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1) Filing taxes isn't fun. As it turns out, for many people, it's also a bit of an odd exercise.

California tried to save the nation from the misery of tax filing — then Intuit stepped in

California had a plan for the government to do your taxes for you. Tax software firms led by Intuit worked to kill it. Why it's getting another look in Washington.

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2) See, the government actually already has a lot of the relevant information. But rather than make that available to the taxpayer, it sends a form asking you to enter your income, investments, etc. Asking you to tell the IRS what it already knows.

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3) The consequences of messing it up can be years of lawsuits and frustration. Filing taxes is basically the government issuing you a test, judging how well you do, as it is actually collecting new information.

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4) And above all that-- filing taxes just sucks. It's messy and annoying and expensive and for a lot of people anxiety producing. All to create a form the IRS already has!

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5) So why can't the IRS be transparent and helpful with the taxpayers? Why can't it give you the information it has? You could still make all the decisions about how to file -- but for many people it'd be a whole lot easier.

4:10 PM · Oct 23, 2021Twitter Web App

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6) Anyway, when I was growing, for a few years my dad spent most of his time traveling too and from Sacramento--CA's capital--helping the state build out the ability to send residents the information it already had. For a lot of people, filing taxes when from days to minutes.

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7) But, of course, the harder, more frustrating, and more poorly defined filing taxes becomes, the more it costs citizens to file. And those costs go, in decent part, to tax filing software producers. Anything that made the system better was bad for their bottom line.

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8) So, they killed it.

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@artem_koloskov

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Here in Russia, being an individual entrepreneur (small business) I found it a lot cheaper and faster to just not pay taxes and wait for our “irs” to demand its share (counted to a penny) with a fee missing the deadline and paperwork. Turns out they did knew everything!

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@artem_koloskov

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@artem_koloskov

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Probably won’t work that well for a big business tho

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Because the IRS believes, if we know what info they already have, we won’t volunteer any income they don’t know about. They believe we’re all crooks, just itching for the opportunity to cheat.

@RolsonFriedrich

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Because they’re a monopoly with the monopoly of force behind them. Large and powerful governments are no different than a mafia except they also have the judges on their side. Moral hazard and incentives matter.

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In NL tax form is prefilled only to be double checked by the tax payer. Not in US?

Atlas Rugged ₿

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Sam this is due to years of lobbying by the tax filing industry. At one point they essentially wrote themselves into this American tradition.

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The answer to “why can’t they share what they already know?” is because it would expose what they “don’t know”. Then, rather than assume the IRS has all info and report everything, you’d get tons of people who underreport. This only works if IRS always has 100% of the info.

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