4 ms·

Yet another case where letting the free market handle things results in bad outcomes.

by kerkeslager 5y ago

mike_ivanov 5y ago
Lobbying has nothing to do with free market.
- AlexandrB 5y ago
  That's a weird thing to say considering how lobbying is justified: As the free expression of speech by companies towards their elected representatives. So is limiting corporate speech necessary for a free market? Most free-market backers I've heard would say otherwise.
  - nybble41 5y ago
    Lobbying consists of influencing either elected officials or bureaucrats to take actions on the lobbyists' behalf which no actor in a free market would be permitted to take. What needs to be limited here is not corporate speech but rather government power.
- vkou 5y ago
  This kind of lobbying is just paid free speech driven by market incentives. So, yes, having a society-critical service provided by a for-profit market actor, that then uses that money to pay for speech that results in a worse situation for everyone is a market failure.
avalys 5y ago
This is not the free market, it’s a perfect example of what’s wrong with government. The fact that the IRS rules are set by politicians and bureaucrats, not accountable to market forces, are what allows this corrupt situation to persist in the first place. You can’t say “the IRS makes this too complicated in order to funnel money into Intuit’s pocket so I am going to pay my taxes elsewhere.” And it's a perfect example of why accepting broad government power provides an avenue for this sort of corruption to exist, especially in areas that people don't care enough about to spend time influencing government policy. In a free market, it requires very little effort for you to make your opinion felt - you give your money to the people you think have the best product. Done. Those people see that they are making money - the people with lesser products see they are losing money. This requires very little effort on your part other than forming an opinion on what product you want to use. In the government, what can you do if you think the IRS is doing a shitty job? Write a letter to your Congressmen? Vote for another Congressman in 2 years (what if you agree with their position on the IRS, but disagree on something more important, e.g. guns?) Run for office yourself? The result is that relatively little attention is paid to public policy around tax preparation. There are no single-issue voters around IRS Free-file policy. There is too much else going on in national politics that is inarguably more important. And because no one really cares about this other than the tax preparation industry, the tax preparation industry is left largely unchallenged in pushing government to enact regulations that favor them.
- fleddr 5y ago
  Just to give a counter example here: In my country (Netherlands), the IRS itself provides the software. Once a year, you download and run it. Everything is prefilled: income from work, bank accounts, mortgages. So if you're a boring, financially stable person, the entire process is literally next -> next -> next -> submit. Filling out tax forms is not a value-add economic activity, so I have no idea why you'd insist on free market, nor do I understand the classic American anti-government stance. If we have solved this a decade ago, why can't you?
  - avalys 5y ago
    Your question is, why isn't the federal government of the United States, a country of 330M people, as efficient and effective as the government of the Netherlands, a country of 17M people? Large organizations are less efficient than small organizations. This is true even in private enterprise. Large bloated, centralized government bureaucracies are the most inefficient of all. Part of the "classic American anti-government stance" comes from the realization that American society is too large and too diverse to be effectively governed by a centralized bureaucracy. This is why you hear people complaining about "state's rights". However, for people who explicitly wish to control society and don't care about efficiency, centralized power is great. It means they only have to win one argument to impose their will on 330M people, not 50 separate arguments. This is why so much attention is paid to the federal government in the US, as opposed to state or local government.
    - fleddr 5y ago
      Population size doesn't matter for taxes, yet having many different types of rules (perhaps at state level?) could indeed be a complicating factor. If that's the case, I'll take your word for it. But do hear me out once more. The dutch tax system is anything but simple. It has an extremely complex rule set. And because it is so complex, leaving the understanding of it to citizens has led to an enormous burden of processing and correcting faulty entries, staffing massive support desks, and so on. So they solved complexity, centrally. The rules are just as complex as before, but the process and UI make it a breeze for a good 75%. With this I mean to say that complexity is in fact another reason to solve things centrally. Why would you want to spread complexity around?

Yet another case where letting the free market handle things results in bad outcomes.

mike_ivanov 5y ago

Lobbying has nothing to do with free market.

AlexandrB 5y ago
That's a weird thing to say considering how lobbying is justified: As the free expression of speech by companies towards their elected representatives. So is limiting corporate speech necessary for a free market? Most free-market backers I've heard would say otherwise.
- nybble41 5y ago
  Lobbying consists of influencing either elected officials or bureaucrats to take actions on the lobbyists' behalf which no actor in a free market would be permitted to take. What needs to be limited here is not corporate speech but rather government power.
vkou 5y ago
This kind of lobbying is just paid free speech driven by market incentives. So, yes, having a society-critical service provided by a for-profit market actor, that then uses that money to pay for speech that results in a worse situation for everyone is a market failure.

avalys 5y ago

This is not the free market, it’s a perfect example of what’s wrong with government. The fact that the IRS rules are set by politicians and bureaucrats, not accountable to market forces, are what allows this corrupt situation to persist in the first place. You can’t say “the IRS makes this too complicated in order to funnel money into Intuit’s pocket so I am going to pay my taxes elsewhere.” And it's a perfect example of why accepting broad government power provides an avenue for this sort of corruption to exist, especially in areas that people don't care enough about to spend time influencing government policy. In a free market, it requires very little effort for you to make your opinion felt - you give your money to the people you think have the best product. Done. Those people see that they are making money - the people with lesser products see they are losing money. This requires very little effort on your part other than forming an opinion on what product you want to use. In the government, what can you do if you think the IRS is doing a shitty job? Write a letter to your Congressmen? Vote for another Congressman in 2 years (what if you agree with their position on the IRS, but disagree on something more important, e.g. guns?) Run for office yourself? The result is that relatively little attention is paid to public policy around tax preparation. There are no single-issue voters around IRS Free-file policy. There is too much else going on in national politics that is inarguably more important. And because no one really cares about this other than the tax preparation industry, the tax preparation industry is left largely unchallenged in pushing government to enact regulations that favor them.

fleddr 5y ago
Just to give a counter example here: In my country (Netherlands), the IRS itself provides the software. Once a year, you download and run it. Everything is prefilled: income from work, bank accounts, mortgages. So if you're a boring, financially stable person, the entire process is literally next -> next -> next -> submit. Filling out tax forms is not a value-add economic activity, so I have no idea why you'd insist on free market, nor do I understand the classic American anti-government stance. If we have solved this a decade ago, why can't you?
- avalys 5y ago
  Your question is, why isn't the federal government of the United States, a country of 330M people, as efficient and effective as the government of the Netherlands, a country of 17M people? Large organizations are less efficient than small organizations. This is true even in private enterprise. Large bloated, centralized government bureaucracies are the most inefficient of all. Part of the "classic American anti-government stance" comes from the realization that American society is too large and too diverse to be effectively governed by a centralized bureaucracy. This is why you hear people complaining about "state's rights". However, for people who explicitly wish to control society and don't care about efficiency, centralized power is great. It means they only have to win one argument to impose their will on 330M people, not 50 separate arguments. This is why so much attention is paid to the federal government in the US, as opposed to state or local government.
  - fleddr 5y ago
    Population size doesn't matter for taxes, yet having many different types of rules (perhaps at state level?) could indeed be a complicating factor. If that's the case, I'll take your word for it. But do hear me out once more. The dutch tax system is anything but simple. It has an extremely complex rule set. And because it is so complex, leaving the understanding of it to citizens has led to an enormous burden of processing and correcting faulty entries, staffing massive support desks, and so on. So they solved complexity, centrally. The rules are just as complex as before, but the process and UI make it a breeze for a good 75%. With this I mean to say that complexity is in fact another reason to solve things centrally. Why would you want to spread complexity around?