As you sit each spring with a pile of receipts carefully tracking which figures to total into Box 57, have you ever wondered how the IRS determines whether you got it right? With trillions of data points to track on hundreds of millions of filers, how does the IRS deliver accurate W2’s and 1099s and then reliably review your return? It’s simple. They long ago built a data infrastructure to track what you owe. For the vest majority of Americans, the time, money and energy poured into annual tax preparation is a pointless formality. With the exception of a few unique filers, the IRS is already sitting on the answers, waiting for you to submit your forms.
People elsewhere in the world stare in bewilderment at our pointless and bizarre tax filing rituals. In Holland, it might take an entire half hour to file your tax returns if you have a very complex portfolio. In Japan you receive an annual postcard. Norway sends you your tax return, already filled out. You just check it online and submit.
Here’s the fun part. The US Internal Revenue Service already has the infrastructure to make tax filing as easy as reviewing a postcard. Your elected representatives have blocked them from doing it. Why? Because your representatives can’t afford to work for you. They work for the people who pay them, and elect them.
This is not a partisan issue. Tax filing companies invest millions of dollars a year on politicians from both parties to maintain the political firewall that keeps them in business. In a modern, functioning representative democracy, tax filing is an industry with no reason to exist, no value to deliver. Tax filing companies profit from the failure of our political system, and they pour money back into campaigns that keep that system broken.
Tax industry lobbyists have fought for years to block the IRS from making its simple tax filing infrastructure available for free to US citizens. This isn’t some new thing, and let me emphasize, this is not a partisan problem. Ronald Reagan tried to make free tax filing available in 1985. Industry lobbyists killed that idea in the cradle, and they’ve smothered every subsequent effort with help from Democratic and Republican representatives.
Emboldened by thirty years of success buying your representatives, tax filing companies reached for the gold this year. They are pressing their minions to approve the Taxpayer First Act of 2019, which would legislatively bar the IRS from further developing a free, automated tax filing system. The bill was sponsored by Democratic Representative and Civil Rights hero, John Lewis, and passed out of committee on a bipartisan basis. Again, this is not a partisan problem.
American voters are strongly in favor of a universal health care system, tighter gun control laws, carbon taxes, and higher income taxes. Voters would easily support expensive efforts to modernize our mass transit and energy infrastructure. You don’t have these things because the people who elect your representatives don’t want them. We can’t have nice things, because we haven’t gotten serious about financial transparency and campaign finance reform.
Do not for a moment imagine that merely electing Democrats will make a dent in this problem. Sure, Republicans are working full-time to cripple efforts to make government function, but Nancy Pelosi didn’t build a 9-figure fortune across a career in public life by prioritizing the public interest. Only a laser focus on financial transparency, independent of partisan interests, will give us a chance to fight the kleptocracy slowing strangling liberal democracy.
A government small enough to drown in a bathtub cannot give you a tax return that fits on a postcard. And a so-called “liberal” party trapped beneath a corrupt campaign finance system won’t provide any relief unless voters are relentless about financial disclosures.
Asking your representative where they stand on free tax filing is nice. Asking them where they stand on mandatory disclosure of tax returns by Congressional candidates is better. Citizens United may stymie efforts at campaign finance reform, but it places no limits on disclosure.
One day, in a functioning American democracy, you’ll not only receive your annual tax return in a postcard, you’ll receive your President’s, Congressmen’s, Governor’s, and State Representatives’ as well. We will not have representatives that work for us until we can be sure we aren’t being outbid by someone else.