Poll: Constitutional ban on making money from tax-return programs
11 comments
I am adamantly against narrow constitutional amendments, particularly those that take away rights rather than add to them.
I agree the tax code is a mess. The way to fix it is to fix it, not apply indirect pressure. Unfortunately, most of the proposals that I have seen hit me, as a middle class self-employed developer, right in the pocketbook, e.g. take away the mortgage deduction, or propose some kind of regressive tax, like a national sales tax.
I agree the tax code is a mess. The way to fix it is to fix it, not apply indirect pressure. Unfortunately, most of the proposals that I have seen hit me, as a middle class self-employed developer, right in the pocketbook, e.g. take away the mortgage deduction, or propose some kind of regressive tax, like a national sales tax.
Two questions:
1. Why does it need to be a constitutional ban? Why not just pass a law against it?
2. Why not make tax-return program publishers responsible for any errors their programs make, and make honest tax payers exempt from liability due to relying on what they believed was a correctly functioning tool?
1. Why does it need to be a constitutional ban? Why not just pass a law against it?
2. Why not make tax-return program publishers responsible for any errors their programs make, and make honest tax payers exempt from liability due to relying on what they believed was a correctly functioning tool?
Writing the tax code to have the correct effect on the economy, and writing it to be easily navigable by normal people, are two separate problems. It's better to use software to decouple them (if you have to) so you can focus on the first.
Not that I wouldn't like it to be simpler. I would. But even with a completely optimal and just tax system, there still might be a place for such software.
Not that I wouldn't like it to be simpler. I would. But even with a completely optimal and just tax system, there still might be a place for such software.
Yeah, this is what pisses me off about people who suggest radical simplifications of the tax code - reminds me of Steve Yegge's Shit's Easy Syndrome.
Taxation is difficult. There are a lot of weird things you can do with your money, and a whole industry out of making more of them - dealing with all that requires complexity.
Even more so, as you mention, tax policy is a manifestation of social and economic policy - it's the way you implement those two, and if you're going to do it right, it's going to be complex.
For a small small view of this, consider that as of now, you get a tax deduction for charitable donations. If you simply paid X% of your income, as many suggest, this would remove that deduction - and what do you think that would do to charitable giving in this county, and to the people that depend on the programs of those charities to survive?
Taxation is difficult. There are a lot of weird things you can do with your money, and a whole industry out of making more of them - dealing with all that requires complexity.
Even more so, as you mention, tax policy is a manifestation of social and economic policy - it's the way you implement those two, and if you're going to do it right, it's going to be complex.
For a small small view of this, consider that as of now, you get a tax deduction for charitable donations. If you simply paid X% of your income, as many suggest, this would remove that deduction - and what do you think that would do to charitable giving in this county, and to the people that depend on the programs of those charities to survive?
It would remove an economic distortion, and I'm all for that; charitable giving, too, needs to be worth what you pay for it.
Nonetheless, your example illustrates the point quite well. Simplifying the tax code, and making it do what you want it to do, are not the same problem.
Nonetheless, your example illustrates the point quite well. Simplifying the tax code, and making it do what you want it to do, are not the same problem.
I say, no. Not because "it's a dangerous infringement on people's rights." but because its not the root problem. The root problem is the complex tax structure, not the tools needed to navigate it.
besides, if your going to put in the effort to amend the constitution, you may as well go after the root cause of all root causes ;): "giving money to people that make our laws."
besides, if your going to put in the effort to amend the constitution, you may as well go after the root cause of all root causes ;): "giving money to people that make our laws."
TurboTax is a great piece of software and the price for using it is very reasonable considering the headaches it saves you. I agree the tax law is too complex and needs reform (I am a supporter of many tax reforms). However we shouldn't punish free enterprise due to bureaucratic mistakes. The Tax code created a market by being so opaque and complex, therefore the root of the problem is that the Tax Code is opaque and complex not that there exist companies in the market place.
I don't think destroying the business model of products like TurboTax will fix tax law. Fixing tax law will remove the need (or most of the need) for products like TurboTax. However even in a world of simple tax laws there will still be such a market, simply because for some people it is cheaper to pay a fee for turbotax (or an accountant or whatever) to help them do their taxes than for them to learn how to do it themselves in terms of opportunity cost.
There will be a market for these services forever for good reasons.
I don't think destroying the business model of products like TurboTax will fix tax law. Fixing tax law will remove the need (or most of the need) for products like TurboTax. However even in a world of simple tax laws there will still be such a market, simply because for some people it is cheaper to pay a fee for turbotax (or an accountant or whatever) to help them do their taxes than for them to learn how to do it themselves in terms of opportunity cost.
There will be a market for these services forever for good reasons.
Two mooism2:
1. I suggested constitutional ban instead of law because a law in the constitution is less likely to be subject to scope creep; most bills signed into law today are hundreds of pages long.
IANAL (obviously)
2. Again, scope creep, also, the Halting Problem. If current trends continue, I could easily see tax-optimization taking the form of a lot of really difficult problems in computer science.
Honestly, I suggest this because I'm very cynical. There's a lot of defacto federal "laws" that exist because of indirect pressure in other bills. For example, the drinking age in most states is 21 because if it's any lower states can't get federal funding for highways. It's true that direct tax reform would be a better way to go, but there's so many parties that stand to benefit from the complexity of the current system that I can't see any attempts at reform succeeding.
2. Again, scope creep, also, the Halting Problem. If current trends continue, I could easily see tax-optimization taking the form of a lot of really difficult problems in computer science.
Honestly, I suggest this because I'm very cynical. There's a lot of defacto federal "laws" that exist because of indirect pressure in other bills. For example, the drinking age in most states is 21 because if it's any lower states can't get federal funding for highways. It's true that direct tax reform would be a better way to go, but there's so many parties that stand to benefit from the complexity of the current system that I can't see any attempts at reform succeeding.
So long as you are going to pass a constitutional amendment it might as well be to outlaw income taxes all together then the problem you describe solves itself.
Even if the tax code were as simple a "straight 10% no matter what no exceptions" there would still be a market for tax software because a large number of people can't do basic math.
Even if the tax code were as simple a "straight 10% no matter what no exceptions" there would still be a market for tax software because a large number of people can't do basic math.
Voting no for the singular reason of I work on Turbo Tax. That's my job you're talking about, sir!
I don't intend to disparage the quality of Turbo Tax....
But I think Turbo-tax is like a very, very effective itch-ointment. When a mosquito bites you you have an itch for a reason, if it people didn't itch they wouldn't dislike being bitten so much, and if they didn't dislike it they wouldn't try to avoid being bitten. If people are annoyed more by the complexity of our system they'll do more to simplify it.
The tax code was ridiculously complicated before TurboTax existed. Banning TurboTax will not magically simplify the tax code.
You're attacking a symptom.
When government is the problem, as is the case here, more government is rarely the solution.
I say making money and not writing such programs because I think the danger of scope creep from a law banning the writing of a certain program is greater than the gain from banning such programs.