Wednesday, November 20, 2019

Tax policy colloquium, week 12: Intuit, Ready Return, and Free File

Yesterday at the colloquium, our pen-penultimate session (if the word is permissible) featured Joe Bankman's "Mr. Smith Gets an Education: Why It is So Hard to Get Easy Tax Filing."

The link above starts with Justin Elliott and Paul Kiel's important ProPublica article, "Inside TurboTax's 20-Year Fight to Stop Americans From Filing Their Taxes for Free," an article that actually changed political outcomes on the ground. By exposing Intuit's deceptive marketing practices, involving steering poor people who thought they were getting free filing to end up paying the company $$ that they might ill be able to afford, the article stopped in its tracks a disgraceful scheme to have Congress permanently take the IRS out of the business of itself making free filing available to people. Intuit had organized a so-called Free File Alliance that signed an agreement with the IRS, purporting to offer free filing if the IRS would stay out of the area, but then did its best to make it extremely inconvenient and difficult to use the service they were purporting to offer.

Bankman's article, which is part of a larger, possible book project, details his experience in the 2006-2007 period attempting to help California state taxpayers by working on the development of Ready Return, a state-run online free file system (just for state income tax returns) that won rapturous customer reviews when it was rolled out as a pilot project, but then got crushed in the state political process by an unholy alliance between Intuit, which generously threw around both money and bogus arguments, and Grover Norquist, who wants to make people's government interactions hateful so that they will hate government.

The story that the article tells is great fun to read, and eye-opening even for the already cynical regarding how lobbyists and money shape political outcomes in an inevitably low-information environment. It illustrates, for example, how legislative deliberation can be thoroughly corrupt and corrupted even if most of the individuals involved think of themselves as honorable, and indeed are following their incentives without getting anywhere close to legally defined corruption. And while the piece wasn't published back then, Intuit's rise back into political prominence, as its practices get exposed, makes it timely, while raising interesting issues about how best to relate the "then" story to the "now" story.

Here are just a few quick thoughts on selected aspects of the issues involved:

1) Rogue company? - Simply because the piece recounts what happened back in the day, albeit with a bemused rather than angry tone, one can't easily read it without seeing Intuit as a villain. It causes one to wonder, perhaps naively, if there are distinctively rogue companies out there, based either on company cultures or their business models, or whether it is instead just Capitalism Plus Low-Information Democracy 101. For another example of what appears to be a rogue company, consider Facebook, which, even leaving aside their conning users and happily undermining American democratic institutions, lied to advertisers in a way that it seems should have landed people in jail. Or think of tobacco companies knowingly lying for decades about the medical implications for smoking. Or certain energy companies actively combating global efforts to address global warming.

Intuit is a for-profit business, and their business model involves selling tax filing and other related services to customers for money. So encouraging lots of people to use their platform for free is going to raise issues for them - although note that this is a role they volunteered to play in order to head off competition. But their tactics and behavior make me for one very glad that I don't use their services any more.

2) Is Free File a feasible approach? - Why would the use of for-profit businesses be the right model for making sure that at least poor individuals can file for free? There's an inherent conflict of interest here.

The conflict becomes less ineluctable insofar as for-profit businesses are seeking either good publicity (halo effects) or a marketing opportunity directed at the currently low-income who may in the future become good candidates to voluntarily buy paid services. But the sad story Pro Publica has uncovered suggests that the model is not feasible, at least given the current actors, unless there is a whole lot more sophisticated and assertive oversight by an IRS that would have to be less beaten down and underfunded than the current version.

3) Possible federal lessons of Ready Return - The California program involved people with very simple filing situations (e.g., no investment income) being able to access a pre-populated tax return, check it out, and then file it with the click of a button. Given all the anxiety and confusion that surround tax filing, it drew wildly enthusiastic responses from users. But a lot of the opposition to it has focused on having the government compute the bottom line tax liability, which raises concerns about trust.

The greater part of what the government could readily do (at least, once the IRS was brought up to speed, which I think an Administration that cared about governance would be able to do unilaterally) pertains to the information it has, not computations as such. For example, while I wouldn't fit within typically discussed Free File boundaries, in a particular year nearly everything that needs to be inputted to my tax return, with the exception of charitable gifts, is memorialized by a W-2 or a 1099 that was sent to the IRS, as well as to me. Simply having pre-populated entries for all those things, which I could then review and supplement as needed, would save me a whole lot of effort, money, anxiety, and I'd greatly appreciate it. It makes me angry that people whose motivations I consider dishonorable (and I don't just mean Intuit here) are keeping this huge benefit out of my reach.

6 comments:

  1. Permit me to introduce you to LE-MERIDIAN FUNDING SERVICES. We are
    directly into personal loan and pure loan and project(s) financing in terms of
    investment.

    We provide financing solutions to private/companies/individual seeking access to
    funds in the capital markets i.e. oil and gas, real estate, renewable
    energy, Pharmaceuticals, Health Care, transportation, construction,
    hotels and etc.

    We can finance up to the amount $10,000 to $1,000,000. ( One
    Million Dollars) in any region of the world as long as our 1.9% ROI
    can be guaranteed on the projects.Interested individual / companies
    should reply with the following details below to lemeridianfund@gmail.com

    Full Name:
    Employment status:
    Amount of Loan requested:
    Age:
    Country:

    For further information how you can secure your loan.

    Best Regard,Le-Meridian Funding Service.
    Address:60 Piccadilly, Mayfair, London W1J 0BH, UK)
    Website:www.lemeridianfds.com

    ReplyDelete
  2. Hello everyone, Are you into trading or just wish to give it a try, please becareful on the platform you choose to invest on and the manager you choose to manage your account because that’s where failure starts from be wise. After reading so much comment i had to give trading tips a try, I have to come to the conclusion that binary options pays massively but the masses has refused to show us the right way to earn That’s why I have to give trading tips the accolades because they have been so helpful to traders . For a free masterclass strategy kindly contact (paytondyian699@gmail.com) for a free masterclass strategy. He'll give you a free tutors on how you can earn and recover your losses in trading for free..

    ReplyDelete
  3. Am Laura Mildred by name, i was diagnosed with Herpes 4 years ago i lived in pain with the knowledge that i wasn't going to ever be well again i contacted so many herbal doctors on this issue and wasted a large sum of money but my condition never got better i was determined to get my life back so one day i saw Mr. Morrison Hansen post on how Dr. Emu saved him from Herpes with herbal medicine i contacted Dr. Emu on his Email: Emutemple@gmail.com we spoke on the issue i told him all that i went through and he told me not to worry that everything will be fine again so he prepared the medicine and send it to me and told me how to use it, after 14 days of usage I went to see the doctor for test,then the result was negative, am the happiest woman on earth now thanks to Dr. Emu God bless you. Email him at: Emutemple@gmail.com Whats-app or Call him: +2347012841542

    ReplyDelete
  4. CONTACT 24/7
    Telegram > @leadsupplier
    ICQ > 752822040
    Email > leads.sellers1212@gmail.com

    We are Selling SSN Dob Leads/Fullz/Pros, along with Driving License/ID Number For Tax return & W-2 Form filling, etc.

    **PRICE**
    >>1$ each without DL/ID number
    >>2$ each with DL
    >>5$ each for premium (also included relative info)

    **DETAILS IN LEADs/FULLZ/PROS**

    ->FULL NAME
    ->SSN
    ->DATE OF BIRTH
    ->DRIVING LICENSE NUMBER WITH EXPIRY DATE
    ->COMPLETE ADDRESS
    ->PHONE NUMBER, EMAIL, I.P ADDRESS
    ->EMPLOYMENT DETAILS
    ->REALTIONSHIP DETAILS
    ->MORTGAGE INFO
    ->BANK ACCOUNT DETAILS

    >All Leads are Spammed & Verified.
    >Fresh spammed data of USA Credit Bureau
    >Good credit Scores, 700 minimum scores
    >Bulk order will be preferable
    >Invalid info found, will be replaced.
    >Payment mode BTC, ETH, LTC, PayPal, USDT & PERFECT MONEY

    ''OTHER GADGETS PROVIDING''

    >SSN+DOB Fullz
    >CC with CVV
    >Dead Fullz
    >Carding Tutorials
    >Hacking Tutorials
    >SMTP Linux Root
    >DUMPS with pins track 1 and 2
    >Sock Tools
    >Server I.P's
    >HQ Emails with passwords

    **Contact 24/7**

    Email > leads.sellers1212@gmail.com
    Telegram > @leadsupplier
    ICQ > 752822040

    ReplyDelete
  5. Investing online has been a main source of income,that's why knowledge plays a very important role in humanity,you don't need to over work yourself for money.All you need is the right information,and you could build your own wealth from the comfort of your home!Binary trading is dependent on timely signals,assets or controlled strategies which when mastered increases chance of winning up to 90%-100% with trading. It’s possible to earn $10,000 to $20,000 trading weekly-monthly,just file a complaint with  Robert,I had almost given up on everything about binary trading and ever getting my lost funds back,till i met with him,with his help now i have my lost funds back to my bank account and I can now trade successfully with his profitable strategies and software!! Email: Robertseaman939@gmail.com or  whatsApp: +44 7466 770724

    ReplyDelete
  6. Amazing trading platform, quick withdrawal I have been using this platform together with the most recommended forex strategy on the internet from Robert and so far i have no complaints making $7000-$15000 on a weekly basis he is great and i am thankful i was lucky enough to have met him via Email Robertseaman939@gmail.com or
    WhatsApp: +44 7466 770724

    ReplyDelete