[jsprogrammer]

Privatized tax collectors are bad. Private collectors have every incentive to make collection as difficult as possible so as to cement their position (and profits).

A government that employs a tax scheme that is so complicated that it requires private collectors is signalling dysfunction and is presenting an attack surface whereby that government is open to undue influence from the collectors while simultaneously hampering the people's ability to direct the affairs of that government.

How much time does a person have to spend to understand and comply with the requirements of the tax scheme? Well, in the US, practically no one knows because they are paying a private collector to figure it out for them. Even when going with a private collector the time I spend at the end of the year is measured in hours. Without the private collector it would likely be more than a dozen hours, and that's just for filling out forms. There is also a significant time cost to maintain and store various documents throughout the year.

Now consider that those are the costs if you are already familiar with the scheme. If you aren't already familiar with the scheme, you're pretty much SOL. The government doesn't even notify you that you are required to pay any taxes until you don't and informs you that they are coming after you for penalties. Go check out the IRS's website [1], no where on the landing page is there an obvious explanation of what your responsibilities are. If you manage to make it to the form 1040 instructions[2], you've got a 100+ page PDF to read up on just to learn how to fill out one of the forms. There's also handfuls of other forms and and instructions all over their site, with no comprehensive structure or explanation for.

The above scenario is already a nightmare and it doesn't even touch on what the actual tax scheme is[3], which the IRS doesn't even bother to host, but instead links to the website of a the law school at an Ivy League university. When you try to read the scheme on the third party site, you have to click through several layers of titles, subtitles, chapters, subchapters, sections, etc. just to be able to read one portion of the scheme at a time. As you try to just get to an actual sentence in the scheme you get prompted by a pop-up to donate $50+ to an unidentified entity for an ambiguous cause[4].

At this point, I've given up researching the matter further. The current system is indefensible and needs to be abandoned as soon as possible.

[1] http://www.irs.gov [2] http://www.irs.gov/pub/irs-pdf/i1040gi.pdf [3] http://www.law.cornell.edu/uscode/text/26 [4] http://i.imgur.com/vSppOXX.png

[sokoloff]

I'd use "preparer" everywhere you use "collector" above. The private companies don't actually collect the money; that goes straight to/from the government. The private companies, whether silicon or carbon-based, just serve to help you prepare your tax return (ie: calculate your total tax and file the return).

I agree with you on the complexity points, as I spend in the just barely four-figures annually for my CPA/EA to prepare our family returns. Our filing generally runs in the 50-100 page range and I don't even run a business.

I disagree on the duty to inform point. It is your duty as a citizen (and optionally a business owner) to understand the laws that are relevant to you, and not the government's duty to push that information to you in a customized-to-you fashion.

[vonmoltke]

> I disagree on the duty to inform point. It is your duty as a citizen (and optionally a business owner) to understand the laws that are relevant to you, and not the government's duty to push that information to you in a customized-to-you fashion.

I agree with you to a point. Citizens and businesses have a responsibility to understand the laws that apply, but government has a responsibility to make those laws as easy to find and understand as practical. The source of most complaints about government services in the US can be traced to lack of customer service, of which this is a form. The government has no impetus to spend resources on this problem; the cynical would claim they actually have a perverse incentive to make laws as obtuse as possible in order to bring in fines for innocent mistakes.

The IRS used to be much worse in this regard. A couple decades ago they didn't give a flying fuck about the taxpayer. "Understanding the laws" back then basically amounted to dumping a pile of legalese the size of the Encyclopedia Britannica in front of the taxpayer and expecting them to go through it and figure out what applies to them. That is the behavior that spawned the tax preparation industry in the US in the first place.

[chii]

> push that information to you in a customized-to-you fashion.

but the IRS somehow knows exactly what you owed them and why, so why can't they just perform that calculation before hand, and then tell you it, instead of forcing an onerous process on everyone else, and waste people's resources paying for tax-preparation services?

[sokoloff]

The largest blocker in my experience is that they don't have that information processed for 6-18 months after the filing deadline.

Source: personal experience with a period of very-late filing in my younger and dumber days.

Other factors are that they can't possibly know your total liability. They literally don't know exactly what you owe them.

Cash-based employment or trade, sales of securities purchased prior to the very recent cost-basis rules, basically anything schedule C or E (small business or rental property), etc, etc.

They might be able to auto-file something close for the simple W-2 employee case with no investments, but they don't have a secret computer system with your full return auto-prepared and just waiting to catch you for forgetting to enter $12 in bank interest from a long-forgotten account.

[ctdonath]

The IRS knows the maximum you owe. If you just want them to send you a bill and you pay it without contention, that could be arranged. If you want to use any deductions, then you'll have to work thru the paperwork explaining why you don't owe them so much.

[chrisan]

> but the IRS somehow knows exactly what you owed them and why

They know how much you owe them before deductions.