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0 pointslaurencerowe2y ago0 comments

> The administration of the Tax Service uses 4% of the total tax revenue it generates. This percentage has stayed relatively fixed over time.

The tax administration is far more efficient than that. The IRS has 79K workers out of a total workforce of 158M, or 1/2000 workers. Federal taxes are about 19% GDP (28% of GDP including state and local taxes.) The IRS costs $14.3B to run and collects 19% of $25.46T = $4,800B or 0.3% of collected taxes.

> If IT really improved productivity, wouldn't you expect that that number would decrease, since Tax Administration is presumably an area that we should expect to see great gains from computerisation?

Those gains are so great that tax administration has been computerised for more than half a century now.

We could certainly save an awful lot more in tax preparation for the economy as a whole if we sent out pre-filled tax forms (the IRS already has all the information required for most people) like other countries do but the tax preparation companies have made a lot of contributions to politicians to prevent this.

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bee_rider2y ago

The idea of measuring the “efficiency” of the tax system in terms of money in per money out seems a bit odd to me in the first place. Taxes don’t create wealth, the job is to destroy it at the correct rate.

Don’t get me wrong, I’m not a “taxes are theft” dummy or anything like that. Taxes are an important knob in shaping the economy. But a better functioning tax collection agency should more effectively implement the rules of whose money is collected for deletion, not just collect more money generally.

Frost1x2y ago

>Taxes don’t create wealth, the job is to destroy it at the correct rate.

Not exactly, it's more about redistributing or reappropriating wealth because we know there exists flaws in the economic system we have (progressive tax systems). In more general terms, ignoring progressive structures, it's about investing in necessary shared services for everyone and to maintain the government that does such and more.

Looking at taxes as if they destroy wealth is a bit bleak. Governments may not be the most efficient institutions in all possible metrics but they're not out to destroy wealth exactly.

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xboxnolifes2y ago

It's still a useful measure to be aware of. Imagine if the IRS costed 30% of collected taxes to run instead of 0.4%. That would be a pretty telling sign that maybe we need to improve the IRS instead of raising taxing.

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Negitivefrags2y ago

It's possible that I misremembered 0.4% as 4%. As I said, it was long time ago.

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bee_rider2y ago

Frost1x2y ago

>Taxes don’t create wealth, the job is to destroy it at the correct rate.

Looking at taxes as if they destroy wealth is a bit bleak. Governments may not be the most efficient institutions in all possible metrics but they're not out to destroy wealth exactly.

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xboxnolifes2y ago

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Negitivefrags2y ago

It's possible that I misremembered 0.4% as 4%. As I said, it was long time ago.

j / k navigate · click thread line to collapse