Poll: Constitutional ban on making money from tax-return programs
It's commonplace now for ordinary people to use programs like Turbotax to do their taxes for them. This means that taxes are so complex for an _individual_, that there's a market for computer software to mitigate that complexity. Every lawyer, account, and programmer who's dedicated their career to knowing the ins and outs of the tax system is a sympton of the horribly crufty, unnecessarily complex being that is/are U.S. tax laws. As tax laws grow ever more complex people will become ever more dependent on computer programs to do the labor of figuring out how they're supposed to fill those forms out. People could get arrested and fined because of errors in the tax software they use.<p>To keep this from happening, and to get ordinary people more strongly invested in the simplification of tax laws I propose a constitutional ban on making money, in any way, from software that does tax returns.<p>
I say making money and not writing such programs because I think the danger of scope creep from a law banning the writing of a certain program is greater than the gain from banning such programs.
14 comments
[ 3.3 ms ] story [ 51.8 ms ] threadI agree the tax code is a mess. The way to fix it is to fix it, not apply indirect pressure. Unfortunately, most of the proposals that I have seen hit me, as a middle class self-employed developer, right in the pocketbook, e.g. take away the mortgage deduction, or propose some kind of regressive tax, like a national sales tax.
1. Why does it need to be a constitutional ban? Why not just pass a law against it?
2. Why not make tax-return program publishers responsible for any errors their programs make, and make honest tax payers exempt from liability due to relying on what they believed was a correctly functioning tool?
I don't think destroying the business model of products like TurboTax will fix tax law. Fixing tax law will remove the need (or most of the need) for products like TurboTax. However even in a world of simple tax laws there will still be such a market, simply because for some people it is cheaper to pay a fee for turbotax (or an accountant or whatever) to help them do their taxes than for them to learn how to do it themselves in terms of opportunity cost.
There will be a market for these services forever for good reasons.
besides, if your going to put in the effort to amend the constitution, you may as well go after the root cause of all root causes ;): "giving money to people that make our laws."
2. Again, scope creep, also, the Halting Problem. If current trends continue, I could easily see tax-optimization taking the form of a lot of really difficult problems in computer science.
Honestly, I suggest this because I'm very cynical. There's a lot of defacto federal "laws" that exist because of indirect pressure in other bills. For example, the drinking age in most states is 21 because if it's any lower states can't get federal funding for highways. It's true that direct tax reform would be a better way to go, but there's so many parties that stand to benefit from the complexity of the current system that I can't see any attempts at reform succeeding.
Even if the tax code were as simple a "straight 10% no matter what no exceptions" there would still be a market for tax software because a large number of people can't do basic math.
Not that I wouldn't like it to be simpler. I would. But even with a completely optimal and just tax system, there still might be a place for such software.
Taxation is difficult. There are a lot of weird things you can do with your money, and a whole industry out of making more of them - dealing with all that requires complexity.
Even more so, as you mention, tax policy is a manifestation of social and economic policy - it's the way you implement those two, and if you're going to do it right, it's going to be complex.
For a small small view of this, consider that as of now, you get a tax deduction for charitable donations. If you simply paid X% of your income, as many suggest, this would remove that deduction - and what do you think that would do to charitable giving in this county, and to the people that depend on the programs of those charities to survive?
Nonetheless, your example illustrates the point quite well. Simplifying the tax code, and making it do what you want it to do, are not the same problem.