No one likes doing their income taxes. Slackers who wait until today, the final day to file without risk of financial penalty, seem to hate it even more.
The problem with taxes is that the laws are needlessly complex.
Some complications are probably necessary to promote fairness. Poor Americans, Thomas Jefferson wrote to James Madison, should be “exempt all from taxation below a certain point” and the wealthy should be taxed at “higher portions” as their wealth increases.
Jefferson, no fan of big government or big business, also warned future generations of “the selfish spirit of commerce that knows no country, and feels no passion or principle but that of gain.”
That warning hits home when reading a ProPublica article that says at least one manufacturer of tax prep software is lobbying against simpler tax returns.
The article points out that Intuit, the company that makes TurboTax, spent at least $2.6 million lobbying Congress. Some of that effort went to fight a plan to implement “return-free filing,” which would make it possible for millions of Americans to file their incomes taxes in a couple of minutes without using a tax preparer or tax software.
The idea has been around awhile, and has been endorsed by Ronald Reagan and Barack Obama.
Proponents of return-free filing say it would save Americans $2 billion annually. It already saves money in several other countries.
But it would also cost Intuit, who declined to answer ProPublica’s questions, some customers.
According to ProPublica, Intuit hired lobbyists and public relations firms to convince community leaders to write letters to newspapers and other publications that blasted return-free filing. The letters used similar language and some writers did not know they were being manipulated by paid professionals.
One letter writer, the president of the NAACP Delaware State Conference, was told by an “acquaintance” that return-free filing would end free tax filing help in low-income communities. The NAACP leader wrote a letter to Sen. Tom Carper (D-Del.) and encouraged other local NAACP leaders to write similar letters.
The NAACP leader was shocked to learn his friend was a paid lobbyist. “We may have to retract … ,” Richard Smith said. “I didn’t question her.”
Some people contacted by lobbyists did their own research.
Angela Martin, director of an Oregon nonprofit, said a PR professional gave her a sample anti-return-free filing letter last year for her organization to send to Sen. Ron Wyden (D-Ore.).
She was skeptical, and learned the PR firm represented Intuit.
She’s now a supporter of return-free filing and wrote a public letter supporting any change that would “reduce the cost and complexity of complying with federal tax law.”
A nice idea, but who is going to pay the lobbyists to get Congress to pass laws that make things easier on Americans?