Tax Preparation: The Other Individual Mandate
I've known Howard Gleckman he was a reporter for BusinessWeek covering the federal budget. Howard is now the principal writer for the Tax Policy Center's TaxVox blog where he puts out a steady series of interesting, well-written, thought-provoking posts on a variety of tax-related topics.
This one caught my eye earlier today in one of those "How come I didn't think about this" moments: While there's a great deal of interest in the individual mandate included in the health care bill, why, Howard asks, does no one complain about what in effect is a mandate to buy income tax preparation assistance. Here's the money quote:
The government does not specifically require us to hire paid tax preparers or buy commercial software, of course. But it has, in effect, left millions of taxpayers with no real choice. Congress has created a tax code that makes it nearly impossible for many Americans to file returns without paid help. And even those who could (most non-itemizers for instance) are so intimidated by the whole process that they pay people to help them anyway.
The whole post is well worth a few minutes of your time.
Flat Tax
Steve Forbes is nodding his head in agreement.
Mandates
I think its simple. Taxes are a mandate to participate in funding public services whether you use them or not. Let's take fire services. I am required to pay for fire protection whether I want to or not. I can't even refuse service.
In theory, if I live alone in a house separated a great distance from my neighbors I'm not harming anyone else if I refuse fire protection - yet I can't.
A silly example, maybe, but there's bound to be some dumb putz willing to take the chance if he could save a few bucks. We have no qualms about mandating fire protection, but health care is somehow different?
Bob
Another iron triangle
It seems evident to me that another Iron Triangle is involved here: special interests (who seek special tax treatment of whatever their situation is from the legislatures), lawyers and accountants (who both draft the provisions to the tax code, and on a much larger scale benefit from the complexity of provisions that are really intended for specific corporate of high-asset taxpayers, but are just as much paperwork for the little guy), and the legislatures themselves (who accept the campaign contributions from the special interests, and work hand in glove with the lawyers and accountants, inside government and outside, who have no interest in simple, straightforward, or easily calculable means of implementing special-interest bonuses).
Frankly, I think this is a construct where parties like Intuit or HR Block can do well simply as free-riders: they have no need to lobby for additional complexity in the tax code, since it happens in an entirely satisfactory way (to them) without any effort on their part at all!