For most of us, even those perfectly happy to pay taxes, actually filing our tax returns with the Internal Revenue Service is a frustrating, complicated, and opaque process. And if you make a small mistake, you could be threatened with additional fines, or even prison. Recently, IRS leadership, with support from the Biden Administration, proposed modernizing the filling process to make it easier for most Americans to file, bringing it in line with nations like New Zealand, Japan and Denmark.
According to Treasury Secretary Janet Yellen, the IRS modernization plan includes intensifying efforts to enforce tax laws on the wealthy, increasing the quality of customer service through in-person taxpayer assistance centers and shorter phone wait-times, and digitizing more IRS functions.
But now, Congressional Republicans and tax-prep corporations are teaming up to protect our nightmarish tax-filing system—and they’re using a century-old playbook to do so.
It’s easy to understand the motivations behind this unholy alliance to kill tax reform. The proposed IRS e-filing system would make the process of paying taxes simple and painless, saving Americans billions of hours a year and allowing them to keep the billions of dollars they now pay annually to tax-prep firms like Intuit, which last year made $11 billion in profit thanks in part to its ubiquitous Turbo Tax software.
Anti-tax Republicans want the process of filing taxes to be frustrating and expensive because it reinforces their arguments that big government is wasteful and inefficient—even though the waste and inefficiency, in this case, is the direct result of their own policy choices.
Corporations like Intuit are generally not in the business of helping low-income people.
Tax firms that profit from the current inefficient filing system have come out swinging against the IRS’s proposal, and if their excuses sound familiar, that’s because they are.
In our upcoming book, Corporate Bullsh*t: Exposing the Lies and Half-Truths That Protect Profit, Power, and Wealth in America, my coauthors and I show that wealthy corporations have long used the same set of well-worn claims to convince people that their profits are more important than the public good. From trumpeting the medicinal properties of cigarettes, to extolling the character-building power of child labor, big corporations have falsely argued that making products like Turbo Tax obsolete would hurt the very people the policy is intended to help.
In the book, we dig into more than 100 years of U.S. history to place these specious claims into recognizable categories, into which Intuit’s most egregious arguments against tax reform neatly fit.
First, they deny. Denial is corporate America’s go-to strategy when trying to kill progressive policy—even when they know their product is problematic. (See Big Tobacco’s public refutations of the connection between smoking and lung cancer, the auto industry’s denial that car emissions hurt public health and Big Oil covering up its role in climate change).
The tax prep firms make comparable arguments. “A direct-to-IRS e-file system is wholly redundant and is nothing more than a solution in search of a problem,” Intuit spokesman Rick Heineman warned. In case you think we’re picking on poor Intuit, H&R Block seems to be working from the exact same playbook, with a spokesperson for the firm warning that “the IRS direct e-file pilot set to start in January 2024 continues to be a solution in search of a problem.”
Intuit and their allies conveniently never mention that consumers are already paying billions of dollars every year to the same tax-software companies which are now lobbying to keep the expensive system in place. They also ignore the point that nearly 75 percent of all American taxpayers have shown support for a free IRS filing system.
Another familiar tack the tax prep companies take: This new program can’t be any good, because it’s run by the government. This argument can go in two different directions, or sometimes both at once: either government is bumbling and incompetent, or it’s all-seeing and all-powerful. Intuit is leaning in on the menacing Big Government message, and its Congressional allies are marching in lockstep.
Never mind the fact that plenty of other countries run their own popular tax filing systems, or that Intuit and H&R Block have already suffered their own information breaches on a level that the IRS has never suffered.
Finally, the tax-prep firms, like so many other profiteers, depict themselves as philanthropists, concerned not about money but their down-trodden customers. As an Intuit spokesperson told The Wall Street Journal, having the IRS build a free file system is “a bad idea that will especially hurt low-income and other vulnerable individuals and families.”
Of course, corporations like Intuit that rake in billions of dollars in profit every year are generally not in the business of helping low-income people—at least, not without a hitch. Right on schedule, here’s that hitch: Last year, Attorneys General from nine states announced a $141 million settlement agreement with Intuit “for deceiving millions of low-income Americans into paying for tax services that should have been free.” All 50 states and Washington, D.C., have signed onto the agreement.
The good news: Once you recognize the pattern, BS of the variety that Intuit and its allies are pushing becomes easy to dismiss.
This column was produced for Progressive Perspectives, a project of The Progressive magazine, and distributed by Tribune News Service.