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Intuit Still Fighting Government Tax Software

Soulskill posted more than 3 years ago | from the no-public-option dept.

Government 374

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."

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Already happened in Virginia (4, Informative)

OhHellWithIt (756826) | more than 3 years ago | (#33114562)

Virginia used to have a web-based filing program, iFile. After successfully running the program for four or five years, the legislature voted to do away with it this year, even though I'm sure it had paid for itself and was generating significant cost savings for the state. The sad part to me is that most Virginians seemed to have been unaware of it, as I haven't found anyone else who is even remotely bothered by it. They already pay for Tax Cut or something like that. <sigh>

Re:Already happened in Virginia (0, Informative)

Anonymous Coward | more than 3 years ago | (#33114622)

Virginia used to have a web-based filing program, iFile. After successfully running the program for four or five years, the legislature voted to do away with it this year, even though I'm sure it had paid for itself and was generating significant cost savings for the state.

That wasn't Intuit's fault, that was Apple suing for infringement of their trademark on the letter "i".

Pssst! You wanna buy the letter I?

Re:Already happened in Virginia (4, Insightful)

jandrese (485) | more than 3 years ago | (#33114678)

Wait, what? iFile was great, and I'll be pissed if it's gone. IIRC TurboTax wanted an outrageous amount of money to file state taxes which I laughed at because Virginia has (had?) such an great online system. Really, ever since Day 1 the Web has been fantastic at putting up forms for people to fill out. The IRS could have built their own website 15 years ago if they wanted, but one feels that they've gotten so cozy with HR Block, Turbotax, Legions of CPAs, etc... that they didn't want to rock the boat. It feels like the buggy whip manufacturers convinced the government that automobiles shouldn't be allowed on public roads because it would hurt their industry. (woo! Car analogy!)

Re:Already happened in Virginia (1)

MBGMorden (803437) | more than 3 years ago | (#33114808)

IIRC TurboTax wanted an outrageous amount of money to file state taxes which I laughed at because Virginia has (had?) such an great online system.

I'm sure you don't want a recommendation for another pay program, but TaxAct really does well and costs a lot less than the other versions. I can't remember exact costs, but IIRC it was around $20-25 including e-filing fees for me to file both my Federal and State returns last year. And since they have an online/web-based version available, you can use it on a Linux system for those who don't have access to a Windows machine. Having never had the option at a state-provided program before, I really found it to be a great value compared to TurboTax or the H&R Block software.

Re:Already happened in Virginia (1)

Maximum Prophet (716608) | more than 3 years ago | (#33114976)

It seems to still be there: https://www.individual.tax.virginia.gov/VTOL/IndLogin.seam [virginia.gov]

I can't actually try it because it's not tax time.

I use tax software to do my federal, so going to a separate web site to do the state seems inefficient, but it might be a good idea for other people.

Virginia even sent out a notice that it saves them beaucoup money when people use online tax filing. Unfortunately, they aren't willing to pay companies like Intuit or Kiplinger's so that the cost to the filer is zero. I always print and send my tax forms so that it maximizes their cost, and minimizes mine. As long as my refund isn't large, and I file early, my lost interest on the money doesn't exceed what it would cost to eFile using the tax software.

Re:Already happened in Virginia (3, Informative)

NukeDoggie (943265) | more than 3 years ago | (#33115076)

Yes the iFile saved the state of virginia millions of dollars. The removal of it will increase paper filing tremendously. They bribed(lobbied) our officials completely to remove it. It was fast free and easy, and it's gone now. There was only discussion by our local rag after the law was passed almost unanimously. Another example of corporate greed raiding the coffers in the name of "Helping" the poor...

Re:Already happened in Virginia (1)

g0bshiTe (596213) | more than 3 years ago | (#33115080)

I live in VA as well. Welcome to the Common Wealth, where Wealth is unCommon!

Re:Already happened in Virginia (1)

cmiller173 (641510) | more than 3 years ago | (#33115132)

Nebraska has one as well, NebFile. Even though I buy turbotax for federal and it comes with one free state software, it does not include the state filing fee. So I let turbotax generate the state forms based on the federal then I re-key the data into the state web based form to file free. If the state eliminated the free web based filing I'd probably just snail mail the state forms. I usually get a federal refund and owe the state a few bucks.

Re:Already happened in Virginia (1)

PopeRatzo (965947) | more than 3 years ago | (#33115264)

After successfully running the program for four or five years, the legislature voted to do away with it this year,

And the lobbyists from the Bar Association and Accountants' organizations had absolutely nothing to do with it.

Clearly, having free software available with which to do our taxes is a Socialist plot to destroy the "free market".

Huh?! (5, Insightful)

therealkevinkretz (1585825) | more than 3 years ago | (#33114578)

So, let me get this right. A tax code is so confusing and complicated - in part because of lobbyists and politicians carving out special exceptions for each other and special punishment for their enemies - that even cash-strapped California sees the need to assist its citizens with compliance? And the result is *more* lobbying from a company that's (frankly) had a windfall for years because of the degree of difficulty of that compliance, to convince the state ... to help the company *make money* from its constituents instead of helping those constituents? Unbelievable.

Re:Huh?! (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33114702)

Companies do what is in the interest of profits; this is news? It is pretty much what companies are chartered to do. Anything within the law to improve shareholder return is will be done.

Re:Huh?! (2, Insightful)

therealkevinkretz (1585825) | more than 3 years ago | (#33115002)

I'm not surprised that Intuit is trying to keep business; I'm surprised that the level of brazenness necessary for politicians to entertain the idea.

Re:Huh?! (2, Insightful)

bonch (38532) | more than 3 years ago | (#33115168)

It's weird that you bash companies and ignore the government's role in creating a confusing tax code in the first place. Governments, as some kind of universal law, fuck things up for their citizens.

Re:Huh?! (4, Insightful)

Shakrai (717556) | more than 3 years ago | (#33114764)

It occurs to me that a simple percentage based income tax would not require anything more complicated than your W-2 form and a calculator to figure out. But why would we do something as silly as that when we can use the tax code for social engineering and as a rewards system for favored industries instead?

Re:Huh?! (1)

jythie (914043) | more than 3 years ago | (#33114832)

Because 'simple' systems are really easy to abuse? And planned economies tend to be more stable and have better long term growth then completely laissez-faire ones? As stated by others, private companies tend to do what is good for their own short term benefit... this is often at odds with what is good for the whole economy... thus the social engineering.

Re:Huh?! (2, Insightful)

CajunArson (465943) | more than 3 years ago | (#33114978)

Because 'simple' systems are really easy to abuse? And planned economies tend to be more stable and have better long term growth then completely laissez-faire ones?

Answers to your questions:
1. No --> and if it is really that difficult for you to understand how it's about a million times easier to abuse a tax system full of loopholes and ambiguities, I feel sorry for you.
2. No:
    With your "planned" economy, you can either get a fun-filled central planner who gets rid of all those "evil" companies at the butt-end of a rifle... or you can get the current implementation of planned economies that we have in the US (and especially in California) where multiple interests compete to outlaw one another by hijacking an oversized and overpowered bureaucracy. Either way is bad news, and convoluted tax laws are a powerful club to use in micromanaging other people's lives.

Re:Huh?! (1)

jythie (914043) | more than 3 years ago | (#33115322)

The problem with simple systems is that they are all or nothing... you pay everything or if you find a way to not 'count' then you pay nothing. As for planned economies.. that first one is a pretty extreme example and does not fit our system of government. The second example I admit is not ideal, but it is a lot better then a laissez-faire system since those tend to just result in private companies becoming stronger then the local government anyway, but having even less interest in public growth.

Re:Huh?! (2, Insightful)

Shakrai (717556) | more than 3 years ago | (#33115016)

Because 'simple' systems are really easy to abuse?

False. A 20% (just to pick a number) income tax without any exemptions written into it by lobbyists would be much harder to abuse than the albatross that it is the current tax code.

As stated by others, private companies tend to do what is good for their own short term benefit... this is often at odds with what is good for the whole economy... thus the social engineering.

The social engineering is done to individuals, not corporations.

Re:Huh?! (1)

jythie (914043) | more than 3 years ago | (#33115210)

Actually such systems are pretty easy to game, just make sure whatever you do does not count as 'income'. If you are getting a paycheck at a regular job things are pretty simple, but when your worth comes in from more complex sources it gets a lot murkier, which is where other types of taxes kick in. As for social engineering... corporations are made up of people.

Re:Huh?! (1)

Normal Dan (1053064) | more than 3 years ago | (#33114884)

Not everyone receives a W-2. Also, there's income from other sources, interest, stocks, dividends, tips, etc. But I do agree it could be a lot simpler.

Re:Huh?! (1)

Firethorn (177587) | more than 3 years ago | (#33115216)

More people get W-2s than get 1099s though.

Still, we're only talking about TWO forms now and a calculator.

My mother is a CPA, she has an original copy of the first tax return form. Form AND instructions fit on the two sides of an 8.5x11 piece of paper.

So much as a 1040EZ takes around 4 pages for the form itself today, and the instructions another dozen.

Re:Huh?! (1)

Monchanger (637670) | more than 3 years ago | (#33115306)

It occurs to me that a simple percentage based income tax would not require anything more complicated than your W-2 form

That's exactly what you can do already, and that's how I prepare mine. If simplicity is all you want, you have the right to simply pay a straight percentage each on your income and capital gains. Of course if you choose to look for every single way to benefit from various government incentives, then yep- it'll take a little more work. Limit yourself to the standard deduction and you'll be done in under ten minutes.

"Occurs"? There's this guy named "Ron Paul" you might like. Tell him about this fascinating idea of yours. Congrats on the original thought. You sure are a bright one. Trying to argue against discretionary government spending by complaining about your tax preparation is a pathetic example of why politicians are justified in ignoring their constituents.

Re:Huh?! (-1, Troll)

Skuld-Chan (302449) | more than 3 years ago | (#33114792)

Sadly this is the cause for many of the gimped and crappy government we've had at every level in this country.

Its just as corrupt as many of these 3rd world dictatorships we read about.

Actually, the USA isn't all that corrupt. (5, Interesting)

crgrace (220738) | more than 3 years ago | (#33115048)

The United States is not even close being as corrupt as a 3rd world dictatorship. According to: World Audit [worldaudit.org], 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?

Re:Huh?! (4, Insightful)

elrous0 (869638) | more than 3 years ago | (#33114800)

The tax code is so complicated because there is a legacy of decades of politicians finessing it to raise needed taxes without LOOKING like they're raising taxes (or restricting raises in such as way as to exclude most voters). Add to this the fact that this is happening on at least *two* levels (federal and state, and sometimes even city and/or county) and you end up with an almost hopelessly complex system.

Politicians are too cowardly to just come forward and say "We need to raise income taxes, because of X, Y, and Z" so they quietly sneak in shit like "A 2% business tax increase for fishing businesses earning over $100,000 a year with 12 or more employees." Repeat this over decades and you get a tax code that reads like the source code of Windows Vista.

Re:Huh?! (2, Funny)

Shakrai (717556) | more than 3 years ago | (#33114828)

Repeat this over decades and you get a tax code that reads like the source code of Windows Vista.

Best. Analogy. Ever.

Re:Huh?! (2, Insightful)

QuantumRiff (120817) | more than 3 years ago | (#33114856)

Its even worse than that.. Our government is the only organization I have ever heard of that refuses to tell you how much you owe!

Could you imagine if you went to buy a car, and the ford dealership gave you the keys, then told you to submit payment, but never told you the price of the car? Especially if they threatened to come after you with the Police and lock you up for not paying correctly?

Fairtax all the way. I find it silly that we have to hire people to tell us how much we owe....

Re:Huh?! (0)

Anonymous Coward | more than 3 years ago | (#33115228)

Its even worse than that.. Our government is the only organization I have ever heard of that refuses to tell you how much you owe!

How would the gubblemint know how much you receive in tips? Exactly?! Also, I think some of it is like liar's poker. Did that Indian Casino report that jackpot winning or didn't it? Is Ebay reporting to the IRS yet? Did someone file an I9 on that sale you made 2009 (having filed one in 2008 for a larger purchase). I believe the mystery is in part to keep people honest and it is intended to give them (IRS) the edge. If they tell you everything they know, then you are only liable for providing information in your favor. I am anti-tax (pro flat tax, pro import tax, pro smaller government) but it doesn't seem unreasonable that you are expected to independently do your taxes. How should they know if your 2nd home is rented out? Do you want them to know without your informing them?

Re:Huh?! (4, Insightful)

Nadaka (224565) | more than 3 years ago | (#33114936)

People are second class citizens in America because the amount of money and votes they can contribute to a politician is severely limited.

Corporations are first class citizens in America because it is a violation of human free speech rights for non-humans to have limited ability to bribe..., I mean donate to the campaign of, politicians.

Welcome to Feudal Corporatist America.

Re:Huh?! (2, Insightful)

Shakrai (717556) | more than 3 years ago | (#33115054)

Corporations are first class citizens in America because it is a violation of human free speech rights for non-humans to have limited ability to bribe..., I mean donate to the campaign of, politicians.

Corporations can't donate to political campaigns but why let the truth get in the way of your talking points?

Re:Huh?! (2, Informative)

Nadaka (224565) | more than 3 years ago | (#33115164)

Corporations are first class citizens in America because it is a violation of human free speech rights for non-humans to have limited ability to bribe..., I mean donate to the campaign of, politicians.

Corporations can't donate to political campaigns but why let the truth get in the way of your talking points?

http://www.pbs.org/newshour/bb/law/jan-june10/supremecourt_01-21.html

Don't let checking the facts of your statements get in the way of what you think is the truth. Its ok, sometimes I do that myself.

Re:Huh?! (2, Informative)

Shakrai (717556) | more than 3 years ago | (#33115258)

Citizens United said that corporations can take part in the political process. It did not say that they can donate money to political campaigns. They can print fliers, buy TV/radio advertisements, take out newspaper ads, etc. They can't write a check to "Obama for America"

I know it's hard for you to understand, but there is a difference between being able to say "Barack Obama kicks puppies" and writing a check to Barack Obama's opponent......

Electronic tax filing should be FREE (4, Insightful)

maillemaker (924053) | more than 3 years ago | (#33114592)

I have long thought that it is a scam that you have to pay a third party to do electronic preparation and filing like the usual services (TurboTax, etc.) provide.

The government made the convoluted tax system - they should make the web-based application to navigate it.

Re:Electronic tax filing should be FREE (3, Interesting)

stalkedlongtime (1630997) | more than 3 years ago | (#33114688)

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. [mymoneyblog.com]

Re:Electronic tax filing should be FREE (1)

Shakrai (717556) | more than 3 years ago | (#33114806)

Taxpayers can create those incentives by reducing their withholdings to $0

Unfortunately it's not quite that simple -- you'll owe the IRS interest if your tax bill is more than $1,000 and you don't fall into one of the exemption categories (recent change in the number of dependents or filing status, among others). Most of the states with income taxes work the same way.

I did change my New York State withholding so that I'd owe them a few hundred bucks instead of having a small ($40 last year) refund coming my way. I did this after they decided to hold onto my $40 for three months after I filed in order to help with the state's cash flow problems. It's my fucking money, you have no right to hold onto it without paying me interest. Now I'm going to owe them money and I'll be damned if I pay it one second before April 15th......

Re:Electronic tax filing should be FREE (2, Informative)

jythie (914043) | more than 3 years ago | (#33114904)

Actually, that is illegal. Under reporting your withholdings can get you into trouble since you are required to be paying your income tax gradually during the year.

Re:Electronic tax filing should be FREE (1)

networkBoy (774728) | more than 3 years ago | (#33115120)

you have the option of setting it to zero and paying quarterly.
That's what I've started doing to California since my last refund was several months late.
-nB

Re:Electronic tax filing should be FREE (1)

jythie (914043) | more than 3 years ago | (#33115148)

Ah, I was not aware of the quarterly option. Can you do that to federal also?

Re:Electronic tax filing should be FREE (1)

Ephemeriis (315124) | more than 3 years ago | (#33114738)

I have long thought that it is a scam that you have to pay a third party to do electronic preparation and filing like the usual services (TurboTax, etc.) provide.

The government made the convoluted tax system - they should make the web-based application to navigate it.

I'd have to ask my wife what website she uses... She always does our taxes...

But we always do them on-line. For free. We have no trouble, usually have them filed well ahead of time, usually get whatever refund may be coming before other folks have even filed their taxes.

Re:Electronic tax filing should be FREE (1)

jythie (914043) | more than 3 years ago | (#33114858)

Well, at least it is a consistent scam. Our whole legal system is built that way... you need a 3rd party expert in order to actually utilize the system.... sometimes you are not even allowed to access it yourself. Even worse, in criminal cases, your opponent (the prosecutor) has all their expenses paid for them by the taxpayer, but the defendant has to out of pocket everything themselves.

Re:Electronic tax filing should be FREE (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33114890)

I don't think that the organizations that produced the forms nobody can figure would do much better at a web site.

They do, in the UK (1)

Kupfernigk (1190345) | more than 3 years ago | (#33114944)

The Government website is slightly clunky but yes, it works. It's a pity the last Government tried to make the system too big and intrusive (Government of anal retentive Stalinists, I'm afraid) because some of the automation projects were very good - like the link between passports and driving licences, which worked perfectly when I had to renew one and change the other, and the car tax system which checks your documents on-line.

It also means that British accounting systems have to be really good because they have to do the essential Government functions more easily than the free versions.

Re:They do, in the UK (0)

Anonymous Coward | more than 3 years ago | (#33115042)

Which is why Sage is so good. Wait, what?

Re:Electronic tax filing should be FREE (1)

Midnight's Shadow (1517137) | more than 3 years ago | (#33114980)

I agree with your point but I don't see any way the government could do it. Their are so many loopholes, requirements, deductions, exceptions, and what not in the US tax system that no tax service will get it completely correct. It also changes so quickly (exceptions, tax cuts, tax increases, etc) that websites would a hard time keeping up especially at the speed of government. The only government website I use is for my student loans and it is poorly put together and hard to navigate in comparison to banking and credit cards. Personally, I'd trust a 3rd party service (like TurboTax) before I would government software because then I'd at least get some assurance that if there was a bug or miscalculation that had nothing to do with the numbers I put in it would be the problem of someone else instead of being litigated into nothingness by the IRS.

Re:Electronic tax filing should be FREE (1)

NevarMore (248971) | more than 3 years ago | (#33115084)

Whenever you say "the government" should do something, you need to replace "the government" with "the government should take something from me/my family/my neighbors" .

The government is not some entity separate from yourself, it acts using YOUR assets and its rules affect YOU.

Re:Electronic tax filing should be FREE (1)

LWATCDR (28044) | more than 3 years ago | (#33115194)

"The government made the convoluted tax system - they should make the web-based application to navigate it."
Except that the "government" aka you the tax payer will be the one to pay for that system.
Do you think that the government can pay the development cheaper than just letting you choose to buy Turbo Tax?
In this case it is already written so the money has been spent.

And not everybody needs to buy or really use tax prep software. If you need help with a 1040EZ you just need help with everything.
I am sure that states that have income tax have the equivalent to the 1040 EZ.

I can see your point but I can also see the flip side of it. Long before their was an internet Intuit/TurboTax was automating doing your taxes. They where a lot cheaper than going to H&R Block or the multitude of tax prep places we had back in the day.
They have built a huge business out of producing what is to be honest pretty cheap and easy to use software. Intuit probably has a lot of employees in California that make good money so yes they do have some clout. They just do not want the state doing the job they have been doing for years and getting paid for.
I wouldn't call it a scam since the idea that doing your income tax is a painful complex experience has been around since long before their was TurboTax. I remember both an Odd Couple episode and a Bob Newhart episode from the 70s based on the idea that doing your income tax was a terrible task. A complex tax code is nothing new.

Nothing in Government is FREE (1)

ColoradoDon (820311) | more than 3 years ago | (#33115346)

Who do you think pays the people that develop these "free" web-based applications? I believe that would be you, the tax payer. Nothing that government does or "gives you" is free. Everything costs you tax dollars. Frankly, I'm not surprised to see this kind of thinking on /. A free market that provides a product that is a fair value for the money will always provide better solutions and services than government, and you get good product support from companies like Intuit, HR Block, etc. compared to anything you could possibly get from government.

And here we see (1)

ArsonSmith (13997) | more than 3 years ago | (#33114672)

And here we see why we'll never have a simplified tax code. Or any kind of reform in this area. The military/industrial (IRS/Tax preparers) complex has grown out of control.

Any Fair Tax Supporters? (3, Interesting)

2obvious4u (871996) | more than 3 years ago | (#33114690)

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.

Re:Any Fair Tax Supporters? (1)

Bryansix (761547) | more than 3 years ago | (#33114834)

Intuit is making money OFF of the problem. Put the blame where it belongs; on the lying politicians and the apathetic public.

Re:Any Fair Tax Supporters? (0)

Anonymous Coward | more than 3 years ago | (#33114908)

Intuit's product is a byproduct of the albatross that is the current tax code. They have been making money making something very difficult for many people much easier (and cheaper than an accountant).

Now the idiots that are the politicians are realizing that the tax code is so complicated that in addressing it they are addressing a symptom and not the problem. Rather than simplifying the tax code and saving individuals and government money, they are going to spend money to create a product that already exists!

And if they screw it up only the taxpayer gets screwed. If Intuit screws it up at least Intuit gets screwed. I don't blame Intuit for trying to protect a legitimate product that the government essentially created the need for...

Re:Any Fair Tax Supporters? (4, Insightful)

wjousts (1529427) | more than 3 years ago | (#33114910)

No, "Fair Tax" won't pass because it is anything but fair.

Re:Any Fair Tax Supporters? (1, Insightful)

AnonymousClown (1788472) | more than 3 years ago | (#33115106)

No, "Fair Tax" won't pass because it is anything but fair.

I was going to post a retort with the facts about it and then I realized it won't make a difference. Besides, I don't know why you don't like it and I don't feel like tackling all the criticisms about it.

Here's my quick and dirty irrational fucking argument for the Fair Tax:

Let's get this out of the way: All tax systems suck. None are "fair" There's no way to make it fair. We all take it up the ass because we the little people have always done that - things have never changed OK?

So why not make the pain a little easier and save the preparation costs every year?

Re:Any Fair Tax Supporters? (0)

Anonymous Coward | more than 3 years ago | (#33115190)

No, "Fair Tax" won't pass because it is anything but fair.

Good sir, I like the cut of your jib, but I do believe the audience wants more detail on that statement.

Re:Any Fair Tax Supporters? (4, Insightful)

frank_adrian314159 (469671) | more than 3 years ago | (#33114932)

Stuff like this is why a program like the "Fair Tax" won't ever pass.

No, a program like "Fair" Tax won't pass because it's ultimately regressive with respect to percentage of disposable income retained by low-income participants after payment of this tax and would only be used as a stalking horse for reducing the percentage paid by upper-bracket individuals while still allowing many deductions available to said upper-bracket individuals (unless you can tell me with a straight face that the government will give up all tax-related financial engineering via the tax code). People who really believe that the "Fair" Tax would really be fair are the same folks who could believe that a Libertarian government is more realistic than a Communist one, i.e., simplistic minds with simplistic solutions which lead to horrific consequences. But go for it. Destroying our government and devolving into anarchy should be on everyone's short list of things to do (and, yes, I'm being sarcastic about this last part - note added for the simplistic minded).

Re:Any Fair Tax Supporters? (1, Informative)

Anonymous Coward | more than 3 years ago | (#33115096)

Nonsense. It gives everybody enough money to pay the taxes on the stuff they need. Poor people end up paying a lower percentage of their income in taxes, because this money offsets the taxes they do pay on the lower amount they spend.

http://www.fairtax.org/site/PageServer?pagename=about_faq_answers [fairtax.org]

There are plenty of things to criticize in the plan, but this is not one of them.

Re:Any Fair Tax Supporters? (3, Insightful)

Shakrai (717556) | more than 3 years ago | (#33115122)

No, a program like "Fair" Tax won't pass because it's ultimately regressive with respect to percentage of disposable income retained by low-income participants after payment of this tax

So it's more fair for the law to treat you differently based on how much money you earn? Equal Protection should apply to all the laws except the tax code?

only be used as a stalking horse for reducing the percentage paid by upper-bracket individuals while still allowing many deductions available to said upper-bracket individuals

You realize that almost half of this country pays no income tax whatsoever, right? It seems silly to think that the upper-brackets are getting the sweetheart deal when nearly half of the working population pays nothing.

Re:Any Fair Tax Supporters? (1)

networkBoy (774728) | more than 3 years ago | (#33115176)

Actually,
A bit of anarchy would likely be healthy for the US about now.
Might get to re-build a saner government from the ashes...

Re:Any Fair Tax Supporters? (3, Informative)

Anonymous Coward | more than 3 years ago | (#33115374)

Have you actually READ the FairTax languange? You might want to start at http://www.fairtax.org

FairTax is a truly FAIR system. YOU, the taxpayer, control both HOW MUCH tax you pay and WHEN you pay it.

The prebate that included takes care of argument about taxing food and essential services up to the poverty line (wherever that gets set at). The argument about the "percentage of disposable income"...

1) The overall percentage of income paid would go DOWN dramatically for the majority -- and EVERYONE pays. No more "hidden" economy or untaxed areas. The drug dealer who buys the $80K Escalade would actually contribute to the tax base for a change.

2) Those buying more expensive items would pay MORE. A person buying a $15K vehicle would pay far LESS tax then someone buying a $80K vehicle. And someone buying a USED vehicle would pay a whopping $0 in tax!

3) The removal of all of the payroll taxes, etc. would mean people would be getting ALL of their income. THEY get to decide what to purchase -- they can buy used and save the tax completely.

4) There are NO deductions. period. It is a 100% consumption-based system -- saying anything else means its NOT the FairTax.

I agree that the lobbyist and others "invested" in the current tax code will do their best to kill it -- and the government certainly will fight to keep their hidden social-engineering and pandering system alive. Your disinformation and libel are just helping them along.

Re:Any Fair Tax Supporters? (1)

bigdavex (155746) | more than 3 years ago | (#33114946)

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.

That's staggering if true; $400 billion is ~2.5% of the US GDP. Are you sure about that? 400 million maybe?

Re:Any Fair Tax Supporters? (1)

vlm (69642) | more than 3 years ago | (#33115150)

That's staggering if true; $400 billion is ~2.5% of the US GDP. Are you sure about that? 400 million maybe?

400 million would only fund a one million dollar tax department at the 400 largest companies. 1/5 of the fortune 500 would have to wing it. A million dollar budget doesn't hire as many people as you'd think, especially with management bonuses, etc. Somehow, I'm not imagining GMs tax department as being 5 people and a supervisor.

I would not be surprised, in the least, were the cost of collecting the dough equal to $1 out of every $50 raised.

Any Poor Tax Supporters? (0)

Anonymous Coward | more than 3 years ago | (#33114966)

By "Fair Tax" I suppose you mean the proposed "Poor Tax" where you only pay tax on what you spend, i.e., the poor pay tax on their whole income, whereas the wealthy pay tax on, say, 5% of their income. Yep, that's real fair, if you are among the wealthy few that are becomming more and more of an oligarchy.

Re:Any Fair Tax Supporters? (1)

Obfuscant (592200) | more than 3 years ago | (#33115260)

Stuff like this is why a program like the "Fair Tax" won't ever pass.

The "Fair Tax" won't pass because so many people would be harmed by it, and so many people would object to being lied to.

The "Fair Tax" proponents don't tell you the actual rate, they tell you the final percentage of your bill that is taxes. The typical example I hear is "a $71 dollar shirt would cost $100, a 29% tax." The truth is, 29/71*100 is a 41% tax. (Nobody expresses existing sales taxes as "of the whole" numbers, it's always "of the item".)

The second reason it is unfair is because it punishes people who have saved money. I have two kinds of accounts -- post- and pre-tax. The day the "Fair Tax" goes into effect, every dollar in a post-tax account goes down 41% in value. (I could have bought the $71 shirt for $71 yesterday, today it costs $100.) Every dollar in my pocket yesterday, which is post-tax money, will be taxed again. Every dollar in my pre-tax accounts goes down 41%, too. That money was put away with the promise that I could withdraw it when I'm old and have no income, thus most likely paying no tax on it.

Want to hear the biggest lie the Fair Tax people spew? "It will do away with the IRS." Someone has to be in charge of collecting and processing the "Fair Tax", and even if it isn't CALLED the IRS it will still have the same function. It will be a massive federal agency tasked with tracking down every ten year old who spends a buck on a piece of candy to make sure the taxes are paid.

They would all be out of work if something like the fair tax ever passed,

See? There will be so much paperwork and effort involved in dealing with the "Fair Tax" that nobody will be out of work. You can't get rid of the mortgage deductions because too many people want it. You can't get rid of charitable giving deductions ditto. At the end of the year, you'll have to find some way of figuring out how much you paid in "Fair Tax", which means keeping ALL your receipts, just so you can make those deductions. Businesses will have to add staff just to keep track of the new tax.

...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.

I have yet to pay for the services of a tax lawyer, and I use the software only because it makes "what if" questions easy. "How much more charity would I have to claim to get $10 more back?" Nobody forces me to pay anyone, nor am I forced to keep itemized lists of what I've bought and spent just so I can get my deductions.

Re:Any Fair Tax Supporters? (0)

Anonymous Coward | more than 3 years ago | (#33115326)

In all fairness to Intuit, there was a time before computers when all this stuff had to be done by hand on paper (only 15-20 years ago). The tax laws then were every bit as complicated as they are now, and tax software did make your life easier. I go to a tax preparer now, because not even TurboTax could save me from the byzantine tax code once I acquired basic assets and investments.

Of, By, and For (1)

drumcat (1659893) | more than 3 years ago | (#33114716)

This is more government of, by, and for the corporation. Bring on the National Sales Tax of 18%. Try evading that you shady fuckers.

Re:Of, By, and For (1)

Bryansix (761547) | more than 3 years ago | (#33114852)

Hmm, then my sales tax exemption form will be REALLY useful!

Deduct business expenses from taxable sales (1)

tepples (727027) | more than 3 years ago | (#33114956)

Hmm, then my sales tax exemption form will be REALLY useful!

As I understand it, these sales tax exemptions correspond roughly to the deduction of business expenses from taxable income.

Re:Deduct business expenses from taxable sales (1)

Bryansix (761547) | more than 3 years ago | (#33115038)

No, the exemption is because we resell things and only the end users is supposed to pay sales tax. We then have to report all our sales and the sales tax we collected FOR the Government. Even with Sales Tax, we have to do the Government's job for them.

Re:Of, By, and For (2, Insightful)

Shakrai (717556) | more than 3 years ago | (#33114878)

This is more government of, by, and for the corporation. Bring on the National Sales Tax of 18%. Try evading that you shady fuckers.

You do realize that corporations just pass their taxes along to their consumers as a cost of doing business, right?

Re:Of, By, and For (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33115000)

You do realize that corporations just pass their taxes along to their consumers as a cost of doing business, right?

Only if their price elasticity of demand is infinite - which, barring a very few things like gasoline, it isn't. If it was, there wouldn't be a thriving industry that revolves around exploiting legal loopholes to hide corporate income offshore and buying the right politicians to make moar loopholes.

Re:Of, By, and For (1)

Shakrai (717556) | more than 3 years ago | (#33115162)

Only if their price elasticity of demand is infinite

Either way, you are still taking money from individuals. Either in the form of reduced dividends for shareholders (which includes a large number of non-rich people with 401(k)s and the like....) or in the form of higher prices for consumers.

Corporate taxes are just backdoor taxes on individuals. It would be much more honest to just raise taxes on individuals but that might require our glorious leaders to justify their behavior to the electorate......

Re:Of, By, and For (1)

TheWizardTim (599546) | more than 3 years ago | (#33115318)

What we really need to do is end all sales taxes and increase income tax. If we are going to have an economy that is based on 70% consumer spending, then we need to make sure that it is easy for people who are willing to spend money to do so.

A person who makes $30,000 a year, and is taxed at 10% will spend the remaining $27,000.
A person who makes $10,000,000 a year and is taxed at 40%, I bet will not spend the remaining $6,000,000 a year. Sure, money will, and should be saved, but again, if we base our economy on consumer spending, then having 222 people with $27,000 take home is better then 1 person taking home $6,000.000. I would like to see people making under $250,000 have income taxes lowered and people making more then $5,000,000 pay as much as 70-90%.

Look at what this country accomplished in the 50-70s. We taxed the very rich at 90%. With that money we build the interstate highway system. We build schools, hospitals, police stations, bridges, fire stations, power girds and flew to the Moon. We fought wars in Korea and Vietnam, on the books. (Yes we did borrow money to help, but at least it was debt to ourselves.)

We had an economy based on building things, not pushing around money on paper. A person could find a job that could feed the family, and put the kids through college with only one parent working. Now teens are fighting with college grads for jobs at Burger King.

Before Regan, we used to be the largest importer of raw materials, and the largest exporter of finished goods. We used to be the largest creditor in the world. Now the reverse is true. We ship our raw materials to China and ship back finished goods. We are the largest debtor.

The solution is to not sunset the Bush tax cuts, but to end the Regan tax cuts.

Flame on!
     

This Has Always Been Weird (1)

EXTomar (78739) | more than 3 years ago | (#33114734)

I'm under the impression elsewhere that tax forms are filled out by the government treasury and sent to the person who then can read it and modify and correct for things unreported. The idea that taxes need to be a guessing game for individuals is kind of crazy and perpetuated by companies like Intuit because this is their bread + butter.

And besides, these tax software companies often have a harsh software business model. I'm not entirely sure anyone should defend them.

Re:This Has Always Been Weird (1)

0123456 (636235) | more than 3 years ago | (#33114862)

I'm under the impression elsewhere that tax forms are filled out by the government treasury and sent to the person who then can read it and modify and correct for things unreported.

Certainly not in Britain or Canada, I can't vouch for anywhere else.

Who's fighting? (3, Funny)

johnhp (1807490) | more than 3 years ago | (#33114742)

I read that as "Inuit still fighting tax software" and had prepared myself for an amazing story of Eskimo software standards. Imagine my disappointment.

Re:Who's fighting? (1)

mooingyak (720677) | more than 3 years ago | (#33115070)

You are not alone. I had a long, confused minute before I realized that they were talking about the company behind Turbo Tax.

That does not follow. (1)

FooAtWFU (699187) | more than 3 years ago | (#33114756)

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 all fairness, spending cuts, especially with regards to the police and fire department funding situation in California, are far from uncontroversial. There are definitely major pension shortfalls right now because of generally unrealistic expectations for growth in these pension plans being compounded by the market crash. A standard Republican line would be that the unions, especially the fire and police unions, are busy bankrupting the state. (In case you haven't noticed, California's in a budget crisis, and had to use IOUs to pay tax refunds for a while last year).

Whether or not providing funding to those departments is the right thing to do (in the short term or the long one) is a matter of significant political contention; they're hardly just sacrificing orphaned firemen on the altar of personal greed, like TFS implies. So please excuse me if I'm hesitant to join in the two minutes' hate just because a blurb on Slashdot tells me they're evil.

The real WTF (4, Insightful)

Korin43 (881732) | more than 3 years ago | (#33114812)

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.

What were these doing in a bill about tax software in the first place?

Re:The real WTF (5, Insightful)

wjousts (1529427) | more than 3 years ago | (#33114990)

RTFA, or even the summary. They are not in the same bill. Republicans decided to withhold their votes on a bunch of unrelated bills because they didn't get their way on this one bill.

I believe they call it bi-partisanship. Everybody else would call it "my way or the highway".

Re:The real WTF (1)

Anonymous Coward | more than 3 years ago | (#33115178)

This behavior constitutes treason to the citizens that elected them. They should be locked up in a tiny dark cell for life.

Re:The real WTF (2, Insightful)

frank_adrian314159 (469671) | more than 3 years ago | (#33115018)

Shouldn't you ask the opposite? I.e., what was "killing the tax program" doing in bills funding "domestic violence shelters, police and fire departments, and prevention of swine flu outbreaks"?

Cry me a river. (1)

ITBurnout (1845712) | more than 3 years ago | (#33114842)

If I had my way, Turbo Tax would not exist. And neither would the IRS. I know that a flat tax or fair tax or even a significantly simplified tax code is a pipe dream at this point, but even though I've used Turbo Tax in the past, I hated every frustrating/confusing/boring minute of it, so I tend to have little sympathy for companies like Intuit in situations like this.

Tax Credit (1)

Balthisar (649688) | more than 3 years ago | (#33114958)

Make the cost of tax software a credit instead of a deduction. Everyone likes corporate welfare and gratis software. Then, problem solved.

Re:Tax Credit (0)

Anonymous Coward | more than 3 years ago | (#33115372)

Make the cost of tax software a credit instead of a deduction. Everyone likes corporate welfare and gratis software. Then, problem solved.

It already is.

Storm The Castle (1)

b4upoo (166390) | more than 3 years ago | (#33114986)

This is not politics. It is corruption at its worst. It's time to create laws that severely slam those who would use our governmental systems for financial purposes. Get rid of lobbyists.

What's Wrong with Our Country (1)

transami (202700) | more than 3 years ago | (#33115022)

This is why USA is dying. WE make are money off pushing bits of paper around and never actually DO anything.

Honestly if our Forefathers we're here to see us today they'd be ashamed. In their day, they would have long ago strung up these politicians in Liberty Trees and been done with 'em.

The biggest problem (2, Informative)

phantomfive (622387) | more than 3 years ago | (#33115032)

A lot of people hate big corporations and 'the man' for rather mindless reasons, and others blame 'big government,' but their understanding isn't nuanced enough to see the real problem.

The real problem is when corporations get special favors from the government. A large, evil corporation will be limited by market forces and legality (it's illegal to kill, illegal to ruin the environment, etc), but when a company gets special favors from the government it distorts market forces and can get around the force of legality. This happens all the time, and its why companies lobby in the first place. Right now it is easy to get put on a board if a company if you have strong 'political connections,' but if politicians didn't bow to this pressure, that wouldn't happen because those connections would be worthless.

Intuit is just the most vocal right now. Another case in California was portable building manufacturers lobbying to make a law that schools need to buy (ugly) portable buildings. Another case was some internet dating company whose entire business model was based on doing background checks for people dating online lobbying to make background checks required by law. Fortunately that one failed.

Fannie May and Freddie Mac are other examples of when this goes wrong. They are private companies whose risk is taken by the public. There is nothing wrong with the goal of helping poor people get houses, but that isn't what Fannie and Freddie have been doing primarily. Banks of course do their lobbying. And lawyers are among the worst: Attorney Generals have their pay-to-play schemes [google.com] set up all over the country.

Because of how this distorts the market, if it all got cleaned up, it would easily add 5% to the GDP. The rent-seekers would suffer a bit, but let them go do something productive.

US Political System (1)

xav_jones (612754) | more than 3 years ago | (#33115062)

The right-wing thinking seems to be that since businesses bring in money -- which is A Good Thing -- then anything a business does or wants must therefore be good. I'm not sure what a political system run by businesses (or at least unduly influenced by businesses) is called but we can summarise it with the acronym USA.

Reminds me of the Piemen of Erie (1)

Palestrina (715471) | more than 3 years ago | (#33115086)

An inefficient system is a boon for those who benefit from helping people manage the inefficiency. Make the system more efficient and they lose. Sometimes they revolt as did the Piemen of Erie [robweir.com].

Let Quicken know! (0)

Anonymous Coward | more than 3 years ago | (#33115110)

Here's the feedback page for Quicken, if you want to register your dissatisfaction with their policies:

http://quicken.intuit.com/support/feedback/

Form 1040 EEZ (1)

GlobalEcho (26240) | more than 3 years ago | (#33115128)

Form 1040 EEZ
== == == ==

Instructions: Fill in the form. Send payment in the amount listed in the final cell to

        Department of the Treasury
        Internal Revenue Service
        Fresno, CA 93888-0102

  == == == ==

What was your total income last year? $__________.___

/not entirely original with me

Collapse of Complex Societies Anyone? (3, Interesting)

TheNarrator (200498) | more than 3 years ago | (#33115136)

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.

I hate Intuit (1)

lophophore (4087) | more than 3 years ago | (#33115188)

I hate intuit, but I need quickbooks for my small business.

Intuit sucks, quickbooks sucks. Sadly, I have not found an affordable alternative.

No, the cat does not, in fact, "got my tongue." (1)

Impy the Impiuos Imp (442658) | more than 3 years ago | (#33115392)

On the one hand, you'll pardon Intuit if they get upset that the government is using money, including some of the taxes Intuit itself pays, to eviscerate the value of Intuit's product.

On the other hand, I've been dismayed for years that there wasn't an onling government form I could fill out and hit "send" with.

Welcome to Capitalism (1)

harl (84412) | more than 3 years ago | (#33115416)

In a country where money is speech who ever has the most speaks the loudest.

Kill the corporate income tax and forbid corporations from donating to campaigns and pacs.

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