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Comment by kn0where | Hacker News Reader

Good, but the situation is so much worse than just this. Most Americans could just use the IRS Free File system, which the article mentions, instead of ever giving money to Intuit or H&R Block ever again. But we don’t heavily advertise that system, because that would encourage people to use it, and if you’re going that far, you might as well let the IRS build its own tax software with all your information prefilled like they do in civilized countries.

As long as the job of Congress is to kiss the ass of every powerful industry lobby, we won’t have good things.

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I tried to make this point in the other thread, so let me take another stab at it here.

You say this like it's just a thing that people can do. But the people you're telling to "Just do this" have already been trained to be terrified of the IRS. Many of them are currently paying huge fines due to missing their returns in prior years. Any small mistake can hang you when you're impoverished, precisely because you don't have any room for error.

"Most Americans" is an umbrella that contains mostly service workers. The people that serve you food, bag your groceries, drive your amazon purchases, and so on. If you've spent a lot of time with people like this, I encourage you to ask them "Hey, do you pay someone to do your taxes, or do you do it yourself? Why?"

I'm pretty sure the conversation will go "I pay. I just don't want to worry about it." And that "worry" is because they've been hit hard in the wallet, because the (American) government is not friendly when it comes to messing up your taxes.

If I am mistaken about this, I would like to know. But this is true of my extended family, and I'm pretty sure it's true for most of their friends.

> But the people you're telling to "Just do this" have already been trained to be terrified of the IRS. Many of them are currently paying huge fines due to missing their returns in prior years. Any small mistake can hang you when you're impoverished, precisely because you don't have any room for error.

Why do you say that? I've never encountered people who were terrified nor have I read about it. How many people are paying "huge fines"? AFAIK, the IRS's audit capacity is greatly underfunded.

My wife and her parents. Not her sisters though, admittedly.

It's possible that I'm just reacting to a biased sample of people. But my impression was that this is a common mindset for a nontrivial subset of the population. Being afraid of doing something wrong on your government forms isn't really an irrational fear. Anyone who's owned a car in Chicago will tell you that the city's goal is to extract as many thousands of dollars from you as possible – it was still one of my worst financial decisions of all time. And that wasn't even taxes.

The broader point is that "dealing with the government" is a big messy bucket that people usually want to pay a janitorial service to dispose of. Even things like "being reminded to file your taxes right now" is valuable in that situation. Most people don't have a clue what day they need to file by. They don't learn it in school, and their parents either don't know or didn't bother to teach them.

> Most people don't have a clue what day they need to file by.

That does not at all match my experience, it's widely discussed every year, and I wonder how many returns are late.

Alright. Thanks for the data point.

But you left out income. The idea here is that HN users tend to be a biased sample. Most of us aren't impoverished.

I would bet that your family's discussions are due to the fact that you have a stable, fully functional family. Most people outside of tech aren't as fortunate.

If I'm mistaken about this, and your family isn't middle class or higher, then that's an important data point though.

I'm not talking about my family discussions. Just turn on the local news and you'll see them discuss it, including the annual segment about the lines at the post office.

Ah.

For what it's worth -- and it's possible I'm living in a bubble, but -- the only family member I know that watches the news is my dad. Everyone else quietly switched to netflix long ago. The news mostly comes from the drama of the day; things that show up on facebook. (The recent Chris Rock drama, and other nonsense like that.)

I recently followed CBS on TikTok though, to my surprise. They had some of the best coverage of the Ukraine war I've seen. I even joked to my wife that the circle of life was complete: not only have I never watched the news in years, and not only does my dad have no clue what tiktok is, but now I'm watching the news on tiktok.

Thanks for pointing out that the news is sometimes a valuable thing to keep on one's radar.

FWIW, I don't watch local news; I read it online. But I've seen studies showing that it's still the most popular primary source of news.

April 15 (ok. Sometimes a few days later based on holidays.) is pretty engrained into the minds of adult Americans who pay taxes. I have rarely watched tv news in years and don’t even get it any longer. But I can pretty much guarantee if you asked a bunch of middle class adults when tax day is, an overwhelming majority would tell you the correct answer.

Wtf?!

I grew up impoverished. Impoverished people talk about tax filing time way, way more than well off people because they need the money (refund) much more. A very pleasant memory of my early childhood was at my aunt's house celebrating her tax refund with her by making strombolis.

>Most people don't have a clue what day they need to file by.

Every single wall or desk calendar I've ever seen has "Tax Day" labeled on it.

This is quite true, even excluding service workers. Every tax season I have conversations with bright, well-to-do, college-educated people who seem to live in terminal fear of the IRS. They're absolutely terrified that if they get one tiny thing wrong during the tax filing process, they will immediately be arrested and shipped off to prison. So they always pay someone to file their taxes, even if they're simple. It's mind-boggling.

The irony is that -- as you said -- the IRS hits people of modest income harder, because the IRS doesn't have the resources to take on many battles with wealthy people who can afford lawyers. This means the IRS mostly goes after easy targets who won't fight back. Yet another tax on being poor.

What are you actually referring to? In my experience, it takes a pretty serious mistake to get charged a fine (it’s never happened to me despite mistakes). The IRS just charges (fairly reasonable) interest if a mistake results in underpayment. And IIRC, they pay interest to you when you overpay too.

Much of my experience may have been shaped by my experiences with Chicago. I vividly remember how painful it was to have to call them up every month in order to pay them. It was 2016, and I forget exactly what the reason was. But autopay was somehow sufficiently painful to set up that the path of least resistance was to set a reminder in my phone of "Pay taxes to city" and deal with sitting on hold.

If it sounds unbelievable, I don't blame you at all. I wouldn't have believed it myself until seeing just how Kafkaesque "dealing with the government" can be. Especially when penalties are involved.

For the rest of my family, it's a little awkward to find out. It's mostly on my wife's side; my father was always very fastidious about taxes, as most families of most HN readers probably are. I only wanted to point out that there's a large number of people where this isn't true.

I'll try to dig up direct answers for you. Thankfully most of this pain has been not-mine for many years now.

I think most of the fear of the IRS comes from rumors like your post.

I think in reality, a way to get the “civilized country” (as referred to by another poster) tax experience is just file an incomplete return, the IRS will bill you the correct amount along with a negligible “fee” (interest) a few weeks or months later.

Maybe doing this repeatedly would upset the IRS, I don’t know. But it definitely works a few times without issue.

That said, I wouldn’t do this on purpose :)

Out of curiosity, what monthly tax did you pay to Chicago? The city does not levy income or property tax. Most people will only ever pay Chicago sales tax or things like a yearly “city sticker” car license fee.

https://www.chicago.gov/city/en/depts/fin/supp_info/revenue/...

I was not allowed to use the free file because I made >70k if I recall correctly. It seems really stupid and arbitrary to not allow people above a certain income to access software that helps them fill out govt. forms. Only lower income people deserve help filling out their taxes??! Bizarre.

> Bizarre

Follow the lobby money.

*edited for flagging

What's your point though? Does the free file system not work correctly or something?

People who make more than the median tend to have more complicated tax situations due to investing, owning business, owning a house, and so forth, and generally have more complicated finances.

So it's not totally arbitrary, but I certainly agree that the US tax system is messed up.

free file fillable forms is available to you (I use it). It's not a hand-holder, but it does get the job done (and it does quite a bit of the math for you).

Its possible to miss a form or worksheet with FFFF. A good guess uses the previous years forms.

.... and just to be completely clear, this is only the way it is because of HUGE lobbying spends by Intuit.

IMO: The mind blowing element, is that in the grand scheme of things It's not actually that much money.

I'm not sure if anyone knows the true amount, but estimates put the number spent on lobbying around a few million dollars. Opensecrets.org estimated ~$3.2m lobbying in 2021.

https://www.opensecrets.org/federal-lobbying/clients/summary...

For a company that makes $2 BILLION dollars a year, the amount they actually spend lobbying and otherwise influencing governments is shockingly small.

Politicians are surprisingly cheap, so long as you're talking about topics that don't get a lot of press.

And thanks to Citizens United and similar decisions that have driven up the cost of US elections, US pols are very expensive compared to their counterparts in other countries.

It does make me wonder about the efficacy of standing up a lobbying fund to lobby to Do The Right Thing about something. This would be a prime example - I would happily pay $100 to compete with Intuit's lobbying here. I'm also certain there are 31,999 other people in the US who feel the same way.

I just don't have the energy to do the work of learning how to set up the corporate structure around that to make it legal.

> standing up a lobbying fund to lobby to Do The Right Thing about something. This would be a prime example - I would happily pay $100 to compete with Intuit's lobbying here. I'm also certain there are 31,999 other people in the US who feel the same way.

Congratulations, you just independently invented the concept of a Political Action Committee.

I completely agree that politicians are not cheap at all. The reality is that so much of the money that's invested in influencing politicians is through means other than campaign contributions.

It's through season tickets to the network of friends that know the politician, it's through donations to the university that gets their child into college, it's through pacs and issue groups, it's through lining up and bundling donors to max out their individual donations to a politician's preferred presidential candidate, it's through flying them out to special events, it's through hiring their best friend, it's through investing in their brother in law's new business, it's through buying things at their husband or wife's charity auction, it's through arranging a job for them after they retire from politics, it's through finding them a buyer for their investment property, it's through an entire network of investments one or two degrees removed from the politician.

The only sliver of that that people typically cite is the amount directly spent on campaign contributions which (1) mistakenly makes it seem like politicians are cheap and (2) is underwhelming, to people who cite those numbers sincerely believing that that's the only economic dimension to political influence.

True! Great point that there are very, very many other ways that they are "compensated" besides direct $$$ donations. Thank you for noting that.

That is called the https://en.wikipedia.org/wiki/Tullock_paradox .

That's not exactly true. Free filing is also opposed by influential conservatives. The argument goes that if paying taxes were easier, then people wouldn't pay as much attention and oppose taxes as much. (I'm paraphrasing as best I can.)

Here's an old article from 2013 on it, for example, and a letter from Grover Norquist (sponsor of the Taxpayer Protection Pledge) and others.

https://www.propublica.org/article/how-the-maker-of-turbotax...

https://www.atr.org/taxpayer-advocates-issue-joint-free-file...

https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Taxpa...

Isn’t the free file system simply asking e-file companies to offer a free program to qualifying customers? I thought that the IRS didn’t actually run their own filling system/website for citizens.

Yes, here's the list -> https://apps.irs.gov/app/freeFile/browse-all-offers/

However, those options aren't advertised and these companies like to do "Free" but then upgrade you as you fill out options.

TurboTax and H&R Block aren't part of Free File as of 2021, so the supported software under the program are now things most Americans wouldn't recognize, either.

The problem truly is advertising, like you said. The government just cannot out-advertise companies that are doing $9 billion in revenue.

Of course the government could out-advertise them. It'd be like Google advertising its own products on its search engine -- the government controls all end-user tax related communications.

They just don't want to because someone bribed them to not do so.

Everyone uses Google. How many more people see TurboTax's ads vs. government "tax related communications?"

Every single tax payer when they get paid, or when they pay their tax bill each year.

The years in which I've had a refund, I have had the amount directly deposited. The years in which I've paid have been through a software portal that supports credit card payment.

I, personally, have no idea what the government's "communications" have been regarding taxes outside of news articles.

Either way, though, this is no competition for a year's worth of massive advertising campaigns.

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