Tax Complexity: Cui Bono?

A year ago Daniel Luzer posted a Ten Miles Square item noting that tax-preparation outfits are the most obvious beneficiaries of a complex tax code, and the folks who probably don’t want you to know the IRS is willing to do your taxes for you if you ask.

Why are taxes so hard? Part of the reason seems to be that tax preparation companies’ lobbying efforts ensure that doing your taxes are really complicated.

When doing your taxes you may notice that, if you’re like most people, virtually all of the information that you’re providing is already something the government has anyway. Why do you have to go through so much effort to show your work all over again?

In addition, if you’ve ever made a mistake filling out your taxes you’ll notice something interesting. It’s not like the IRS accountants just send the forms back to you and say “do a better job, citizen.” No, they usually just fix it for you. (Granted, this often means processing takes longer and you pay more money, but still.)

So, um, how hard are taxes really? Why can’t the government do most of it for you?

Actually, it can. The tax preparation companies just don’t want taxes to be too easy, because then Americans wouldn’t use their services.

It’s too late for most people to make up their minds to take a different direction in tax preparation this year. But print out a copy of Daniel’s piece and put it in your file of receipts for next year.

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Ed Kilgore

Ed Kilgore is a political columnist for New York and managing editor at the Democratic Strategist website. He was a contributing writer at the Washington Monthly from January 2012 until November 2015, and was the principal contributor to the Political Animal blog.