, the more time you have to consider all the ways the government is wasting your money.

Instead of withholding, everyone should have to pay their income taxes, and they should be due on November 1st.
Writing out a big check every year would lead to different election results.

 

[pothb]

Someone ultimately has to pay the services/goods of the government, no? That money has to come from somewhere!

That's why there should be a flat tax. It's simpler, and easier to spot that someone didn't do it or didn't do it correctly. With such a simple system, I would think that loopholes should disappear.

I also think that some government stuff should be made smaller or receive less funding, but that's a different thing altogether.

 

[Tsumi]

Flat Tax wrt affecting lower income vs. higher income, think about this simple question: using your present cost of living (all in) with no behavioral modification, how much %age would you have left over making post-tax 50k a year? How much would you have left over making post-tax 100k a year? This is a math question, not a political/philosophical one.

Yes, progressive tax rates = higher %age of income for higher earners.

Not when all these loopholes (pushed by the lobbyists for the rich) are added to the system so that the rich don't get taxed as much. Offshore bank accounts, earnings reported in another country, obscure deductions, etc. And then the burden actually gets put on the middle to low-upper class that can't take advantage of the loopholes.

The government is not (and should not act as) a wealth redistribution program. Nor should it act as a jobs program.

 

[tetris42]

I'm a bit lost at this....

How would a flat tax system benefit the wealthy more than the poor? First time I've heard the term progressive taxation, but I'm going to guess that it means the more you get the bigger the percent you pay? (the system we have now) I think the flat tax system would work well because it would put everyone on the same field with the same rules. When you separate like you currently do, it tends to create groups who'll then do things to benefit only their group. It also creates the sense that because you're more successful, you have to pay out more. And when you feel like you're being attacked, naturally you start to think you're singled out and so find ways to subvert it.

Because the wealthy spend far less of their income on food and shelter (aka things we need to survive) than the poor. Look at it this way. Say you work full time at Wal-Mart for minimum wage. Say your rent is $500, food comes to $300, so you have 360 left over for other expenses (utilities, phone, basic supplies, etc.). Now instead of paying poverty level taxes, you have to pay a flat tax of $116, leaving you only $244 for other expenses. That really bites you in the ass and it's hell scraping by on that level.

Now compare it to a hedge fund manager bringing in around 200k a month. Let's say 100k of that goes towards his estate and all other expenses. He pays his flat tax of 20k a month, leaving 80k a month for a rainy day. You see how that flat tax hits the poor person way the hell harder?

 

[pothb]

See, you're looking at it with the hard numbers rather than percentage. Personally I think it's better to have the same percentage all around. And have the minimum income rise, with the inflation, afaik, it's been stagnant despite the inflation, which causes that scenario.

 

[Derfnofred]

Not when all these loopholes (pushed by the lobbyists for the rich) are added to the system so that the rich don't get taxed as much. Offshore bank accounts, earnings reported in another country, obscure deductions, etc. And then the burden actually gets put on the middle to low-upper class that can't take advantage of the loopholes.

The government is not (and should not act as) a wealth redistribution program. Nor should it act as a jobs program.

Did you miss the part where I was trying to help the guy understand how at a flat %age, assuming equal cost of living, would hit the lower income person disproportionately more? Or the part about this being a math question, not a political/philosophical one? I was deliberately *trying* to avoid all the other shenanigans and side commentary. Let's start with understanding the basics first so we can talk philosophically on the same page (even if all parties disagree/interpret things differently), please?

 

[Tsumi]

Did you miss the part where I was trying to help the guy understand how at a flat %age, assuming equal cost of living, would hit the lower income person disproportionately more? Or the part about this being a math question, not a political/philosophical one? I was deliberately *trying* to avoid all the other shenanigans and side commentary. Let's start with understanding the basics first so we can talk philosophically on the same page (even if all parties disagree/interpret things differently), please?

Except you can never talk about an ideal scenario. Ideal scenarios are just mere fantasies, and discussing them is purely an academic exercise. It's like saying X GPU has higher GFLOPs than Y GPU, but in reality, Y GPU has higher framerates in more games than X GPU. You can talk about GFLOPs all you want and how X GPU should be superior, but it does not translate to the real world scenario. Same thing with this discussion. Sure, in theory, what you say is true. In reality, it does not work that way, and therefore a moot discussion. And I believe this thread is about theoretical what-ifs in the real world, not theoretical what-ifs in a fantasy, ideal world.

I have many fantasies on how the world should be. I believe everyone should have a minimum standard of living, provided that they put at minimum a certain amount of effort towards it. I believe that all children should have access to the same educational base. I believe that anyone that causes damages to society must repay the damage in an equal amount to the damage. Everyone free to express their opinion, and no one should feel threatened or offended by it. My ideal world would be a socialist world, with everyone open and accepting of others essentially.

However, I'm also pragmatic and thus base my views on how I see the real world operate. Wealth redistribution by the government does not work. Too many people manipulate the welfare system, so I believe welfare needs to be scaled back greatly. Actually, too many people manipulate the system in general, and with computer tracking of information, there should be no reason why most abuse goes undetected. Minimum wage raises do not work unless they rise the same rate as inflation, and aren't meant for supporting a family anyways. The minimum wage was supposed to prevent teen workers from being taken advantage of. The amount of resources and technology available to us will never be able to support our population with a moderately decent standard of living. All raising the minimum wage would do is put people into higher tax brackets while their adjusted real wages remain the same, and their adjusted spending power actually decreases due to the real higher taxes. The capitalist, restricted democratic republic world is the best system I see for the real world.

 

[harmattan]

I've been living and working in the UK for the past year, and must say, the PAYE scheme (where they deduct exactly what you owe from your paycheck) is far, far superior to the mess in the US. Unless you have complex deductions, assets, cap gains, you never need to do a return.

On the other hand, claiming back my UK foreign credits for my US taxes is an exercise in perturbative mathematics. Unlike most other country's citizens who are only taxed in the country in which they are living, US citizens living abroad need to do their US taxes (based on the income you earned abroad), then claim back the taxes you paid locally. I pine for the days when I'd do my 20-min "TurboTax sprint" and be done with them.

 

[Uvaman2]

#neverforget

Bullshit.. that would have meant a mayor tax hike for me