Inflation Reduction Act Requires IRS to Study Free Tax Filing Options

Sure has to embarrass economists of the last 500 years. Silly adam smith, you just had to pass a law banning inflation duhhh

The main reason that we don't have free filing on the US is not because we don't know how or it's too hard or requires study -- it's because a variety of different political actors across the spectrum desire that outcome for different reasons and they all effectively advocate for it.

Planet Money did a decent episode on the topic a few years ago, but the summary is this:

The companies that make tax prep software will spend ~any amount of money to fight free-file. It would destroy their business. That's one major faction.

Another major faction is that part of the Republican party which wants lower taxes. Their argument is basically that if we made tax filing too easy/automatic, it would be less visible. If you have to spend hours preparing your taxes, you're likely to notice how much you pay and therefore will be more resistant to policies which raise them. If it all just disappeared out of your paycheck transparently, you might not notice it as much.

A third major faction is very-wealthy businessmen, who benefit from the incredible complexity of our system since they can afford to spend large sums of money (and lots of accountants' time) to optimize for maximum avoidance of tax. A system which was simpler or more automated would likely be less game-able -- and even if it wasn't less game-able, the fact that the vast majority of people would have trivial automated filings would mean that limited enforcement resources would be more available to audit the most-complex cases.

And the final major faction is people who do not trust our institutions. They generally fear that it would be scarier and riskier for people to fight inaccurate automated returns, and that people would feel compelled to pay whatever the automated system said they owed for fear of what the enforcers would do to them if they complained about it.

Getting to simpler or automated filings is going to require addressing at least some of these.