[hn_throwaway_99]

100% disagree with your comments on tax preparation. Something like 80%+ of tax payers could have their 1040s automatically generated by the government because they only have stuff like wage and bank interest income. The proposal was just to have the government send these taxpayers a summary that they can accept or amend, the default being they wouldn't have to do anything at all to file their taxes.

Intuit et al fought tooth and nail against this, because they knew it would cost them big time.

These companies aren't benefiting from "the free market", they are rent-seeking regulatory capture organizations.

[motbob]

"Something like 80%+ of tax payers could have their 1040s automatically generated by the government[.] The proposal was just to have the government send these taxpayers a summary that they can accept or amend, the default being they wouldn't have to do anything at all to file their taxes."

Sure, that sounds good on paper. But here's a list of people who would be hurt by this system unless they were sophisticated enough to realize that they should revise their return:

  - Most people with a kid  
  - Most people supporting a relative  
  - Most people supporting someone who has no income and lives with them  
  - Most people who made charitable contributions in 2021  
  - Many people with a home energy deduction  
  - Most people who participated in post-secondary education  
  - Anyone in the gig economy

That's a big list, and it's far from complete. So it's not clear that your proposed "do people's taxes, leave it up to them whether to acquiesce or not" plan is good for consumers overall.

[hn_throwaway_99]

Agree with SideballOfDoom. Other countries do this, this isn't hard. Besides, most of your examples are specious. First off, it's not hard for the first page of this to be "any changes to your life situation?" which would be simple, straightforward, and account for the vast majority of deductions/credits in the real world (i.e. dependents).

Most of your other examples aren't really valid because the vast majority of people take the standard deduction anyway, so things like charitable contributions, home energy deductions etc. don't matter.

But most importantly, the whole proposal always leaves the "You're welcome to do your own taxes if you have anything we haven't addressed." It's just that Intuit didn't want to even allow this option because they know the vast majority of people don't have complicating factors, and they hadn't gotten really good at scamming "free filing!" users into buying upgrades they didn't need.

This isn't hard, and tons of other countries do this.

[motbob]

I shouldn't have called the home energy thing a "deduction." It is a credit. And in 2021, some amount of charitable contributions could be claimed on top of the standard deduction.

"This isn't hard" -- as illustrated by both my and your mistake, this is as far from the truth as could be. Everything related to taxes is absurdly hard, whether it's setting up the right tax prep system, the right level of complexity in the tax law, or simply the right return to file as a taxpayer. My overarching point here is that Congress made a certain value judgment as to one of these very hard problems—that a healthy industry dedicated to getting people's tax returns correct might be in the best interests of both the government and taxpayers—and this might not actually be the product of corruption.

[hn_throwaway_99]

I still don't buy, at all, the argument that "default do nothing" is better than "default pay TurboTax".

The fact is the vast majority of taxpayers do not have special situations, and it's straightforward to say "if you think you have any custom situation that may apply to you, file yourself".

And Intuit's behavior, as well documented in the ProPublica report, absolutely point to corruption and scammy behavior.

[bobthepanda]

In fact, that‘s pretty much the first page of Turbotax as it is.

[miohtama]

Note that some European countries like Nordics already operate like the parent comment. These corner cases are naturally included in the four page paper where you can mark any corrections with tick boxes and amounts. So it is definitely doable, and not very hard, because other countries manage to do it as well.

[SideburnsOfDoom]

> So it's not clear that your proposed "do people's taxes, leave it up to them whether to acquiesce or not" plan is good for consumers overall.

I disagree, if you want clarity, look at other countries (e.g. UK) that already do this kind of thing. There is no "how can we know?" argument to be made. And IMHO, It's so much better for consumers overall.

[motbob]

Looking at other countries is unproductive, since their tax laws and tax credit systems are completely different.

For example, in the UK, I believe where a child is living is tracked through some centralized benefits system throughout the year. That hugely changes the calculus as to whether an automated tax return makes sense. If the U.S. had a similar sort of centralized system for tracking dependents or at least children, then an automated return would make a lot more sense, since claiming children/dependents is a huge part of getting the credits you deserve, and it would be great if it were possible to do that automatically. But it isn't.

I've already explained why I think automated returns are bad in the United States. If you disagree, make counterarguments based on how taxes work here, not in some other country with an entirely different system.

[SideburnsOfDoom]

> Looking at other countries is unproductive,

IDK, this is a variation on the good old "The USA can't do this proven common sense thing that delivers benefit to citizens in many other developed countries, because ... uh ... USA special!" (1)

There's a chance that it's correct, but institutions that cannot learn from examples right in front of them are "special" in a different way, not a good one. Being able to learn would set a better trajectory towards greatness.

1) e.g. see The "FedNow" thread, yesterday https://news.ycombinator.com/item?id=32510581 Also, any healthcare or gun control thread.

[astrange]

Anyone who works for a FAANG couldn't have their taxes done automatically - the IRS doesn't know the cost basis of your share compensation. Same for anyone with crypto trades, or more prosaically anyone who's sold anything at a flea market or garage sale.

Conversely if you buy and sell the same stock with two different brokers and cause wash sales, or do anything with HSA investments in California, TurboTax and any other consumer tax product will not get your taxes right, and it may not even be possible to do them properly by hand, so everyone is doing them wrong and the IRS just isn't noticing.

Good thing ignorance is a defense for taxes.