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Comment by henryfjordan | Hacker News Reader

The Federal Government cannot, by law, compete with TurboTax

Laws are designed by the government - if the executive branch cannot, by law, compete with TurboTax, then the legislative branch is free to alter the laws in whatever (constitutional) way benefits the society and explicitly delegate some agency the power (and duty!) to make TurboTax redundant.

it'd be great if it worked this way, but it's already been captured at both a federal and at least 1 state level:

https://www.propublica.org/article/congress-is-about-to-ban-...

https://priceonomics.com/the-stanford-professor-who-fought-t...

yah, businesses making money via legitimately adding value is awesome; making it via rent seeking and regulatory capture sucks.

turbotax could still have a lucrative business by building on top of free filing with value added services, but no, they want government-protected profits. it's dishonorable.

and it's a symptom of money controlling politics. we need to figure out how to allow politicians to be productive and contributive without money being the measuring stick proxying power.

Oh my, you don't know how laws get "designed." Congress ostensibly writes the laws, but they're now often allowing outside special interests and lawyers to pass along laws for introduction nearly verbatim. Furthermore, Intuit was caught lobbying to keep the tax submission process complicated and not free.

Yeah I agree. Congress is trying to pass a law to prohibit the IRS from doing free tax returns (competing with Turbotax) but theoretically congress could just repeal that law whenever they get around to finally letting the IRS just do the tax returns right? So all the law would do is prevent an executive order for the IRS to do that

Not exactly. The IRS has made a deal with an industry group called the Free File Alliance saying that in exchange for offering free tax filing to some subset of taxpayers, the IRS won't create competing software. Congress is working on a bill called the Taxpayer First Act that would enshrine that deal in law [1], effectively prohibiting the IRS from creating their own software. It looks like that bill has only passed the House so far [2] so it may still fail.

Regardless, it would still be okay for the IRS to automatically file people's taxes and send them a return, which is the true best solution here.

[1] https://www.propublica.org/article/congress-is-about-to-ban-...

[2] https://www.congress.gov/bill/115th-congress/house-bill/5444

Who is congress being bribed by here?

TurboTax (Intuit) and H&R Block mostly

Why, is it illegal for them to make tax filing easier (if it is, did TurboTax lobby for it?)

It is right now, and they did. They've been trying to make it permanent: https://techcrunch.com/2019/04/09/the-government-is-about-to...

There's a great Reply All episode (#144) about this exact article and the background, and eventual impact of it. From what I remember, the IRS had an idea to make a free filing online system but determined that the cost would be too great so they divvied up the different groups of people that qualify (people under some level of income, veterans, etc.) amongst the different companies (TurboTax being one of them) with the agreement that they would not build a competing system. I think they mention a bill that was shot down that would've maintained that agreement forever.

There are two justifications, all coming from the Republican side of things. 1) Tax filing being difficult makes people pay more attention to what they pay in taxes. 2) Tax filing being difficult makes people hate taxes, which will make them vote against raising taxes and or supporting socialism.

This is all covered in an excellent podcast by Planet Money

https://www.npr.org/sections/money/2019/04/03/709656642/epis...

In other countries, they have:

- higher standards of living

- longer life expectancies

- better healthcare

- higher taxes, but the money is used more efficiently and for better results than on mass incarceration or the largest military-industrial complex

- very easy tax payment processes

Taxes aren't universally "bad": fire departments, police departments, roads, schools. And guess what? That's "socialism." So is Social Security and USPS. The myth of anarchistic hyperindividualism (libertarianism) is a self-delusion because there are benefits to common infrastructure no individual could build themselves alone.

PS: Why don't most Americans know how bad they have it? Is it their lack of passports or lack of honesty in paying attention outside of their filter bubble?

> PS: Why don't most Americans know how bad they have it? Is it their lack of passports or lack of honesty in paying attention outside of their filter bubble?

I think it's both, now, but I think that the 'no passports' thing has been a factor for a while.

When I was in middle school I wondered why many (white, middle-class, etc) Americans only speak English when so many people from Europe, etc speak several (or at least can get by).

It dawned on me one day that you could start on one coast and drive clear across the continent without ever needing a second language - it's all USA the whole way.

So yeah - much like the language thing there's no real exposure to anything other than our country.

Still, Spanish is a very real second language in the US

That fact that just knowing English you'll get by in most of the world doesn't help either. As a native English speaker there is less motivation to learn another language, this affects the UK and Canada as well, I suspect it impacts Aus, NZ, etc...

It does come down to living in a bubble, but the bubble is absolutely huge; as the other replier said, it stretches from coast to coast. We're also heavily propagandized everywhere we turn -- whenever I turn on big media news sources, it blows my mind how this stuff is presented as "news," yet there you go. We're also under-educated, which makes appeals to things like "make it a fair tax" feasible, where we'll go along with whoever says that (where fair almost always means regressive).

It's not just the Republicans, the current bill to enshrine this into law has bipartisan support. The link to HR 1957 shows 1 Democrat sponsor, 18 Democrat co-sponsors and 10 Republican co-sponsors.

> Last week, the House Ways and Means Committee, led by Rep. Richard Neal, D-Mass., passed the Taxpayer First Act, a wide-ranging bill making several administrative changes to the IRS that is sponsored by Reps. John Lewis, D-Ga., and Mike Kelly, R-Pa.

> In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system. If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry’s profits.

Thanks for the correction, The planet money podcast was just focusing on California almost 20 years ago so if make sense the federal situation would be different today.

Intuit/TurboTax would love it if filing was so hard it's practically impossible, without the use of TurboTax.

* In 2007, Intuit lobbied to make sure taxpayers cannot electronically file their tax returns directly to the IRS by negotiating a deal preventing the IRS from setting up its own web portal for e-filing.

* In 2009, Intuit spent nearly $2 million in political contributions to eliminate free online state tax filing for low income residents in California.

* Between 2001 and 2010, Intuit Inc., maker of the tax-preparation software TurboTax, spent more than $1.7 million on lobbying in an attempt to kill ReadyReturn. Proposed statewide rollout of the ReadyReturn program was defeated in the California legislature in 2006. The FTB revived it on their own for the 2007 tax year, expanding it to cover one million Californians

* From 2009-2014, Intuit spent nearly $13 million lobbying. Intuit spent $1 million on opposing ReadyReturn, against John Chang, a Democrat who supported ReadyRun. Joseph Bankman, professor of tax law, Stanford Law School, and advocate of simplified filing, believes that the campaign warned politicians that if they supported free filing, Intuit would help their opponents.

* On March 26, 2013, ProPublica reported that the company lobbied against return-free filing as recently as 2011. One year later, ProPublica reported that the company appeared to be linked to a number of op-eds and letters to Congress in a campaign advocating against direct tax filing backed by the Computer & Communications Industry Association, an advocacy organization of which Intuit is a member.

https://en.wikipedia.org/wiki/Intuit https://en.wikipedia.org/wiki/ReadyReturn

There is (currently) no such law.

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