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CA State Offers To Prepare Simple Tax Returns
Makarand writes "California is ready to roll out a program for taxpayers where the
state will
offer to fill out their tax forms for them if they are simple enough. Taxpayers
will merely have to go online, download and review the completed forms prepared
for them and confirm their return. This program is supposed to save money
for the state, reduce tax related headaches for many and bring into the
tax system those who are not paying any taxes currently.
The state will take information it already receives on W-2 wage statements,
put it in the right boxes on the tax return, and do the math."
I think it would be great if this was national, I don't see any privacy issues since the gov't is the entity you are sending the info to anyway
The government is the only corporation that demands you calculate your own bill before paying it, and then refuses to trust that you did it right.
first psot!!!
How long before the state penalizes you for NOT having them do your taxes?
of H&R and others?
Sounds fantastic to me. Of course, plenty of people may miss out on possible deductions, but overall, simplifying compliance is a wonderful thing.
Hooray for simplicity!
500GB of disk, 5TB of transfer, $5.95/mo
The State can do everything but sign your money over to them. That's still voluntary.
They'll bend over backwards to make it easy, but it's still your decision.
oh well, i suppose i'll just have to console myself with all this extra untaxed cash.
1. How much money do you have?
2. Send check for amount specified in step #1.
3. You still owe, work harder next year.
Thank you,
Your Government
state tax returns are generally really easy, compared to the federal, since they just have you copy stuff off your federal return. What they should do to get more people to use it is, when you are done, tell them what what numbers to put where on the federal form.
Why the hell don't they just replace the "too complex" original tax form with this new "simple" form? Instead of making it all that much more complex, by feeding the simple form into the complex one, then the complex one into the complex system? Are they trying to better bistromathics with a higher form of inscrutable symbolic manipulation? Or is there some kind of "100% accountant employment" law in force in California, demanding ever more layers of unusable complexity?
--
make install -not war
The tax system is too complicated... we need the Fair Tax.
Simply put, the FairTax replaces the way we're currently taxed - based on our annual income - with a tax on goods and services. The FairTax is a voluntary "consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.
It's simple.
Everyone pays their fair share of taxes, and with the FairTax rebate, spending up to the poverty level is tax free. The Federal government is fully funded, including Social Security and Medicare, and you don't need an expert to determine your Federal taxes.
It's simple.
Read the FAQs
everything related to taxes is sent to IRS anyways, make them do the fucking work.
The one thing I hate more than paying tax is working out my tax.
Last year I filled in my tax and missed out a bit of interest I had earned. It wasn't anything significant and the tax office sent me a nice letter saying that I'd missed out on a bit but that it wasn't a big problem etc etc.
But that left me thinking that if they already know how much interest I've earned (as it's all reported by the banks) then why the hell make me work it out myself. Just give me something filled in as much as possible and then let me check it for errors, fill in any gaps, and be done.
Boffoonery - downloadable Comedy Benefit for Bletchley Park
What could possiblie go wrong?
(How about reducing spending so you don't need to collect as much income tax? They currently take FIVE HUNDRED DOLLARS from me each month in state income taxes.)
Ironically, the word ironically is often used incorrectly.
This is somewhat similar to the UK self assessment system. No such thing as state taxes in the UK, so it's all just one system.
Many self employed people simply scribble in their earnings, their losses, and their profit.. and if they send it back by September (rather than January) the tax office will work out the tax on your behalf. If your profit is over a certain amount, you also have to fill out a few more boxes explaining what sorts of expenses you had, but it's pretty simple. You can even do it online.
The New Zealand government basically does this already, but in an even simpler form - you don't even need to check!!
Most people who simply earn a wage have a simple enough tax return that the government simply deducts tax from your pay cheque - and that is all you need to do.
If you want to fill a tax form out (because of complex investments, etc) then you can - but probably something like 70-80% of people don't bother.
Of course, the NZ tax scheme is actually sane and easy to work out compared to some US taxes.
Damnit - I wanted my nick to be "WouldIPutMYRealNameOnSlashdot"
How is it that every time I see some unique law or way of governing it's in California? I'm genuinely interested. Do they have a fundamentally different way of thinking? Can someone who lives there comment?
a) States (and the Feds) should be ashamed that they have not been doing this since they first required W2s
b) Muggers have long since been polite enough to tell you up front how much you are supposed to give them ("all of it"); the government is still finding out how much of the teat it can slice open before the cow keels over
c) What percentage of adult Americans pay end-of-year taxes at all? (I don't know; I've heard wildly different numbers -- you tell me, and tell me where you get the number from!) I say "end-of-year" to distinguish from other taxes, such as sales taxes, that people pay without filling out special forms.
d) If the folks who create the Federal income tax form can deign to ask me if I'd like to contribute to a free-money pot for politicians running in order to spend even more of my money (ha!), why can't they also ask if I'd like to contribute to the National Endowment for the Arts (ha!) and other non-essential spending (ha! again)? Why don't they ask me if I'd like to contribute to the Fund for Global Military Adventuring (No, thank you. Please return me to the main menu.)?
e) Why did Bush give up his only slim chance to win my vote by nixing all talk of a national sales tax after his one mention of it?
f) If not a Nat'l Sales Tax, why doesn't some politician repeat what Jack Kemp said about a postcard-sized return? Our tax code is Byzantine, tough to understand fully without a full-time background in it, even in the simpler forms. It's worse if you want to take advantage of any of the many, many loopholes. Most taxpayers haven't a chance.
Grrrrr.
timothy
jrnl: http://tinyurl.com/c2l8yr / foes: http://tinyurl.com/ckjno5
New York state already has something similar in substance to this. You simply fill out the IT-100 form, fill in your wages earned for the year and sent it to the state. They take the info provided, and send you a complete statement of what taxes you paid with annotated explanations.
The biggest time consumer (for me, anyway) is actually reading everything and deciding what I need to fill in or not - and then how to actually do that...
(I'm in Australia, but all tax forms are in the same universality class [condensed matter theorist humour]).
Physicist, consultant, science communicator
"The tax system is too complicated... we need the Fair Tax."
Even better. The NO TAX system. I get to keep all my money, and the government gets what I feel like sending.
Actually, I think this has the potential to clarify pricing for tax preparation services. For folks who just can't deal with preparing their own taxes, this offers a minimum tax refund. Why shouldn't there be tax prep services that offer a complete package with pricing based on difference of the refund they justify vs. the refund offered by the state-prepared tax return?
State income tax should be simple nation wide form to determine what percentage of your income is taxed by which state. For the majority of people that would be 100% of their state tax due be sent to their state of residence. others would adjust based on where they lived and where their money was earned.
For most people it be send x% of the amount you paid the feds to your state gumnt.
I believe a few states do this now.
That is unlikely to happen though. Taxes are used to control behavior and tremndously large buerocracies hve been built up in states areound collecting income tax. You would have to drive a stake through the state tax parasites to simplify state taxes.
Question: Does this effort have Linux or Open Standards in mind or does my system have to be compatible to M$?
Identity theft..........
now this will give all those Virii / Worms something to chew on.
All your personal info in one nice tight bundle
Aww c'mon, PornMaster. You gotta know this is just the first step. In a few years CA will come out and say, "Since you now trust our numbers we won't require you to check the website and give your approval. It'll be even more simple. We'll just figure out how much you owe us and send you the bill. If you want to dispute it after the fact we'll have another website you can go to."
That's step #2. The IRS is pretty firm when you goof? We'll see how easy it is to get money back when they goof.
The state will take information it already receives on W-2 wage statements
After living in Virginia most of my life, I moved out and didn't bother to file for a $20 return. "It's been a good state, they can consider it a tip" I thought. Boy was I wrong; three years later I got a nastygram demanding several thousand in back taxes. Duh, didn't they see that my employer had taken the money out in W-2s? No, I was told, I had to file. Then and only then would they match up the W-2's. They DIDN'T KNOW I'D HAD ANY TAXES DEDUCTED!!! And I had to come up with copies of the W-2's to staple to the filing. After spending $15 to the IRS to get them to dig out old microfiche and send me copies, the state of VA sent around $25. $20 plus four years of interest. Talk about a total waste of mine and their time. Govt beauracrats drive me nuts!
There forms are quite simple, you don't have one because there is no socialist income tax in those progressive states.
Considering the tax rate I get in the state of California, I could care less as to whether they offer this or not. What equates to a kiss to taxpayers is still followed up by a colossal screwing.
the fair tax would cover strippers and drug dealers and high power execs and tourists from other countries and, well anyone who buys non-essentials.
always mosh clockwise
"Of course if you elect not to sign the money over to them you then you've just volunteered to have your assets siezed and maybe even to have a wonderful vacation at a minimum security prison. Thank goodness for choice."
You CAN choose to not live in this country. No, this isn't a "If you don't like it, leave" post. But living in a given country is a CHOICE. Also what about all those services and goods that society offers to you? Are you going to help pay for them, or are you going to leave the bill to others? You get tit for tat, AND a voice, and vote to use. It's not societies fault that you chose to not use either.
I don't what you're talking about but my Georgia town has great schools and a low, low crime rate.
I'm currently in a battle with the California Franchise Tax Board (the state's version of the IRS). Basically, I took off 2000 and most of 2001 to start a company. During 2000 I had negative income, and 2001 I made a (very) modest amount. However the FTB is convinced that I made at least $50k during those years, and is trying to make me pay back taxes, penalties, interest, etc. The reason? I have investment property (a house and a condo), and I pay taxes and interest (and collect some interest on my money set aside for property taxes, etc. by my bank) on those. As a business, they have a slightly negative cash flow. Getting this through the thick skulls in Sacramento is taking some doing.
Yes, I have a good attorney working on this - no advice is being solicited here, and I expect it to work out in the end.
The moral of this story, however, is don't let the fucking government even try compute your fucking taxes because the fuckers will try to rob you fucking blind.
If the rich are only taxed by what they spend, the amount of tax they'll pay will be negligible to them. If you spend, say, $20-30K a month, you get taxed much less than you would under the "regular" tax system in your tax bracket. I'm your typical "middle class" guy, but even I'm against reducing taxation for the rich. If anything, they should be taxed more, they won't go broke anyway.
Consider a typical club. It has 50 strippers, and each earns about $150,000. That amounts to a total revenue of $7.5 million. Of that amount, none goes to the state treasury.
Damn, what kind of high-class strip clubs are you going to, where there are that many serious earners walking around?
no, seriously, I'd like to know. 8)
"What do you think?" "I think 'What, do you think?!'"
Um... a lot of strippers are the working poor. I'm not sure where you're getting your "thin air" numbers from ;), but perhaps you should consider the downside.
The Australian Tax Office (ATO is equiv to IRS) has some e-tax software to help you prepare your tax return (even for more complicated tax returns including rental income, capital gains, business income, depreciation etc). This can either be submitted online or printed and submitted via snail mail.
Unfortunately I think that previous versions have been Windows only but since their corporate stuff is now Java maybe that is where e-tax is headed too?
Carjackers will now be offering to pick up your car right at your home. Just leave the keys in the ignition, and email them your address, and they will steal your car far more safely and conviently than the ordinary gun-point on the street corner technique.
It will benefit everyone (except slimy DC lobbyists)...
http://www.fairtax.org/
http://www.fairtaxvolunteer.org/smart/faq.html
We have an online tax program. You still need to fill in the details though. But for a simple tax form it's just "taxable income", "tax witheld" and it calculates an 'estimated' return.
You get the money in about 7 working days. The great thing is for less simple things, as in tax-deductable spendings it walks you right through.
9.3% highest bracket, 7.5%+ sales tax, 32 cents per gallon gas tax. Fortunantly property taxes are somewhat low... if only I could afford property with the above mentioned taxes eating my salary + 33% federal income tax + 15% FICA/Medicare. This concludes my offtopic bitching.
You then tell it how much you want to claim in work expenses, and it'll work out how much you'll get back. It can even have the ATO deposit the funds directly into your bank account, if you so desire.
I used to dread tax time, with all that paper work, but now I just keep a running tally of my work expenses (and the receipts to prove it), and I'm happy :D
You could find out here: http://www.originalintent.org/edu/fedincometax.php
As far as the "fair share" argument, read this: http://www.devvy.com/notax.html
I moved to CA in 1988, and I never got my taxes right until I started paying somebody to do them for me. The state just corrects the mistakes and eitehr sends you a bill or a check.
What I'd really like to see is the Federal governemnt offer to collect income tax for the state and just have one additional line on the Federal tax for 'For the privilege of living in the great state of X, tack on an extra 30%' and get rid of all of the state social engineering in the tax code that happens in addition to the Federal social engineering. The only problem I can se is that the Feds would probably help themselves to a 10% 'handling' fee.
I agree 100% that the tax code needs to be simplified. Off the top of my head I can think of three problems, though I'm sure there are many more.
1) What about Roth IRAs, savings accounts, investments, etc where the money has already been taxed? I already paid income taxes on the money in my bank account, if we switch over then I'll be taxed again.
2) Tax deductions. I know you want to get rid of them to simplify the code, but it's not realistic to do away with the housing interest tax deduction, for example. 70% of American families own their home, so this would be political suicide.
3) This would create a huge black market for tax-free goods. People would be forming fake small businesses and then apply for resale permits to buy their goods tax-free. What about goods sold online? They will have to be taxed. Will you go after every last person on Ebay?
I think we're pretty much stuck with the system we have.
What if record keeping was good enough (nevermind the privacy issues etc) that your taxes, no matter how complex, could be computed for you without any effort of your own?
...perhaps just a nice sheep in the flock getting fleeced on a yearly basis?
Would you be happy or
**start vignette**
You (looking like a sheep): "Baa. Baa."
Uncle Sam: "This won't hurt a bit, we need just a little bit more to fund Senator [enter favorite name here]'s pet project."
You (looking less like a sheep not much coat left): "Baa. Baa."
Uncle Sam: "Oh it turns out that prescription drug for the older sheep is going cost a bit more." Buzzing sound heard in the background.
You (looking a bit naked): "Baa. Baa."
Uncle Sam: "Remember that Social Security thing? Well it turns out you sheep haven't been getting it on enough and the older sheep just keep getting older and older. So just a bit more if you don't mind."
**end start vignette**
Losing the ability to see how much the government is taking of your hard earned money is NOT a good thing, because if they could they would take more and more... they would.
Everytime I have to read the instructions for any section, I get so mad. I often scratch my head and re-read things multiple times because it is far too complicated. To see all the rules that they make up to give each little interest group their piece of the pie is amazing. Can you imagine trying to do your taxes by hand? omg, shoot me.
Getting mad at tax time is important!
I could go on for a while... but I'll spare people who have read this far more diarrhea of the mouth.
I think you get the picture.
hmm? what is it going to be? You want to be a sheep?
"Baa. Baa."
http://www.taxfoundation.org/news/show/52.html
http://www.taxfoundation.org/
http://www.socialsecurity.org/
http://www.atr.org/
The government should be required to provide open-source software that reflects the tax code. The software would essentially do your taxes for you. If the tax code is so obscure, arbitrary, or convoluted that it can't be expressed properly in software, eliminate it.
If this is done, then the internet takes over. All local merchants can wave good bye.
I prefer the "u" in honour as it seems to be missing these days.
Just a little something I remember from Economics class, the sales tax is a regressive tax. This essentially means that (as I believe one other person said). The poor pay a higher percentage of their income than the rich. If anything, we should start reducing the number of deductions to simplify the system, then increase taxes for the rich (so that we can replace the deductions with a simple drop in taxes for lower income families), and (if possible) find a way to reduce sales tax.
The right to protest the State is more sacred than the State.
Finally. They already have the info (or can get it if they don't have it), and can calculate it for me.
Many, many places have this already.
Those that claim this is a bad thing, and say the government is trying to screw you, seems to imply YOU are actively screwing your government NOW. (The Bush administration considers you a terrorist. Please report to the nearest concentration camp. Republicans can ignore this message.)
First the IRS says they want to make a free web-based tax preparation system. Intuit says, "No, don't do that. We'll do it." So Intuit completely burries the free version of there tax prep service. Only if you enter their site from the IRS did you get the free version.
But you still had to pay for the State. And now California does this.
So what does Intuit do now to make up for all that lost revenue.
How about this: End-of-life Quicken 2005. Make everyone upgrade to the '06 version in November.
I have a feeling that once this pilot program gets going, it will be simple enough for the State to prepare a tax return whether we ask them to do it or not - just to compare with what we send in. A mini-audit in effect.
Most people wouldn't actually like a 'simple' tax system if they saw one.
Making lots of medical payments you currently get to deduct?
Sorry.
Putting yourself through an expensive school (or paying for your kids)?
Sorry.
In the middle class, as 95% of Americans think they are?
Sorry, a flat tax and other 'simple' solutions tend to lower taxes on the wealthiest, meaning some of that burden gets shifted to you.
I'll take the time to fill out complicated forms or hire an accountant, thanks, if it means that when I or someone else has a serious expense that deserves to be exempted, like medical bills, it gets exempted rather than ignored.
Having a simple option like this one in a system that allows for complexity when necessary, however, seems like a great idea; those people who don't need to worry about lots of rare exceptions can get an easier tax experience.
Don't forget that, in reality, 'gifts' are taxed as income once they exceed a certain level($11,000 federal), so it'd take lots of 'friends'.
;).
Besides, wouldn't you count all the grubby cash individual 'gifts'
I don't read AC A human right
Since 1990's Brazilians can do taxes by computer... Details (in portuguese, of course) available at http://www.receita.fazenda.gov.br/Pagamentos/Pagto IRPF/default.htm
The tax system is too complicated... we need the Gullibility Tax. Now, I will cut-and-paste something.
Simply put, the Gullibility Tax is a tax on slack-jawed credulity. If you are enough of a rube to believe that "Fair Tax" is anything but Orwellian doublespeak for a tax system that screws working people to help a small number of idle rich, then send me all your money now.
This is opening up a can of worms...
(In the year 2030)
Feds: I'm sorry mam but our records show that our tax software miscalculated your tax returns in the year 2005. The 1000 dollar miscalculation plus interest means you owe us today.... 1 milllliooonnn dollarsss!!!
Fair tax isn't regressive at all.
A flat sales tax is neither regressive nor progressive.
I don't read AC A human right
Dang enter key! (Can we at least swap the preview and submit buttons?).
would have to be around 70% to replace other taxes
Now, this says one of two things: Either the government is spending way, way too much of our money, or you're wrong. According to the figures I've seen, the federal government can comfortly replace every income tax including corporate, as well as social security and medicare, with a 30% tax. While still substantial and indicative, it does give a much more reasonable figure, especially when you figure that it would only be charged on new goods.
I don't read AC A human right
Stupidity of our population is a big part of why California is doing this.
We've already got a really simple tax form here in Canada, since 1999.
Check it out:
http://funkypages.com/tax/Tax.jpg
plenty of the comments here will be about other countries already implementing this years ago. In Sweden, for example, you can confirm your taxes via SMS or the Internet. And of course, tax returns are automatically deposited to a bank account of your choice.
Welcome to 2002, at the latest. E-Tax is available for anyone to download and file (and pay) electronically. I run my own business and I used it. It coveres everything in any tax pack and the suppliments, not just "simple" taxes.
(We also use PKI to validate online quarterly business activity statements and other higher-tech, paper-saving measures).
In Japan, if you're employed with a salary under 20 million yen (~$180k) and you don't have any other significant income--which covers a pretty large fraction of taxpayers--you don't even have to send in a tax return in the first place; your employer does it for you and you see the result on your December or January paycheck (we call it nenmatsu-chousei, end-of-year adjustment).
Good or bad? I dunno, but it's sure less of a pain than writing up a 1040 every year that says I don't owe the IRS any money because I earned it all abroad.
Wow...that's it, I'm moving to California and be one of those people...
The Bigger The Headache The Bigger the Pill
In sweden I have been doing tax returns via internet since 2003 or 2004. You just log in on the swedish IRS webpage, using the national internet-id system "bankID" (its platform indepedent). When you are logged in you find a bunch of html forms (income, profit on capital, etc) prefilled with numbers, just as the ordinary tax return. You also see how much return on tax you get or if you must pay more tax.
If everything is ok, you just click "send in", if you think something is wrong, you just change the numbers, give a motivation, and then click "send in". Just like with the normal declaration.
Also one can do the tax return via SMS; if everything looks good, you can SMS a code to a certain number, and voila, done. However, this sms-tax-return does not allow for altering of the declaration. But most people does not need to anyway.
There is also lots of other stuff to do on the swedish IRS webpage using BankID, such as checking the "tax-account" (its like a bank account, but on this only tax gets in and out) to see if the return of tax has come yet. Normally amounts above 100 SEK is automatically transferred to ones normal bank account (this is also configured via the webb).
It works really good. "E-government", as it is called here, is a good idea.
The House of Representatives is currently working on a bill to abolish a 3% telephone tax that was originally imposed in 1898 to help finance the Spanish American War. This "temporary" tax has been in effect for more than a century. Various attempts to repeal it in recent years have met with failure in Congress or Presidential veto. The current attempt (HR1898, coincidentally?) is in committee, but counter-efforts are also underway to expand the tax to cover more modern forms of communication.
We already have that in Finland.
Except for the online bit.
Almost all people of Finland get a prefilled
tax form by snailmail. All you have to do is look it over. If you have nothing to add you don't have to do anything. Which is something like 60-80% of the people.
Which reminds me I have to return mine next week...
It would be nice if you could do that online.
But then again how do you make it secure enough that no one can sabotage other peoples taxes. I would not want my neighbor doing my taxes for me.
In Finland you could use the HST card. (electronic id-cards)
Another plus if the government followed through on the fair tax system would be the sharp reduction in the number of returns to process: Instead of the IRS processing say 100 million returns they could just process the returns of all the businesses large and small (say 1 million). Look at the benefit: 99% of the manpower at the IRS would not be needed as the number of returns to process is 99% less.
Enforcement and penalties would be easier to perform but would be likely unecessary. The 'Big Brother' infrastructure is already in place: The businesses bank their earnings with a bank who report it all to the IRS. Going the 'cash in a mattress' route will not help business who cheat on their taxes. The IRS knows where these businesses are via the local governemnts that have these business 'on file' and can simply 'stake them out' or raid them and confiscate everything.
All that will be left are people running underground businesses out of their home.
Then there could be a return to bartering: No cash changes hands and no income to tax(?)
Here in Spain this is something we are doing since five years ago at least. And, in the last two years, they even send you your own form, already filled-in, by mail, so you can just "approve" it or make changes by phone, personally in the offices or, if you have a digital certificate (also offered by the government), via Internet.
So what? Where is the big news?
america is descending into a tyrannical nightmare. the government will know everything about everyone and eventually just send you a bill.
sadly, we are getting the government we desire.
We've been doing something like this for years in Denmark. Most people (my guess is at least 2 out of 3, including myself) don't need to add anything except a few deductions that the tax agency can not possibly know about (we can deduct parts of the cost of transportation to work, for instance). Most people still use the snailmail version, but we've been able to do this electronically for several years now.
Black holes are where God divided by zero
The gov't already has info on my income etc. and sends me a completed tax form. If I have any deductions or unreported income I can fill them out online, by snail-mail or over the phone. If i do nothing the gov't-completed form is used.
Any sufficiently advanced libertarian utopia is indistinguishable from government.
In the spring, a pre-filled tax form is sent to each participating taxpayer, with the calculations based on previous year's actual income figures. The taxpayer must inspect the form and if there are any errors, fix them and mail the form back - otherwise no action needs to be taken. Those who sent back a fixed form, will receive another one with the new calculations in autumn. Then, based on these numbers, possible tax returns will be paid in the beginning of december. If further tax needs to be paid, it's divided into two payments - one in December and the other in January.
I've been fortunate enough to have been included in the program on it's first year so I've actually never had to fill out a tax form.
Let's say I want to do activity A, like go to the strip club. And she wants to do Activiy B, like anything other than go to the strip club.
I will say 'Hey, we should go to the strip club. Do you want to go?'
Of course, we all know the answer is No. But there's no way she's going to just say 'No, I don't want to go to the strip club', because she's female, and that would violate the laws of physics. Instead, she'll say "It's Sunday. The strippers on Sunday are ugly."
And I'm supposed to pretend that the reason we're not going to the strip club is that the strippers are ugly on Sunday, not that I'm dating a jealous, selfish prude.
Actually, maybe H&R Block isn't like my girlfriend. If you let someone else do your taxes for you this time, you can still pay H&R block to do it next time.
paintball
For some years now we've been able to do this in Spain, even before the Internet was popular.
You had to call a phone number to request a draft, which was sent to you. If you agreed with it you could simply take it to the tax office and you were done.
Now you can connect to the tax authority's webpage using a X.509 digital certificate (which is issued free of charge by the state), request the draft and even file online.
The rich get a lot more from our government than the poor. Who is bailing out those corporations? Who builds the roads the rich people owning the corporations ship their products on? Who makes sure the rich don't have their foreign investments seized by foreign governments? Who makes sure the rich stay that way? Who makes all those nie tax loopholes for the rich?
The thing is, rich people spend very little of their money in the way your average poor or middle clas schmuck consumer does. They invest it - most people arn't rich in cash, they're rich in stock or other assets. More taxes on the rich diverts some of that investment from private concerns (new factories, better technology, bigger real estate) to public concerns, like roads and military.
I'll support a FairTax when we also get FairSpending.
paintball
CA state tax refunds are expected to drop by more than 75% this coming year.
"Yes, we did your taxes for you. Looks like you paid exactly what you owed us, no refund for you! And look at this--seems a lot of you underpaid this year. Tsk tsk tsk...we'll expect those checks by April 15, please, otherwise we'll be seeing you later.
I refuse to answer that question on the grounds that you're an idiot!
.. as I am having significant education related expenses this year unless they have a way to account for that without additional forms.
Is this really news?
Many other countries have been using similar systems for years now.
Over 30% (2.1 million of a total 7.3 million) of the Swedish tax returns for 2004 were made over internet, phone or SMS.
The news should really read "California ready to join the 21:th century, five years late..."
I'm all for a better electronic income tax declaration, but let us take it one step further: default declaration. The IRS already has all the information it needs, so why not send out a mail that says "Here is our suggestion for your declaration this year. If you don't agree, then change it, but if everything is correct then you don't need to do anything".
This is just an optimization for the vast majority of us, but then there are people, mostly homeless, that don't have an address - they don't care about declaring their income. Why should they, when their major problem is getting food for today? It only costs the IRS (and therefore, society) more money to DEMAND that EVERYBODY should declare their income, and if they don't, then they will get a fine. It costs the IRS money because someone has to process the extra work, and that homeless guy doesn't have any money, so the IRS will not get anything anyway.
Yes, we have a law proposal here in Sweden to this effect that will probably be in effect in the next couple of years.
Even the H&R Block history says so:
So if it went national, it would mean a return to the old days. The IRS and taxpayers created them, and now there is no turning back. I guess we are regretting it huh?
It's bad enough that Joe Blow doesn't have to write out a check, and thinks that his ever lovin government is sending *him* money every year.
Now he won't even have to *file*? He'll have no consciousness at all that he is taxed?
Why this hasn't been done sooner .... boggles my mind.
I think many governments [canadian included] seem to forget that THEY work for US. By making tax forms impossible to decipher [in a timely fashion] or deductions in anyway easy to sort out they're just pissing off their customers and wasting everyones time.
Provided they handle the data securely I can't see a problem with this idea. I just wish my own Ontario government was smart enough to do this.
Tom
Someday, I'll have a real sig.
Check out the irs.gov webpage and click on the federal e-file button and you will find various commercial providers who will allow you to e-file for free provided that you earn less than $30,000 - there are even websites that will allow anyone, no matter what the income, to file federally for free.
However, lots of these programs charge for a state return and might not be able to deal with high levels of complexity.
I used TaxAct.com 's service this year and was fairly happy with the price ($16 for federal and one state e-file) which allowed me to include all of my relatively simple deductions.
I think more States should sponsor free e-filing.
All of these arguments about a flat tax or fair taz or revising the tax code ignore the fact that even if you repeal the entire tax code (all 40 or so volumes annotated volumes of the IRS code), quite a few of these regulations will be grandfathered...so, there will be 2 tax systems in effect for 30 years. Chew on that for a while.
In Chile the Internal Revenue Service already does this. I did it with my return last year. I have a very simple tax situation and the Chilean Government already has all of the information required to do it. I simply connected to the website, reviewed the proposal against my slips (3 minutes), and clicked OK. To help get this system popular, all people that file this way receive their electronic bank deposits 2 weeks earlier than those who file an online form, and a month earlier than those who file with paper. Chile reached 98% of total returns filed electronically via their website. Next year the paper forms go away. Those with complex tax situations can still attach all forms and upload relevant documents. Chilean Internal revenue went from completely inefficient to extremely efficient in 3 years. Very impressive bit of work. Every aspect of the previous system exists, but without the paper and manual keying of returns. The keying of returns is done by the millions of taxpayers, employers, and financial institutions; not by the hundreds of tax agents.
Go for it California. The results are worth it. For the tinfoil hat types: This system works with information that the government already has already been given to them by your employer or financial institution, so forget about saying invasion of privacy or anything like that. It can actually work in your favor with undeclared income, as the reviewers basically ignore the pre prepared returns because they assume them to be correct.
"How do you think that strippers can afford those BMWs and 2-story houses in Sacramento?
Because you keep tipping them?
"I worked hard for it. I deserve it. And I have it," Campbell said. "It's all mine."
More like ignorance and corruption, not necessarily 'politics'. The whole reason progressive legislation affecting big business (in this case tax firms) isn't passed is because of corporate lobbies. This isn't really a Democrat or Republican issue. You could make a case against the Republicans because their constituency is primarily big business, but I think selling out to remain in power is more corruption then anything else.
You have to also remember that these politicians have little to no technological knowledge (take the president), so some large company that has been around for a long time will have more sway then a select few technical voices with no lobbying power.
If the dollar is an "I owe you nothing", then the Euro is a "Who owes you nothing." - Doug Casey
California is ready to roll out a program for taxpayers where the state will offer to fill out their tax forms for them if they are simple enough.
By simple, do they mean the taxpayers?
damit we have the .ca TDL I thought this was the Canadian Government from the rss feed.
use CAL, or something.
We are more important than some stupid state.
end rant
--meh--
Of course you like the "FairTax". If it was called "CrabTax" nobody would like it. The reason that people who make more money pay a higher percentage of taxes is because, A) they can afford to, B) they reap more benefits from the way taxes are used.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
I always hated that the government made ME do all the work in order to give them MY money. Most services you pay for, the company sends you a bill and you only do anything if there is a mistake. This California system is essentially the same thing, except the services provided by the government may or may not be something the buyer actually wants.
Ehh...this is the life we chose.
Doesn't everyone buy goods and services? Then why not make the state sales tax a few percent higher and abolish the income tax? Of course this is California, so they'll probably just raise the sales tax and "forget" to abolish the income tax (also see: New Jersey). To keep the "eat the rich, give to the poor" types happy, any states who do this should tax neither food NOR clothing (yes, this means you New "Clothes? Who needs clothes?" York State).
Gamingmuseum.com: Give your 3D accelerator a rest.
It is said that 90% of US taxpayers either get direct checks from the government (e.g. social security) or qualify for a deduction beyond the personal & standard ones (e.g. mortgage). For example over a dozen new deductions for raising children and education were approved since 1980. Many of these phase in & out according ones income level. The president and Congress propose new "quirky" deductions every year to appeal to voters.
I had to give up hand-filling of forms a few years back and use a computer program because if you sell a single stock, you have to fill out Schedule D with five different ways to calculate capital gains and 54 lines of computation. Since I make a inadvertant arithmetic error every 50 lines or so, a several hundred line hand tax filing comprising 4-6 schedules almost guarantees an error with my arithmetic capabilities.
Young working singles are most like to be in the 10% that dont qualify for a deduction or grant, espcially if their income is only from an employer. Even so college loans and retirement accounts may give them a deduction now.
that's really going to help the economy, people are going to stop spending money and start saving it up. This will severely handicap consumer [customer] spending and prevent market growth, putting the contry into the dark ages or recession.
thank God the internet isn't a human right.
The fair tax just changes what is being taxed from income to consumption. There could still be hundreds of adjustments (otherwise called deductions) in that system just as in an income based system. For example, I'd expect Americans want to exclude real estate from the tax, because it is a sacred cow in US system these days.
I've always wondered about that line that says to do X if you're exempt from paying taxes. Where are the rules that define who's exempt? Are there a bunch of rich guys sitting around laughing because they're exempt? That doesn't seem feasible, or you'd never hear about IRS guys cheating on their own taxes (they'd legitimately exempt themself if they knew how). So what's that line for?
In Norway it's like described already. You're sent a pre-filled-out form, and if it looks basically ok you can accept it on a web site.
You can even just send an SMS and you're done.
I move to PA 5 years ago. I have always filed my PA state taxes online, and it only takes 10 minutes. It takes longer to log in than it does to fill in your information.
The software does the rest. I of course always double check the numbers, but have never found a problem.
I even got my wife to do our state taxes one year, it's that simple.
I have no idea how many people take advantage of the service. I'm guessing a smaller percent of the population than I expect.
this service is personalized. The collectors actually visit your establishment and just tell you how much you need to pay.
Assume I was drunk when I posted this.
Canada introduced online filing of income taxes a few years back. Only catch is, you have to submit using "approved" software. So basically, you have to pay $40 for a software package to submit forms for you. There's an exception for people earning less than $20,000 a year.
When this first came out (and I hadn't read the fine print), I thought it was brilliant. Go to SSL website, enter your figures, done. Oh? I have to pay Intuit $40 and have a Windows machine handy? Damn. There simply is no way to hand-calculate your tax forms and submit them online.
So I got bored, and started examining the files that QuickTax produces. They're basically ASCII files with line:value entries, plus a few codes spread about. I was thinking of doing some further analysis of this. It should in theory be easy to set up some simple perl/javascript/whatever, with a form that the user inputs their numbers, and gets this ASCII file in return. I know myself and a bunch of friends would use it, and if I put it online, I could see lots of people using it. Yes, many of us still calculate our taxes by hand instead of paying H&R or using software!
Anyway, I gave up. Seeing as the federal government has never even attempted something as simple as this, I assume Intuit has some powerful lobbying going on. If I tried, I probably would have been put in jail for tax fraud or something.
*sigh*
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
I still prefer to do my own, but you can let them if you want.
antipaucity
See http://www.taxhelpers.com/glossary/substitute-for- return-sfr.html - it is called Substitute For Return, and it is designed, as the glossary entry linked to here indicates, maximize your tax payment (no deductions, etc.).
But honestly, does the IRS From 1040EZ really confuse so many people?
Form 1040EZ http://www.irs.gov/pub/irs-pdf/f1040ez.pdf
Form 1040EZ Instructions http://www.irs.gov/pub/irs-pdf/i1040ez.pdf
Ken
I was stating 30%, not the 23% figure that fairtax quotes. The 23% figure is if you end up figuring the tax into the price, which I admit, is probably an attempt to make it look nicer. It's 30% the way Americans normally figure sales tax.
Do you have a link that shows where they figure this?
Now the European VAT could be considers a gross income tax, with the only deduction being on purchased equipment/supplies. A business is far better equiped to keep track of financial matters than personal households anyways.
I don't read AC A human right
powers at large are enjoying the benefits of the law as it is
;)
;). Don't want to be audited? Don't run a business.
I agree. All the communists and socialists love it because it's 'progressive', and the rich love it because it has so many shelters and loopholes and is so complicated that they can save money by simply hiring a number of accountants and lawyers.
Who ends up paying for the government? The middle class.
As you point out, you'd have to have a registered business to lower your tax liability; most people smart enough to have a small fortune (assets greater than a couple million or so) already have their own registered small business, and use it as some type of tax-shelter. As far as I'm concerned, you'd be stupid not to--unless you actually like paying Uncle Sam for thousand dollar toliet seats! Most people that have lots of money didn't get there by not being smart about it.
I mean, unless the government actually required businesses to have some sort of consistent profit, this wouldn't change anything.
This is where some complicated regulations would come into play. Trick is, only the millionares would have to worry about them, as they're the only ones who'd have something to gain by using them. My initial idea is to simply require books to be kept, and sales must exceed otherwise taxable material costs. Sales to other businesses must be tracked, and tax collected if you sell to a consumer. If you want, we can argue about depreciation of large capital startup costs, such as buildings.
The idea is that the tax ends up being paid somewhere along the line. Either by a seriously unprofitable company(and that would be serious, as the major expense at most companies is payroll, which isn't taxed anymore), a cutout company that can't cook the books anymore, or the consumers who bought product from a company whose owner/CEO is 'grifting'. But that's what auditing and free market is for
Some small businesses might even find it easier/cheaper to simply have their supplier pay the tax. Such as repair shops, maybe.
For instance, it WOULD hurt people that live paycheck to paycheck--which is quite alot of people.
While it's very easy to hurt somebody living 'paycheck to paycheck', as they have no safety barrier, I should note that it's not really any different than the situation as it is right now - Where they often have to wait an entire year to get their refund for any income taxes. I would also note that they only pay tax when they spend money, so the most they'll have to 'wait' is thirty days. Also, I'd like to note that living 'paycheck to paycheck' is far more often a result of poor money management, than substinance level income. Money management should be taught far more, but it's something that I feel the parents need to teach, as a school teaches skills, it takes parents to actually teach a kid to use them.
With all of the monthly sending of checks and whatnot, it's going to make it's own new level of bureaucracy--even if it does eliminate the IRS, and that's never a good thing.
We already send monthly checks to a substantial portion of the population. Everybody on Welfare, Social Security, or Medicare for one. Much of the working population receives a refund each year. Technically speaking, you wouldn't get rid of the IRS, though it'll be severly retasked. And rather than sending checks, I imagine that the majority of households today would go for electronic deposit, which would be quite easy to set up. Also, you'd reduce the amount of paper they have to process, from a glut the first quarter of every year, to a steady stream from people filing when their status changes, such as moving, changing banks, having a new kid, kid moves out(and gets his/her own credit), etc. Most people stay stable for these variables for years. Given that each household would get a monthly deposit of a set amount, of which maybe 5 different amounts would cover 90% of the population (single through married with three), it'd be easy to program the computers to do it. then you'd have the entire collection end, but they'd all be dealing with businesses, who are far better equiped to deal with the tape.
I don't read AC A human right
I know you're just making a joke, but it was Indiana that proposed making pi equal to 3 and that was in 1897.
This sig has absolutely no significance and serves only to take up screen space and waste the time of the reader.