TurboTax, the online service that guides you through your tax returns, released a new ad during the Super Bowl last weekend. The ad shows a guy dancing blissfully by a fountain. How much easier your taxes are, the ad proclaims, when you pay TurboTax to do them for you! Using TurboTax gives you so much free time every April! What a great service it is!
Wow, TurboTax looks pretty great. Except … did you know that TurboTax is a huge part of the reason we have to calculate and file our own taxes in the first place?
See, many countries around the world have what’s called return-free filing. In these systems, the government simply tells you how much you paid in taxes in the previous year, and if necessary, sends you either a refund or a bill. In a return-free system, if your taxes are simple (for example, if you only earned income from one job), you never have to file a return at all. You can check the government’s math if you want, but the onus isn’t on you to figure out how much you might owe.
In other words, in a return-free system, there’s no need for companies like TurboTax in the first place. That guy dancing by the fountain? That’s everyone, all the time. (Well, probably not people with super complicated taxes, but you get the idea.)
So why don’t we have that here in the United States?
Is it because the IRS doesn’t know how much money we’ve all made? Nope. All those forms you get each year? The IRS gets copies of the same forms. They make the same calculations you do. They have all the same information. They already know what’s on your return when you file it—but they keep that number a secret, and can penalize you if your math doesn’t match theirs.
Is it because we value our freedom so much? That’s not it, either. In a return-free system, you can still double-check the math or make any necessary adjustments, like business expenses.
Why, then? It’s because companies including TurboTax and H&R Block have spent years lobbying the U.S. government to make taxes as complicated and time-consuming as possible.
This episode of Adam Ruins Everything provides a basic rundown of how commercial tax preparers have spent decades making a mess of our tax system, despite numerous efforts to simplify it:
The worst part is that what TurboTax is doing isn’t a secret.
Anyway, thanks, TurboTax! Thanks for being an expensive solution to a problem you created! Glad to know you’re looking out for us.
(featured image: Intuit)
