Taxes are, as Oliver Wendell Holmes once said, the price we pay for a civilized society. Fine. We need roads and schools and firefighters and a naval fleet. However, even if taxes are an unpleasant necessity, there can be no justification for the U.S. tax code’s stupidity.
Our tax system is needlessly complex, burdensome, inequitable, and inefficient. It should be reasonably plausible for the average American to do his or her own taxes without professional assistance. It's not. Instead, we spend an estimated $2 billion and 225 million hours in prep costs and time.
Truthfully, unless you have complex investments or something, you shouldn't even have to do your own taxes. In several European countries, the government completes tax forms for most citizens. Adopting voluntary “return-free filing” is an idea that makes so much sense that it was once endorsed by Ronald Reagan and is supported by Barack Obama.
Taxes represent a bill to be paid for public functions. The supermarket doesn’t expect me to calculate the cost of my own groceries, and threaten to arrest me for shoplifting if I do it incorrectly. Why should our bill for the cost of government be any different?
Urban-Brookings Tax Policy Center’s William Gale told ProPublica earlier this year that return-free filing is “doable, feasible, implementable, and at a relatively low cost.”
Given that the average American spends $246 annually on tax preparation, according to the Wall Street Journal, why isn’t Congress behind a reform that saves people money and reduces the stress that comes with doing your taxes?
Because Intuit, which makes TurboTax, and the rest of the tax preparation industry don’t want you messing with their honey pot.
Pro Publica: Intuit has spent about $11.5 million on federal lobbying in the past five years — more than Apple or Amazon. Although the lobbying spans a range of issues, Intuit's disclosures pointedly note that the company "opposes IRS government tax preparation."The disclosures show that Intuit as recently as 2011 lobbied on two bills, both of which died, that would have allowed many taxpayers to file pre-filled returns for free. The company also lobbied on bills in 2007 and 2011 that would have barred the Treasury Department, which includes the IRS, from initiating return-free filing.Intuit argues that allowing the IRS to act as a tax preparer could result in taxpayers paying more money. It is also a member of the Computer & Communications Industry Association (CCIA), which sponsors a "STOP IRS TAKEOVER" campaign and a website calling return-free filing a "massive expansion of the U.S. government through a big government program."
Good Lord, can you imagine anything worse than a government takeover of taxation? Back when this was a free country, taxes were the exclusive domain of the private sector. Oh, wait…
For all their anti-government rhetoric, companies like Intuit are in business basically to do business with the government, albeit indirectly. When they lobby government to ensure you need their services, they’re essentially lobbying for a tax paid to a private cartel.
But a reform like return-free filing, as basic and obvious at it seems, will take serious political will. Between the $11.5 million in lobbying and, according to the Department of Labor, the more than 60,000 people working in the tax preparation industry, opposition to reform is fierce. Can you imagine the caterwauling from America’s beloved bean counters if they risked becoming as obsolete as typewriter repairmen?
Well, I for one, say destroy all their jobs without delay or mercy. The guy who writes TurboTax code, fired. The H&R Block accountant, fired. The schlub in a costume waving signs at passing motorists, fired. Put them all in the unemployment line. Treat the tax preparation-industrial complex like it was Carthage. Destroy it, and then salt its fields.
Taxes exist to fund necessary government functions, not to prop up an otherwise pointless industry.
Besides, it’s not like the money most Americans spend on tax preparation would disappear. We’d find a way to spend that extra $250 in our pockets on stuff we might actually need or want—car repairs, a home improvement, new clothes, a Kindle Fire, Tiger tickets, whatever.
Put $246 in a CD every year for 18 years and a child born today graduates high school with an extra $5500 (give/take) to put toward college.
The point is, the money you're wasting on tax preparation could be and should be spent on something more useful. The government can do your taxes for you. But first, we just need to tell an artificial industry to go suck an egg.
