There is a growing sentiment that we are living in a capitalist democracy. Which in and of itself isn’t a bad thing. Unfortunately, when the capitalism begins to impede on the democracy that leaves the non-wealthy struggling to find a way to make it though. As appropriate as it is, Democrats and Republicans came together to make it illegal for the IRS to make a free tax filing option for taxpayers. The Taxpayer First Act is anything but putting the taxpayer first.
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.
The bill, essentially, makes it illegal for the IRS to create its own online system of tax filing, which is free. Why would they do something like that? Companies like Intuit, the maker of TurboTax, and H&R Block have never liked that option, and lobbied against it for years, because it threatens the profit of the industry, according to ProPublica.
“This could be a disaster. It could be the final nail in the coffin of the idea of the IRS ever being able to create its own program,” said Mandi Matlock, a tax attorney who does work for the National Consumer Law Center.
The Free File Alliance, a private industry group, says 70% of American taxpayers are eligible to file for free. Those taxpayers, who must make less than $66,000, have access to free tax software provided by the companies. But just 3%of eligible U.S. taxpayers actually use the free program each year. Critics of the program say that companies use it as a cross-marketing tool to up-sell paid products, that they have deliberately under promoted the free option and that it leaves consumer data open to privacy breaches.
While taxpayers can’t get any support from bills that would benefit their best interest, we have bipartisan support for an industry that constantly under promotes an option is that required by law. Then again, money is a powerful key for politicians to get their agenda through. In 2019, none of this surprises me anymore.