Thursday, April 11, 2019

Note to all the Howard Schultz types out there

Sometimes bipartisan legislative ideas can be despicable. A case in point is the provision in the Taxpayer First Act that, as ProPublica explains here, would "make it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system. If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry's profits."

It's true that the IRS is still, to say the least, not very computer-savvy. (But this is largely Congress's fault for underfunding it, whatever internal institutional issues may have contributed negatively as well.)  But it's not true that a well-designed program would, e.g., undermine taxpayer confidentiality. The idea would be to create pre-populated tax returns based on information that the IRS already has, and that taxpayers could modify as needed.

And if the companies believe that taxpayers have good reason to pay for an independent service, rather than using a free pre-populated return from the IRS, let them do what businesses that have a worthwhile product usually do: that is, offer to sell it. Suppressing a free alternative that the nation's taxpayers have already effectively paid for amounts to making them pay for the same thing twice: first as taxpayers, and then again as Intuit customers.