Monday, April 7, 2014

TurboTax, the IRS, and Our Congressman

Making life easier and cheaper, or not.

Through its political action committee (PAC), TurboTax maker Intuit spends millions lobbying against income tax simplification and government-provided tax preparation software. Intuit PAC made at least one $1,000 contribution to our 11th District representative during the last election cycle.

Hearing this reminded me of a breakfast meeting last year at which our Congressman spoke. As with a lot of political conversations in 2013 the discussion came around to expenditures, revenue, and a looming government shutdown. Our representative's answer to revenue issues was to hire more IRS agents and collect money that was "left on the table".

So instead of proposing a simpler, more efficient tax code that makes compliance more effective and less costly, he suggested hiring more enforcement and leaving the bad old system in place. Did Intuit's campaign contribution influence his position? I don't know, though our Congressman is an advocate for the Federal workforce.

As I suggested during my 2012 campaign for Congress, I think the tax code can be simplified and taxpayer-filed returns made unnecessary. Along these lines economist Austan Goolsbee proposed in 2006 a Simple Return that "might apply to as many as 40 percent of Americans, for whom it could save up to 225 million hours of time and more than $2 billion a year in tax preparation fees."

Full disclosure: I'm a long-term TurboTax customer and will use it again this year (in part because it's easier than learning new software). That doesn't mean I enjoy filing a return. And it certainly doesn't mean I like wasting my time untangling the tax code, worrying whether I've applied the code correctly to my situation, and shelling out $50 a year for tax preparation software.

With the April 15 tax filing deadline a week away, it's frustrating but expected that a company defend its market niche. But it's galling and unacceptable that our elected officials should accept contributions from companies looking to do so.

Information technology is supposed to make us more productive and tasks less costly. Unless, of course, it's someone else's livelihood.