The way we file taxes in the US is odd. For most of us, almost all the documents that we use to prepare our tax returns are also provided directly to the government, so the government has the same information that we use. We then prepare our returns, send it in, and the government checks to see if we did it right. Surely it would make more sense for the government to calculate our taxes and then send us a statement to check to see if there was any error, the way that credit card companies compile a bill based on all our expenditures and then tell us how much we owe. If we wish, we can check their calculations with the receipts we have. Countries like Denmark, Sweden, and Spain already have such systems.
Of course, taxes are more complicated than credit card bills and there may be some things that we need to inform the government about, like how much we gave to charity. As far as my own taxes are concerned, our contributions to charity are the only things that the government does not know in advance of our filing. But that can be easily dealt with by us sending in a statement to the government of the total amount of charitable contributions.
Of course, there will be some people and businesses that have taxes so complicated that they cannot trust the government to get it right and need to hire accountants. But for most individuals, taxes should be something that the government can do pretty easily without error. And the system could be made voluntary, so that you could do your taxes yourself if you wanted to.
So why don’t we have that system? Simple. As ProPublica reports, companies like TurboTax that sell tax preparation software have lobbied Congress hard to prevent that change from happening. Not only that, they like the tax policies to become even more complicated so that it drives more people to them. Conservative anti-tax activists like Grover Norquist also oppose making tax filing easier because they use the aggravation to aid their anti-tax pitch.
So much of the nation spends a lot of time and energy in the first quarter of the year doing something that the government could do more easily and efficiently, just in order to funnel money to those companies.