> There have been several proposed bills that would create a pre-filled tax form system, but they always get quietly sidelined by tax industry lobbyists.

Not just industry lobbyists. Another big part is Grover Norquist's "Americans for Tax Reform" and similar groups. They have a lot of influence with about half of Congress.

Here's a PowerPoint presentation [1] Norquist presented to the President's Advisory Panel on Federal Tax Reform in 2005 explaining their opposition to free filing.

It's short so I'll paste the text from each slide here, with the slide titles marked with dashes, so people don't have to find a copy of PowerPoint (or LibreOffice or Keynote, which also can open it fine).

---- Implementing a “Return-Free” Tax Filing Scheme

Presentation to the President’s Advisory Panel on Federal Tax Reform

Grover Norquist

President

Americans for Tax Reform

May 17, 2005

---- The Current System

Tax filing is citizen-based – taxpayers tell the government what they earned and owe

---- Under Return-Free

Tax filing would be government-based – the burden would be on the taxpayer to challenge the government’s findings -- essentially an audit of every single American taxpayer

---- The Fox Would Guard the Henhouse

The same agency that collects taxes would be the tax preparer – the motivation to maximize revenue would dominate both ends of the process

---- Return-Free is a Tax Increase

The true goal is to increase revenue. The government knows few taxpayers will challenge its findings

---- Taxes Should be Visible

Doing taxes keeps citizens aware of the tax burden imposed upon them by the government. A Return-Free scheme would allow the government to raise revenues invisibly

---- The California Example

The State would not guarantee the accuracy of the returns it prepared – the taxpayer was removed from the process, but left with the responsibility

The pilot program achieved 50% less uptake than planned

Comments by CA officials tell us that the true aim was increased revenue

[1] http://govinfo.library.unt.edu/taxreformpanel/meetings/docs/...

So much BS in these lines. For whatever record IRS already has on me, there is nothing my version of the filing can change. It's not like I can arbitrarily remove an 0 from my AGI and "challenge" IRS to accept my version. Then why demand me to repeat the duplicate information? "keeps citizens aware of the tax burden" - Sure if some people want to be aware, but I'm sure many people don't care about and can't reason about every tax change. Seriously, how many of you ever read a news about a new tax and "talked to your congress representative"? All these are just giant waste of time to majority of the population in the country.

> there is nothing my version of the filing can change.

The IRS can say "this is not a valid business expense." You can say "it clearly is a valid business expense and should be deducted!"

The IRS can say "this is contractor income." You can say "it clearly is an down payment for subcontractors, you can see the money leaving here!"

These are two obvious problems you could have, and it doesn't even require dishonesty on the IRS' part. Maybe one of your subcontractors is trying to cheat the system and is jamming you up?

For most people, you won't have these issues. For those that do, what difference does it make to fix it vs making it all on their own?

Well, you've flagged the point. These people, about 10% of the population, that own small businesses are in the minority. They're likely to be an explicit disadvantage in this system. This is a segment that you probably want to use tax policy to protect, not harm.

Further.. it feels like the goalposts have moved on this since it last came up. I don't need the IRS to do my taxes for me, I just need to be able to login to the IRS, pick a form, fill it, and submit it.

E-filing should be free and available to everyone. If you have that, I'm not sure what the value of having it prefilled for me is. In particular, if you just have a single W2 to work from, there could be a 1040-SUPER-EZ where you just enter a serial number from your W2, have it fill from that, and then submit.

You can make this easy without putting everyone under the thumb of the IRS.

> They're likely to be an explicit disadvantage in this system

How are they at a disadvantage? Before, they had to do all their filing themselves, after, they have to also do all the filing themselves.

Why would they be at a disadvantage? As a small business don't you keep your business accounts separate to your personal accounts, and have an accountant to at least audit them each year before submission?

I think you are both right. There can be a process for business and personal. The two are different, why lump them together?

> what difference does it make to fix it vs making it all on their own?

That sounds like a big difference to me. The former would require government knowledge of every single transaction you make/receive, while the latter does not.

It isn't. Most people only pay tax on their income, which is already sent to the IRS. Just pre-file it and ask the payee to approve it. If you have more complicated taxes, you can just decline the pre-filed and file your own, like you already do.

> Seriously, how many of you ever read a news about a new tax and "talked to your congress representative"?

You and I don't do that, but rich people and companies do, if a tax increase is going to impact you and I by $100 it's barely worth the email that will be ignored. If a company is going to be hit by $100m, then it's well worth spending $1m to carve out an exception.

> All these are just giant waste of time to majority of the population in the country.

It works too. Tax return day is ingrained in the American Psyche through cultural output (TV), there is a constant undertone in the US that taxes are bad and the government is stealing your money.

Get rid of tax day and make 70% of the country not have to worry about it other than a line on their payslip and as well as making things far more efficient for both the taxpayer and the government (thus reducing government spending), it changes that cultural balance. Few will care about taxes, and that means the pressure to introduce a 0.1 cent drop in tax (which is structured to benefit someone on $150k by say $2 a week, but benefits people like the Koch Brothers by $200k a week) goes away.

This is such a load of horsecrap. If you need to file deductions then you do that, the government just pre-fills everything they already know. If you want to hire an accountant to be creative with your exceptions you can still do that.

The nice thing about Norquist is you can choose an optimal policy set by simply doing the exact opposite of everything he says.

In the UK the vast majority of national tax take is either baked into the price of goods (things like VAT, alcohol, petrol taxes) or taken off by your employer.

Each month I get a payslip saying I've earned £xxxx and £yyyy has been taken in various taxes and other deductions (from pension to [optional] healthcare, some of which comes off pre tax, some post tax), and the balance is transferred into my nominated bank account each month.

At the end of the year I get a summary from my employer called a P60, which shows how much tax I've paid.

If I have complex needs I then have 9 months to go to a gov.uk website, fill in that data, and either get a rebate or a bill. If it's a bill then they adjust my tax code (which defines the deductions) the next year it takes about 10 minutes (or I can just pay straight away), if it's a rebate they pay it direct to my account (or they can adjust next years deductions)

For self employed people then, but you likely have an accountant who handles everything, and pay yourself via dividends, making large enough tax savings to easily pay accountant fees (which for a small business is pretty low)

I don't consider tax a burden, I consider it the cost of living in a western society. I don't have to pay them - I could move to Svalbard or a country that would take me and pay taxes in that country. Even Americans can do this (and get rid of their US citizenship - saying "no I don't want the benefits of American society")

Very interesting - basically none of that is the case in most countries that have a pre-filled system...

This is a point that I return to often—on so many issues, Americans feel compelled to argue using speculation informed by their particular ideologies, when there is no need to speculate. We can just observe the effects of various policies around the world, assuming of course that we are somewhat curious and willing to be proven wrong by reality.

I've done my taxes by hand - pencil and paper (not even a calculator), and it was faster than filling in all the forms for the online tax software. I still use the software, because the last time I did things my hand I didn't transfer line 17a of form 2345b to line 28c of form 9876d and when that was caught it was a big hassle to correct (even though the IRS had the right numbers I still had to fill out an amended return and then send new forms to the state - the state of course had the right numbers too if they could be bothered to double check)

There is another good talking point: "You already pay the IRS to do your taxes each year. That is how we know if the forms you submit us are correct. You shouldn't have to pay twice!"

Yeah really taxes could be much easier if you only had to submit what they don't already have. E.g. various deductions, non-W2 income, etc. They could then prep the final return and make it available for you to review and approve.

All my problems with taxes over the years have amounted to similar mistakes - forgetting to transfer one amount from one form to another, or transposing numbers, etc.

IMO there are basically two types of tax filers in the US:

1. People who really should file with pencil and paper (or excel, at most)

2. People who need an accountant

Very few people fall in between these categories. The tax code is so complicated and annoying that even things like employer RSUs, mortgages, side hustles, and doing more than 20 stock trades in a year can be risky and weird.

> but they always get quietly sidelined by tax industry lobbyists.

Turbo tax has spent 44 million dollars on lobbying.

The American Medical Association(Physicians) have spent 500 million dollars on lobbying. (All of medical spent about 2 billion)

Its good that people are angry that lobbyists control the nation, but for some reason we give the biggest lobbyists a pass. I don't see the outrage against the top 20 lobbyists, I do (rightly) see it against turbotax.

The medical industry is squarely in the crosshairs of "most broken and fucked up industry in the country" pretty much constantly. I agree that we often don't consider all sorts of other lobbying, but "our medical industry is broken because of corporations" is a pretty uncontroversial statement in the US.

> The medical industry is squarely in the crosshairs of "most broken and fucked up industry in the country" pretty much constantly.

The problem is that you speak for others when they hold the opposing view - our medical industry is evidence of the free market working at its best, and providing care for dollars with no hidden or extraneous fees.

I’d love to see a thorough breakdown of what that opposing stance is. How is medicine, a service that is non-negotiable (e.g. you can die without it) in a position to work without problems in a completely free market? I’m any free market, you vote with your wallet, but that’s impossible if you don’t have time to switch providers or if forces outside of the free market dictate price?

I’d love for us to just say “let the market sort it out”, but that generally requires presumptions that aren’t universally true for all goods or services.

Where are these people? While the bulk of democrats and republicans disagree on what the route evils of the medical industry actually are, they largely agree that it is broken. The republicans, for example, complain to high heaven that the ACA has eliminated the free market within the medical industry and replaced it with regulation and rot.

I think GP was being sarcastic. Nobody really thinks that.

GP you should definitely throw in a /s or something because it's not real clear whether you're serious or not

> The problem is that you speak for others when they hold the opposing view - our medical industry is evidence of the free market working at its best, and providing care for dollars with no hidden or extraneous fees.

Who are these unicorns which are not paid by this system?

Are they friends with Yeti, Bigfoot, and the mythical hot single living in my area?

The medical industry is something like 20% of the economy. That’s not the case for the tax prep industry. Their lobbying is outsized, and able to be more narrowly focused on the couple things they really care about.

The broader medical industry is something like 1/5 of the American economy. It had over 2.5 trillion dollars in revenue this year. Intuits annual revenue was 5.6 billion, so it directs 10x as much revenue, relatively speaking, at lobbying.

I don't get it. Are lobbyists in control of congress? Aren't politicians the ones who pass bills? Or not pass bills in this case.

Reminds me this joke:

“Taught my kids about democracy tonight by letting them vote on which movie to rent and what pizza to takeaway.

I then picked the movie and pizza cos I’m the one with the money.”

The real issue is that the tax industry is a large employer. There are about 80k full time tax preparers in the US, and several times that are hired seasonally. H&R block alone hires about 80k for Jan->April. The lobbyists only have to go into senator's offices and say "We created 14,000 jobs in your district, and this bill puts those in jeopardy". Our tax payment system is, in part, a taxpayer funded private jobs creation program.

The US tax code is longer than the C++ standard if you count only the laws that are active today. If you add on the rulings in IRS tribunals, clarifying papers, and other publications, the US tax code is something like 100,000 pages. It is easy to see a profession being established around learning to read that sort of thing.

The solution to the tax prep industry isn't to have the IRS do your taxes for you, it's to reduce the size of the tax code.

With how US govt uses tax (instead of other adhoc channels) to interact with citizens, let's be honest, reducing the size of the tax code is the least likely event to happen. It would require a complete change of paradigm in how the govt works to make it happen.

Nobody is incentivized to reduce the number of laws on the books, but I would vote for any politician whose position was "I will only repeal laws."

The US government is obsessed with giving narrowly-targeted groups of people money through the most obtuse mechanism possible, and it is ridiculous. If you were just sent a check when you bought an EV (for example), a lot of the tax stuff would be much simpler.

It's both.

> Are lobbyists in control of congress?

Effectively, Yes.

> Who passes bills?

Technically the elected officials, but the bills themselves are usually written by lobbyists.

Pressure from campaign donors, either directly or through lobbyists, or through "party" channels influence votes.

"Congress should wear jackets like NASCAR drivers so we can know who bought them."

https://www.armstrongeconomics.com/international-news/north_...

Yet another reason I wish the US were a real democracy. For all the good that checks and balances do, let's not forget that the founders were trying to entrench the power of their class.

Yes because having a Twitter mob rule the US would be such a great improvement../s

I know there were issues that precipitated the direct election of Senators but I think we would be better if we went back to State Senate control of the Senate, that would force people to focus more on their state and local politics where they have more power rather than ignoring them and shouting how the US Senate is doing nothing.

I think usually is a stretch but some bills certainly are written by lobbyists (or think tanks/do tanks)

Even if they aren't written by Lobbyists I'd be surprised if most bills weren't influenced at least a little by at least one lobbyist group.

Hmm, probably depends on what you define as a lobbyist. If you're writing a bill about education reform and including more tech in the classroom (just a hypothetical example) and ask the teacher's union, Brookings, and a major education company about what would be important to include or not include, would that be influenced by a lobbyist group?

Congressional members commonly have no idea what is in the legislation they propose. Nancy Pelosi is on the record saying as much:

https://posey.house.gov/news/documentsingle.aspx?DocumentID=...

>Are lobbyists in control of congress?

Yes, lobbyists and intelligence agencies.

Why legislate any of it? Just charge all 300+ million of US with tax evasion and allow everyone to enter a plea of no contest. The fine for this treachery can be to pay the exact amount of taxes I owe. No need for any laws to be changed anywhere. We can enter our plea via zoom call.