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H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017)
- cfitz 9y agoAm I disappointed? Yes. Am I surprised? Absolutely not. They truly fear for the safety of their industry, which is responsible for ~$7.5B in revenue between the two (per annum).
- jonny_eh 9y agoWould it make sense for the government contract out the pre-filled tax returns to these companies?
- kenning 9y agoReminds me of the similar article posted recently, '“Is curing patients a sustainable business model?” Goldman Sachs analysts ask.' Or net neutrality. Regulatory capture is out of control in at least a dozen american industries i know of. I've read a thread like this before, prepare for lots of people from countries that aren't the US explaining that their taxes are way simpler.
- flexie 9y agoLobbying is a way for the rich to legally shortcircuit democracy. It’s legal corruption and as bad for democracy as the illegal counterpart. In Denmark we have had prefilled tax forms for I don’t know how many years. More than two decades. Nowadays its online. You log on and see your taxes and edit when necessary. It’s still unnecessarily complicated if you are not an employee, but for the 90 percent who receive salary as their only income and only have ordinary deductions it’s somewhat bareable although it can be hard to check if the tax authorities calculated the tax correctly.
- Karishma1234 9y agoLobbying is an excellent way for small groups to be heard in political corridors. Lobbying happens in any large democracy and when it is illegal it often happens through backdoors creating a chain of unimaginable corruption. It is much better for Intuit and HR Block to openly lobby for complex tax code rather than paying bribes through backdoor. Secondly, why are people re-electing the politicians who suck up to Intuit then ? It is because people do not care as much.
- on_and_off 9y agoYou don't explain why it is supposedly better than the alternative.
- dragonwriter 9y ago> Lobbying is an excellent way for small groups to be heard in political corridors. “Lobbying” is literally any effort a person or group makes to influence a government decision-maker.
- Karishma1234 9y agoSo ? Are you saying people or group should not be allowed to influence government decision making ? Do you want your government to do X ? X => Ban Guns/Allow people to bear arms X => Make abortions simple/Ban abortions totally X => Enforce net neutrality/ Let markets handle it Every person will always have a stand on this issue and will try all in his power to influence the government. Would you rather want it to be legal and open or underground black market is the question.
- simion314 9y ago>Secondly, why are people re-electing the politicians who suck up to Intuit then ? In US you have less choices AFAIK, just seen yesterday that one party owns a big TV network and some HNer commented that the other party should also buy a similar big network, there is no consideration that maybe there should me more then 2 choices, from what I see from outside US is that it is impossible to have a 3rd or 4rd option so you have to chose between 2 bad options each cycle. If I am wrong please correct me, again this is how the things appear from us outside US (I never heard of a 3rd party or 3rd president candidate with a real chance)
- humanrebar 9y agoIn the U.S., the major parties compete with each other. Over the decades, what they actually do varies a lot. As one party has success generally or on particular issues, the other party will adjust to attract voters. Positions held by (relatively) successful third parties are quickly absorbed to some degree by one major party or both. The net result is a weird mishmash of positions on either side of the aisle that no individual would actually choose. It also means disproportionate benefits for things that intensely benefit small portions of the population with mild downsides for the rest. Despite all the concern, the national legislature has been fairly evenly divided over the last 25 years or so, giving control back and forth. This is even more true of the presidency. It's exceptional that a party will hold the presidency for more than two terms of office. All that being said, I do think there could be some national consensus about things with little more explicit horse-trading. I could see a carbon tax passing, for instance, if it were attached to a bill requiring a balanced budget. But no major party could propose something like that without angering its base.
- on_and_off 9y agoFrance, same. I have moved to the US very recently. I have actually filled my 2017 French revenue form today. It took me 10 minutes and that's because I had to find how much I had paid home cleaning services (home employment is deductible), it could have been done in 2. Even after paying 180 dollars to HRBlock, my US taxes were way less straightforward and took me hours. The 2 jobs are comparable and should be just as easy to declare for.
- dominotw 9y agoWhy was it more complicated compared to France. Curious whats different for you.
- on_and_off 9y agoMost of it is prefilled in my french declaration. I had to check a box saying that I don't own a TV (so I don't have to pay that tax) I also had to connect to my home cleaning service website in order to know exactly how much I paid them in 2017. That's pretty much it, everything else was already filled. Since my employer has declared that I worked for them (I mean .. that's the case for most people except black market), the FISC (french IRS) already knows how much I made that year. If you are freelancing, or another regime different from full time job in a company, it might be more complicated. but for 90% of the people, you connect to the gov website, approve your taxes and that's it. US has federal and state taxes. Both are obscure. AFAIK, there is no government website to do your taxes. No prefilling either of course. So I had to google a lot, look for my w2, etc. I used hr block since it looked easier than figuring out everything myself. It was still more of an headache than my french taxes and I don't think that it was only because of my expat status.
- dominotw 9y ago> there is no government website to do your taxes. i was curious about your comment > Even after paying 180 dollars to HRBlock, my US taxes were way less straightforward and took me hours. I used turbotax for both state and federal it imported and prefilled my adp w2 and imported my tax account from etrade.com. It took me 10 minutes to finish it.
- make3 9y agoin most industrialized countries lobbying is heavily regularized.
- IkmoIkmo 9y agoSame in the Netherlands, there's even a phone app that a lot of people use. Filing takes minutes.
- my123 9y agoIn France too, the paper is prefilled, and if there are no changes, you just scan the QR code and it's done.
- rocqua 9y agoI've heard (so this is a weak second hand story) that here in the Netherlands we also have a lot of lobbying, but the less strict laws around campaign financing make it less evident. I'm not sure if it's true, but it's something to think about. At the very least, it suggests that the strong laws on campaign financing in the US help pull lobbying into the light.
- Angostura 9y agoI don’t think lobbying per se is a problem. I have friends who have successfully lobbied in the the U.K. to get bills introduced to curb climate change. I support the Alltrials people, lobbying to ensure that the results from all medical trials are published whether ‘successful’ or not. Groups of people or interest groups should be allowed to bring their case to legislators to try to convince them. It’s when the convincing them comes in the form of personally enriching the legislators that it turns into bribery and the problems occur.
- flexie 9y agoAgree
- ivan_gammel 9y agoNot necessarily personally - all sorts of exchanges here should be banned, including contributions to the election campaigns, which in true democracy should be funded solely from public money. Being allowed to bring the case does not mean that you have to or should be allowed to pay for that.
- anovikov 9y agoIsn't funding election campaigns from public money a quick and sure route to totalitarianism? I'll say the opposite - any kind of public money involvement into elections should be banned. Don't get fooled with 'democracy' thing. Election and democratic process are the way for the elites to decide matters between themselves without resorting to civil wars/violence, in an orderly, regulated manner. They were invented for that purpose in the middle ages England which got tired of civil wars and serve that purpose perfectly. 'Opinions' of ordinary people are not important because they effectively, don't exist: propaganda decides what their opinions will be.
- vvillena 9y agoFunding campaings from public money is widespread in Europe. Sometimes the opposite argument is made: public funding ensures a level field, in which no one has a disproportionate advantage. Of course, this has the effect of displacing the battle to the real battlefields, one of them being propaganda, as you said.
- pjc50 9y agoI think we need to distinguish between "lobbying", which is basically just talking to politicians, and campaign funding which is so close to legalised bribery. The big question is "why does America seem to have no effective consumer lobbying groups"?
- adventured 9y agoThat's not a big question, the US does have a lot of large, effective consumer lobbying groups. Most of the consumer protections and product labeling the US has, is thanks to them, going back more than a century. The US has a consumer lobbying group for pretty much every topic and demographic you can name. https://en.wikipedia.org/wiki/National_Consumers_League https://en.wikipedia.org/wiki/National_Consumers_League http://www.fraud.org/ http://www.fraud.org/ https://en.wikipedia.org/wiki/Center_for_Science_in_the_Public_Interest https://en.wikipedia.org/wiki/Center_for_Science_in_the_Publ... https://en.wikipedia.org/wiki/Consumer_Federation_of_America https://en.wikipedia.org/wiki/Consumer_Federation_of_America https://en.wikipedia.org/wiki/Consumer_Watchdog https://en.wikipedia.org/wiki/Consumer_Watchdog https://en.wikipedia.org/wiki/Consumers_Union https://en.wikipedia.org/wiki/Consumers_Union https://en.wikipedia.org/wiki/Consumer_Federation_of_California https://en.wikipedia.org/wiki/Consumer_Federation_of_Califor... https://en.wikipedia.org/wiki/Consumer_Action https://en.wikipedia.org/wiki/Consumer_Action https://en.wikipedia.org/wiki/Public_Citizen https://en.wikipedia.org/wiki/Public_Citizen https://en.wikipedia.org/wiki/Better_Business_Bureau https://en.wikipedia.org/wiki/Better_Business_Bureau https://en.wikipedia.org/wiki/Americans_for_Financial_Reform https://en.wikipedia.org/wiki/Americans_for_Financial_Reform https://en.wikipedia.org/wiki/AARP https://en.wikipedia.org/wiki/AARP https://en.wikipedia.org/wiki/National_Consumer_Law_Center https://en.wikipedia.org/wiki/National_Consumer_Law_Center
- dustingetz 9y agothis will blow your mind but what if lobbying is the purpose of american democracy?
- travmatt 9y ago>Lobbying is a way for the rich to legally shortcircuit democracy. It’s legal corruption and as bad for democracy as the illegal counterpart. Lobbying is the lifeblood of American democracy, and the system was expressly designed for it, so its a little odd hearing you instead posit that it’s actually not. Maybe you’re thinking of modern campaign financing?
- ransom1538 9y ago"Lobbying is a way for the rich" Let's say you want to build a road (to nowhere really) in Mississippi. Your company builds roads and you are pretty damn sure you will win the contract if it happens. You want Senator Cindy Hyde Smith to ear mark some federal cash for the project (s). How much would it cost? Answer: not much. She only has 200k of cash on hand. If you donate $50K you got a new best friend. If you give her 2k, you will probably land a dinner. https://www.scribd.com/document/370443725/Cindy-Hyde-Smith-2018-Campaign-Finance https://www.scribd.com/document/370443725/Cindy-Hyde-Smith-2...
- gok 9y agoIn practice, many Americans don’t have to do much more work than that. If you work for an employer that uses a major payroll system, tax prep software can often directly import your paycheck information and for the most part you’re done. The big problems with US tax preparation seem truly hard to solve. A huge number of Americans take deductions which are fundamentally hard to automatically report. It would be hard for every charity to talk to every tax authority. Another trouble is that tax laws at federal, state and local levels are weirdly different and sometimes incompatible. The latest federal tax law eliminates the use of itemized deductions for about 90% of tax payers, however. This may nudge us closer to prefiled taxes.
- lern_too_spel 9y ago> If you work for an employer that uses a major payroll system, tax prep software can often directly import your paycheck information and for the most part you’re done. The only tax preparers that do this charge quite a bit if your AGI is above a certain amount. The others make you do manual data entry. If you have a brokerage account with a lot of trades, it's over — you pretty much need to use a tax preparer that can import that information. This is true even though the government already has that information from your employer and your brokerage. In GP's country, he doesn't have to do anything at all in these cases.
- jessaustin 9y agoIt would be hard for every charity to talk to every tax authority. Every payer files 1099s and sends the payee a copy. It would be no hardship for charities to file analogous forms and send analogous copies to donors, although I suppose the chance of false filing would increase. To prevent that, just issue charities some secret identifier they write on the form that goes to IRS and don't write on the copy they send to the payer.
- chiefalchemist 9y agoLobbying / lobbyist are nothing more than a polite euphemism for influence and corruption. I think it's worth adding that non pre-filled (i.e., the status quo) is also in the IRS's best interest. A person's mistake(s) allow for fines, interest, etc. The policing + enforcement also increases the IRS's head count. Layoffs by the fed gov never play well politically; to say nothing of lawyer and/or accountant fees incurred by the accused. Bottom line: Everyone wins, except for the average American citizen. He / she is screwed. Again.
- curun1r 9y agoIt's worth noting that they're also against it getting too complex too. There's a sweet spot where most people feel comfortable using software to complete and file their returns but is also not too simple to need software. Also, their position is that simple filings allow the government too much control and that taxpayers are better represented by an entity that is incentivized to minimize their tax burden. Still, I always found Intuit's lobbying efforts to fail Brad's (Brad Smith is, the CEO) "you wouldn't tell your mother" test and it was one of the main reasons I ended up leaving Intuit.
- arnarbi 9y agoDon't hate the player? Lobbyism doesn't serve the public, but it is how American law-making is done. Of course companies will lobby to keep their business.
- sendben2 9y agoThat’s apologism for a despicable practice. Hate the player and hate the game because we’re all getting played in systems where lobbying is legal. This is how politicians end up serving corporations instead of people.
- briandear 9y agoOk, so how does a group lobby for something they want? That IS what a representative republic is all about. You could lobby too you know.
- db48x 9y agoWriting a letter to your congressman is also lobbying. Are you going to make that illegal too?
- JetSpiegel 9y agoOnly if there is money in the envelope.
- db48x 9y agoOh, gotta outlaw all forms of political fund-raising too, then; apparently it's ok to give money to your neighbour unless that neighbour is running for office. Am I still allowed to spend my own money on an ad in the newspaper extolling the virtues of my preferred candidate?
- chimeracoder 9y ago> Only if there is money in the envelope That's already illegal; it's called bribery.
- baxtr 9y agoIn Germany, many people don’t need to file taxes, as they’re deducted anyways. But you can and it usually saves you some money. If you do though, it’s about as complex as in the states, the only difference being that there is only one form you’d need to fill and not 2-3 (federal, state, city)
- gmueckl 9y agoThis is true for employees without additional income on the side. If you have this, you are obligated to file and have a tighter deadline. Also, the set of forms is a monster. There is a simple-looking main form with four pages, but you usually need two or three of the appendix forms as well (there are ~10 different appendices, some of which can be required multiple times). This still hides the true complexity of German tax law. Almost every field in every form has a stupidly long list of rules and exceptions attached. Even as a single and empolyee, I need to fill out a few appendices (or rather my tax advisor does) plus a big set of of copies of proofs for the data in the forms (usually between 20 and 40 pages).
- IshKebab 9y agoSame in the UK. I think it's probably like that in most countries.
- jaclaz 9y ago>Same in the UK. I think it's probably like that in most countries. I can confirm for Italy, it is the same, for very, very simple situations (employee or retired) the government provides a pre-filled tax form, with the addition, since a couple years that some (not always correct though, yet) medical expenses (that can be subtracted) are already filled in. As soon as you have some other source of income (or some extraordinary expenses) you actually need an accountant/consultant.
- ProblemFactory 9y agoMy impression is that "US taxes are complicated" arises from the fact that they have such a wide variety of possible tax deductions and tax credits, each with complicated conditions and rates. For medical expenses, moving expenses, training expenses, for various personal purchases that you use for work, for solar water heaters, and so on. If you earned salary from one employer and used only a few standard deductions, then filing US taxes should be easy as well.
- danieltillett 9y agoNothing can be done about open corruption like this until money is taken out of politics. Since the Supreme Court has ruled that this can’t be done by banning donations or limiting political advertising, the solution is to reduce the size of each electorate so that politicians don’t need to raise truckloads of cash in order to run. If there were only 20,000 voters in each district then people would be able to run (and win) on personally meeting all the voters. No need for advertising and the money this requires. If you got rid off all the political staff then it wouldn’t even cost anymore.
- johnlbevan2 9y agoRelated thead on SE: https://politics.stackexchange.com/questions/30223/why-doesn-t-the-irs-just-send-me-a-bill-for-the-taxes-i-owe-based-on-the-info-th https://politics.stackexchange.com/questions/30223/why-doesn...
- raverbashing 9y agoI wouldn't be surprised if a significant part of the GDP of the US comes from rent-seeking "services" that are either not needed or overcharged. Like "credit protection" for "identity theft". Healthcare seems to be the main contributor to this.
- dcposch 9y agoThis is a really important issue that I’ve never seen addressed well... We measure numbers that are easy to measure, like GDP or GDP PPP according to some basket, or unemployment rate. But how much of it is real? We have a ~18t GDP, but how much is actual productivity vs rent seeking? We’re at 4% “unemployment”, but how many people have busywork jobs that don’t fundamentally need to be done? How many have crappy jobs / bad bosses / no security/ need a second or third job to make rent? Without digging deeper, I think the top line numbers are misleading and lead to optimizing the wrong things. I think the things we care about most are the things we aren’t measuring yet.
- afarrell 9y agoThere is a useful distinction to be made among three things: - The activity of lobbying, which is explicitly protected by the 1st amendment as petitioning the government for a redress of grievances. - Contracts to pay someone else to engage in lobbying, which apparently used to be illegal[1]. - Giving gifts to legislators, which is illegal if quid-pro-quo. [1] My source is https://priceonomics.com/when-lobbying-was-illegal/ https://priceonomics.com/when-lobbying-was-illegal/ though that does not itself cite any sources. I'd love if someone more familiar with legal history could comment on its accuracy.
- yasminahmed 9y agoGovernments across the world are becoming more proactive and trying to improve ease of doing business and paying taxes. This is the way it should be. Citizens shouldn't have to run around or pay someone to pay taxes. In India, starting a business used to be a hassle taking more than 2 - 3 months, now they have completely made it online and free. So players in India like https://www.indiafilings.com https://www.indiafilings.com are also adopting to the changes by providing more services or lowering the fee, which is great for Entrepreneurs. Hopefully, the politicians will not budge for lobbying to satisfy a few corporates and look at the bigger picture.
- gbacon 9y agoIn an opinion piece for The Daily Caller and on his site, Rep. Peter Roskam, R-Ill., said “making the tax collector also the tax preparer creates an inherent conflict of interest while forcing citizens to relinquish control of their taxes to the government.” The government already controls taxes and thus citizens’ incomes. In a time when so many are worried about privacy, few voice any concern about the enormous privacy problems inherent in the forced full disclosure of the intimate details of one’s financial affairs. Fiscal year 2019 is forecast to have federal revenue of $3.422 trillion[0], of which $1.688 trillion will be from individual income taxes. That means repealing the income tax and replacing it with nothing would take the federal budget not back to the founding era or even the nineteenth century but to the Clinton years[1]. [0]: https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta... [1]: http://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-summary http://www.taxpolicycenter.org/statistics/federal-receipt-an...
- Retric 9y agoSocial security and Medicare are individual income taxes and add up to quite a bit even if people pretend they are not 'income taxes'. Cutting close to 3 trilllon from the federal taxes would mean vast disruption and many older workers and other beneficiaries ending in deep poverty.
- TheCondor 9y agoIsn’t Grover Norquist and his tribe also against this stuff? I think that was the issue with California’s readyReturn system. https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero https://www.npr.org/sections/money/2017/03/22/521132960/epis...
- shmerl 9y agoYeah, they are known crooks who want to retain their middlemen position at the cost of the public. Quite disgusting.
- Pierre-C 9y agoI have found a free spreadsheet online,and I mail a paper return. The spreadsheet is surprisingly good, and I can use it in libreoffice. I started doing that after finding $22,000 worth of errors in years past. I call it paper protest.
- rayiner 9y agoIt’s annoying to see this pop up every year. H&R Block and Intuit aren’t somehow blocking tax reform that would simplify filing for all the other huge companies that do taxes. That’s an absurd theory. They’re lobbying to support something that’ll happen anyway because a huge bloc wants people to be outraged every April 15 when they do their taxes. And you know what? It works! Every year I write a check to pay our marriage penalty and fume about how it. I think it’s responsible for why middle and lower income Americans feel like they’re over taxed (even though they pay much less taxes than in europe).
- loeg 9y ago> And you know what? It works! Every year I write a check to pay our marriage penalty and fume about how it. FWIW, the marriage penalty almost completely disappears in the 2018 tax reforms. There is still a higher rate for very high earning couples than for very high earning singles, and some deductions are not doubled for couples, but most of the tax brackets now line up as exactly double the single bracket (up to the 32% bracket). This markedly closer than prior years. https://www.forbes.com/sites/robertberger/2017/12/17/the-new-2018-federal-income-tax-brackets-rates/ https://www.forbes.com/sites/robertberger/2017/12/17/the-new...
- Redoubts 9y ago> a huge bloc wants people to be outraged every April 15 when they do their taxes. Seems like a bad strategy. Most people celebrate their return.
- matte_black 9y agoPersonally I’ve always found it sickening that a government would just hand you a prefilled form and say This is what you owe! Feels much better to do it all yourself and declare This is what I’m going to pay. It’s a careful distinction.
- sachinprism 9y agoWhat are the examples of some of the other industries that thrive on this kind of asymmetric information for the buyer? Reminded me of this article by Tyler Cowen https://www.cato-unbound.org/2015/04/06/alex-tabarrok-tyler-cowen/end-asymmetric-information https://www.cato-unbound.org/2015/04/06/alex-tabarrok-tyler-...
- dawnerd 9y agoI might be alone here but in high school we had a single class to teach us money management and how to file taxes ourselves. It’s only complicated if you have complicated situations. Vast majority of people probably shouldn’t be using software anyways but the marketing makes them think they’ll get a bigger refund. I also wouldn’t have a problem with them getting rid of all the weird rules around certain deductions. Example, is web hosting a utility or subscription service?
- tuna-piano 9y agoThe legitimate side to this is that people should know what their government is costing them. Because of tax withholding, many people don’t even realize how high/low their taxes are. I have a belief that we should get rid of tax-withholding, and have people just write a big check (or receive a EITC check) for all of their taxes at the end of the year. To me (and I think many republicans), hiding the taxes you pay with withholding is really pretty slimy.
- ransom1538 9y agoI realize totally insane, but, I think we should end withholdings. I think people should at the end of the year - cut a huge check to the government. Also, you should be given a Scranton with government institutions listed -- YOU pick where your money goes.
- mikeash 9y agoIt’s hardly hidden. Withholding is clearly listed on each pay stub. It’s true that people often don’t pay attention, but that’s not at all the same thing as hiding it. If you ended withholding, tons of people would spend too much during the year, not have enough saved to pay their taxes, and get into serious trouble. It would be the mirror of how so many idiots are giddy about their refund each April, except instead of feeling like they got a windfall, they’d end up with massive penalties. You could argue that it’s their own fault and they should be more responsible. I’d agree that they should, but they won’t, any more than they’ll be responsible enough to read their pay stubs and understand their withholding.
- dangoldin 9y agoFor those interested in the theory of lobbying and special interest groups one of my favorite books is Mancur Olson's Rise and Decline of Nations (https://www.amazon.com/Rise-Decline-Nations-Stagflation-Rigidities/dp/0300030797/ https://www.amazon.com/Rise-Decline-Nations-Stagflation-Rigi...). It's an incredibly approachable read that does a wonderful job digging into the incentives and explains why lobbying exists and why it works.
- kpozin 9y ago> Sen. Elizabeth Warren, D-Mass., offered a bill last year that would have actually allowed the government to start offering prefill tax returns. Ironically, just last year, Massachusetts got rid of its own simple, free online tool for filing state taxes, and instead directs residents to commercial offerings.
- paxys 9y agoIMO the problem is the tax code itself rather than who is filing the paperwork. Unless that is simplified, there is zero chance the average citizen can work through their taxes themselves and pay the correct amount.
- mitchdoogle 9y agoI'm always puzzled when average people argue that taxes are too confusing. It seems to me like people make it out to be a much larger burden than it actually is. If all you have is a W2, and deductions less than the standard deduction (which is what I'd argue is average), then you can fill out a 1040 by yourself in 30 minutes or less. Even faster if you use some of the software solutions out there.
- JoeAltmaier 9y agoHalf the people filling out taxes were in the bottom half of their math class. Its not easy for everyone. This forum may suffer from selection bias?
- akayoshi1 9y agoTax companies whose existence relies on them and only them to decipher cryptic government tax laws. Quite literally the most predictable and unsurprising news article to come out on the internet.
- barneygumble742 9y agoEvery year a week before the tax deadline, this exact topic pops up. I've noticed now for the past 4 to 5 years. The IRS should really advocate for this since it makes their jobs easier due to people making less mistakes. The IRS also has it's own lobby group - the US Congress. It's just not good at lobbying for the IRS...or Americans.
- Mauricio_ 9y agoPlanet money had a podcast on this subject. https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero https://www.npr.org/sections/money/2017/03/22/521132960/epis...