4 ms·

The only thing worse than a private monopoly is a public one.

by ethbr0 3y ago

ericmay 3y ago
In the case of taxes in the United States this doesn’t really follow because if the government says you owe $x.xx then you have to go through the bureaucracy either way to either pay or dispute the charge. For most people (simple wage earner) TurboTax and other software is just an additional regulatory tax and no different than the government except that it takes money from citizens. A government has a monopoly on taxation by definition or else it can’t be a government so calling it a public monopoly doesn’t make a lot of sense.
- siftrics 3y ago
  ethbr0 is referring to monopolies enforced by law for private companies; they're not trying to point out the government itself is a monopoly.
- ethbr0 3y ago
  The difference is that if the IRS provided the only filing solution AND adjudicated taxes, there'd be no adversarial tension. Right now, the IRS is forced to establish some sort of data interchange format and adjudicate incoming tax filings equally, because they're required to work with TurboTax et al. (even if only required from a practical standpoint). If they also provided the only filing solution, that pressure would be gone. IMHO, the best possible outcome is definitely IRS-supplied free file + private options, if users would like. Keeps everyone honest and on their toes.
  - lazide 3y ago
    Huh? What adversarial tension is needed for filing? It’s literally data entry. Tax prep/accounting (what to put where for cases where there is ambiguity) can always be different. That doesn’t apply to W2 earners though (in 99% of cases)
    - ethbr0 3y ago
      Free filing would by definition be both, as people using it would be unlikely to have separate tax prep services. Ergo, imagine there's a checkbox option that would apply to 25% of free filers to save them money. How would the IRS free file handle that from a UX perspective? What are their incentives? Alternatively, suppose a feature used by 10% of filers is broken for the current tax year. How long does it take to get fixed? Current private solutions are incentivized to optimize those ("We save you the most money!") and fix them ("Our software isn't broken"). And because only the data transfers over to the IRS, all the prep optimization can be done independent of the IRS. Some of the incentive concerns would be alleviated by (as this did) building this from a different branch of government (e.g. US-DS). But at the end of the day, it's still the government telling you how much to pay the government. Or as the joke went about the 1040-EZ: "How much money did you make? Good. Give it to us."
      - lazide 3y ago
        You are correct, and I hate it ! Hahaha, sigh.
vkou 3y ago
The only thing worse than a public monopoly is where you have to navigate both a public monopoly, and a private monopoly, which is how taxes work in the US.
- nostromo 3y ago
  There is no monopoly on tax preparation in the US. It’s a highly competitive market. Dozens of companies sell online products to file, and thousands of individual providers are available too.
  - ethbr0 3y ago
    There's a monopoly to a first-order approximation. Apparently TurboTax has ~70% market share for tax preparation software, and TurboTax + H&R Block have ~95% market share. [0] But even that's still a heck of a lot more competitive and responsive than if the IRS shipped the only tax prep solution. [0] https://secondmeasure.com/datapoints/tax-prep-2021-turbotax-hrblock-blucora/ https://secondmeasure.com/datapoints/tax-prep-2021-turbotax-...
    - refurb 3y ago
      No, not even by "first order approximation" because plenty of returns are done without any software at all, or done by professionals with different software.
  - maerF0x0 3y ago
    > It’s a highly competitive market. It's a competitive market on a stupid game. The market solutions (maybe mostly just intuit) fight to keep the game near impossible for the lay person to play. They generate "GDP" by making it more grievous than it need be. At least part of this is a symptom of a broken political system (the current process of voting encourages 2 party system which are incentivized to not experiment)
    - lazide 3y ago
      The political system is this way because the cities/urban areas and the rural areas have fundamentally different interests, and the vast majority of the resources and land area isn’t in urban areas. The federal gov’t has enough power to make either of these groups miserable; and so each is using it to fight out who gets to do so. Picking one to win isn’t going to stop the conflict, but it could turn it into a shooting war.

The only thing worse than a private monopoly is a public one.

by ethbr0 3y ago

The only thing worse than a private monopoly is a public one.

In the case of taxes in the United States this doesn’t really follow because if the government says you owe $x.xx then you have to go through the bureaucracy either way to either pay or dispute the charge. For most people (simple wage earner) TurboTax and other software is just an additional regulatory tax and no different than the government except that it takes money from citizens. A government has a monopoly on taxation by definition or else it can’t be a government so calling it a public monopoly doesn’t make a lot of sense.

siftrics 3y ago
ethbr0 is referring to monopolies enforced by law for private companies; they're not trying to point out the government itself is a monopoly.
ethbr0 3y ago
The difference is that if the IRS provided the only filing solution AND adjudicated taxes, there'd be no adversarial tension. Right now, the IRS is forced to establish some sort of data interchange format and adjudicate incoming tax filings equally, because they're required to work with TurboTax et al. (even if only required from a practical standpoint). If they also provided the only filing solution, that pressure would be gone. IMHO, the best possible outcome is definitely IRS-supplied free file + private options, if users would like. Keeps everyone honest and on their toes.
- lazide 3y ago
  Huh? What adversarial tension is needed for filing? It’s literally data entry. Tax prep/accounting (what to put where for cases where there is ambiguity) can always be different. That doesn’t apply to W2 earners though (in 99% of cases)
  - ethbr0 3y ago
    Free filing would by definition be both, as people using it would be unlikely to have separate tax prep services. Ergo, imagine there's a checkbox option that would apply to 25% of free filers to save them money. How would the IRS free file handle that from a UX perspective? What are their incentives? Alternatively, suppose a feature used by 10% of filers is broken for the current tax year. How long does it take to get fixed? Current private solutions are incentivized to optimize those ("We save you the most money!") and fix them ("Our software isn't broken"). And because only the data transfers over to the IRS, all the prep optimization can be done independent of the IRS. Some of the incentive concerns would be alleviated by (as this did) building this from a different branch of government (e.g. US-DS). But at the end of the day, it's still the government telling you how much to pay the government. Or as the joke went about the 1040-EZ: "How much money did you make? Good. Give it to us."
    - lazide 3y ago
      You are correct, and I hate it ! Hahaha, sigh.

vkou 3y ago

The only thing worse than a public monopoly is where you have to navigate both a public monopoly, and a private monopoly, which is how taxes work in the US.

nostromo 3y ago
There is no monopoly on tax preparation in the US. It’s a highly competitive market. Dozens of companies sell online products to file, and thousands of individual providers are available too.
- ethbr0 3y ago
  There's a monopoly to a first-order approximation. Apparently TurboTax has ~70% market share for tax preparation software, and TurboTax + H&R Block have ~95% market share. [0] But even that's still a heck of a lot more competitive and responsive than if the IRS shipped the only tax prep solution. [0] https://secondmeasure.com/datapoints/tax-prep-2021-turbotax-hrblock-blucora/ https://secondmeasure.com/datapoints/tax-prep-2021-turbotax-...
  - refurb 3y ago
    No, not even by "first order approximation" because plenty of returns are done without any software at all, or done by professionals with different software.
- maerF0x0 3y ago
  > It’s a highly competitive market. It's a competitive market on a stupid game. The market solutions (maybe mostly just intuit) fight to keep the game near impossible for the lay person to play. They generate "GDP" by making it more grievous than it need be. At least part of this is a symptom of a broken political system (the current process of voting encourages 2 party system which are incentivized to not experiment)
  - lazide 3y ago
    The political system is this way because the cities/urban areas and the rural areas have fundamentally different interests, and the vast majority of the resources and land area isn’t in urban areas. The federal gov’t has enough power to make either of these groups miserable; and so each is using it to fight out who gets to do so. Picking one to win isn’t going to stop the conflict, but it could turn it into a shooting war.