Monday, September 28, 2020

Automatic tax filing

One line in the Canadian throne speech:  "Feds promise free, automatic tax returns — a change that could send benefits to thousands" (Tasker):
"The federal government says it will soon introduce a free, automatic tax filing system for simple returns — a policy change meant to provide government benefits to qualified people who don't collect them now because they skip filing their taxes.

The promise — a one-line commitment buried in the 6,783-word speech from the throne — could help hundreds of thousands of low- and fixed-income Canadians access benefits that are only paid to people who file tax returns.

By law, and in most cases, only people who owe taxes are required to file a return each year with the Canada Revenue Agency (CRA).

Many people — notably those on government assistance — don't expect to owe the federal government anything, so they seldom file.

Under the proposed changes, the CRA itself would draw up the paperwork for such simple returns each year — using data they already have on hand about individuals' income — to eliminate a bureaucratic burden that stands in the way of financial support.

Experts in tax policy have long said that the CRA already has enough personal information to automatically fill out tax returns for many infrequent filers. Much of the needed figures are electronically transmitted to the agency by employers and government agencies alike.

Thirty-six countries, including Germany, Japan and the United Kingdom, already permit return-free filing for some taxpayers.

On average, 12 per cent of working-age adults in Canada don't send in a return each year — a number that jumps to 15.9 per cent in Ontario, according to figures compiled by researchers at Carleton University.

As a result, many would-be recipients miss out on some federal programs like the Canada child benefit (CCB), the Canada workers benefit and the carbon tax rebate — money that could give a significant leg-up to low-income families.

Fewer than 3 per cent of homeless Canadians collect the GST/HST credit, according to research done by the Calgary Homeless Foundation.

Research from Prosper Canada, published in 2018, suggests as many as 40 per cent of eligible First Nations families aren't collecting the CCB — a monthly cheque paid to people with kids who fall below a certain income bracket. 
A 2017 CBC News report documented internal government concerns about the slow uptake of the CCB among First Nations, Métis and Inuit people."
Thread by Dr. J Robson. - "a conservative estimate of $1.7B in benefits unpaid due to non-filing".

The Assholian experience:  "Why filing taxes isn’t easy" (Bankman/Hemel/Ventry):
"Why would lawmakers want to stop the IRS from simplifying tax filing? Here’s a clue: H&R Block has spent $3.4 million lobbying the current Congress, and Intuit—the maker of TurboTax—has pitched in an additional $3.1 million. They and their employees also have contributed more than $500,000 this cycle to congressional candidates, political action committees, and parties. 
And tax politics make strange bedfellows. Fighting alongside H&R Block and Intuit are anti-tax activist groups like Grover Norquist’s Americans for Tax Reform. H&R Block and Intuit love taxes—that’s how they make their money. Grover Norquist wants to cut taxes wherever possible. But on this issue, their interests are aligned. H&R Block and Intuit want to make it difficult for you to file on your own. The anti-tax activists think that if taxpaying is too easy, voters will be less likely to resist the federal government’s growth. Both want to make it as painful as possible for you to do your taxes yourself."
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