Intuit Continues To Make Sure Filing Taxes Is Complicated
from the getting-intuit dept
Three years back, Mike wrote a piece about how Intuit, maker of TurboTax software, was actively lobbying against a system that would allow for a simple, quick way of filing income taxes (a way that might possibly mean fewer people need to buy TurboTax). Basically, the government could give you pre-filled out forms with all the info it received from your employer and you could just review it, click okay, and be done with your taxes. Intuit's explanation for fighting this ranged from lying by saying taxpayers already had access to that functionality (they don't) and misleading when they said it was a conflict of interest for the government to be the tax preparer and collector (the government wouldn't be doing any actual preparation). Now, as we approach the income tax deadline in the United States, Intuit has changed its tune. That doesn't mean they've stopped lobbying against this system, which has been backed by presidents from Reagan to Obama. Rather, their excuses have simply changed to be at once even more misleading and simultaneously more honest.
Let's take the first excuse, for instance.
Intuit argues it might cost some taxpayers more money.Well, thank science that we have disinterested parties like Intuit looking out for our tax-paying well-being. The system would cost more money? Obviously the government is trying to force more taxes out of hard-working 'Mericans! That would be the conclusion you could reach if the proposed return-free filing program wasn't entirely optional. Instead, Intuit comes off as merely wishing to keep choices away from Americans. As for their second reason:
Such changes would hurt its business.Boom, honesty. Requesting tax-paying options not be given to American citizens because it would hurt a company's bottom line is an interesting argument to make. By interesting, of course, I mean laughably silly. What's not silly is that for the past five years, the $11.5 million Intuit has paid in lobbying efforts has resulted in the selling out of the American taxpayer. Reports suggest that enabling a return-free system would save taxpayers up to $2 billion (with a "b") and over two hundred million hours in preparation time.
But, hey, that apparently won't stop the company and a couple of key allies from fanning the flames of anti-government conservatives to make sure it rakes in billions (also with a "b"). Intuit has decried the simple filing solution to be "big government", despite the conservative argument generally looking to make the tax system more simple. Backing them, unbelievably, is tax activist Grover Norquist.
Can someone please tell me why the hell Grover is fighting simpler taxes?
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Filed Under: lobbying, paying taxes, taxes
Companies: intuit
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Simple, because he doesn't care for conservative ideology, he is just saying what will make him the most money.
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Provided you drop the word conservative from that line, I am willing to say that is like most hard core republicans and democrats. Very ideological, until a dollar is involved.
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Mini-rant
The problem of conservatism is the fact that they argue against all forms of government spending fiscally (and they've yet to balance a budget since Ike) and suppress people that would vote against them.
The problem of liberalism, as evidenced by Obama, is that they go right with the status quo and continue in a rightward direction until the public speaks out and shows how extreme their position has gotten. I personally believe that Obama is making the same mistakes as FDR and may not do much to help reform the republic we've lost.
The point here is that we should understand the politics of someone's position and where their incentives lies. Obama's relies on just doing what the very rich corporations want him to do. Same with conservatives in the Republican or Democratic party. If you want to force a change in our society, it isn't going to be done by voting these people out of office. It's going to be done by getting to the root causes of such extreme positions, namely money in politics, gerrymandered districts, and people losing their votes with inane drug laws.
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Simpler taxes would be less onerous to file. He's worried that if people hate filing less, they might hate paying taxes less.
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Just like Intuit, he's arguing against simpler taxes for his on self-interest. The only reason anyone pays attention to him is because people hate taxes. If taxes became much simpler and easier, people would have less of a reason to hate them, and less reason to listen to Norquist.
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And TurboTax is something I won't ever go near.
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ANY change to the tax system that raises taxes by even 1 penny on a single American = UNACCEPTABLE DOOM TO AMERICA'S ECONOMY in Norquist's eyes, even if it cuts taxes to $0 for everyone else in America.
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ftfy
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I like the game.
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Heightening the contradictions?
In the interests of full disclosure, I should note that the Computer & Communications Industry Association, which has paid Techdirt's Mike Masnick for some work and also hosts the Disruptive Competition Project blog I write for, has also backed Intuit. I agree with CCIA on other issues, but I have no idea where they're coming from on this one.
- RP
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Re: Heightening the contradictions?
I do that right now, and have for years. Because the tax system is, simply, insane. It takes a lot of time and/or money, and increases risk of an audit, to minimize your taxes. In my personal cost/benefit calculation, it's cheaper to simply overpay my taxes.
Plus, I don't have to give a dime to companies like Intuit. I'd rather the government use that money anyway.
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Perhaps the US tax office could look into that?
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It works almost exactly the same way in Scandinavia, but a very good system, it is not.
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Slimy, but tax simplification is not good
Meaningful tax reform is not simplification or changing from one type of tax to another. It is simply drastically lowering tax rates of whatever type of tax system is in place. And that is why the state does not propose this--it would lower their take--and instead keeps mooting cosmetic changes to keep the tax-sheeple docile. It's like the stupid marriage tax penalty. They've been promising for decades to get rid of it. Meanwhile, people keep paying it.
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Re: Slimy, but tax simplification is not good
Really? I attach a value to money outlaid for things like tax prep and software. I also attach value to hours spent self-prepping taxes. It seems that, unless the fear is that somehow the government info used to simplify the filing process is going to be manipulated by the government, streamlining the tax FILING process poses no threat to anyone.
"Meaningful tax reform is not simplification or changing from one type of tax to another."
Agreed, and I never argued otherwise.
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Re: Re: Slimy, but tax simplification is not good
As simpler system is harder to abuse. A simpler system could also reduce the size and power of the relevant government agency.
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Re: Re: Re: Slimy, but tax simplification is not good
Also, a complicated system facilitates hiding loopholes, and allows those with more financial/legal resources to better game the system.
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Re: Re: Re: Re: Slimy, but tax simplification is not good
Agreed.
I've always thought a flat 15% (or whatever is optimal) across the board income tax would be a good idea.
The 1040 could be as easy as this:
Line 1: Enter amount earned in 2012:____
Line 2: Taxes owed (Line 1 x 0.15):____
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Re: Re: Re: Re: Slimy, but tax simplification is not good
I of course agree with other comments--that reducing the burden, ceteris paribus, is good. But the primary burden of taxes is not the complexity or record keeping: it's the amount. Focusing on "simplification" is giving in to their distraction.
Consider: suppose you are paying on average 33% taxes now, after all the bullshit. You have a choice: you can just pay 45% of gross income on a postcard. No records, no nothing. Simple! What would you choose? HELLOOOOO
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Re: Re: Re: Re: Re: Slimy, but tax simplification is not good
Loopholes, for the most part, aren't good, because they reward some people and penalize others. People and companies end up making decisions based on tax loopholes. And people and companies with better accountants and better lawyers end up getting breaks that others don't get to take.
Tax loopholes reward some industries and penalize other industries, and that tends to reinforce the economic status quo.
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G.E.�s Strategies Let It Avoid Taxes Altogether: "Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.�s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world�s best tax law firm. Indeed, the company�s slogan 'Imagination at Work' fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress."
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Re: Re: Re: Slimy, but tax simplification is not good
Yes, and that is a bug not a feature. It's good that people are able to game the system, "abuse" it, evade or avoid taxes. If making it simpler makes it harder to evade, that is hardly an arguemnt in favor of simplification.
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Re: Slimy, but tax simplification is not good
The fact that that they are complicated IS a problem. Far too much time is wasted on the paperwork involved in keeping track of what needs to keep track of. Simplify the tax system and you'll save people a lot of time, and for most of them time is money.
Think of all the accounting that goes on in relation to taxes. Streamline that and you may end up putting a lot of accountants out of work, but that would be an improvement for most people and companies.
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Re: Re: Slimy, but tax simplification is not good
Simplification would mean less waste. What does tax prep business add to the US economy? Yes there are jobs, etc, but in the end they create nothing (hence simplification is a threat) and leech money from those who do add to the economy.
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Re: Slimy, but tax simplification is not good
Are you familiar with oppurtunity costs? The simplest reason for being in favor of simplification of taxes is for the amount of time wasted on them that could be better spent doing something else more productive. The resources in time, money, and frustration spent by individuals and companies just paying their taxes is enormous.
It is that they are high.
That statement is incorrect. Taxes are near historical lows, both in rates and actual taxes paid.
https://en.wikipedia.org/wiki/File:Historical_Mariginal_Tax_Rate_for_Highest_and_Lowest_Inc ome_Earners.jpg
https://en.wikipedia.org/wiki/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg
https://en.wikipedia.org/wiki/File:US_high-income_effective_tax_rates.png
https://en.wikipedia.or g/wiki/File:Estate_Tax_Returns_as_a_Percentage_of_Adult_Deaths,_1982_-_2010.gif
And compared to other developed countries, the US has very low taxes.
https://en.wikipedia.org/wiki/File:Tax_Revenue_as_Share_of_GDP_for_OECD_Countries_in_2009. jpg
https://en.wikipedia.org/wiki/File:Tax-Revenues-As-GDP-Percentage-(75-05).JPG
Everything above is from Wikipedia, but there are plenty of other sources for the data if you care to look.
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Re: Re: Slimy, but tax simplification is not good
This one looks at highest and lowest earners.
https://en.wikipedia.org/wiki/File:Historical_Mariginal_Tax_Rate_for_Highest_and_Lowest_Inc ome_Earners.jpg
Corporate Taxes
https://en.wikipedia.org/wiki/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg
High income people, again
https://en.wikipedia.org/wiki/File:US_high-income_effective_tax_rates.png
This is the rate of returns, but says nothing of the actual tax rates.
https://en.wikipedia.or g/wiki/File:Estate_Tax_Returns_as_a_Percentage_of_Adult_Deaths,_1982_-_2010.gif
So you are talking about lower tax rates of a minority of the taxpayers in the country.
I am not saying your statement is untrue - I don't know the fact myself. But these links don't back you up.
Also, comparing us to the "rest of the world" is not the argument. This does not apply.
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Re: Re: Re: Slimy, but tax simplification is not good
The claim was made that taxes were high. I showed historical rates that show they're not. While not explicitly stated, taxes for the middle earners track the rates for the highest and lowest in a similar manner. In addition to individual tax rates, the corporate rate is also historically low, again more evidence that tax rates are not high. And yes, the tax rates as compared to other countries is important in showing that taxes are not high.
If your opinion is that taxes are "too high" then that is your opinion. But the fact is that taxes are at some of the lowest points that they have been throughout the recent history of this country. I'm not making any value judgements on whether this is good or bad, just pointing out the facts.
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Re: Re: Re: Re: Slimy, but tax simplification is not good
The big problem in this country is that people get stirred up about taxes, but no one wants to talk about the alternatives. If you want to cut taxes, you either cut the budget or you generate more debt.
If you cut the budget, the economy changes, no matter what you cut. Imagine, if you will, what would happen if the government decided to suddenly eliminate taxes and also to end all government jobs, all government contracts, and all government transfer payments. The economy would collapse.
Now, from an environmental point of view, that's not necessarily a bad thing. If there is no money, there is no consumption. People forced to live within their means would be cutting back on everything, and maybe growing food in their backyards again (assuming they still had houses with backyards).
I tend to distrust the tax cutters because I believe once they got in control, they actually wouldn't cut taxes. They would just funnel money into the industries they wanted to support. And no one is willing to take the drastic cuts that would likely plunge the country into an economic crash. We already know that giving companies more money doesn't mean they increase capital investment or hire more people. They already have lots of money and aren't doing that. If there aren't customers, they sit on their cash. And if government spending ended, enough people would feel the effects that they wouldn't spend.
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As for the comment that no one wants to cut spending--nonsense. We libertarians do.
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Re: Re: Re: Re: Re: Slimy, but tax simplification is not good
No one who hopes to be elected. If you tell people what will disappear when government spending ends, they won't elect you. Ending all government spending, especially suddenly, would throw the economy in turmoil. That sort of tough love might actually be best for the long-term survival of the planet, but most people wouldn't go for it.
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About Post Growth | Post Growth Institute: "For the last few decades the world economy has focused incessantly on growth: growth in national production, growth in profits, growth in a dizzying array of consumer items, growth in financial markets, growth in population. Across political parties and ideologies (capitalism, socialism, communism) many have come to accept the story that 'all economic growth is good'. This growth orientation has led to massive changes in terms of the relationship between humans and the earth and our relationships with each other. The growth story tells us that these changes are good, and that this is the way we will, and must, continue into the future.
"Yet, other perspectives are emerging. "
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Re: Re: Re: Re: Re: Re: Slimy, but tax simplification is not good
Eliminating all government jobs, contracts, and transfer payments suddenly would crash the US economy and probably the world economy. I'm not advocating that (I believe good government is possible and desirable).
However, if that were to happen, there could be a sustainability benefit. Here's a website to ponder. (Hopefully my previous messages with the active link to this site will work.)
Post Growth Institute
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If you eliminate taxes, you eliminate much of government. Like I said, eliminate all government contracts, government jobs, and government transfer payments and see what the economy does. I can live with the result because I'd like to see global consumption go down to make for a more sustainable planet, but a lot of other people can't live with the immediate results.
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Re: Re: Re: Re: Re: Re: Re: Re: Slimy, but tax simplification is not good
But politicians won't because there are lobbies for every single tax loop. We've known the tax system needs to be fixed for decades, but we don't elect people who will do it. The politicians say what they need to say to get elected, and then in office they work for whatever corporate interests that fund their re-election campaigns.
I would love to see tax reform, but it isn't going to happen until we change campaign finance laws and until we have voters willing to accept change.
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Re: Slimy, but tax simplification is not good
I disagree. First, I disagree that taxes are too high. But even if I did think that we're overtaxed, I'd still think the fundamental problem is that the tax system is way, way too complicated.
For any but the simplest cases, you pretty much have to hire an expert to figure your taxes. That's nuts. It should be possible to do your own taxes unless you have something really unusual going on.
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Other countries
I believe other countries' governments also publish their own tax filing software. The USA seems to be an anomaly.
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Re: Other countries
I've yet to encounter a form that I COULDN'T download from the IRS' own website. Then again, mine aren't that complicated.
Even if mine was complicated Intuit would be the last outfit I would turn to. I'd rather pay a local CPA than Intuit.
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Re: Other countries
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Re: Other countries
Even before the form was pre-filled, it was a simple case of copying over the numbers from your employer's year-end declaration to the (single-page) tax form and then submitting it. Note that I didn't own any property, and as a foreigner I didn't have the mandatory retirement fund or other complications, but I don't think it gets much more complicated.
I think Singapore follows the ideology of making tax as simple as possible, so NOT paying tax is harder than paying it. The first year I accrued a tax debt in Singapore, I was being lazy to actually pay it, and I got a letter from the tax department. It basically ran along the lines of "We notice you haven't paid your tax yet, and technically we could fine you for it. But tell you what, pay us by the end of the month and we'll call it square". I paid, they got their tax, I wasn't fined... everyone was happy!
-T
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It never ceases to amaze me that people who hate taxes, because government is a waste, love the same thing if it's by a business.
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Explanation: Grover Norquist is an ignorant asshole
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One possible explaination
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I'm just glad it's Grover, not SuperGrover.
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Count me as an ex-TurboTax user
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Re: Count me as an ex-TurboTax user
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Re: Count me as an ex-TurboTax user
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I got a wife and 2 kids and make a combined household income of 32K.
The block lady says that will be $149.95 but you qualify for earned income credit so if you take our EIC prepayment we will give you a check right now and all you need to do is sign here.
So the schmuck walks out with a check and the block makes over $300 from the schmuck.
This is the thing that the tax prep companies are fighting to keep.
I'm all for the governments idea here, shit did I just say that, damn.
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That's pretty much how I did my state taxes. I got a letter in the mail with my CSN Number, went to the state franchise tax site, reviewed my info (that was automatically filled out from the info my employer provided) and clicked 3 buttons to file my taxes. Then I just filled out my bank info for the refund. Took all of 5 mins to do my state taxes...The Federal return was a different story...
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Democracy
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Are we going to be boing boing soon by taking various jabs at people not on the liberal love list?
That is about as annoying as what I call "in words", examples include "job creators", or "copyright maximalists". I try an ignore the maximalist comments on tech dirt, but I always view things like "science be praised" as an people knocking the beliefs of others. I just think it is childish and short sighted and I have always thought this site was mostly above such things. Not offended, not upset, just mentioning.
Other than that, I will have to say the comments that mentioned Grover Norquist would become a non-issue if taxes were less infuriating are spot on. I do wonder though, if (big IF) is intentions were pure (yeah), would the ends justify the means? I don't know anything about the guy, I seriously doubt he has my best interests in mind, but I wonder what I would do in his shoes if tax reform was important to me. I guess, I hope, it would not be backing Intuit. Bunch of jackasses. ;)
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That is about as annoying as what I call "in words", examples include "job creators", or "copyright maximalists". I try an ignore the maximalist comments on tech dirt, but I always view things like "science be praised" as an people knocking the beliefs of others. I just think it is childish and short sighted and I have always thought this site was mostly above such things. Not offended, not upset, just mentioning."
Perhaps if I explain why I specifically chose that phrase, you'll think differently of it. Religions vary among people. Some are one, some are another, some have none at all. Science, on the other hand, is universal. Therefore, I was specifically trying NOT to call out anyone's beliefs by going w/a phrase that is universal instead.
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Nice reporting... Would you mind telling us which key allies and anti-government conservatives you are referring to?
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Norquist's motive?
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Nice Hatchet Job on Grover Norquist
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Re: Nice Hatchet Job on Grover Norquist
Basically people are saying here is one way to simplify things. And yet we have companies and politicians trying to get in the way of that. It does strike people as yet another example of a big company using its money to protect its turf.
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