The Swedish government realised long ago that people had trouble doing their taxes so now we just get a form filled out with the basics like incomes and deductibles that they already know we're entitled to, and you can add stuff if you need to. But mostly you just sign it and send it in because it's accurate.
I like that and would like us to do something like that. We probably won’t.
The USA DOES teach taxes in schools. College. It takes 4-8 years plus and then usually years or decades on the job to get really good at taxes. hard to cram that into a high school class- and most people won’t need that. Most US taxes are actually very simple- a form or website that gives step by step instructions and you place the numbers on the lines it says- then send it. That’s all most people need to know- or for $30 US or less you can have your simple taxes done automatically.
So why does it take so long to really learn taxes when I say they are so simple? Well- it’s the same reason we won’t likely take the route of doing the Swedish tax method…
Our tax code is full of complex stuff and multiple ways to do things. You can even “go back in time” and change previous taxes and move things- sometimes taking things from past taxes and putting them in the future or vice versa.
This stuff is usually only useful or if most use when you have VERY complex tax situations and ave expertly structured your finances to take advantage of the tax code to lower what you pay or get more money back. Most people- even if they knew these things existed, can’t use them. You can create a company in another state from where you live, have the company buy a car, and lease the car from your own company and then have your company pay you back what you paid for the lease for example. Odd stuff like that- but you have to have the money or ability to do those things for them to be useful- otherwise like most people you’ll end up with fairly simple taxes.
So basically the tax code favors corporations and those with the wealth and means to use all these loop holes. When you hear about US billionaires and such paying no taxes” this is how it is done- using your ability to travel and live different places and work different places and donate large sums and hire skilled tax accountants and do things to take advantage of these “loopholes.”
When we do our taxes wrong- our government knows. They actually take taxes from our paychecks already (with some exceptions like contract workers), and for almost anyone making around or below “middle class” wages- taxes aren’t something you pay when you do them- you do them to get back the excess money the government took from your check. Most “middle class” and “lower” Americans will get money PAID TO THEM on their taxes.
Tl:Dr and in conclusion: we probably won’t do “pre filled” taxes because it doesn’t serve the wealthiest people and corporations, and it is more likely to cost the government money. People doing taxes wrong, not doing them, or failing to claim money they are owed as a refund all put money in the governments hands.
The IDEA behind our tax system is to give people the flexibility to accurately report their own tax situations and take advantage of rules supposedly designed to stimulate growth of wealth- you’re incentivized to give to charity or to start or run a business or do other things that help make wealth- but these rules are disconnected from those goals and mainly serve the increasing wealth gap in our country. Sweden is a nation with a relatively small income inequality compared to much of the world and especially the USA. 50% of our country holds 2% of the wealth and 10% hold 70% of the wealth with the rest in between.
This isn’t a “natural occurrence” of a “free market” due to those people being more talented in general etc- it is a protected eco system designed and ran by entrenched wealth to ensure their own wealth and power, and people who are more talented at working that system and have the money and connections to work it.
So sadly, it is very unlikely the US would go to such a simple and effective system of tax prep as sending you your tax bill with some fields for corrections, and teaching complex tax rules in primary schools isn’t practical. Teaching simple taxes most people need is pretty pointless as all that info is simple, provided, and just consists of: “do what the piece of paper says, send it.”
^--- my first job, taxes were straight forward, now? So much more complex. It takes me 2 days just to do the easy things.. and my god the receipts... so many fucking receipts. I try to do most of it online, and print things out, but the little things that are deductibles need to be sorted through when I either forgot what I bought, or bought something along with something non-deductibles... so almost all of it has to be done receipt by receipt...
edit: and I gotta keep hardcopies cuz sometimes my laptop just sorta overheats, crashes and can't do much until I get a new laptop. The cloud helps a lot, but isn't perfect.
Yes! And that’s part of the double underlying problem. Contractors and independent businesses, the self employed and any profession where itemizing makes sense or is required- they can’t send a pre filled tax form for since without detailed access to financial records and meticulous reporting the government can’t know what is to be itemized- so the people that would really help… it won’t help; and when it comes to teaching taxes in school- again about they best they can do is tell you to save receipts and use spreadsheets etc. The tax code is so complex and by nature each itemized case is so variable that they can’t really teach things like what can be itemized and such.
It compounds the problem that there are state and local taxes as well- and what is or isn’t allowed as a deduction etc. can vary- so even if they spent all the time to train students to the bullet point on tax codes for itemization- a good number would never itemize anyway, and another good number may move out of state or even country- and then that education is basically a waste compared to spending the time on general problem solving, organization, and/or research to find said answers.
Teaching “taxes” would likely further disadvantage many kids since… it’s all very circumstantial and even if a genetic course on itemization that didn’t run a HIGH risk of actually causing audit woes was practical- it would be generic- not optimized for their tax situation and thusly following a “rule” as taught would probably end up costing money to the student. Are they head of household? Do they rent or do they own? Are they a landlord? Can they take depreciation of certain assets? Do they carry over anything to the next year? So much of it goes beyond the actual taxes as well to the behaviors and choices you make- selling stocks for a huge gain can end up costing you huge, buying or selling property at the wrong time, buying vs. leasing, even things like which check a commission is taken on can impact tax liability.
Bonuses and how they are paid, prize winnings, inheritance, medical bills, business expenses and… that becomes very complex- more so when we get to depreciation and loss or gains from selling or upgrading etc…. The system is very complex. It’s by design in part- a form of “gate keeping” to guard wealth and sort those from finically educated and advantaged circumstances from those without. The tax system in the USA is full of flaws that so long as very wealthy people can convince not wealthy people that changing the system to benefit the “common man” is a ploy to “take more” from them- the only real solution is to do your taxes, hire an accountant, get turbo tax or something, or become very financially literate. Lol. It’s a mess and not one that can be easily solved- but changing the tax system at a fundamental level would help I think.
lol. Yeah. That has its definite pluses. Of course it also speaks to the complexity of the issue. A student in Texas- would we teach them all state taxes in a “nutshell” in case they ever move or work across state lines…. Or not teach state taxes at all- and then if they move… lol. A mess of a system. Glad you don’t have state to deal with though.
I can't be the only one who does taxes by:
-Following the directions, and
-Doing the math, which is addition, subtraction and multiplication, but no calculus, complex numbers or matrix algebra.
If you have anything like investment capital gains or rental income, you need to fill out additional forms so you have to realize that, but you don't need to take a class in "doing taxes." Plus, the rules change often (dividends used to be taxed as regular income, then got change to a preferred cap gains rate).
Really UNDERSTANDING your taxes lets you make decisions that can minimize them and improve your investing:
-Should I take a tax-deductible IRA or 401k now or pay the taxes to invest in a Roth that'll be tax-free later?
-Will I be better off taking a standard deduction or deducting state tax + property tax + chartable contributions? If the latter, what if I donate nothing this year and double next year?
Gosh, if only there were a resource available on your phone or computer for this.
The USA DOES teach taxes in schools. College. It takes 4-8 years plus and then usually years or decades on the job to get really good at taxes. hard to cram that into a high school class- and most people won’t need that. Most US taxes are actually very simple- a form or website that gives step by step instructions and you place the numbers on the lines it says- then send it. That’s all most people need to know- or for $30 US or less you can have your simple taxes done automatically.
So why does it take so long to really learn taxes when I say they are so simple? Well- it’s the same reason we won’t likely take the route of doing the Swedish tax method…
Our tax code is full of complex stuff and multiple ways to do things. You can even “go back in time” and change previous taxes and move things- sometimes taking things from past taxes and putting them in the future or vice versa.
When we do our taxes wrong- our government knows. They actually take taxes from our paychecks already (with some exceptions like contract workers), and for almost anyone making around or below “middle class” wages- taxes aren’t something you pay when you do them- you do them to get back the excess money the government took from your check. Most “middle class” and “lower” Americans will get money PAID TO THEM on their taxes.
The IDEA behind our tax system is to give people the flexibility to accurately report their own tax situations and take advantage of rules supposedly designed to stimulate growth of wealth- you’re incentivized to give to charity or to start or run a business or do other things that help make wealth- but these rules are disconnected from those goals and mainly serve the increasing wealth gap in our country. Sweden is a nation with a relatively small income inequality compared to much of the world and especially the USA. 50% of our country holds 2% of the wealth and 10% hold 70% of the wealth with the rest in between.
So sadly, it is very unlikely the US would go to such a simple and effective system of tax prep as sending you your tax bill with some fields for corrections, and teaching complex tax rules in primary schools isn’t practical. Teaching simple taxes most people need is pretty pointless as all that info is simple, provided, and just consists of: “do what the piece of paper says, send it.”
edit: and I gotta keep hardcopies cuz sometimes my laptop just sorta overheats, crashes and can't do much until I get a new laptop. The cloud helps a lot, but isn't perfect.
-Following the directions, and
-Doing the math, which is addition, subtraction and multiplication, but no calculus, complex numbers or matrix algebra.
If you have anything like investment capital gains or rental income, you need to fill out additional forms so you have to realize that, but you don't need to take a class in "doing taxes." Plus, the rules change often (dividends used to be taxed as regular income, then got change to a preferred cap gains rate).
Really UNDERSTANDING your taxes lets you make decisions that can minimize them and improve your investing:
-Should I take a tax-deductible IRA or 401k now or pay the taxes to invest in a Roth that'll be tax-free later?
-Will I be better off taking a standard deduction or deducting state tax + property tax + chartable contributions? If the latter, what if I donate nothing this year and double next year?
Gosh, if only there were a resource available on your phone or computer for this.