Imagine filing your income taxes in five minutes—and for free. You'd open up a pre-filled return, see what the government thinks you owe, make any needed changes, and be done. The miserable annual IRS shuffle, gone.
It's already a reality in Denmark, Sweden and Spain. The government-prepared return would estimate your taxes using information your employer and bank already send it. Advocates say tens of millions of taxpayers could use such a system each year, saving them a collective $2 billion and 225 million hours in prep costs and time, according to one estimate.
The idea, known as "return-free filing," would be a voluntary alternative to hiring a tax preparer or using commercial tax software. The concept has been around for decades and has been endorsed by both President Ronald Reagan and a campaigning President Obama.
"This is not some pie-in-the-sky that's never been done before," said William Gale, co-director of the Urban-Brookings Tax Policy Center. "It's doable, feasible, implementable, and at a relatively low cost."
So why hasn't it become a reality?
Well, for one thing, it doesn't help that it's been opposed for years by the company behind the most popular consumer tax software—Intuit, maker of TurboTax. Conservative tax activist Grover Norquist and an influential computer industry group also have fought return-free filing.
Timely, from Mother Jones. Opponents to return-free filing say it's a conflict of interest for the same entity that collects taxes to calculate your taxes, but essentially they have to do the work every year anyway, they'd just be sharing their calculations ahead of time. And of course you wouldn't have to accept their calculation, you could amend or reject it. Given the immense national suffering imposed by tax day each year, a shift like this could turn it into a national holiday.
Not surprising for special interests to spend millions of dollars lobbying to protect their revenue stream, our government structure practically invites it, but it's still disappointing to see Intuit acting this way. TurboTax has always been a brand people view positively, but this is like discovering your caretaker has been shielding you from a better life in order to protect a paycheck.
If we could just collect a fraction of the tax preparation fees spent each year we could out-lobby Intuit and its partners here easily. That's the power of a motivated minority, though.