In the most technologically advanced countries, filing a tax return is free, easy and fast: Instead of taxpayers painstakingly calculating figures themselves, the government provides estimates of what they owe based on the very bank records and wages it already collects. Intuit, maker of the popular tax preparation software, TurboTax, has funnelled millions to oppose every effort to make tax day less painful.
Intuit has spent $11.5 million lobbying the federal government — more than Apple or Amazon. Former California Senator, Tom Campbell, who felt Intuit’s power during his proposal for an easy-file system in California, wrote that he “never saw as clear a case of lobbying power putting private interests first over public benefit.”
Intuit’s long and expensive campaigns over the years have argued that IRS-based service is a “massive expansion of the U.S. government through a big government program.” Intuit’s efforts have made friends from the most tech-savvy members of Congress, including Republican House Majority Leader Eric Cantor (CrunchGov Grade: A) and Rep. Zoe Lofgren (CrunchGov Grade: A).
“Government should avoid impeding innovation in the private sector because commercial innovation almost entirely occurs in the private sector,” wrote former Lofgren to her colleagues in 2005. “Duplication of private sector innovation by the government may seem to have short term advantages, but the long term benefit of nurturing innovation in the private sector is usually lost.” (Publica, which filed the investigative report, stated that Lofgren declined to comment for the story, but her office quickly responded to us with this letter.) Examples of such innovations from TurboxTax would include live Q&A with tax professionals and automated tax deduction-finding features.
Still, some tech-savvy policymakers are convinced a government system wouldn’t stop innovation. “It’s voluntary,” argues Obama’s former chief economist, Austan Goolsbee, who authored a lengthy report on how return-free filing could save taxpayers billions. “If you don’t trust the government, you don’t have to do it.” [PDF]
Moreover, Senator Ron Wyden (CrunchGov Grade: A) introduced a bi-partisan tax-reform bill in 2011 with a return-free file plan. Wyden and Lofgren rarely stand in opposition on tech issues, which makes opposition to an IRS system curious.
One day, Americans may be as advanced as Estonia, Denmark and Sweden. Until then, try not to procrastinate doing your taxes — it’s a long and complicated process.
[Image Credit: Zazzle.com]