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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."
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
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.
Sounds like a really bad idea, if you ask me.
People need to have a better idea of what is going on with their money. This includes uncle sam robbing you blind. I'll do my own taxes, thanks. No matter how simple.
I'll tell you a really good way to simply it for everyone. Stop giving out tax credits to promote people squatting out half a dozen kids. Stop giving out credits and incentives just because a couple of stupid kids get hitched. Stop giving out incentives, period. Next, stick in a flat tax. You don't have to be a genius to realize that 10% of $50,000,000 is a lot more than 10% of $40,000,000.
Your tax process could take place on a 3x5 index card. Subtract the flat rate from your income and pay the result. Simple!
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?
Your not only sending it to them, they already have it. Every W-2, every 1099, every piece of paper you receive, the IRS has already been sent that info. When you report, they simply match up your info to that which your employer or bank or whoever already sent in. If there is a discrepancy, the computer spits out an automated request for clarification which is mailed to you. This is what makes it harder for the average individual to cheat.
When you own your own business, and generate these forms yourself, that is where the real opportunity for cheating is.
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 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?
I'm not sure about the crime rate, but the public schools are VASTLY influenced by where you live. Georgia is rated one of the worst in the country mainly because of PSAT scores. It's average score is vastly reduced due to the percentage of kids who take it. Almost all students in the state take it, compared to most other states which have very low percentages due to the Georgia government paying for the PSATs for their students.
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.
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.
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
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.
This California innovation isn't tax reform. It doesn't change the basis on which you pay taxes. It doesn't even change which info you report. It's purely as "formatting" change.
But it does speak to a serious tax inequity problem. There should not be different ways to calculate one's taxes, which produce different results from the same person. That kind of system means that those more capable of deciding which way is cheaper will owe less taxes. Which is an arbitrary favoritism, except that paying an expert will save taxes (if the expert's fee is less than the savings). Which means that people with money to invest in the expert will see the returns, while others won't. That means that richer people, and people with investment experience (or culture), will benefit. And that the rest will subsidize those advantaged people. When the tax law is so complex that its comprises the largest text of any laws in our country, and tax accounting is a many-billion-dollar industry, a billion dollar government operation, the inequity is obvious, and dominates politics and the economy - all for the worse.
Fair taxation requires recognition of a fair basis for taxation, and recognition that taxation consumes some of the money to be spent on developing the rest of the economy (whether or not the taxes are then spent to develop the economy). We tax people's income, but we should tax people's expenses instead. Our government operates to protect our rights, our transactions (business and otherwise). The more one spends, the more the government is serving one, by protecting one's commercial rights and privileges. But one's basic rights are not proportional to anything - protecting them is a fixed overhead. So a sales tax is the most fair, with exemptions for expenses on basic rights. Raw food (not prepared by a restaurant) is a basic right, which expense should not be taxed. Raw cloth (not finished clothing), primary shelter (one's home), basic energy consumption (some heat in cold Winters, some cooling in hot Summers), basic education, essential healthcare - these expenses should not be taxed. To ensure that those who can afford only these basics are not required to do with less than necessary, to fund the government that does not serve them well enough that they could afford more. Everything else consumed should be taxed, to fund the government that protects the system that enables that consumption, and the production that feeds it.
So we need a universal sales tax, with those exceptions. In the building code, in tenant/landlord rights, in nutrition, in education, even in fashion, we already have precise minimum standards, defined in terms of basic rights. So we can establish exactly which expenses are not taxable. Everything else consumed must have a sales tax. Each enclosing government must have the option to collect their tax, not to exceed a limit set by the people of the enclosing constituency (eg. maximum town tax is countywide, maximum state tax is federal). I expect that the total maximum would be somewhere around 25-30%, total for all taxing governments. Which, in a $12T economy, would collect $3-4T - the current expenses of all American governments. Without deficit, without requiring people to do without any of the basics. It essentially taxes people's discretionary income, at the same rate regardless of our class or tastes. And since it's collected by vendors, rather than everyone, it's much cheaper to administer. For everyone, like the already-organized business, and the goverments which deal with the much fewer, more organized businesses, rather than the hundreds of millions of largely disorganized individuals. And because it's much easier to close a business violating tax laws than it is to even find violating people, compliance is much higher, so closer to the theoretical total can be collected.
This system encourages (untaxed) savings. It balances the budgets. It charges people based on how much "extra" money they have, protecting their essentials. And it generates enough proportional t
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make install -not war