Check out the following expose from Ezra Klein about the tax software scheme by Intuit and H&R Block to make lots of money from an unsuspecting publilc. This is something I didn't know anything about.
For most Americans every dollar made, including our current family status, is already known by the IRS. It would be simple for the IRS to send you your tax form already filled out, waiting for your signature. You could also check the box and opt to do it yourself.
But the big financial software companies have successfully lobbied to kill that option. Here's a great video where Klein spills the beans on another corporate ripoff:
If I'm not itemizing deductions (like 70 percent of taxpayers), the IRS has all the information it needs to calculate my taxes, send me a filled-out return, and let me either send it in or do my taxes by hand if I prefer. This isn't a purely hypothetical proposal. Countries like Denmark, Sweden, Estonia, Chile, and Spain already offer "pre-populated returns" to their citizens.Obama and Reagan both backed this idea:
The United Kingdom, Germany, and Japan have exact enough tax withholding procedures that most people don't have to file income tax returns at all, whether pre-populated or not. California has a voluntary return-free filing program called ReadyReturn for its income taxes.
The Obama administration supports return-free filing, and Ronald Reagan touted the idea in a 1985 speech:The Republican talking point for decades plays on the myth liberal Democratic Americans like taxes in general, and don't mind paying more. Without this silly caricature, they can't make the argument that freeloading off the work and legacy of generations before them is okay:
"We envision a system where more than half of us would not even have to fill out a return. We call it the return-free system, and it would be totally voluntary. If you decided to participate, you would automatically receive your refund or a letter explaining any additional tax you owe. Should you disagree with this figure, you would be free to fill out your taxes using the regular form. We believe most Americans would go from the long form or the short form to no form."