
Congress Scraps Provision to Restrict IRS from Competing with TurboTax - danso
https://www.propublica.org/article/congress-scraps-provision-to-restrict-irs-from-competing-with-turbotax
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rayssgyms
It seems like the incentive structure is broken here because the tax software
companies have the wrong customer.

Their customer should be the IRS. These are the options asI see them:

1) Have the government “make” their own version. There would be little
attention paid to user experience, since there’s no competition and the
bureaucracy has no incentive to create good products.

2) Have the government hire a company - which is really the same as “making
it” since I’m assuming government employees aren’t the ones writing the code.
However, if structured properly, the outsourced company could be compensated
based on user experience metrics. I see the likelihood of this happening as
low.

3) Arbitrarily complicate the tax return policy. Put the burden of
understanding on the citizen. Let the “free” (contrived by government
intervention in this case) market fulfill the artificial need in the market.
This seems to be the way things are being done now.

Trouble is, our democracy doesn’t seem to be effective at solving problems
like this. It appears that we don’t have the ability to actually have a direct
impact on this policy change. Only if the majority party happens to have the
political willpower to work on this, and only if that party holds a majority
in the house and the senate.

Couple that with a $100M+ annual investment (institutionalized bribery from my
perspective) from these tax software companies to ensure that elected
officials don’t unwind the artificial demand that’s been created, and you have
the situation that we are in right now.

Let me know if I’ve missed anything or have been unfair. If anyone has any
ideas about how an average citizen can affect this policy, I’d love to know.

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microtherion
> Have the government “make” their own version. There would be little
> attention paid to user experience, since there’s no competition and the
> bureaucracy has no incentive to create good products.

Empirically, the place I live in (Zürich, Switzerland) has offered excellent
government created tax filing software for several years (used to be somewhat
monstrous Java apps, but nowadays the software is web based and really
convenient to use), for ALL taxpayers, as far as I can tell.

I would argue that there IS an incentive to the government to make tax
compliance simple, and keep grumbling to a minimum.

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ScottFree
How does the Swiss tax system work? How are taxes added and/or removed? Do you
have tax deductions or other incentives?

The truly weird thing about the American tax system is the way it handles
deductions and other incentives. You can't take advantage of them unless you
know they're available and request them specifically. This gives the
government a real incentive to make the tax code as complicated as possible.
If you don't know what deductions are available to you, then you'll probably
miss some or all of them and end up paying a lot more money than you would
have if the process was more straight forward.

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microtherion
There are all sorts of deductions, and there are also anti-deductions, e.g.
imputed rent for homeowners. The more common deductions are enumerated in
separate fields, the others you can itemize on more free form input.

It's not like all of those deductions are obvious here either. When we moved
back to Switzerland, I had an accountant do my taxes once or twice, but after
that, I knew what kinds of deductions I could claim.

Switzerland has no AMT, which is one of the more painful parts of the US
filing process in my experience.

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jackfoxy
The income tax system is as much about the government asserting dominance over
citizens (and residents) as it is about raising revenue.

There could be more efficient revenue collection schemes devised (less
friction), taxes with fewer collection points, but then everyone would not
have to submit to Caesar annually.

It is a tribute to the success of popular delusions that the 16th amendment
was, and pretty much all new taxes are, sold as tax-the-rich schemes.

~~~
oceanghost
You get it. :)

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Derek_MK
> The Free File program will continue as before. The development in Congress
> only means the program will not be codified into law.

So uh, no real change.

~~~
orev
Exactly, which is the point. If it was codified into law, then it becomes more
or less permanent. It’s insane that we allow the tax filing companies to have
so much say over how taxes are filed, so at least if it’s not an actual law,
there’s a better chance the situation can change in the future.

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dariusj18
I hope which ever managers that ok'd that particularly insidious strategy at
Intuit are shamed and the those staff that said "this is a terrible idea" are
rewarded.

I know that will never be the case, but I can hope.

Those lobbyists have got to be so pissed too.

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r00fus
So wait, this is a part of a bill that was customarily added to legislation in
the past protecting TurboTax but is not this time (good), but hasn't yet
passed the House (ok - probably will) and only has Grassley as a sponsor in
the GOP controlled Senate (who knows if it'll pass).

Sounds like Intuit needs to fire up their Senate lobbyists and push them into
overdrive - I don't see this as a win, not until it passes the desk of
McConnell (aka the grim reaper of legislation passed by this House) or signed
by Trump (who vetoed another bill that passed with 100% Senator support -
which just happened to cause the 2019 shutdown).

Let's not break out the champagne just yet.

