In 2005, the agency that collects state income tax in California began a pilot programme called ReadyReturn (later called CalFile), a voluntary, ‘simple, easy-to-use service that offers free, direct to government e-filing’, similar to the British system. It saved the people who used it money and time, and was projected to save the state half a million dollars a year in administrative costs, since its tax officers wouldn’t have to spend months correcting the mistakes that people make when they do their taxes themselves. The programme was so popular that both Republicans and Democrats wanted to take the credit for it. What could go wrong?
Enter Intuit, the Silicon Valley software company that owns TurboTax (until last year we used it ourselves; no one can exaggerate its complexity). During the 2006 race for state controller, who oversees tax collection, Intuit funnelled a million dollars to the candidate who said he opposed ReadyReturn because it would hurt ‘private enterprise’ – that is, Intuit. The company also gave more than a million dollars in campaign contributions to the state’s legislators, who promptly killed off ReadyReturn. The state government had to change before the tax board could bring the programme back. More than a million Californians now use it. So why not expand it to the rest of the country?
According to the Sunlight Foundation, commercial tax preparers have spent more than $28 million lobbying Congress to oppose any changes that might cut into their business. So far they’ve prevailed because the people who would benefit most from having easier tax forms can’t afford to do their own lobbying.
I don’t know how long it has taken us every year to gather tax information together, but once we have started entering up Turbo Tax it has taken an intense 8 hours. After twenty years of this I still couldn’t do it accurately without my wife. The ridiculous thing is that the IRS knows everything about us, otherwise why, at the end of the process do they accept the return and say it is correct?
Thus is the time and patience of the many subordinated to the greed of the few. What would Epicurus do about it? I think he would say,”I don’t have time for this. My ataraxia is too important. Tell me what I owe and I will send it on the back of an ass.”
This is one (of only a few) issues I agree with Republicans on. Taxes are far too complex. I’m not sure about the details, but Carly Fiorina’s three-page tax seems extremely appealing. There is no case for making taxes to be any more complex than they need to be. It costs both businesses and the government money. It also reduces tax revenues through all the loopholes that complex tax codes create.