Should the government do your taxes for you?
The IRS already has all your financial information, and could theoretically just send you a bill every April for what you owe
It's tax day, and as procrastinators across the nation scurry to file their returns, they might be forgiven for wondering, "Why isn't the government doing this for me?" In the more hopeful days of 2008, then-candidate Barack Obama promised to "dramatically simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes." Obama's proposal bore similarities to California's ReadyReturn program, in which the state sends residents their completed returns, listing the amount they owe or the amount they'll be refunded. All residents have to do is sign the return and send it back. Should the federal government follow suit?
Absolutely. Filing taxes is totally unnecessary: "The extremely annoying process of actually filling out the forms and calculating the required sum is a completely unnecessary evil," says Matthew Yglesias at Slate. After all, the IRS has "almost all relevant information about your money," since your employer, bank, stockbroker, and others "submit paperwork about your income." Most of the "pain of tax compliance could be eliminated by a few keystrokes at IRS headquarters."
"Who wants taxes to be more complicated?"
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But programs like ReadyReturn could hurt compliance: The main reason most people don't cheat on their taxes is because they're afraid the IRS might have some document from their employer that catches them in a lie, says Josh Barro at Forbes. But in a ReadyReturn system, "the government has to lay its cards on the table," and the taxpayer "knows exactly what the government knows about his earnings." If the government makes a mistake in the taxpayer's favor, he's unlikely to report it. "It's a lot like when you check out of a hotel and review your bill." If the hotel fails to "charge you for one night of parking," do you "call the clerk's attention and ask for a parking charge to be added? Be honest."
"Why doesn't the IRS do your taxes for you?"
And tax companies won't let us do away with personal filing: "Who doesn't like an idea that is so simple and convenient and just generally helpful?" asks Matt Stoller at Republic Report. The companies that make their daily bread from helping you prepare your tax returns, of course. Tax-filing software companies like Intuit have spent millions of dollars lobbying Congress to make it "more annoying for you and me to file our taxes." Making taxes simpler is also opposed by "right-wing tax groups," since it could reduce public antipathy toward taxes in general.
"Corruption is why you can't do your taxes in five minutes"
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