TurboTax to charge more lower-income customers
propublica.org
propublica.org
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.
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.
> 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.
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.
https://www.propublica.org/article/turbotax-deliberately-hid...
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.
[1]: https://www.irs.gov/individuals/free-tax-return-preparation-...
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.
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.
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.
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.