Today, as you well know, is Tax Day. If you’re reading this, it’s likely you’ve already completed the frustratingly complex, often stressful, yearly ritual that is filing your taxes.
Imagine for a moment a world in which doing your taxes was as easy as receiving a pre-filled form in the mail, verifying what the government thinks you owe, making any necessary changes, and sending it back. A 5 minute task in place of what the IRS estimates to be a 13 hour long exercise in patience our convoluted tax code requires of us. Perhaps you spare yourself the effort and spend upwards $150 dollars to a tax preparation industry now worth more than $6 billion annually.
This “pipe-dream” is already a reality in countries like Sweden, Spain and Denmark, where their IRS equivalents use financial information readily provided to them by banks and employers to prepare a return themselves. It’s called “return-free filing” and as ProPublica reports, it could save taxpayers significant time and money:
Advocates say tens of millions of taxpayers could use such a system each year, saving them a collective $2 billion and 225 million hours [emphasis added] in prep costs and time, according to one estimate.
Return-free filing is not a new concept, it’s been endorsed by host of public figures and lawmakers including former President Ronald Reagan and current President Barack Obama. When was the last time those two endorsed the same fiscal or economic policy?
So why then are we still living in a world with a 73,954 page tax code? Who could possibly oppose a simplified system of return-free filing, saving taxpayers energy, time and money? The answer, made clear by nearly $20 million in lobbying over the last decade, is Intuit, the company behind the popular and extremely profitable TurboTax software.
Intuit is well aware of the danger return-free filing poses to their business model. According to their own internal documents;
We [Intuit] also face challenges in our Consumer Tax business from publicly funded government entities that offer free electronic tax preparation and filing services at no cost to the individual taxpayer.
Why allow the Federal Government to interfere with “free market capitalism” by providing a necessary service free of charge to taxpayers, when a private company can charge up to $150 for it? This is America after all. As recently as 2011, Intuit’s lobbying arm was able to defeat two bills promoting return-free filing in Congress!
Allegations from a ProPublica report suggest a more sinister and better coordinated opposition to simplifying the tax process than previously known. ProPublica’s latest report accuses Intuit of “Astro-Turfing,” or creating and funding an artificial campaign against simple and free tax-filings, while trying to make it look like a movement borne from the genuine will of concerned citizens.
Intuit spokeswoman Julie Miller would not comment on the allegations of astroturfing, but she explained to ProPublica that;
“Like many other companies, Intuit actively participates in the political process.” Return-free programs, Miller argued “curtail citizen participation in the tax process” and also potentially have “implications for accuracy and fairness in taxation.”
Maybe. More likely it’s their bottom line they’re looking out for, not the American people.
If you’re tired of paying taxes to a government that doesn’t represent you, Huffington Post published a great article today. Citizens from around the country are taking a stand against this kind of political corruption this tax day.