Column: Let’s make taxes less taxing
Return-free filing would provide an easy solution for many taxpayers, but lobbyists keep getting in the way.
Apr. 14, 2019
The opinions expressed by The Maneater columnists do not represent the opinions of The Maneater editorial board.
Bryce Kolk is a freshman journalism major at MU. He is an opinion columnist who writes about politics for The Maneater.
Taxes are frustrating.
Whether you’re having trouble tracking down the documents, picking the right software, or finding the time to file, tax season is a stressful time of year. This process, however, is intentionally difficult.
Taxes don’t have to be as, ahem, taxing. Many countries utilize return free filing to ease the strain on taxpayers. Under the system, taxes are calculated automatically by the government. If it were implemented in the U.S. the IRS would just send you a bill every April. It’s as simple as that.
Imagine if Walmart made you fill out a 1040 form any time you wanted a loaf of bread. It’d be pretty ludicrous, right? It’s nonsensical that the administrative burden is on the customer, not the IRS who is charging for services.
So how do we get to a future free of tax returns? Well, we will probably can’t, but we can get closer.
Return free filing isn’t a solution for everyone. It’s a simple solution to simple problems, but the U.S. tax code is more complicated than most.
Roughly 8% of taxpayers will itemize deductions on their 2018 taxes, according to the White House Council of Economic Advisors. These individuals would not be eligible for the program, but the remaining 92% who choose the standard deduction could be.
The standard deduction is a fixed amount that is deducted from what a taxpayer is required to pay. For 2018, those filing single can deduct $12,000. Itemizing deductions refer to specific deductions a taxpayer can claim, such as out-of-pocket medical expenses and charitable donations.
Say what you will about Trump’s new tax plan, it has gone a considerable way to opening the door for return free filing. Before the change, about 26% of taxpayers itemized, according to the IRS.
Switching to a system where we count taxes by the individual, rather than the household would be even more helpful. As of now, only those who file single would be eligible for return free filing.
Even without changes to the tax code, many Americans could benefit from the program.
This begs the question: what’s standing in our way? Primarily, the tax preparation lobby.
There have been attempts to implement return free filing federally. In 2016, H&R Block and Intuit combined to spend about $5.7 million on lobbying. A majority of that money went to promoting the Free File Act of 2016, which would have strengthened ties between tax preparation services and the IRS.
H&R Block spent another $210,000 lobbying to defeat Sen. Elizabeth Warren’s bill to implement return free filing.
Despite the lobbying money working against it, return free filing has had support from figures of both parties. Then Sen. Barack Obama voiced his support for the policy during his campaign in 2006. Before that, President Ronald Reagan supported its implementation in 1985.
Though it has a long history in politics, return free filing has never been attempted at the federal level. California, however, operated a pilot program from 2005 to 2006 that gave some taxpayers the choice between filing their own taxes and having them done by the state.
The short-lived ReadyReturn program was favored by the vast majority of its participants. Of those who used ReadyReturn electronically, 95% said it saved time, and nearly all of those who used the service said they’d use it again. ReadyReturn may be dead, but some of its features remain intact for California’s taxpayers.
Enterprising return free filing at the state level could show its effectiveness, and Missouri is as good a state as any to get the ball rolling. Students specifically could benefit from return free filing, as younger taxpayers tend to file single and take the standard deduction.
Only H&R Block and Intuit stand in the way of a future free from April tax headaches.