[syradar]

Here in Sweden my employer reports my income tax and my investments app reports capital gains, to the Tax Authority. Last week I could log in, review the data, and e-sign it in less than 5 minutes. It turns out that I payed 53.80 dollars to much tax last year. Since I filed my taxes early (before March 30) they will pay it back on April 6 (instead of June 9).

[gorgoiler]

The US system is incredibly complex. The federal government wields very little on-the-ground political power compared to states, but what power it does have is effected via tax policy.

It is as if the EU wanted to regulate mobile phone roaming charges by offering a tax rebate on your phone bill, which it then used to calculate a penalty that is added to the phone companies corporation tax bills. There is no federal EU tax bill passed on to citizens of course but if there were you might continue to have your payroll taxes go to your country’s government but you could then submit your phone bills to the federal EU government to get money back from any tax they levy on you. They’d have to levy it in the first place but to avoid unfairness they offset it against anything your state takes, first.

At the other end of the spectrum, some city funding is done via income taxes. That seems a lot more equitable than, say, the UK where you pay a rate based on the value of the building your landlord bought. Because it’s an income tax though, and because double taxation is anathema to any voter, it too must be used to offset state and federal income tax.

In a way it would be a lot easier if each entity could just stick to one kind of tax. Maybe city funding via property tax, state funding via income tax, and federal funding via corporation tax. The power of federal government is restricted via the tenth amendment, so it’s always going to try to end run states rights via the only means it has — your tax form. That seems unlikely to change. Also I’m not sure my off-the-cuff idea of having the federal government answer only to corporations (via corporation tax) is a very good one, but it is a good example at least of how the machinations of taxation, if not the politics, might be easier if things were picked apart.

[Dalewyn]

>The US system is incredibly complex.

To give some idea for our not-American friends, here's a very general, far too simplified gist of how the tax system is laid out:

* Federal taxes, overseen by the IRS.

* State taxes, separate and independent from Federal taxes and overseen by the governments of each State.

* County taxes, mostly separate and independent from State taxes and overseen by each county's government.

* Municipal taxes, mostly separate and independent from County taxes and overseen by each municipality.

Taxpayers need to file their taxes with the IRS (Federal), their State, their County, and if applicable their Municipality. No, these taxes are not handled together in the bureaucratic machine (for good reason; individual rights and all that).

The reasons for the complexity are rooted in how the United States is structured politically, where having certain rights and freedoms at each level of governance is a very big deal.

[jrochkind1]

But literally even JUST THE FEDERAL taxes is incredibly complex.

As far as income taxes, the state income taxes have always been pretty simple for me. City even simpler, and I've lived place with and without them. Most of the complexity is federal (although in part because state and city take the income from the federal as their starting point). But that's enough! And sure, adding more on top doesn't help.

The federal taxes keep adding complexity, even for people with relatively simple situations. It's true for low-wage earners who don't have many assets, federal taxes can be... relatively simple. Maybe as simple as European ones. I dunno, it's a mess.

[rat9988]

This problems exist in many other countries with fully automated taxing for salarymen.

[vkou]

This complexity does not require a private tax prep industry for 99% of taxpayers.

All of the various tax collection agencies already manage to do all the work necessary to determine my tax bill. They do it every year.

[mschuster91]

Here in Germany, the state tax authorities coordinate collecting taxes and forward them to the federal government.

[ianai]

Not all counties nor municipalities have yearly local taxes.

[danielrpa]

MOST counties and municipalities do not have local income taxes.

[japanuspus]

Having done personal taxes in both Scandinavia (Denmark) and the US, I would claim the opposite: The US system is relatively simple, and finding precise instructions is possible. Admittedly, my life was simpler then (rental property, no investments), but event with international income I remember it as a mater of filling out two sheets of paper.

[Hamuko]

I got a message on Saturday of all days that my prefilled tax return for 2022 was ready. Logged in to the Finnish tax services website and found out that was the government owes me about 100 euro in overpaid taxes. Won't be paid out until August though.

I did have to go correct my tax information for 2023. For some reason my work-from-home tax deduction was set manually to 900€ instead of the full 920€ that I'm allowed. Hopefully now my 2023 tax filings will be correct.

[29athrowaway]

Same in most countries.

The US was a weird model where they ask you to resubmit the same information they already have in hope you will declare more income than they know about.

In part, because the US taxes you on your global income, not only your US income, which means that there will be income they won't know about unless you declare it.

For the majority of people that only have income from salary, it's an unreasonable burden and Intuit has lobbied the government so that it continues to be a burden.

[samus]

It's not that income abroad would be particularly easy to hide. Since financial institutions around the world have reporting duties regarding US customers, Uncle Sam will find out about it. The true, completely legal way to hide income abroad is establishing holding structures to siphon most of it into tax shelters abroad.

[29athrowaway]

Is FATCA effective? how automatic is it?

[King-Aaron]

Same in Australia. The complexity increases if you have investment properties, or self manage tax, etc. But for the large majority of employees in the country you can simply log onto their website and effectively one-click confirm that your details are all correct, and that's it.

[AlchemistCamp]

Do you do any entrepreneurial activity at all or is your entire income salaried employee work?

[altacc]

Not PP but I've been employed & self employed in Norway, with a similar system, and being self employed was a bit more work throughout the year, keeping up with invoices & receipts. You have to keep up to date for that as you have to send regular VAT statements. You need to use some accounting software, but if you're a small business you probably have that anyway. That accounting software has to integrate to the tax authorities and at end of year was just push a button to submit final numbers.

Then you wait for your updated tax return later in the year, which would automatically combine self-employed earnings, wages, investments, debts, tax deductions due to paying for childcare, etc... I normally have to spend 10-15 minutes to correct that if something like a travel calculation for my employer is wrong.

[brewdad]

In a sane tax code it wouldn't matter. Revenue = Income.

[qeternity]

What?! You can’t be serious. You think that a local shop with $1m in revenue but 5% net margins should pay the same tax as a services business with $1m in revenue but 50% net margins?

[nicky0]

In a sane tax world you tax profit not revenue.

[mjx0]

Does that not imply that everyone else — through taxes — subsidizes losses, and thus poor business decisions? If so, why should these be subsidized for businesses? Should regular expenses also be subsidized for individuals?

[nicky0]

No, it doesn't imply that.

Consider a scenario where I have £100 and decide to start a business as a self-employed individual. I invest £100 in inventory, but only manage to sell it for £100, resulting in zero profit. Under your hypothetical tax system, the tax authority would demand (let's say) 20% of my revenue, which amounts to £20. However, I don't have £20 to pay since I made no profit. Consequently, I am now £20 in debt to the state and essentially penalized for trying.

For a self-employed person, or a company, profit is analogous to an employed person's salary. Both represent the net flow of money or disposable income resulting from business activities or employment. This is why self-employed individuals and companies are taxed based on their profit, while employed persons are taxed on their salary.

Moreover, your use of the term "subsidy" is incorrect. A subsidy implies that the government provides financial support. In the case of a loss, the government does not send money to the individual or company. Instead, they simply refrain from taxing them, which is not a subsidy.

Note also in this example that in investing my £100, I likely generated tax revenue for the government through taxes on sales, salary, and profits on those who I bought from. So even though I paid no income tax, my activity still resulted in positive tax flows.

Finally let's imagine another example - simplified but makes a point. A grocery shop receives $1000 from customers selling bread. It bought the bread for $900 from a baker. The baker paid $850 for the flour from a mill. The mill paid $800 for the corn from a farmer. The farmer paid $750 for fertilier. In this example each entity recieves revenue, but a large portion of that money is passed on to the next entity where it is taxed again. By taxing the same money again and again even when it has already been taxed in a previous stage, the cumulative tax burden becomes higher and higher the longer the supply chain. With a long supply chain it could even exceed the total money in circulation. Mathematically, taxing revenue just doesn't make sense.

[davidkuennen]

Same in Germany.

[gostsamo]

Funny, but it is the same here in Bulgaria. Terrible, horrible, no good, very bad governmental intervention.

[bouke]

Same here in The Netherlands.

[masklinn]

I think at this point it’s probably easier to list european countries where you still can’t easily e-file.

[Helmut10001]

Germany

[imtringued]

I use Elster.

[kybernetyk]

I'm regularly filing taxes in the UK and in Germany. The German ELSTER system is a bad joke compared to how this is handled in the UK.

In the UK it's a bunch of nicely designed web forms with clear worded explanations what they expect you to fill in the fields.

In Germany it's ... well you can be masochistic and try to use ELSTER webapp which runs only on certain browsers. With explanations like "fill in here any amount if you fall under §223 EKST, 4 II".

So you either get a paid 3rd party software which still isn't the quality of the official UK filling service (somehow Germans have a love for their cryptic explanations directly referencing laws - god forbid someone would use simple and clear explanations) or you pay a professional to do your taxes. Which is what most people do.

[Helmut10001]

This was a reference to this statement:

> Asking citizens to pay their fair share of taxes should not include them spending a day or two every year trying to find a piece of paper to mail to an agency which _already has that piece of paper_ and is categorically more equipped to process it.

There are so many duplicate fields and redundant parts in Elster and the pre-fill function is a joke.

[isoprophlex]

Heavens forbid you have a foreign sounding surname, though.

https://en.m.wikipedia.org/wiki/Dutch_childcare_benefits_sca...

[ahoef]

This is as bad as it gets and something that should shame us all. But it has nothing to do with filing e-taxes.

[hungryforcodes]

I hear Sweden is also a cashless society with occasional negative interest rates -- sounds wonderful. Are there any benefits? For example if you pay on negative interest rates can you apply that to your income tax filing?