Intuit lobbies against California's free tax filing service
latimes.com
latimes.com
Or, as I like to think of it, governments, by necessity, introduce a certain amount of friction into our lives, and have every right to try and reduce that friction. If your business is built on reducing that friction, you simply need to ensure that your service stays ahead of the free service, because your profits are not a right.
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Of course Intuit isn't happy because they don't get to make a profit on a product that nobody wants to buy.
If we really wanted to save money, we'd reform the tax system, not provide band-aids like this program.
Exactly! As a taxpayer I want the tax code to be simplified so that I don't need to use a computer or pay someone to prepare my return.
IRS FORM A
Name: ______________________________________________
Social Security Number: ___-__-____ OR
State ID Number: ____________
1. Total individual income from all sources:
Records available to the IRS show your income
to be at least $XXXXXXX. _________________
2. If line 1 is less than $33,000, enter again here.
If line 1 is $33,000 or more, enter $33,000 here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
3. If line 1 is less than $66,000 but $33,000 or more,
subtract $33,000 and enter the difference here.
If line 1 is $66,000 or more, enter $33,000 here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
4. If line 1 is less than $100,000 but $66,000 or more,
subtract $66,000 and enter the difference here.
If line 1 is $100,000 or more, enter $34,000 here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
5. If line 1 is less than $500,000 but $100,000 or more,
subtract $100,000 and enter the difference here.
If line 1 is $500,000 or more, enter $400,000 here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
6. If line 1 is $500,000 or more, subtract $500,000
and enter the difference here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
7. Sum the following: 10% of line 2, 20% of line 3,
25% of line 4, 30% of line 5, and 40% of line 6.
THIS IS YOUR TOTAL INCOME TAX. Enter it here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
8. Calculate 10% of line 1. THIS IS YOUR TOTAL SOCIAL
SECURITY TAX. Enter it here:
Records available to the IRS show this amount
to be at least $XXXXXXX. _________________
9. Add lines 7 and 8 here:
Records available to the IRS show this amount
to be at least $XXXXXXX. __________________
Records available to the IRS show your total tax withholding
to be $XXXXXXX.
If this is greater than or equal to line 9, you may submit this form
for a tax refund.
If this is less than line 9, submit this form along with the attached
payment form below (IRS FORM P).
Submit this form and any necessary payments by April 15. Forms received
after April 15 are ineligible for any tax refund.
If additional payment is due to the IRS but not received by April 15,
penalties will be added to your tax liability, as described on
IRS FORM X. FAILURE TO PAY INCOME TAXES IS A FEDERAL CRIMINAL OFFENSE
PUNISHABLE BY UP TO 5 YEARS IN PRISON.
"Total individual income" includes wages, salaries, tips, revenue from
sale of capital assets, stock dividends, and inheritance of cash assets.
It does not include acquisition of non-cash assets including real or
personal property, securities, or other capital assets. However, any
sale or liquidation of non-cash assets may then become subject to
income tax. In general, one-time transactions of less than $1,000
may be omitted. Detailed rules are available in IRS DOCUMENT I,
available at http://www.irs.gov/documents/i/ or at your local library
or post office.
For any recurring transactions, or one-time transactions of $1,000
or above, IRS Form R or O should have already been submitted to the
IRS. We have enclosed copies of those forms in this mailing. If any
of these forms are in error, file a copy of IRS FORM C to appeal
for a correction.
When you take a 1099 job, you include in your rate the extra money that you'll need to do the extra paperwork.
Similarly, I never consider the money that I need to pay for taxes "mine". This is why I am not bitter about taxes. When I ask for salary, I decide how much money I want (or can get), calculate how much of that the government is going to take, and ask for the amount of "real pay" that ends up being the amount of take-home pay I want. That way, income tax is my employer's problem, not mine.
It would be a very different story if the form suggested above was _the_ form, with zero loopholes available to people with expensive tax attorneys.
(You could argue that we don't need the government because humans are self-organizing and all that, but do we really want to go that far?)
Complicated taxes are a necessary evil. But it would be nice if the government just sent me a bill at the end of the year saying "oh hai, write us a check for $12345" and that was the end of it.
If gas consumption is too high, why not increase the gas tax and let individuals figure out the best way to deal with it? Maybe for some people the best solution is to reduce their commute rather than buy a new car.
The only reason we don't use that far simpler system is government spending that looks like a "tax break" is some sort of fetish among the Republican party.
Edit: Democrats often do the same thing, just not to the same extent.
There are vastly more alternatives than that. I'm really surprised to see this post from you. You could leave income tax alone and just add in a big sales tax on non-hybrid cars, for example.
I suspect that there are going to be a lot of long-time TurboTax users like me who feel the same way.
You seem to believe that just because you will not use the states tax software that no one will, which seems to be a error in generalization.
From a profit maximization perspective, I completely understand how Intuit's rent seeking behavior is justified. On the other hand, it almost certainly socially suboptimal.
"I suspect that there are going to be A LOT of long-time TurboTax users like me who feel the same way."
From yours
"You seem to believe that just because you will not use the states tax software that NO ONE will, which seems to be a error in generalization."
Seems to me like you made an error in reading comprehension.
But given Intuit has taken this tact, perhaps they don't work as hard as they should be to justify their cost...
I think this is California Hippies significantly price gouging the competition out of its Highest profit margin customers. And Big Business is like you are price gouging us, when we are suppose to be price gouging them.
Those customers that are the quick and easy returns, might file themselves through the state. I would imagine consumers general risk aversion with regards to government oversight would be the determinate for logical consumers adoption of these government goods with a relevant weight with regards to the price savings and the resulting of a comparable net return.
If the california system is off in its returns or doesn't produce returns similar results as previous year. The customer is going to intuit next time.
The false positive is the trick for Califronia to catch in order to make their system a success. The guy that had someone doing his taxes for years. Really basic, but now that guy started a business, or bought a house and the deductions are not standardized enough for the flag to call a higher level of deductions.
This guy uses the system for years and now he finds out from his friend that intuit does it much better, and tax preparation service steps in and wham.. They have a wow loyalty customer.
This is just market signaling that the actuary boys at Intuit think that the free deal is going to be a winner for customers. Or false signaling, you tell me.