There is no rub. Here[1] are 2010 numbers from the IRS showing 42% of Americans used 1040A or EZ. Many more /could have/. Since 2010 the standard deduction has gone up and there's no reason for a lot of people to itemize.
In many other countries the government provides you a pre-filled form. You can sign and return or file your own with relevant "loopholes."
There are two groups of people who want to keep tax filing difficult. Grover Norquist feels if paying taxes is too easy people won't be angry about it. This increases support for cutting taxes. The other group are tax preparers, like Intuit.
Nothing special happened in 2010. Beginning 2018 there was a temporary change (TJCA) that increased the standard deduction, but that ends in 3 years unless extended by Congress.
>There are two groups of people who want to keep tax filing difficult.
No, there is a third, much larger group, of taxpayers who want to keep loopholes, grey areas, and little things you can cheat on and get away with. This is only possible with the current system.
> Nothing special happened in 2010. Beginning 2018 there was a temporary change (TJCA) that increased the standard deduction, but that ends in 3 years unless extended by Congress.
My understanding was that the personal exemption was temporarily removed, but the standard deduction was changed moving forward...but what do I know? I want the government to give me a default option that has a correct answer.
> No, there is a third, much larger group, of taxpayers who want to keep loopholes, grey areas, and little things you can cheat on and get away with. This is only possible with the current system.
Huh? All people are asking for is that the IRS fill out your 1040 for you as one option for paying taxes. No loopholes, grey areas, or enforcement changes. If you're talking about possible knock-on effects; people not paying attention to taxes, therefore paying more, or not paying enough attention that taxes get raised with out noticing--that's literally Grover Norquist's position.
You say a "much larger group." When California had a pilot program[1], the only opposition was from Intuit. "99 percent stated they were satisfied with ReadyReturn, 97 percent stated this is the type of service government should provide, 96 percent stated it was more convenient than how they filed in the past, 95 percent stated it saved them time, and 98 percent stated they would use it again."
>All people are asking for is that the IRS fill out your 1040 for you as one option for paying taxes. No loopholes, grey areas, or enforcement changes
Then how do you solve this scenario? Suppose my tax liability according to tax law in all its complexity is $1,000. However because it can't know everything, the IRS sends me an "optional" tax return with $800 liability, no questions asked, just sign here. What is to stop me from cheating in this case? It is only the risk of being audited that keeps most people somewhat honest under the current system.
So many countries already have it figured out. My understanding is by law income already needs to be reported to the IRS (from your employer or by you). I would imagine that's all you'd be legally signing off on. That's all I remember confirming when living abroad. If your income is accounted for correctly is there a scenario that would increase your tax liability assuming you already qualify for a standard deduction?
Somewhere around 90% of Americans take the standard deduction and the IRS is in a better position to judge eligibility for most of the adjustments outside that (e.g. EITC) than many taxpayers are. There's always going to be a way to fill out your own taxes for people with complicated tax situations, so there's no harm in simplifying things and reducing mistakes/fraud for the vast, vast majority of people.
Most people don't qualify for those. If you think you can (legally) pay less tax, great, go for it. I'm sure you'd still be able to file taxes the hard way if you want. That's how it works in most non-US countries. The government tells you how much you owe, and you can either accept it or file paperwork demonstrating that you can pay less than that.
They actually do know about all the loopholes you're using. Using a loophole isn't about changing how you file your taxes, it's changing how you live your life to be more tax-efficient.
