| New Zealand has dramatically (dramatically!) simplified our tax for ordinary (salary/wage employees), especially in the 1980s and 1990s. Given the period was one of dramatic economic and social change I doubt most Kiwis could give you a remotely impartial account (myself included); a couple of key elements that appear to be completely absent in the US culture are: 1/ A willingness to accept loophole losses. I have almost nothing I can really claim on as a salaried employee - childcare and charitable donations are about it. There used to be more. I certainly can't claim deductions for "having a mortgage", for example. If I was a lot poorer or had a lot more children (7+) I could get a tax redution for that, but nothing like as generous as the US rates are. Most of the loophole reduction went hand-in-hand with tax cuts, but we're talking dropping from a top rate of >60% by the end of the Muldoon government down to the 30s for the top tier. 2/ Much of the compliance burden and risk falls on employers, so business groups tend to support simplification, because it mitigates risk and reduces costs for them. 3/ There's more a perception of getting value out of taxes paid in New Zealand than the US. Mainstream political dialogue tends to be around fixing perceived problems in government, not nuking it to a smoking hole, pissing in the hole, and sowing the ground with salt. Many US progressives/lefties I've spoken with seem to react with suspicion and horror at the idea of being able to have the IRS estimate your taxes on your behalf in case they swindle them out of their tax breaks, which is both a nice combination of 1) and 3), and illustrates the gulf operating. Mainstream left/progressive voters in New Zealand are not commonly of the opinion that accepting the IRD's estimate on owed taxes is going to stiff them out of thousands of dollars in loopholes. |
>>Many US progressives/lefties I've spoken with seem to react with suspicion and horror at the idea of being able to have the IRS estimate your taxes on your behalf
I felt the opposite when I first heard that US tax system was too complicated. What I know before about filing tax was simply 1) approve my employer's filing about my salary 2) declare child and donation. How complicated could that be?