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Why is the free file thing such a big deal? Considering the taxes paid, tax prep software is a tiny expense — and it’s deductible. How about complaining about a

Why is the free file thing such a big deal? Considering the taxes paid, tax prep software is a tiny expense — and it’s deductible. How about complaining about a tax code that requires accountants and lawyers just to understand? Complaining about tax filing software is like complaining about a paint chip on the Titanic. The tax prep industry is a result of a ridiculously complicated tax code and the ridiculously complicated tax code is the result of politicians that reward or punish people as a means to garner more relevance. See Milton Friedman’s speech on tax code complications and the reasons behind it.

Stratoscope 7y ago
> Considering the taxes paid, tax prep software is a tiny expense — and it’s deductible. It's only deductible if you itemize deductions, which most people don't do. And even then it isn't free. Your tax deduction only means that you don't have to pay taxes on the cost of your tax preparation service or software. That said, I agree with you about everything else!
- ArnoVW 7y ago
  And most importantly, it is not free in the sense that insurance fraud is not a victimless crime. Any money shunted away from the state is money that the state will have to raise additionaly.
alexmingoia 7y ago
Agreed. Tax filing is complicated because taxes are complicated. A flat tax on all personal income from all sources as the sole tax would make tax filing incredibly simple. It’s equal in that everyone pays the same rate, and fair in that the more money people earn the more they pay. It would eliminate double taxation, tax uncertainty, save the economy money by eliminating tax accounting, and eliminate tax loopholes by eliminating different classifications of taxable goods, services, transactions, and events.
- rebuilder 7y ago
  Paying 20% of income in taxes (for example) is a much heavier burden to bear if you're making 20k a year than it is if you're making 200 000. Which is why progressive taxation exists.
  - whamlastxmas 7y ago
    Back in my youth I didn't "get" this the marginal utility of a dollar. I was also a libertarian and Ron Paul supporter. How naive I was.
    - alexmingoia 7y ago
      The law of diminishing marginal utility refers to homogenous goods. The marginal utility of the dollar only has meaning in the context of a particular good or service. Whether someone earns $20,000/year or $200,000/year says nothing about the marginal utility of dollars with respect to a particular good or service. The diminishing marginal utility of dollars is the same with respect to a gallon of milk for example, whether one has $20,000 or $200,000. I’d also like to point out that “utility” is subjective. There are serious methodological shortcomings with quantifying the subjective satisfaction of various goods and services, particularly heterogenous goods like housing.
- vonmoltke 7y ago
  We'll never get a system like this in the US because it removes the ability to legislate via tax code.
AdieuToLogic 7y ago
> Why is the free file thing such a big deal? The answer to that question can be found in the article itself: > This year, as part of our coverage of the IRS and TurboTax maker Intuit, we filed a request for correspondence between the IRS and the Free File Alliance, an industry group. The request sought records surrounding a public-private partnership called Free File. > Under that program, which has long been championed by Intuit, the IRS agrees not to create its own tax filing system that would pose a threat to the industry’s profits. HTH

Stratoscope 7y ago

> Considering the taxes paid, tax prep software is a tiny expense — and it’s deductible. It's only deductible if you itemize deductions, which most people don't do. And even then it isn't free. Your tax deduction only means that you don't have to pay taxes on the cost of your tax preparation service or software. That said, I agree with you about everything else!

ArnoVW 7y ago
And most importantly, it is not free in the sense that insurance fraud is not a victimless crime. Any money shunted away from the state is money that the state will have to raise additionaly.

alexmingoia 7y ago

Agreed. Tax filing is complicated because taxes are complicated. A flat tax on all personal income from all sources as the sole tax would make tax filing incredibly simple. It’s equal in that everyone pays the same rate, and fair in that the more money people earn the more they pay. It would eliminate double taxation, tax uncertainty, save the economy money by eliminating tax accounting, and eliminate tax loopholes by eliminating different classifications of taxable goods, services, transactions, and events.

rebuilder 7y ago
Paying 20% of income in taxes (for example) is a much heavier burden to bear if you're making 20k a year than it is if you're making 200 000. Which is why progressive taxation exists.
- whamlastxmas 7y ago
  Back in my youth I didn't "get" this the marginal utility of a dollar. I was also a libertarian and Ron Paul supporter. How naive I was.
  - alexmingoia 7y ago
    The law of diminishing marginal utility refers to homogenous goods. The marginal utility of the dollar only has meaning in the context of a particular good or service. Whether someone earns $20,000/year or $200,000/year says nothing about the marginal utility of dollars with respect to a particular good or service. The diminishing marginal utility of dollars is the same with respect to a gallon of milk for example, whether one has $20,000 or $200,000. I’d also like to point out that “utility” is subjective. There are serious methodological shortcomings with quantifying the subjective satisfaction of various goods and services, particularly heterogenous goods like housing.
vonmoltke 7y ago
We'll never get a system like this in the US because it removes the ability to legislate via tax code.

AdieuToLogic 7y ago

> Why is the free file thing such a big deal? The answer to that question can be found in the article itself: > This year, as part of our coverage of the IRS and TurboTax maker Intuit, we filed a request for correspondence between the IRS and the Free File Alliance, an industry group. The request sought records surrounding a public-private partnership called Free File. > Under that program, which has long been championed by Intuit, the IRS agrees not to create its own tax filing system that would pose a threat to the industry’s profits. HTH