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Intuit Still Fighting Government Tax Software
Back in January we discussed Intuit's opposition to California's free, convenient software to file tax returns. TechDirt noticed a recent article in the LA Times about Intuit's continued lobbying efforts to get rid of those programs. Quoting:
"Most importantly, Intuit is offering nothing that California doesn't already have. The state has arranged with other tax software providers to do exactly what Intuit proposes: Help low-income folks fill in and file state and federal returns for free — although Intuit refuses to participate. It apparently only wants in on this deal if the state knocks out its free programs, thereby creating a larger potential paying customer base for TurboTax. Not surprisingly, Intuit has been greasing the wheels in order to try to sell its scheme in California. Since 2005, public filings indicate that Intuit has spent $1.25 million on lobbyists in the state. Over the same period, it contributed an additional $2.12 million to statewide campaigns, including more than $1 million to state Sen. Tony Strickland (R-Thousand Oaks), a ReadyReturn foe who is running for state controller. In all, Intuit has doled out cash to nearly 120 politicians. The impact has been clear, even if Intuit hasn't gotten its way — yet. As documented in The Times, in 2009 California Republican legislators held back their votes on 20 bills in an attempt to do the corporation's bidding and force the abolition of ReadyReturn and CalFile. They didn't succeed in killing the tax programs, but they did kill funding for domestic violence shelters, police and fire departments, and prevention of swine flu outbreaks."
In theory, you'd think this would be the case. In practice, most people filing on April 15th are filing to get their money back, not send money in.
There are actually no incentives for governments to make it easier for taxpayers to get refunds. Taxpayers can create those incentives by reducing their withholdings to $0 so that they owe the government on April 15th rather than the other way around. Given California's problems, that seems like a pretty good idea anyway.
Stuff like this is why a program like the "Fair Tax" won't ever pass. There is nearly a 400 Billion dollar tax preparation industry. They would all be out of work if something like the fair tax ever passed, so not only are we stuck paying income tax we have to pay for all those tax services and tax lawyers that go with it. Intuit is part of the problem, not part of the solution, they are making your life harder not easier.
The United States is not even close being as corrupt as a 3rd world dictatorship. According to: World Audit, the United States is 16th in the world in terms of being free from corruption. All the countries above it in the rankings are first world democracies (although I admit some people would debate Singapore).
I know it is the fashion to insult the US government at the moment, and there *is* a hell of a lot of room for improvement. However, hyperbole and fighting words (comparing the US government to that of a third world dictatorship) just shuts down debate and, frankly, damages your credibility. Let's keep this civil and factual, OK?
in the classic Collapse Of Complex Societies, Joseph A. Tainter theorizes that societies collapse when they hit a point at which increasing complexity creates negative returns. For instance, the Romans funded their society on plunder of outlying civilizations for a long time. Eventually, each incremental conquest required more and more funds to maintain while not providing enough real wealth in return. Similarly the Mayans collapsed because they farmed more and more marginal lands leading to soil degradation, etc. and tried to fix civil wars through more and more ostentatious temple building. Tainter, in his book profiles more than 20 different significant societies that all collapsed following this pattern in one form or another. He says the only solution is voluntary simplification, which has happened only a few times in history.
Now here in California we have an actual complexity industry, with its own lobbyists! How long can that last when you have an actual industry that makes money off of negative returns on additional complexity.
www.fairtax.org.
Flat tax sounds like a good idea. You have two people, one makes $200,000 a month and one makes $1000 a month. Both should be taxed at a flat rate - let say 10% - so the first pays $20,000 in taxes while the other pays $100 in taxes. Fair, right?
Okay, let say the cost of living (minimal housing, basic food staples for cooking, basic transportation because in the USA there are very few total basic services walking communities, etc) comes out to about 20% of income with a minimum cost of living of $950. Thus the first individual he pays the greater of $40,000 or $950, while the second pays the greater of $200 or $950.
Thus, the first individual has a net income of $140,000 a month while the second has a net income of -$50 a month. This means something has to give - don't eat, don't have basic shelter, or don't have transportation for work. In other words, a flat tax is a detriment to those who are in poverty - and to say that those below a certain income threshold do not need to pay income tax is merely implementing a very simple progressive tax (0% up to the poverty line, 10% above the poverty line).
This is not some theoretical discussion either. When growing up my mother was our sole source of income, and as such she constantly had to make the decision between paying the rent, buying basic food staples, or having transportation to work. Even after she finally divorced my father and was able to cut out his useless spending she still faced this decision all the time. Pardon my graphic description but even with a slipped disk she would opt to walk what should have been a 30 minute bus commute because she wanted feed and shelter her children - despite the pain being so great that she'd soil herself and have her s**t running down by the time she'd get to work. Her friends said she could work miracles with flour, and I still remember going and picking wild berries and living off them for a week. Until she was divorced, evictions were a semi-annual to annual event because she needed to feed us.
However, despite our poverty, I realize we were far from the bottom of the heap. My mom still worked hard despite all the pain to feed and shelter us, so we never had to be exposed to the dangerous winter lows that caused her so much hardship or go without food for more than a couple of days at a time.
So, no, a simple percentage based tax income is something beyond silly - is is criminally inhumane
What I don't understand is why free tax filing is only available to low-income citizens. It's got to be cheaper for the state or the feds to process returns electronically. Why not offer it free to _everyone_? I think it would save the government money.
Hmmm...it's tough to tell if your post is an example of Poe's Law or not. Either you're a complete crackpot, or you're a brilliant satirist.
Third parties airing their opinions in the public debate is an 'end-run' around our political system?
"Third parties"? Interesting that you would phrase it that way. In our political system, there is the electorate and the elected. By definition, anyone not of those two groups would be outside of our political system and thus not entitled to engage in it. To suggest that a piece of paper, which is all a corporation really is, is entitled to the same level of Constitutional freedoms as a living, breathing human being is, well, inane. What's next? The right to bear arms? "Dear employees, in accordance with our company's 2nd Amendment rights, all employees are being issued a sidearm for use in protecting corporate IP..."
Why are you so afraid of free speech?
Question cocked and loaded, huh?
Do you think the American people are too stupid to see corporate speech and decide for themselves?
Yes.
Which is more painful? Going to work or gouging your eye out with a spoon? Find out!
http://www.workorspoon.com
It's only complicated because we differentiate between different types of income. If the tax code were written such that you took this year's net worth and subtracted last year's net worth, the difference could be called income, and for something like 99% of the people it would be laughably easy to calculate (we would need some type of depreciation table for homes and cars, perhaps a few other valuable items, or just exempt one house and one or two cars per household). Lop off the first $20,000 or so (in my system it would be a year over year calculation, so cost of living would be included automatically), and flat tax the rest. With one house, two cars, a saving account, and a minor stock portfolio, my income tax return could be maybe four boxes.
Jealously hoarding mod points since 2007.
Here's the problem with a Sales Tax based solution...
I buy expensive shoes when I can afford it. I spend, say $100. That $100 buys me a good pair of shoes that lasts me maybe 2 years.
The guy one income bracket down buys the cheap shoes because he never has $100 cash on hand. He spends the $20 he has to get a passable pair of shoes. In those 2 years he replaces them 8 times.
In two years he has spent and been taxed on $160, I have spent and been taxed on $100. This is not because he *likes* his $20 shoes, it's not because he's simply being short-sighted. It's because he simply doesn't have $100 to spend all at once on shoes.
Now, apply this same concept to any commodity or property you like. The Sales Tax based solutions *always* favor the rich who have far greater latitude to manage their money into tax-free ventures just by virtue of having more of it at any given time.
That's not a problem with a sales tax based system. That's a market situation in which you pay more for quality up front, but less in the long run.
And, with the current system, you're paying the taxes anyway. They're just hidden in the price of the shoes. By removing the income tax component of the price, the price goes down and the consumption tax is paid on the lower price. You spend the same money, you just actually see what the two components (the cost to make them and the tax) are on your receipt now.
The problem with income tax vs consumption tax is that income taxes put a tax on productivity, which is beneficial to society. Consumption is what costs society and thus is what should be taxed. It's also the most fair, because when you add in the pre-bate that the fair tax has, it's an extremely progressive tax that substantially lowers the cost of living burden for low income people while forcing those that spend lavishly to pay a lot more by taking away all the loopholes that their lobbyists buy them in the current system. The only way you can shelter money is to not spend it. And since the pre-bate pays people the cost of the taxes for the basic cost of living up-front before they would ever have to pay the taxes, those under the poverty line actually end up with a net gain on their income because they get money for taxes they would have never paid since they didn't reach that level of income.
Don't listen to all the propaganda and read up on it. There's been plenty of studies done by reputable and independent institutions that conclude that everyone would be much better under the fair tax than the current system.
Actually, that's not entirely true. The politicians and lobbyists that derive all their power and wealth from the current system would be screwed. But, the rest of us would be much better off.