I have no issue with companies making profit but TurboTax is a bad product, with terrible scam-esque profit strategies, and actively preys upon the poor.
Their "audit protection", the constant nag screens IN A PRODUCT I ALREADY PAID FOR, their push for you to upgrade (with no discount at the end if you didn't use the upgraded features), and so on. Tie that in with the "spend your refund before you get" double dipping offers, and it's a scam.
I hate TurboTax, they have no real competitors, and the federal government should make them redundant.
There's a great Reply All episode (#144) about this exact article and the background, and eventual impact of it. From what I remember, the IRS had an idea to make a free filing online system but determined that the cost would be too great so they divvied up the different groups of people that qualify (people under some level of income, veterans, etc.) amongst the different companies (TurboTax being one of them) with the agreement that they would not build a competing system. I think they mention a bill that was shot down that would've maintained that agreement forever.
There are two justifications, all coming from the Republican side of things. 1) Tax filing being difficult makes people pay more attention to what they pay in taxes. 2) Tax filing being difficult makes people hate taxes, which will make them vote against raising taxes and or supporting socialism.
This is all covered in an excellent podcast by Planet Money
- higher taxes, but the money is used more efficiently and for better results than on mass incarceration or the largest military-industrial complex
- very easy tax payment processes
Taxes aren't universally "bad": fire departments, police departments, roads, schools. And guess what? That's "socialism." So is Social Security and USPS. The myth of anarchistic hyperindividualism (libertarianism) is a self-delusion because there are benefits to common infrastructure no individual could build themselves alone.
PS: Why don't most Americans know how bad they have it? Is it their lack of passports or lack of honesty in paying attention outside of their filter bubble?
> PS: Why don't most Americans know how bad they have it? Is it their lack of passports or lack of honesty in paying attention outside of their filter bubble?
I think it's both, now, but I think that the 'no passports' thing has been a factor for a while.
When I was in middle school I wondered why many (white, middle-class, etc) Americans only speak English when so many people from Europe, etc speak several (or at least can get by).
It dawned on me one day that you could start on one coast and drive clear across the continent without ever needing a second language - it's all USA the whole way.
So yeah - much like the language thing there's no real exposure to anything other than our country.
That fact that just knowing English you'll get by in most of the world doesn't help either. As a native English speaker there is less motivation to learn another language, this affects the UK and Canada as well, I suspect it impacts Aus, NZ, etc...
It does come down to living in a bubble, but the bubble is absolutely huge; as the other replier said, it stretches from coast to coast. We're also heavily propagandized everywhere we turn -- whenever I turn on big media news sources, it blows my mind how this stuff is presented as "news," yet there you go. We're also under-educated, which makes appeals to things like "make it a fair tax" feasible, where we'll go along with whoever says that (where fair almost always means regressive).
I have a radical idea. Maybe some peoples definition of good is different from yours? Your comment is ridiculous and unproductive and doesn't provide any value to the conversation.
I one of those people who you are calling deluded but I would hardly call not agreeing with you delusion. I get the sense that debating an aggressive post on a throwaway account isn't a good use of time.
It's not just the Republicans, the current bill to enshrine this into law has bipartisan support. The link to HR 1957 shows 1 Democrat sponsor, 18 Democrat co-sponsors and 10 Republican co-sponsors.
> Last week, the House Ways and Means Committee, led by Rep. Richard Neal, D-Mass., passed the Taxpayer First Act, a wide-ranging bill making several administrative changes to the IRS that is sponsored by Reps. John Lewis, D-Ga., and Mike Kelly, R-Pa.
> In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system. If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry’s profits.
Thanks for the correction, The planet money podcast was just focusing on California almost 20 years ago so if make sense the federal situation would be different today.
Intuit/TurboTax would love it if filing was so hard it's practically impossible, without the use of TurboTax.
* In 2007, Intuit lobbied to make sure taxpayers cannot electronically file their tax returns directly to the IRS by negotiating a deal preventing the IRS from setting up its own web portal for e-filing.
* In 2009, Intuit spent nearly $2 million in political contributions to eliminate free online state tax filing for low income residents in California.
* Between 2001 and 2010, Intuit Inc., maker of the tax-preparation software TurboTax, spent more than $1.7 million on lobbying in an attempt to kill ReadyReturn. Proposed statewide rollout of the ReadyReturn program was defeated in the California legislature in 2006. The FTB revived it on their own for the 2007 tax year, expanding it to cover one million Californians
* From 2009-2014, Intuit spent nearly $13 million lobbying. Intuit spent $1 million on opposing ReadyReturn, against John Chang, a Democrat who supported ReadyRun. Joseph Bankman, professor of tax law, Stanford Law School, and advocate of simplified filing, believes that the campaign warned politicians that if they supported free filing, Intuit would help their opponents.
* On March 26, 2013, ProPublica reported that the company lobbied against return-free filing as recently as 2011. One year later, ProPublica reported that the company appeared to be linked to a number of op-eds and letters to Congress in a campaign advocating against direct tax filing backed by the Computer & Communications Industry Association, an advocacy organization of which Intuit is a member.
Laws are designed by the government - if the executive branch cannot, by law, compete with TurboTax, then the legislative branch is free to alter the laws in whatever (constitutional) way benefits the society and explicitly delegate some agency the power (and duty!) to make TurboTax redundant.
yah, businesses making money via legitimately adding value is awesome; making it via rent seeking and regulatory capture sucks.
turbotax could still have a lucrative business by building on top of free filing with value added services, but no, they want government-protected profits. it's dishonorable.
and it's a symptom of money controlling politics. we need to figure out how to allow politicians to be productive and contributive without money being the measuring stick proxying power.
Oh my, you don't know how laws get "designed." Congress ostensibly writes the laws, but they're now often allowing outside special interests and lawyers to pass along laws for introduction nearly verbatim. Furthermore, Intuit was caught lobbying to keep the tax submission process complicated and not free.
Yeah I agree. Congress is trying to pass a law to prohibit the IRS from doing free tax returns (competing with Turbotax) but theoretically congress could just repeal that law whenever they get around to finally letting the IRS just do the tax returns right? So all the law would do is prevent an executive order for the IRS to do that
Not exactly. The IRS has made a deal with an industry group called the Free File Alliance saying that in exchange for offering free tax filing to some subset of taxpayers, the IRS won't create competing software. Congress is working on a bill called the Taxpayer First Act that would enshrine that deal in law [1], effectively prohibiting the IRS from creating their own software. It looks like that bill has only passed the House so far [2] so it may still fail.
Regardless, it would still be okay for the IRS to automatically file people's taxes and send them a return, which is the true best solution here.
The Federal Government or the policy makers in control of it, seem to believe that privatizing things is an approach for making them redundant, in a way.
Until we can step back from the belief that private corporations can solve every problem, we will be stuck with long-standing, and wasteful systems/situations like this.
They do - TaxHawk (who also owns FreeTaxUSA.com) is an ethical full feature tax prep software company. Federal return is free (for everyone) and state is $15 (for everyone). No nag screens, no dark patterns. You can even file your federal without filing your state and not pay a dime, no problem. The UI is good (and the UI is the whole reason I'm using tax prep software over paper forms)
> their push for you to upgrade (with no discount at the end if you didn't use the upgraded features)
This one actually got me this year. They force you to upgrade prior to seeing if the upgrade helps. I 'upgraded' to see if itemizing a certain thing would beat my standard deduction. It didn't, so I removed that whole section. But then I forgot to downgrade and accidentally paid an extra 30-50$ or whatever it was for absolutely nothing- something they could have easily detected.
Obviously the responsibility lies on me for overpaying, but most other businesses wouldn't have taken the extra money for something I didn't use.
I used to send my tax information directly to Massachussets via their own free platform.
Sometime around 2016 they discontinued it and told me to go beg someone for free service, or pay turbotax (seriously).
They told me only 2% of state filers used the website.
Question-- why should I have to pay for them to tell me what I owe them? If running the platform is so much money, donate to an open source consortium who will maintain it forever for a rational price.
Louisiana has a very good platform from an instate contractor. Oregon OTOH IIRC just gives you some forms you can type into. I guess given the Cover Oregon thing I shouldn’t be surprised.
Oracle committed one of the largest frauds ever, $150m to not deliver what they said they would deliver, while deliberately misleading Oregon govt with statements like "it's 70% done, just give us money!"
They'll generate a large 2D barcode of the data and perform some addition, but the one most critical calculation in the form, looking up the relevant tax amount from taxable income and filing status-- is "read these tables and formulas on a seperate screen and do it yourself."
Seems like a chicken-egg problem. Having been a resident of CA for nearly two years, I remain amazed by the poor UX of pretty much every online system operated by the government. FTB, BART, DMV. They are all horrible! I am not surprised the usage is low. The systems are all painful to use.
What if the federal and/or state government offered, to tax return software makers, a small part of the proceeds for every successful tax return, on the condition that the software remains free of charge to the users and does not share or sell user data to advertisers?
Might we see a lot of good competition spring up this way?
Let's just skip to the chase and have the IRS automatically for everyone's tax returns.
The problem isn't lack of competition. It's that this industry is entirely propped up by a byzantine and entirely unnecessary process. The only reason these companies are able to reduce friction filing your taxes is that they lobby to create it in the first place.
Don't use TurboTax. I found out about IRS's VITA[1] program a few years ago and it's been a game-changer. The only real limits is that you make less than $55K, and it specifically targets those with disabilities and limited-English speakers. When I went, my preparer even said that they don't really care if you make more than $55K, as long as the return isn't super complicated.
I don't even understand the tax preparation system in general. As a newly-minted Adult, I find it rather frustrating that I collect all the documents that the government and I both have (or they've sent me) and fill out one big form that condenses all that info. Then if I mess it up/lie, the government comes after me. Ridiculously inefficient system.
That's because it's "voluntary compliance", somewhat based on the honor system, if you can believe that. If you mess up isn't as big a deal as it is if you cheat and are caught. Some people make their livelihood on attempting to lie on their taxes, a fudge here, a fudge there in order to collect more than their share. Some get away with it.
> I collect all the documents that the government and I both have
Our tax system is terrible and convoluted, but this statement is not actually correct. In may cases you get copies of tax forms from businesses before the IRS has processed the business return, possibly before the business return has even been submitted. Business and personal returns are processed in parallel and cannot be reconciled against each other until they have all been done. That's why audits almost always have at least one tax year of lag, because that's how long it takes to get through everything. Filing extensions make the process even worse.
Ah okay. I just assumed that the fact that my paycheck itemizes the tax withholdings that they were already receiving or at least aware of my taxes to date.
I'm from the UK but listened to this episode, one of the shocking aspects to it was they set noindex directives on the FreeFile site - although looks like they've removed them since
On a meta level, this is a little biased and click-baity: the Trump references, the "abuses of power" mission statement, the emphasis on "the Disabled, the Unemployed and Students".
In short, Intuit moved from previously-free features to their paid tiers. This move may have disproportionately affected low-income taxpayers, though—if true—that impact was unintentional, not targeted.[1]
The article cites several different features that were monetized and affect lower-earning taxpayers[2] as well as those affecting higher-end earners[3], but doesn't state that this list is comprehensive, and doesn't prove that impact was disproportionate.
ALL THAT SAID, there's still some crappy dark patterns here, as well as broader tax-ecosystem improvements that would benefit taxpayers that Intuit has fought tooth and nail to block. So I'm certainly not defending Intuit here, but I'd find more objective reporting to be more compelling.
[1] "The income levels of the groups that were being driven to paid products 'was never really considered.'"
[2] "One of these forms was for a tax credit that goes exclusively to poor taxpayers who are elderly or get disability benefits. Another is used by low- to middle-income households that receive a credit for putting money in a retirement account." (Which, if it's what I'm thinking of, applies to above-average earners, too.) "A third is used by taxpayers who collected unemployment benefits." "And then there are people with student loans, who also have to use Deluxe." (Unclear if this is a change.)
[3] "The company’s changes also affected parents who get a credit for child care expenses, as well as people filing the schedule for interest and dividends."
Why would you say the impact on low-income people was unintentional? Do you think that Intuit would release a tax product without an analysis of who it would affect? It feels like you’re giving Intuit the benefit of the doubt here when numerous sources, including Intuit employees, say that Intuit deliberately set out to increase revenue at the expense of lower income taxpayers.
> “They were always supposed to be customer focused, customer first,” one former staffer said. But the income levels of the groups that were being driven to paid products “was never really considered.”
Where's the numerous sources that said Intuit deliberately set out to increase revenue at the [disproportionate] expense of lower income taxpayers (emphasis mine)?
The "Freefile" product is only supposed to be free for lower income people, so when Intuit misdirected everybody to the (non-free) product which they named "Free", they exclusively harmed lower income people, as the higher income people were never entitled to free filing.
(that entitlement is due to an agreement with the IRS, where the IRS agreed to limit competition in the tax filing industry in return for the development of free file products).
edit: also note that it is absolutely not an accident that Intuit used these names which make it almost impossible to talk about their non-free product which is named Free, and their actually free product which is named Freedom and Freefile.
That's a good point, and a valid one, but not the central thesis of THIS article. (ProPublica has previously written articles on that.[1])
[1] "But, as ProPublica has been reporting, Intuit has steered eligible customers away from the truly free version, aggressively marketing products that are called “free” even though many customers end up paying."
It is absolutely intentional that TurboTax Free is not free and that Turbotax Freefile (which is free in return for the government's promise not to launch a competitor) is noindex'ed.
If you're able to do your taxes by hand but just want to efile, there is https://www.freefilefillableforms.com/ . Terrible UI (and the emails about failed form validation are comical) but it works, and is free.
I don't blame TurboTax (Intuit). They do what any company in that position would. Hell, a good percentage of companies that exist probably shouldn't exist. TurboTax is definitely one of them. I blame our shit government for making such deals and not creating proper legislation. That's why such shit companies exist. There's literally no solution to this. Yeah, one can vote but that isn't actually a solution as it clearly doesn't get anything done. We have a failing government that is not and may never have been representative of any of its people, save for the ultra-rich. That's the real failing here. TurboTax is just a symptom of this disease.
And who wrote the laws allowing bribery? Congress. That's where the blame lies. If you create a system that can be abused, it will. If you create a system that's corrupt, why are you surprised when there's corruption? Blame the disease not the symptom. Our government is the disease. Corporations like intuit are just symptoms of the corruption. Legal corruption is still corruption. As they say, this is a feature not a bug from our government's point of view. Greatest country in the world for people who love to bribe. Corruption in most other places pales by comparison. Most places in the world outlaw bribery of government officials. We embrace it. So what if people get ripped off or even lose their lives? Business above all.
I don’t blame the mice for eating my garbage when I leave the door open, that’s just what mice do, they’re just trying to survive. It’s my job to keep the door closed.
There is a (partial) solution to this: support press like ProPublica that bring the issues to light. Their reporting on a bill related to this, the Taxpayer Fist Act (H.R. 1957), was directly responsible for squashing a bad bill.
Awfully confusing since stealing in this case (lobbying) is currently legal.
Getting upset at TurboTax for lobbying is like getting upset when a baseball player steals a base.. it’s part of the game. If it isn’t working then change the rules of the game! Trying to shame every baseball player into not stealing bases isn’t gonna work, they want to win.
I find their profit strategies to be abhorrent with their nag screens, bait & switches, dark patterns, purposely confusing "free" wording, no-indexing of the real freefile page, and so forth. I think that is clearly unethical business behavior.
But you're saying one can only get upset at a company if they do something illegal, not if one considers what that company is doing unethical, regardless of legality?
Why not just enshrine a reflection of our morality into law itself? Large groups of people have shown a pretty bad track record of caring about "ethical behavior".
Law is not intended to be a reflection of morality. There's a lot of behavior most people would consider immoral (lying, adultery, cutting in line) that we generally don't want laws against. Coordinated social pressure can be a powerful coercive force as well!
> Law is not intended to be a reflection of morality
By whom? By any reasonable definition the two will never be the same (otherwise why have two words for it), but it does seem like laws ensure justice, and justice is a reflection of how people feel, and that all comes together to form morality.
Coordinated social pressure has its limitations. 50 years ago homosexuality is deeply frowned upon in the US, now it's accepted in a fair number of places, shouldn't the law change to reflect the new morality of the times?
And now likewise if we think that taxes are too low for the mega wealthy, or companies are bribing the living hell out of congress... shouldn't we make laws against that? I don't see stern looks changing these problems.
Enterprises like these are free to make whatever decisions they want and I don't think it's fair to evaluate them with morals that seem to imply they are evil. What I mean is : this enterprise is not a monopoly, and there is competition, and it is free to fail ( unlike some banks lets say). If some other tax website provides better value, people are free to move to that.
If you disagree with this view that is not a reason to down vote. If you think the point I am making is irrelevant or insulting or a bunch of other reasons which are not addressing the topic at hand, then that is a reason to down vote. I will continue to argue that it's ok that a tax firm like Intuit can operate with profit being it's main motive
I agree people are too quick to reach for labels like evil when the reality is that systems create incentives and groups of people follow incentives (basically don’t hate the player hate the game) and do an amazing job at rationalizing their actions as good (we’re all the protagonist of our own stories).
However we don’t have to throw in the towel and let these things run wild. If TurboTax exists by the grace of rent seeking and fixing tax filing at the federal level increases our overall productivity/happiness then we should try to change the system.
I don't work for either company. I'm just someone that used TurboTax for 5 years and switched this year. Intuit has a huge history of lobbying against simplification of tax code, and there was even a bill to create a government run self serve e-file platform that Intuit helped kill. Also, Free Tax USA is a better UX and it's "free". Federal is free you pay like $10 to file state. I live in WA (no state income tax) so it was totally free for me. I paid $6.99 for the premium support just 'cause I wanted to give them some money 'cause I appreciate the service.
If you're in Canada, and want to stop supporting TurboTax, I recommend giving SimpleTax.ca a try. It's free for everyone, but you can donate after you file your taxes if you want. I was also very impressed with their privacy policy [1].
Besides, "lower income customers" pay little to no tax.
TurboTax Timmy made a decent ROI (assuming he hasn't pirated the software, in which case the ROI was awesome) on TurboTax - that must count for something.
TurboTax isn’t the IRS and it isn’t their responsibility to help tax payers navigate the overly complicated tax code for free (to the extent that the company doesn’t lobby for complex tax laws). Congress should create a streamlined tax filing system for everyday people.
Students also should not be charged for filing with a 1098, but I would also expect anyone in graduate school to be able to file a simple tax return on their own.
I used H&R Block this time around (I just picked a competitor, no real reason for specifically choosing H&R), because I ran into the same thing. The student loan interest deduction was free through them.
Most competitors were offering it for free, still, so I'd just say dump TurboTax like I did. I'll never go back.
There were quite a few competitors I considered. H&R even allows import of TurboTax files which saved a bunch of time.
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[ 0.27 ms ] story [ 145 ms ] threadTheir "audit protection", the constant nag screens IN A PRODUCT I ALREADY PAID FOR, their push for you to upgrade (with no discount at the end if you didn't use the upgraded features), and so on. Tie that in with the "spend your refund before you get" double dipping offers, and it's a scam.
I hate TurboTax, they have no real competitors, and the federal government should make them redundant.
This is all covered in an excellent podcast by Planet Money
https://www.npr.org/sections/money/2019/04/03/709656642/epis...
- higher standards of living
- longer life expectancies
- better healthcare
- higher taxes, but the money is used more efficiently and for better results than on mass incarceration or the largest military-industrial complex
- very easy tax payment processes
Taxes aren't universally "bad": fire departments, police departments, roads, schools. And guess what? That's "socialism." So is Social Security and USPS. The myth of anarchistic hyperindividualism (libertarianism) is a self-delusion because there are benefits to common infrastructure no individual could build themselves alone.
PS: Why don't most Americans know how bad they have it? Is it their lack of passports or lack of honesty in paying attention outside of their filter bubble?
I think it's both, now, but I think that the 'no passports' thing has been a factor for a while.
When I was in middle school I wondered why many (white, middle-class, etc) Americans only speak English when so many people from Europe, etc speak several (or at least can get by).
It dawned on me one day that you could start on one coast and drive clear across the continent without ever needing a second language - it's all USA the whole way.
So yeah - much like the language thing there's no real exposure to anything other than our country.
I one of those people who you are calling deluded but I would hardly call not agreeing with you delusion. I get the sense that debating an aggressive post on a throwaway account isn't a good use of time.
> Last week, the House Ways and Means Committee, led by Rep. Richard Neal, D-Mass., passed the Taxpayer First Act, a wide-ranging bill making several administrative changes to the IRS that is sponsored by Reps. John Lewis, D-Ga., and Mike Kelly, R-Pa.
> In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system. If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry’s profits.
* In 2007, Intuit lobbied to make sure taxpayers cannot electronically file their tax returns directly to the IRS by negotiating a deal preventing the IRS from setting up its own web portal for e-filing.
* In 2009, Intuit spent nearly $2 million in political contributions to eliminate free online state tax filing for low income residents in California.
* Between 2001 and 2010, Intuit Inc., maker of the tax-preparation software TurboTax, spent more than $1.7 million on lobbying in an attempt to kill ReadyReturn. Proposed statewide rollout of the ReadyReturn program was defeated in the California legislature in 2006. The FTB revived it on their own for the 2007 tax year, expanding it to cover one million Californians
* From 2009-2014, Intuit spent nearly $13 million lobbying. Intuit spent $1 million on opposing ReadyReturn, against John Chang, a Democrat who supported ReadyRun. Joseph Bankman, professor of tax law, Stanford Law School, and advocate of simplified filing, believes that the campaign warned politicians that if they supported free filing, Intuit would help their opponents.
* On March 26, 2013, ProPublica reported that the company lobbied against return-free filing as recently as 2011. One year later, ProPublica reported that the company appeared to be linked to a number of op-eds and letters to Congress in a campaign advocating against direct tax filing backed by the Computer & Communications Industry Association, an advocacy organization of which Intuit is a member.
https://en.wikipedia.org/wiki/Intuit https://en.wikipedia.org/wiki/ReadyReturn
https://www.propublica.org/article/congress-is-about-to-ban-...
https://priceonomics.com/the-stanford-professor-who-fought-t...
turbotax could still have a lucrative business by building on top of free filing with value added services, but no, they want government-protected profits. it's dishonorable.
and it's a symptom of money controlling politics. we need to figure out how to allow politicians to be productive and contributive without money being the measuring stick proxying power.
Regardless, it would still be okay for the IRS to automatically file people's taxes and send them a return, which is the true best solution here.
[1] https://www.propublica.org/article/congress-is-about-to-ban-...
[2] https://www.congress.gov/bill/115th-congress/house-bill/5444
Until we can step back from the belief that private corporations can solve every problem, we will be stuck with long-standing, and wasteful systems/situations like this.
They do - TaxHawk (who also owns FreeTaxUSA.com) is an ethical full feature tax prep software company. Federal return is free (for everyone) and state is $15 (for everyone). No nag screens, no dark patterns. You can even file your federal without filing your state and not pay a dime, no problem. The UI is good (and the UI is the whole reason I'm using tax prep software over paper forms)
Been using them for like six year at least.
It does use your data to advertise to you - https://www.washingtonpost.com/technology/2019/03/07/when-ta...
The UI also sucks compared to TaxHawk.
https://ttlc.intuit.com/community/saving/help/how-do-i-save-...
This one actually got me this year. They force you to upgrade prior to seeing if the upgrade helps. I 'upgraded' to see if itemizing a certain thing would beat my standard deduction. It didn't, so I removed that whole section. But then I forgot to downgrade and accidentally paid an extra 30-50$ or whatever it was for absolutely nothing- something they could have easily detected.
Obviously the responsibility lies on me for overpaying, but most other businesses wouldn't have taken the extra money for something I didn't use.
Sometime around 2016 they discontinued it and told me to go beg someone for free service, or pay turbotax (seriously).
They told me only 2% of state filers used the website.
Question-- why should I have to pay for them to tell me what I owe them? If running the platform is so much money, donate to an open source consortium who will maintain it forever for a rational price.
They'll generate a large 2D barcode of the data and perform some addition, but the one most critical calculation in the form, looking up the relevant tax amount from taxable income and filing status-- is "read these tables and formulas on a seperate screen and do it yourself."
I would love if CA established a department along the lines of 18F (https://18f.gsa.gov/) or USDS (https://www.usds.gov/) to improve these systems.
Might we see a lot of good competition spring up this way?
The problem isn't lack of competition. It's that this industry is entirely propped up by a byzantine and entirely unnecessary process. The only reason these companies are able to reduce friction filing your taxes is that they lobby to create it in the first place.
[1]: https://www.irs.gov/individuals/free-tax-return-preparation-...
Our tax system is terrible and convoluted, but this statement is not actually correct. In may cases you get copies of tax forms from businesses before the IRS has processed the business return, possibly before the business return has even been submitted. Business and personal returns are processed in parallel and cannot be reconciled against each other until they have all been done. That's why audits almost always have at least one tax year of lag, because that's how long it takes to get through everything. Filing extensions make the process even worse.
https://www.propublica.org/article/turbotax-deliberately-hid...
In short, Intuit moved from previously-free features to their paid tiers. This move may have disproportionately affected low-income taxpayers, though—if true—that impact was unintentional, not targeted.[1]
The article cites several different features that were monetized and affect lower-earning taxpayers[2] as well as those affecting higher-end earners[3], but doesn't state that this list is comprehensive, and doesn't prove that impact was disproportionate.
ALL THAT SAID, there's still some crappy dark patterns here, as well as broader tax-ecosystem improvements that would benefit taxpayers that Intuit has fought tooth and nail to block. So I'm certainly not defending Intuit here, but I'd find more objective reporting to be more compelling.
[1] "The income levels of the groups that were being driven to paid products 'was never really considered.'"
[2] "One of these forms was for a tax credit that goes exclusively to poor taxpayers who are elderly or get disability benefits. Another is used by low- to middle-income households that receive a credit for putting money in a retirement account." (Which, if it's what I'm thinking of, applies to above-average earners, too.) "A third is used by taxpayers who collected unemployment benefits." "And then there are people with student loans, who also have to use Deluxe." (Unclear if this is a change.)
[3] "The company’s changes also affected parents who get a credit for child care expenses, as well as people filing the schedule for interest and dividends."
> “They were always supposed to be customer focused, customer first,” one former staffer said. But the income levels of the groups that were being driven to paid products “was never really considered.”
Where's the numerous sources that said Intuit deliberately set out to increase revenue at the [disproportionate] expense of lower income taxpayers (emphasis mine)?
The "Freefile" product is only supposed to be free for lower income people, so when Intuit misdirected everybody to the (non-free) product which they named "Free", they exclusively harmed lower income people, as the higher income people were never entitled to free filing.
(that entitlement is due to an agreement with the IRS, where the IRS agreed to limit competition in the tax filing industry in return for the development of free file products).
edit: also note that it is absolutely not an accident that Intuit used these names which make it almost impossible to talk about their non-free product which is named Free, and their actually free product which is named Freedom and Freefile.
[1] "But, as ProPublica has been reporting, Intuit has steered eligible customers away from the truly free version, aggressively marketing products that are called “free” even though many customers end up paying."
Getting upset at TurboTax for lobbying is like getting upset when a baseball player steals a base.. it’s part of the game. If it isn’t working then change the rules of the game! Trying to shame every baseball player into not stealing bases isn’t gonna work, they want to win.
But you're saying one can only get upset at a company if they do something illegal, not if one considers what that company is doing unethical, regardless of legality?
Legal does not equal ethical.
By whom? By any reasonable definition the two will never be the same (otherwise why have two words for it), but it does seem like laws ensure justice, and justice is a reflection of how people feel, and that all comes together to form morality.
Coordinated social pressure has its limitations. 50 years ago homosexuality is deeply frowned upon in the US, now it's accepted in a fair number of places, shouldn't the law change to reflect the new morality of the times?
And now likewise if we think that taxes are too low for the mega wealthy, or companies are bribing the living hell out of congress... shouldn't we make laws against that? I don't see stern looks changing these problems.
However we don’t have to throw in the towel and let these things run wild. If TurboTax exists by the grace of rent seeking and fixing tax filing at the federal level increases our overall productivity/happiness then we should try to change the system.
I don't work for either company. I'm just someone that used TurboTax for 5 years and switched this year. Intuit has a huge history of lobbying against simplification of tax code, and there was even a bill to create a government run self serve e-file platform that Intuit helped kill. Also, Free Tax USA is a better UX and it's "free". Federal is free you pay like $10 to file state. I live in WA (no state income tax) so it was totally free for me. I paid $6.99 for the premium support just 'cause I wanted to give them some money 'cause I appreciate the service.
[1] https://simpletax.ca/privacy
Besides, "lower income customers" pay little to no tax.
TurboTax Timmy made a decent ROI (assuming he hasn't pirated the software, in which case the ROI was awesome) on TurboTax - that must count for something.
Students also should not be charged for filing with a 1098, but I would also expect anyone in graduate school to be able to file a simple tax return on their own.
Most competitors were offering it for free, still, so I'd just say dump TurboTax like I did. I'll never go back.
There were quite a few competitors I considered. H&R even allows import of TurboTax files which saved a bunch of time.