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Covering the Front and Back Pages of the Newspaper
April 17, 2007
POLITICS: John Edwards: Trust The Government To Do Your Taxes
"I'm from the government, and I'm here to help." As if he needed to work harder to solidify the perception that he trusts the government to know everything in your life better than you do, John Edwards wants people to trust the IRS to do their taxes for them: John Edwards is suggesting that the Internal Revenue Service prepare tax returns for 50 million Americans who have simple tax circumstances. First of all, start with a mental picture of how exactly a federal agency produces an additional 50 million forms in just a few months, and if you form in your mind an image of smooth, flawless execution by white-lab-coated experts running superintelligent supercomputers, well, you haven't spent much time with bureaucracies. Of course, the taxpayer will do one of two things with the IRS-prepared form: either check its accuracy, in which case it saves little or no time, or sign it unchecked and return it. Either way, the idea is pointless at best, unduly trusting of the competence and disinterest of the bureaucracy at worst - to say nothing of the infantilizing assumption that people should have yet another thing done for them at public expense. As Jim Geraghty notes, Edwards is imitating a California program, but there are reasons to believe that this program, ReadyReturn, is not trusted by a lot of taxpayers: only 22% of respondents used it: At the delightfully unsubtle URL taxthreat.com, the ReadyReturn opponents touted a poll that found that 67% of respondents opposed the program, that 7% of respondents trusted a state agency to prepare their taxes, and that 81% preferred "an independent tax preparer." The tax code is indeed too complicated, but the answer is less complexity and offering people at least the option to use a simplified flat-tax* form, not having the government pass the rules and then interpret them for its own benefit. * - By which I mean "flat" as in "without deductions/exemptions" - flattening out the tax rates being a separate issue that goes more to the growth vs. progressivity debate than to tax simplification. Comments
What I find so amazing is that the people with the simplest tax returns tend to be the lower income groups, and there is a corellation between income and education. Given the IRS' issues with their helpline providing accurate answers and that the less educated are more likely to accept at face value an 'experts' opinion, this will lead to the government taking advantage of the most vulnerable. If a mortgage provider tried this, I would be permanently deaf in my left ear from the screeching and gnashing of teeth from the usual suspects. Why does John Edwards hate that Second America he's always talking about? Posted by: Joe at April 17, 2007 1:01 PMI have a better idea. Let's take this idea and see if we can improve it, or maybe come up with something better than just insulting somebody for at least advancing a change to a broken system. While I still think a flat tax is a better idea, it's not likely to happen. I think the Edwards idea is a trial balloon that might actually be possible. At least, assume the IRS has your income information (which they already have); then assume you can check off online what your various allowable deductions are: mortgage interest, credit card interest, medical expenses--whatever. Your tax then gets calculated. It sounds more like an automated 1040ES form than anything else. Intuit already does that. Posted by: Daryl Rosenblatt at April 17, 2007 1:05 PMThe ultimate irony being that the IRS eventually decides to audit a return they themselves prepared, leading to a tax-evasion charge for the taxpayer... Posted by: Mark at April 17, 2007 2:10 PMI am presonally in favor of the "Fair Tax", a sales tax. It would tax the big spenders appropriately and reward saving. That being said, almost anything is better than what we have now. Posted by: maddirishman at April 17, 2007 4:45 PMCrank - I disagree with you on this one. What is the point of someone compiling their income tax data, completing a tax form and mailing to the IRS when the service already knows the final answer? Do we calculate our own gas bill, water bill, dinner bill at a restaurant? Of course not. Though I see Edwards as a Democrat's Democrat and won't vote for him - he's a little too populist, a little too melodramatic and a little unctious --- I'll side with him on this one. Posted by: PatrickG at April 18, 2007 10:15 PM
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