Intuit, Maker of Turbotax, Lobbies Against Simplified Tax Filings 423
McGruber (1417641) writes "Return-free filing might allow tens of millions of Americans to file their taxes for free and in minutes. Under proposals authored by several federal lawmakers, it would be voluntary, using information the government already receives from banks and employers and that taxpayers could adjust. The concept has been endorsed by Presidents Obama and Reagan and is already a reality in some parts of Europe. Sounds great, except to Intuit, maker of Turbotax: last year, Intuit spent more than $2.6 million on lobbying, some of it to lobby on four bills related to the issue, federal lobbying records show."
Re:Lobbying aside (Score:5, Insightful)
On the one hand, filing Return-free filing would be a nice option...on the other, I like that people have to take the time to notice how much money Uncle Sam is taking.
Most of them only look at how much they're getting back, which is the majority of people. If you really wanted it to sink in, you'd need to end paycheck income tax withholding and actually have them write a check on April 15.
Re:Lobbying aside (Score:5, Insightful)
It amazes me that people *still* give the government interest free loans. Getting money back via your tax return is bad. I strive to owe the government the maximum amount I can each year without penalty.
Yes, technology must be used (Score:4, Insightful)
Re:Lobbying aside (Score:4, Insightful)
I strive towards $0 but that's mostly because I'm not confident in my own ability to invest the money for growth.
Reminds me of . . . (Score:5, Insightful)
a story I heard on NPR not too long ago. The head of the Government Printing Office was talking about how their headcount was less than half what it was 20 years ago due to heavier use of digital forms. She mentioned how few copies of the federal budget they print every year and so on.
All of this sounds great because she's helping to keep costs down while increasing the availability of government documents to he masses. Who would think that's a bad thing?
The paper industry. They had the head of an umbrella group for the paper and forestry groups who cautioned about moving too fast to go digital, how some people still liked paper forms and so on.
So the next time you hear someone say the government doesn't create jobs, ask them why private industry is up in arms every time the government tries to cut costs by not purchasing things. In this case, the literal tons of paper that used to be used to print government documents or, as in the case of Intuit, all the work they would no longer have to do if the tax filings were simplified.
Re:Lobbying aside (Score:5, Insightful)
While that sounds nice in theory but for most people it doesn't make any different. For example say you get back $2,000 from your tax return. If you intend on saving you could keep in your weekly check that money and put it in an interest barring account and come out ahead. but when your saving account is paying 0.1% interest you are making less then $2 by doing so. $2 a year for most people isn't even worth time time to figure out the proper withholding. And don't tell me about the stock market or similar where i am putting my money at risk. so until interest rates go to a sane level its just not worth it.
Re:Get rid of income Tax (Score:4, Insightful)
If you want to talk overall economic health, taxation does not really impact it since all those tax dollars just go strait back into the economy anyway.
Please remove this falsehood from your economic system. If you take productive money and piss it away on boondoggle projects instead of useful purposes then it's a complete loss for the economy. The entire premise of capitalism is that money that gets invested into useful purposes (production equipment, invention, entropy-reducing services) multiplies the value of that money over time. All spending is not created equal (so far from it)! Hanging fiber optics on poles and getting drunk are not equally beneficial!
it tends to skew who pays and who does not
Everybody pays. The producers add their tax burden to the cost of goods. The study from Harvard econ. sets the price of goods as 22% higher (average) than they would otherwise be without the income tax. When that single mother is buying a $3 loaf of bread for her kids' school lunch, more than fifty cents of that is going straight to pay the income taxes of the people in the supply chain. That's why it's the most regressive tax possible. People can only pretend that it's progressive if they completely ignore second order effects and beyond.
Re:Lobbying aside (Score:3, Insightful)
Right, what we should do is get rid of withholding and make EVERYONE pay quarterly estimated taxes. I suspect we would very suddenly have TEA party ( or similar ) membership right around 53% of the adult population.
Re:Lobbying aside (Score:3, Insightful)
Better than any market investments as well. 10% is a phenomenal rate of return right now.
Government jobs (Score:5, Insightful)
So the next time you hear someone say the government doesn't create jobs
The government absolutely creates jobs. Lots of them. The government is something like 20-30% of the economy and a similar portion of the jobs. This is true for most of the governments on earth and it's actually not a bad thing. Remember that government jobs include things like the military, police, fire, teachers and the like which are all necessary and useful functions. Some amount of administration is useful too. Many important and necessary private businesses make their money contracting for necessary services to governments. Governments definitely create jobs and many of them are even worth creating.
The problem is that the government doesn't generally have a good way to prune back services that are no longer required and doesn't tend to be exposed to market forces forcing it to be efficient. It also means that those who are doing well with the status quo will try to keep it, even when that doesn't make economic sense.
Re:Not even much money (Score:5, Insightful)
To be fair, that's billions in revenue, not profit, so I wouldn't say they "make" a couple billion per year. In fact, the source you linked to shows that their operating income is negative, so after subtracting expenses from that revenue they are losing money. So, they don't have a few billion in spare cash sloshing around -- that $2.6 million is not a negligible amount of money for them. The fact that they still think it is worth spending on lobbying when they don't have a lot of spare money is perhaps an even stronger statement about how effective lobbying dollars are.
Re:What the tax form should look like (Score:3, Insightful)
And if you happen to be a poor person, too bad for you.
Re:Lobbying aside (Score:5, Insightful)
No, you'd just have a bunch of big banks getting into tax financing, offering modest loans at reasonable interest rates(see fine print) to help people who didn't save for their bill.
The withholding system works because it causes the least economic distortion -- the more a tax "hurts," the more adverse an effect it has on day-to-day economic decisions, the more it's liable to cause people to make bad economic decisions, like saving huge lump sums in the bank instead of investing or consumption. A tax "hurting" might be good politics (for some people), but if it causes people to have irregular cash flow or makes it significantly harder for them to make planning decisions it will hurt economic growth.
Re:Think of all those poor accountants! (Score:5, Insightful)
What studies are you referring too? Everything I have seen has suggested lower taxes on capital leads to move investments.
I will admit that doing studies like these are hard. You have to factor the difference between high vs. low taxation states, how taxes are raised (income vs. consumption vs. investments)that the country has to be publicly committed for the long term (i.e. 10+ years), and how capital is taxed (capital gains, wealth tax, dividend income, etc.)
Re:Government jobs (Score:4, Insightful)
You're missing the point. You will routinely hear from the right side of the political spectrum (and private industry) people claiming the government doesn't create jobs, it only takes from the masses.
In their next breath they whine and complain whenever the government cuts back, such as with the Printing Office or elimination of military projects (the Abrams tank comes to mind) because it will cost jobs, completely ignoring the only reason theses folks in private industry have a job is because of the government.
I only bring this up because I like to throw things back in people's faces when they make blanket statements such as this, just like all government workers are lazy or how private industry always does things better than the government.
Re:Not even much money (Score:5, Insightful)
True capitalism at work, everything is for sale, even the laws.
Re:Not even much money (Score:5, Insightful)
If we could get back to some Regan-esque conservatism that would be nice. A lot better the the wackos we deal with today anyway...
Proposal (Score:5, Insightful)
Re:Lobbying aside (Score:4, Insightful)
People "see" it already, on their paystubs and on their 1040s.
What he wants is for tax collection -- not taxes themselves, just the way they're collected -- to be intentionally disruptive, so that people will attempt to lower rates and revenues not because they are high, per se, but just because the way they're collected causes economic harm.
Re:Lobbying aside (Score:5, Insightful)
While that sounds nice in theory but for most people it doesn't make any different. For example say you get back $2,000 from your tax return. If you intend on saving you could keep in your weekly check that money and put it in an interest barring account and come out ahead. but when your saving account is paying 0.1% interest you are making less then $2 by doing so. $2 a year for most people isn't even worth time time to figure out the proper withholding. And don't tell me about the stock market or similar where i am putting my money at risk. so until interest rates go to a sane level its just not worth it.
Unless of course you're one of the unwashed masses that has an abundance of credit card debt [nerdwallet.com]. Using that extra money to pay off your debts more quickly can give you a great return, at least in the sense that you'd LOSE less money.
Re:Not even much money (Score:4, Insightful)
You have to remember that the lines are moving. Compared to Reagan, Eisenhower was a pinko. But compared to Bush Jr., Reagan was at least a left leaning Democrat.
Re:Not even much money (Score:5, Insightful)
Re:Think of all those poor accountants! (Score:5, Insightful)
Bullshit. Every time money changes hands it is taxed. That the person who held it before you aid taxes is completely and totally irrelevant.
I pay income tax. If I hire you to mow my lawn, what I pay you is not tax free just because I have paid taxes on it. Same as if I simply hand you a wad of cash. It changes hands, it is taxed.