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[dupe] Former CEO of Paypal, Intuit: “Bitcoin is the greatest scam in history” (recode.net)
53 points by DEFCON28 9 months ago | hide | past | web | favorite | 40 comments




I'd believe Intuit's CEO as I trust him to know about scams - he's running one of the most successful ones there is! He successfully lobbied Congress and the IRS to mandate the use of tax preparation software, and hey, guess what his company makes?


I assume you’re referring to Intuit’s lobbying against proposals for automatic tax filing.

Keep in mind that this would generally only apply to people who are taking the standard deductions. The IRS may be able to pre-fill your returns with W-2 or investment related 1099 information. But if you’re a freelancer, or own rental properties, or donated to charity, or have a child in college etc., you’re going to want to itemize your deductions for maximum benefit.

There is no conceivable way for the IRS to pre-populate the relevant information for all of these cases. For example, many major charities still give donors hand signed receipts for donations of physical items. Rental properties can have multiple owners, and the IRS may not be able to discern if they are spouses etc.

If you actually have a simple tax situation, there are plenty of free filing options: https://freefilealliance.org/.

TurboTax isn’t cheap, but if you have a complex tax situation, the fact that their software takes you through every possible deduction can lead to real savings. YMMV, but this has been the case for me.


> Keep in mind that this would generally only apply to people who are taking the standard deductions. The IRS may be able to pre-fill your returns with W-2 or investment related 1099 information.

That’s all anyone is asking for. This is exactly how taxes work in most of the modern world: you’re sent a prefilled form which is already completely filled for the majority of people, and you only need to confirm if it’s correct or edit if not.

> If you actually have a simple tax situation, there are plenty of free filing options: https://freefilealliance.org

Which is headed by Intuit and designed in a way to purposely make the options as difficult to understand and use as possible so that people buy Intuit products. Google to read any number of articles which go into this in detail.


Back when my tax situation was a bit simpler, I used one of these providers (I forget which) to file a 1040EZ: https://www.irs.gov/filing/free-file-everyone-can-file-an-ex.... If you are above the income threshold, you can mail in a paper return.

I don’t remember the process taking very long? Maybe there’s disinformation out there, but it was my experience that once you’ve actually found a free filing option, the process involves entering maybe a dozen numbers.


From the front page about a week ago: https://uxdesign.cc/turbotax-design-1a37356adc61

And "a dozen" fields for the common case is still absolutely ridiculous. Here the "common case" e-filing requires exactly three fields: your personal number, your password, and your password again after you've confirmed everything.

Even the time they got it wrong (an employer was missing) it took.. two extra numbers: their org no. and the total pay.


I probably should’ve made clear that I support the idea of pre-filled taxes for most people.

At the same time, I think there’s some tendency towards exaggeration on how hard someone who derived all their income from a single W-2 has to work to file taxes.

Your W-2 alone has 20 boxes, albeit usually a dozen are actually used. When you file using a free online service, they have to ask you if you’re filing jointly, if you have dependents etc. A dozen fields is not a lot of work when you’re literally retyping information from a paper form. It’s tedious, but not particularly time consuming. It took me maybe an hour, part of which was just getting my pay stubs and W-2 out.


Not everyone is a well-educated HN reader like yourself. I know tons of people (genuinely good people who work hard and contribute significantly to our society) who get anxiety around tax time and end up paying for services they don't need because they buy into the dark patterns and scare tactics pushed by Intuit and H&R Block. They wouldn't have this problem if they received a pre-filled form in which they knew there would be basically zero chance of error if they were a regular W2 employee.


Seems like one political solution is to simplify the tax code


There’s probably too much room for political gamesmanship in a complex tax base for that to get traction, sadly.


You realize what you're talking about (pre-filling data).. is exactly how the majority of the industrialized world do taxes.

You log on to a website, and if you're just taking a standard deduction, you can basically just next, next, finish your way through the whole thing, and just verify everything is correct.

And of course, if your taxes are more complicated, the options for you to itemize or whatever you want are right in front of you.

Most standard deduction people can have their taxes completed and filed in 1-2 minutes.

I've never heard of a good argument not to try and make things easier on people, and "free options exist", is kind of a lame excuse because it requires that people know about these first, and second requires people to trust third parties with sensitive information, which not everyone is chomping at the bit to do.


So I probably should've made clear that I support the IRS pre-filling taxes. This would make the lives of roughly 2/3 of tax filers, the ones who take the standard deduction, much easier. That's my bad for not making this clear.

However, I think you're underselling the nuance on quite a few of your arguments.

> You realize what you're talking about (pre-filling data).. is exactly how the majority of the industrialized world do taxes.

If you're talking about "return-free" filing, sure, quite a few countries do this: http://www.taxpolicycenter.org/briefing-book/what-other-coun.... Note that these countries operate under far simpler tax systems. "Britain’s Pay As You Earn (PAYE) system, which has incorporated exact withholding since the 1940s, has several features that facilitate return-free filing. One is that it treats the individual (rather than the family) as the unit of taxation. Another is that a large proportion of taxpayers (64 percent) are taxed at the same “basic” marginal rate."

If you're referring to tax information being fully filled out, only 8 of the 35 OECD countries do so (https://www.theatlantic.com/business/archive/2016/03/the-10-...).

> You log on to a website, and if you're just taking a standard deduction, you can basically just next, next, finish your way through the whole thing, and just verify everything is correct.

See this piece from the Tax Foundation, https://taxfoundation.org/pre-filled-forms-solution-tax-comp.... The Tax Foundation has a center-right political leaning, but I think point 1 is a valid one, point 3 may or may not be. One of the advantages to using tax preparation software is that you can compare scenarios. Does it make sense to claim your college student child as a dependent? Should I itemize?

It's unclear to me what incentives the government has as the preparer of your taxes. Should they aim to collect the maximum amount of revenue? Or, should they guarantee the taxpayer the smallest possible tax burden? For grey areas, like whether your home office really qualifies as a place of business, should they pre-populate the return in a way to maximize your return?

> And of course, if your taxes are more complicated, the options for you to itemize or whatever you want are right in front of you.

You're basically suggesting that the government build online tax software with the same functionality as a TurboTax or other tax software. This is something that no government currently offers. Most OECD countries do not offer the litany of tax deductions that we have in the US. Most of these countries have no college tax credit, no mortgage interest deduction, no HSAs etc.

Some 44 million households (30.1% of the total) choose to itemize their deductions (https://taxfoundation.org/who-itemizes-deductions/). Particularly for anyone who's upper-middle class or richer, you're going to want to itemize your deductions. If you look at the sales numbers of tax software, we're looking at ~60 million copies of tax preparation software sold annually (https://www.vox.com/2016/3/29/11320386/turbotax-boycott-lobb...). So sure, there's some number of people, say ~16 million households, who should be filing a free standard deduction, but aren't for one reason or another.

The complexity of the US tax code makes what you're suggesting a complicated and difficult task. See for example, this comparison of US vs foreign tax codes (https://www.npr.org/2017/04/03/522440141/author-looks-to-oth...).

I think we agree on the basic goal of having a simpler filing option that works for the majority of people. But no other tax authority in the world has to contend with the maze of US tax law. Your own vision of an online system that lets people work through each deduction belies the fact that the US tax system is not particularly suited to the proverbial one postcard tax return.


Did you read the part that says he's the past CEO of Intuit? Not involved with Intuit's current lobbying. In any case attacking the author or Intuit about something that has nothing to do with the topic doesn't make sense.



It makes sense if trying to discredit him/put him down. It seems like an emotional reaction and it makes me wonder if the commenter has vested interest in incentivized crypto-assets like Bitcoin - Pyramid-Ponzi scheme structures.

Edit to add: I just realized the original comment might not have been said maliciously, and simply pointing out the ex-CEO was positioning himself well, if he was also part of the lobbying efforts - and if he owns stock still then it could benefit him.


Does he still own stock?


How would that make the original comment more or less valid?


Someone's downvoted me for asking a question for clarification? I'm regularly reminded how garbage downvotes are.


Lobbying Congress to influence their decisions isn't a scam.


No, it's legalized bribing but that does not change what it causes. People are angry that the system is abused, and want a simple solution because we as tech workers understand that all the "issues" around taxes could simplified, but won't because of greed.


It might not be a good idea, but I don't think it's fair to call it a "scam". I don't think Satoshi created it with the anticipation that it would fail.


What's so righteous about the status quo that makes skeptics feel so compelled to defend it so vehemently by degrading Bitcoin?

But it seems we should be far beyond Denial and Anger stage and well into Bargaining and Guilt at this point. Don't worry, he'll join the chorus of "blockchain is good, Bitcoin is bad" rhetoric soon enough.


What's so righteous about the status quo? I'll put it to you as succinctly as possible:

I can hold money in a checking account and have the same amount of money next week, or next month

Inflation is largely predictable, and pretty much non-existant compared to crypto volatility

Fraud, phishing, and hacking will not cause me to lose my life savings. My mother is not technologically savvy at all. I would be terrified to let her keep any significant portion of her savings in a system where a hash with a typo will cost you you everything.

For as much as cryptocurrency supporters will harp about the evils of Wall Street; the explicit scams, pump and dumps, and market manipulation by 0.001% of crypto holders make Goldman Sachs look like a company of boy scouts. 2008 Financial recession? Ha, wait until you see what happens when Chinese mining pools decide it's time to weed out the small fish (ie, every other month or so). Sure, lecture me all you want about how the Federal Reserve is evil - but at least they don't prey on investors with explicit pump and dumps, useless ICOs, or that shit circus Tether.

Although there are certainly smart people working in the blockchain space - most cryptocurrency/blockchain supporters are needlessly confrontational, smug, have a limited understanding of economics or financial engineering, and use ad hominems when they're confronted by arguments they can't debate against.

From an economics and engineering perspective, there are a lot of holes in blockchain and crypto as a technology. This is reflected in the fact that there are currently no useful innovations built on blockchain, other than money laundering, and cryptocurrency (which has no inherent value itself).


I find nothing righteous about a system designed for a select few to profit from maintaining the illusion our money is safe and secure in a vault somewhere. That illusion has already cost people their life savings without any attacks or user error required. But the difference is they are deemed "too big to fail", so when they screw up, they get bailed out while everyone else loses it all.

More egregious is economists insistence that the continuous debasement of our currency combined with skyrocketing consumer debt and stagnant wages due to automation will not end badly. These are the same economists that couldn't possibly predict what would happen when bankers and creditors were allowed to produce billions in worthless financial derivatives and sell them as triple-A investments.


Funnily enough, when people realised they could copy code and sell them off as triple-A investments that is exactly what they did. (OK, not triple A, but the scam of money from nothing is happening again and again.) At least with Bitcoin there is an end.


I see little distinction between a shitcoin ICO and a fart app on the App Store. A fool and their money are easily parted.


If you buy Bitcoin, you still have that much Bitcoin at the end of the week. I think you are referring to exchange rates. Your money is still subject to exchange rate variation on a daily basis.


"Although there are certainly smart people working in the blockchain space - most cryptocurrency/blockchain supporters are needlessly confrontational, smug, have a limited understanding of economics or financial engineering, and use ad hominems when they're confronted by arguments they can't debate against."

How is this not an ad hominem on its own? Easily the most hipocritical one I have seen in years too.


I'm not sure why they needed to add incorrect/unfounded ideas to the otherwise ok article.

> Because transactions can be anonymous — law enforcement cannot easily trace who buys and sells — its use is dominated by illegal endeavors.

That's a no, no, and [citation needed]. Especially since later they write:

> The IRS recently ordered one major exchange to produce records of every significant transaction.


I assume that most mom and pop investors will use the same exchange to buy their bitcoin and then later sell them. In that case the IRS can see both transactions in their account and know the capital profit/loss they have not declared.

If you buy at one exchange and then transfer the coins to another to sell it would be harder for the IRS to match up and discover your profit/loss. Especially if you move the coins via several intermediaries and sell in a different country that is not under the IRS jurisdiction.


You can still track the transactions though - or specifically IRS or LE can request history from the exchanges. Some exchange in the chain may not be under the IRS jurisdiction, but if you want to actually withdraw your money, you'll have to do it either by buying something, via local organisation in cash, or in another country. I.e. it's not that much harder to track than if you did it in cash (rather than btc), which has the same pros/cons if you're in the US.

And I don't think exchanges will ever protect anyone if the LE asks, because of the know your customer rules (https://en.m.wikipedia.org/wiki/Know_your_customer)


https://cointelegraph.com/news/bitcoin-is-a-scam-claims-oust...

Seems like Harris spent around 20 working days as "PayPal Founding CEO" before he got figured out. Quite ridiculous.


Not sure what "figured out" means. However, just to deflect another crypto-fueled ad hominem, I'd like to point out that Elon Musk was also a CEO of PayPal, and lasted only around a year in the position before he too was forced out.


I mean, it is though.

Consider the quality of life that could've been achieved with the same energy cost, material cost, and eventual environmental cost--all so that nerds can collect Merkle pogs.


Consider the quality of life that would be gained by having the same energy all these "gamer" nerds use, with their consoles and graphics power on these useless. silly games. Or consuming netflix. Or watching movies. Or doing anything that is not directly used on the survival of the human race. This is a pedantic argument.


There's a big difference between entertainment and bitcoins--your false equivalence is wrong.


It is. One is the most important economic innovation of our lifetime.


Think of the quality of life that could be achieved if we take all the money from the drug cartels and use it to feed and shelter the homeless of the world.

It's a nice sentiment about an idealistic world but ultimately meaningless beyond producing feelings of guilt for the target.


If your counterargument needs you to bring up drug cartels (and even there, for better or worse, they have physical products that actually do something for the end user) maybe your argument is not airtight.

> It's a nice sentiment about an idealistic world but ultimately meaningless beyond producing feelings of guilt for the target.

Maybe the target should feel guilty for participating and spreading this scam?

Like, if the Bitcoin fans came out and said "Look, okay, we're basically just riding this super volatile security to take advantage of normies and rubes", that'd be fine. America has a long and storied tradition of honoring conmen.

The smug bullshit though? The idea that because they got lucky with some crackpot stupid 'net token scheme (of which there have been dozens over the years) and thus are clearly so superior to the plebes actually building things and powering the economy they take for granted?

It's a racket. It's always been a racket. Don't try to act like it isn't.


Reminds me of this piece re: other fields:

President of American Association of Buggy-Whip Manufacturers takes a strong stand against internal combustion engine, argues that the so-called “automobile” has “little grounding in theory” and that “results can vary widely based on the particular fuel that is used” [0]

[0] http://andrewgelman.com/2014/08/06/president-american-associ...




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