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The US government currently takes in about $1.7 trillion in individual income taxes per year, so even spending $500 million to pre-fill forms would be almost nothing (0.03%). Heck, that's less than a useless aircraft carrier or a Facebook consent decree violation.

The IRS already has W-2s and 1099s, which cover ordinary pay and retirement investments, and enough money has probably been automatically withheld already. Remember that this isn't automatic billing, but automatic filling. They'll send you the form, and you can insert the number of children. If your taxes are much more complicated than that, you can probably afford TurboTax.

For the record, the IRS (in partnership with various tax companies) already providers for free filing for people making less than 66k/year.


The whole point of doing it this way - via the tax companies' own services - is to make it an advertisement for those companies, so that once somebody starts earning more, they would preferentially pick them. It's also a form of mild lock-in, since already having their return history etc there makes filing that much easier, creating an incentive to pay.

In the meantime, the same lobbyists who created this scheme are trying to prohibit IRS from developing its own free filing system:


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