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Why the IRS Should Automatically Fill In Returns With What It Knows
theodp writes "An article in the NY Times begins, 'In the digital age, filing income tax returns should be a snap. Important data from employers and financial institutions has already been sent to government computers. Yet taxpayers are still required to perform the chore of preparing a return from scratch, in many cases paying a software company for the privilege.' Why, if your needs are simple, can't you just download forms pre-filled with whatever data the IRS has received about you, make any necessary adjustments, and automatically get the IRS calculation of your taxes? Sounds reasonable, but the IRS rejected the President's proposal to give taxpayers the option to do so as 'not feasible at this time' due to delays in the receipt of W-2 and 1099 data. However, California managed to offer a pre-filled state tax return, which cost only 34 cents to process compared to $2.59 to process a traditional paper return. Despite the success of the pilot, meager funds have been allotted for the program due to the strength of its political opponents — 'principally, Intuit' — according to the state controller. Intuit argues it would be a 'conflict of interest for government to be both tax collector and tax preparer.'"
Intuit would probably argue that it's a conflict of interest to be both a tax payer and tax preparer.
I wonder how much the IRS figures into its revenue stream the profit obtained via people filing taxes and not knowing what they're doing. Folks who use professional preparation services no doubt get them correct most of the time and owe the correct amount (or get the right refund), but how many people are just doing it via paper and submitting, and, due to the arcane, maze of rules and regulations, overpay and don't claim the exemptions they should?
Leave it up to the IRS -- they probably have it figured out that if they pre-fill items on forms, that means less error and less money. Plus, this gives them more opportunity to audit and assess fees. Whee!
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If the IRS pre-fills what the government knows about on the form, then that tells you what the government doesn't know about, and thus can safely be omitted. If you get a blank form, there's always the risk that the government knows about your offshore account and will prosecute you for omitting it.
In the US private companies are able to fill in your data electronically. Your employer, banks, etc can download their data (essentially the forms the IRS has them mail to you) directly into your tax preparation software. It is only the gov't that finds such things infeasible.
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Perpenso Calc for iPhone and iPod touch, scientific and bill/tip calculator, fractions, complex numbers, RPN
Whilst I don't live in Sweden (I'm in the UK), I have to ask quite what your point is?
The Swedes may pay more in taxes, but in return get free healthcare, good roads, low crime, free schooling and university, (i believe) free (or heavily subsidised) childcare, efficient public transport, and much more.
They're also very highly rated in terms of their low wealth disparity (road fines for example are based on a percentage of your annual income so that a rockstar in a ferrari feels the same sting in their speeding ticket as does a poor person in a skoda), and human development index.
I could go on. The key point is that nations all make decisions about their priorities - the US believes in waging war and keeping the poor unhealthy and uneducated, other nations do not.
tl;dr - high taxes are worth paying if you get good services in return. Think of Sweden as the 'Apple' of nations, versus the 'Windows Me' of the USA.
Look, it's not like the government takes my word for it on most of the numbers I submit, anyway. If I put in the wrong number from my W-2 or W-9, they replace it with the right number, and either send me the bill or deduct from my account if I underpaid. So if they were consistently lousy with their records, this would be happening all the time.
I once got a letter from the IRS informing me that I didn't report interest income from a bank account I forgot about because it had so little money in it, so since I'd payed by direct deposit they just deducted the $0.15 from my account.
Another time I got a digit wrong on my W-2 amount, and the IRS informed me that they'd corrected the amount and credited me with the $400 I didn't need to pay, and if I thought this was an error to please call them (even if I thought it was, would I?) They do the same thing for math errors you make.
Anyway, my point is, for most of the basic things that you put on a 1040 in a boring year, the government already knows and more to the point already considers the numbers they have to be authoritative unless disputed.
So... My employer and banks still send me the tax info they usually do, the gov sends me their numbers and calculated tax liability, and if it's all right -- which it probably will be, the gov gets their numbers from the same banks and employers I do after all -- then I just pay it and am done with it. If it's not you do the 1040-Difficult like normal. I'm not seeing the huge problem here.
The enemies of Democracy are
They won't do it because then the tax payer knows what sources of income the government doesn't know about. The uncertainty now is enough to scare some people into declaring their tips, gifts, or private sales. Full disclosure from the government makes it easierto dodge taxes. The correlary is that more people might pay if the simply get a bill in the mail. Of course, that just "puts the burden" on "poor people", because the educated would be smart enough to get away with not declaring an overseas investment, and the poor would be too afraid not to send money they know the government wants.
Which means that healthy people...
Yeah, because you just know you'll never get cancer or get hit by a car. Or maybe you've got some special ability to plan this not to happen right after you got laid off from a job?
...who don't drive much...
Taxes also pay for other pieces of infrastructure including bicycle paths and subsidies for public transport.
...and are long-ago graduates...
"Hey! I got my free cake courtesy of my parents' generation, now why should I pay for the next generation's free cake?!"
...with no children...
Ok, you may have a point here, were it not for a concept known as "solidarity" (look it up, the word is in practically every dictionary).
...pay to support people who want to freeload off the government.
Most people who are receiving more money than they're contributing tend to feel pretty bad about this but most of the time it's also not as easy as "oh well I guess I'll stop having cancer/being paralyzed/being unemployed and start paying more taxes!". The current swedish government did some amazing arithmetics prior to the last election and claimed over and over and over again that the reason unemployment was so high wasn't because there weren't enough jobs but because those who were unemployed simply weren't looking for jobs hard enough, naturally they ignored people pointing out that all available numbers showed that for every available job there were something like 4-5 unemployed people, kind of hard to get rid of unemployment just by "trying harder to get a job" under those circumstances...
/Mikael
Greylisting is to SMTP as NAT is to IPv4
[m]ost people who are receiving more money than they're contributing tend to feel pretty bad about this.
That is not a given in the US. It has been my experience that most Americans I know who are big-government, welfare-state liberals grew up in places where government works. By contrast, most of the small-government, go-it-alone conservatives grew up in places where it doesn't. Don't forget that not all governments work...