It’s that time of year again – tax time – when Americans are reminded of everything that’s wrong with the federal tax system. It is fiendishly complicated. It is riddled with regressive breaks and loopholes and doesn’t actually raise enough revenue to finance the government. It distorts economic decisions and puts U.S. firms at a disadvantage against foreign competitors who pay lower rates.
What it needs is a comprehensive overhaul. Radically streamlining the tax code is the right way to make our government more user-friendly and to reduce the time and money citizens spend on filing their taxes
Yet every April, like some kind of hardy perennial, a supposed panacea crops up: A return-free filing system. Under this proposal, the same government responsible for creating the byzantine mess that is our tax code will undertake to calculate your taxes for you. No fuss, no muss: you just sit back and let the bureaucrats do all the heavy lifting.
However beguiling that might sound to some, there are at least three big problems with this idea. First, there’s the inherent conflict of interest in having the taxman do your taxes. Second, government has already implemented free solutions for tax return preparation – IRS Free File – that relies on the private sector without costing taxpayers a dime. Third and most important, return-free filing is a procedural trick that promises to reduce the burden of filing taxes without actually doing the hard, but essential work of tax reform. Indeed, return-free can actually hide tax dysfunctionality and inefficiency by making it invisible to citizens, which would work at cross-purposes to the long-term improvements and reform of the tax system that is long overdue.
Continue reading at The Hill.
