Happy April everyone. This is a point of agreement with everyday conservatives, right?
There’s probably disagreement with how it should be changed but would your ideal world feature a radical redesign of how taxes work?
Happy April everyone. This is a point of agreement with everyday conservatives, right?
There’s probably disagreement with how it should be changed but would your ideal world feature a radical redesign of how taxes work?
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Happy April everyone. This is a point of agreement with everyday conservatives, right?
There’s probably disagreement with how it should be changed but would your ideal world feature a radical redesign of how taxes work?
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In the context of a country where 50% of Americans read at or below a 5th grade level it’s probably too complicated. Otherwise it’s really not all that difficult.
No, it is not too complicated. Having nuance for different situations is good. Having different tax rates for different people (progressive taxation) is good.
Yes, complexity favors the big, big corporate, big wealth, etc….
The complexity is a big part on how big corporations and the wealthy can pay far lower effective tax rates than the published rate.
The complexity adds layers of difficulty to auditing these big entities, to the point where audits of the biggest have to be caught in court to settle law on how various elements interact.
The complexity builds industries that offer little benefit to society based around tax efficiency and avoidance.
The complexity has elements that have hurt society through perverse incentives, given breaks to fossil fuels, incentivized real estate investment over development, encouraged the rise of SUVs, etc….
A far simpler progressive personal and corporate tax policy would benefit the majority, would reduce inequality, support entrepreneurship and competition, remove perverse incentives in real estate, etc….
For most filers it isn’t, but complexity is often used as an argument for a flat tax, which is a regressive tax on the poor.
If Walmart won’t hire you to do their taxes because you aren’t a master accountant or an attorney, yes.
Too complicated for what? For the average civilian? The problem is not that the tax code is complicated; the problem is that it’s too complicated for people to file their taxes on their own. Other countries automatically file their taxes, and then all normal people have to do is make a claim if they think they were over taxed. This sort of automatic taxation is something that many people have tried to implement, including Barack Obama, but the lobby from TurboTax is too strong.
As an accountant, yeah, probably. There’s definitely plenty of deductions that incentivize certain behaviors that can probably be done away with. I am not a fan of tax benefits to certain industries, personally. AMT is pretty whack too, in practice at least.
But a lot of people blow it out of proportion, the weird stuff doesn’t apply to the vast majority of people. People act like it’s a herculean task to fill out a 1040 for wages and the standard deduction.
Conservatives think taxes are evil. They have no opinion on the actual tax code. They will spew whatever talking points the Cato Institute feeds them. This is purely a righteous battle for conservatives to escape responsibility.
There are way too many exemptions/credits/deductions/classifications for businesses. For individual earners, I think it generally makes sense.
Speaking as a tax cpa, the code could be made simpler for individuals that are just wage earners.
When it comes to businesses, though much of the complexity comes down to calculating your income. If the US tax code mirrored income for accounting rules for financial reporting, you would still have a lot of complexity. This would make it simpler, but there’s good reasons why the tax code differs from generally accepted accounting principles.
Yes, and that complexity makes any arguments about “in this year the top rate was x%!” kinda moot when it’s a difference of only 7 points
For individuals, probably not, at least for most people. For businesses, absolutely
But a complex tax code is often necessary to try and prevent gray area and loopholes. If you think the current tax code is long, take a look at how long the Treasury Regulations are, which are used to fill in the gaps that the tax code doesn’t cover
I wouldn’t radically redesign it, but there are some clear and simple things we could do to help fix it
Maybe a little bit, but for the large majority of people filing a 1040 should be really easy. I get suspicious of people complaining about complication because it often just hides lame anti-tax rhetoric.
I’m suspicious of any amount of process as the solution to a problem. So too complicated, not complicated enough, it doesn’t matter. So long as people look for loopholes, they’re gonna find them.
It’s the people that are the problem. That “greed is good” thing that started in the 80s(?) has gotta stop. The founding fathers were all about people being selfless and having that civic spirit, or the entire system doesn’t work. We gotta either find that again, or we’re doomed.
Sure. We should replace all our current taxes with a Land Value Tax.
I mean, too complicated for what? Is an internal combustion engine too complicated?
I think if the way we paid our annual taxes was basically the gov sends us a bill and we pay it, people wouldn’t care about how complex the U.S. tax code is.
First, let me say that every time this is said, it inevitably leads to someone saying we should move to a flat tax.
Flat tax is regressive as fuck. NO. GO AWAY.
If I had MY way? Total pie in the sky idea?
We’d be able to allot our taxes ourselves. War? Nope. Schools? Yes! Give us 5-10 categories, we’d fill in percentages, and that’s what the US budget would be. Fuck Congress, they have to work with what they get.
We’d have the best funded infrastructure in the world.
I’d feel a LOT better about my taxes if I knew they weren’t going to bomb brown people on the other side of the planet.
I think there are two different questions here: Is the tax code too complicated is to me, not necessarily the same question the same question as a redesign as would I like to see a redesign for how I’d like to see a redesign of how taxes work.
For the first question of are taxes too complicated: for the vast majority of people? No, it’s really not.
For the wealthy, people who earn money in particular, non-traditional ways or large corporations? Sure. But a major component of the reason of the “complication” is that–just like with any other set of regulations–to ensure that there is uniformity in application of enforcement action when the regulations are applied, every component must be identified, defined, etc., which makes the regulations long.
Then, because there are of course times where certain codes are meant to really target X, but you wouldn’t want to accidentally throw Y under the bus, you want to put in exemptions, but those have to be crafted carefully, and to do so requires a lot of words.
For the second question: a redesign of the tax system: yes, I’d like to see one.
To start with something very analogous to current events: I’d be open to a corporate income tax near zero and removing a lot of the off-setting credits (but not getting rid of things like payroll taxes, to be clear). Just like corporations are going to pass on the tariff increases to their workers or to consumers, corporations just pass on corporate income taxes to their workers or consumers. Remove the administrative burden for some efficiency.
A better progressive income tax bracket, close the “buy-borrow-die” loophole, and Biden’s unrealized capital gains was a lot better than many realized–not just for the government’s revenues, but it would fix a lot of the kinks happening in the market today.
I’d also probably tax ads on sportsbooks 1,000% because I’m really tired of seeing those ads everywhere and honestly probably drastically up the percentage tax on sportsbooks (the companies, not the gamblers) when done online–while not a gambler myself, I’m well aware that the revenue can be important to many communities (plus, it’s up to you), but unlike traditional gaming facilities, which have systems in place to “nudge” gamblers that start/are showing signs that they may have problem behavior to take a break, more and more evidence is emerging that the sportsbooks apps are just using a majority of their resources to target those they think are addicts until they suck every last penny from them.
As a pretty average American, it doesn’t strike me as that complicated. Not the parts I deal with personally, at least. If I come across terms I don’t understand I’ll just look them up.
I think a lot of the confusion comes not from inherent complexity but because conservatives keep lying about it.
Depends on who you ask. Most of the wealthiest people benefit immensely from the needless complexity of the tax code.
irs has 90,000 employees
CRA has 59,000
us is roughly eight times larger. this is the fundamental issue we should be discussing.
I’m far from an expert on tax policy but my taxes seem unnecessarily complicated to me and filing is intentionally overcomplicated as I understand it due to lobbying from hr block and other similar groups. As far as I know w2 equivalent workers in other countries don’t need tax prep services, though I do have investment income also.
I saw a book once that argued that the personal tax system should be simple enough to do on a postcard. It would simplify bureaucracy and make it easier for individuals.
The average person’s interaction with the tax code is not too complicated. You go to a website run by a private for profit corporation, give them all of your personally identifying information about yourself and everyone in your family, copy over the numbers on the forms you got in the mail, click submit, and then pay the $100 fee for the service that was advertised as free.
Yeah I have a lot of issues with that system, but those are the fault of Intuit, not the tax code, the tax part of it is just copying numbers into boxes.
It does get complex of course, and I do deal with that complexity daily as a CPA. But most of that complexity doesn’t apply to most people. And much of it only exists to close the loopholes found in previous “simpler” versions of the code. It didn’t get complex for no reason. Like yeah, 704(c) breaks my brain, but it doesn’t affect you, and it if does, it’s because you’re trying to use partnerships to sneakily shift capital gains around and pay less tax. It would not be in society’s interest to “simplify” this rule away, as much as it would make my job easier.
Abolish FATCA and Citizenship Based Taxation.
since it is suppose to be completed by every citizen, i think the answer is yes.
Yes, the government shouldn’t be subsidizing wealth creation after a certain point. People like bezos and musk don’t need training wheels for their companies anymore
For sure.
And that is a feature, not a bug.
This complexity allows big corps to get sneaky loopholes to reduce tax liability for themselves while strangling out the smaller competition that can’t navigate the absolutely labyrinthine tax code.