I understand that major problem with taxes is how complicated it is. Accountancy fee could be thousands dolars even if yoy pay zero taxs.. Some foreign banks even refuse to open bank accounts to US citizens, because of complications.
I understand that major problem with taxes is how complicated it is. Accountancy fee could be thousands dolars even if yoy pay zero taxs.. Some foreign banks even refuse to open bank accounts to US citizens, because of complications.
This is a manufactured problem by companies who create tax software who lobby the American government to increase the complexity of the tax code. I have never needed to hire an accountant to do my personal taxes in any country other then the USA.
There are also Americans whose taxes are so complicated that not even the most expensive accountants know what the answers are. The system is broken on both ends.
I deal with 3 tax agencies every year. I submit my personal and my business's tax returns to the British HMRC as that's where I live. I deal with my home country's (Hungary) tax agency too for various, boring reasons. And, ultimately, as I tend to do my wife's tax returns as well and she's a citizen of the United States I file taxes with the IRS.
I don't know how else I could put this: the US tax system is absolutely insane. It's several orders of magnitude more complicated than any other I'm familiar with. It's simply ridiculous. It's really, really bad.
Part of the problem is of course the convoluted tax code in the US with all the very specific deductions and odd cases, where other countries may have much more simplified tax codes to avoid the problem completely.
Taxes in the US aren't actually that much lower than in other countries - and the exploitation of all your juicey tax loopholes usually requires a pretty expensive accountant not accessible to the average person.
I'm pretty sure there are accounting interest groups that don't want easy way to file taxes. It still boggles my mind that somehow I have to calculate how much I owe to the IRS when they can calculate it themselves and just give me the bill (or refund).
I think the bigger issue is the complexity of personal taxes in the US. The technology is a solved problem. Australia has had a government provided free tax client since 1998 with pre-fill facilities, which was retired & moved to a web portal in 2016.
You have entrenched interests keeping the whole process as difficult as possible.
The US really does have a lot of problems with their tax system to be honest.
For a country whose citizens outwardly hate tax, you'd think they would have one of the best, most straightforward, and fair tax systems in the world. But instead you have one of the most convoluted, loopholey, broken systems in the world.
Whereas in countries where taxes aren't as "hated" (Europe, Canada, etc) they don't pay a cent to file taxes, have less loopholes, it is less complicated, and overall fairer.
If I was an American I'd hate tax too, but you guys made it that way. Why does it still cost money to file taxes anyway?
That's because of corrupt American politicians and lobbying by Intuit, not something inherent to an income tax. Many countries have a simpler income tax process.
It's just a theory, but I'm somewhat convinced that half the reason Americans hate taxes is because of how inconvenient and in your face they are in the US: IRS requires you to fill in a complex form with no help and punishes you if you get it wrong, and sales tax is not part of the advertised price of goods. I reckon if you got rid of that then people would care about taxes a lot less.
IMO the problem is the tax code itself rather than who is filing the paperwork. Unless that is simplified, there is zero chance the average citizen can work through their taxes themselves and pay the correct amount.
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