Imagine, as complicated as tax forms are, and as obtuse as the IRS instructions are compared to TurboTax.
Now imagine the government puts up a website for you to file your taxes.
Do you really want to use that? Do you think it will be as easy to use? Do you think you'll have a nice wizard to walk you through it? Will it be faster than TurboTax?
Now, a year or two after their site has come out, and TurboTax has seen a huge drop in revenue (they don't know it, but it's only temporary), they decide to shut it down because they can't compete with both free and "government guaranteed" even if the site sucks.
Will you be happy then?
Seriously - I get the frustration of the current situation, but if you've ever done it on paper and have anything other than the 1040EZ form, this should give you pause.
In other words, for the same reason we have laws against unfair competition.
Business for the sake of business is not necessarily good. If the business does not provide real value any longer, it shouldn't exist.
Government for the sake of government is never good.
Some things lend themselves very well to for-profit businesses. Others do not. Firefighting and filing your taxes to the government strike me as two things the government can probably handle better than capitalists.
If you make under $66,000 a year, filing your taxes online is probably free.
Every year only about three million people — of the nearly 100 million eligible — take advantage of the private partnership the Internal Revenue Service has set up with tax giants such as Intuit Inc and H&R Block Inc. to provide free tax preparation online, according to Tim Hugo, director of the Free File Alliance, which is made up of major tax preparers that manage the Free File program.
Imagine if back when we had paper forms H&R Bloch had managed to lobby Congress to prohibit the IRS from providing free forms and mail in processing directly to taxpayers, and instead required them to work with private vendors to provide proprietary forms and postal tax filing solutions? Would this really be better? How does “with a computer” change this?
And, yes, I've done 1040 and 1040A filing by paper in the past
To make that fair, they would have to lobby against E-File.
I can actually make this comparison, because corporate tax returns still require paper forms.
Now I know the US tax system is much more complex, so take this with a grain of salt. But "free and government provided" doesn't necessarily mean "bad".
And if it were successful enough to drive TurboTax out of business, that would be a massive indicator of popularity and a net win.
I find it utterly absurd that the USA is beholden to this kind of regulatory capture. Forcibly preventing the government from delivering better services to protect an entrenched player? That's an absolute perversion of capitalism - I'd actually say it's reminiscent of communism more than anything.