Magazine article The American Prospect

Devil in the Details

Magazine article The American Prospect

Devil in the Details

Article excerpt


During the 1998 tax filing season, 25.5 million Americans filed their returns electronically--ten million more than just the year before. Of those 25.5 million taxpayers, one million used commercial software to file their returns via their own computers, and the rest worked through a paid tax preparer like H&R Block. While filing electronically may save taxpayer time, it won't save money. A taxpayer can't file his or her taxes electronically for free; the only ways to do it are to buy commercial tax software or to work through a middleman.

Yet Congress has become a big fan of electronic filing. The Senate and the House recently enacted legislation that directed the Internal Revenue Service to make sure that 80 percent of all tax returns are filed electronically within a decade. But instead of having the IRS develop free computer software to make the process easier, the legislation directs the IRS to coordinate its efforts with the private sector. As the Wall Street Journal reports, the reasoning behind this move was simple: lobbyists from H&R Block and the Intuit corporation (a leading tax software producer) argued that expanding free public software would "undercut their franchise."

But shouldn't the government be striving for a free and fair way to enable taxpayers to file their returns as easily as possible--and not worrying about a slight diminution of a big corporation's profits? If Congress's real concern is that providing public domain software will hurt tax preparers and software companies, then why not also shut down the IRS Web site and toll-free number, so that taxpayers will have to go to commercial tax preparers to get their questions answered? Why not quit providing the tax forms and guides that "steal" accountants' business?

IRS Assistant Commissioner Bob Barr, a former vice president of Intuit who is now in charge of electronic tax administration, replies to objections like these by noting that the private sector "is likely more efficient" than the IRS. Barr has even spearheaded an ad campaign to encourage taxpayers to file electronically, which will (incidentally, of course) expand business for his old employer even more.

It should be no surprise that, according to campaign finance figures made public by the Wall Street Journal and the public interest reform group Public Campaign, H&R Block and Intuit have been heavy donors of congressional cash. In the last election cycle, Block donated $58,250 in soft money, while its PAC and employees gave another $67,290 to congressional candidates. Scott Cook, Intuit's CEO, gave $50,000 to the Democratic National Committee in 1996, and another $25,000 to the DNC, $5,000 to Majority Leader Trent Lott's leadership PAC, and $1,000 to both Senator Alphonse D'Amato and Minority Leader Tom Daschle as the bill was being drafted.

Congress's recent foray into the field of electronic tax filing was supposed to be part of a larger effort to completely overhaul the IRS--an effort to make a detested government agency more like a business than a bureaucracy. In this case, though, it looks to us like it was really concerned with furthering the interests of a few corporate contributors.


Since the May publication of his book More Guns, Less Crime, University of Chicago fellow John R. Lott has become the darling of the National Rifle Association. Lott alleges that gun control statutes actually embolden criminals-and that the best way to decrease crime is to enact "shall issue" concealed weapons laws, which would require judges to issue permits to any citizen who has neither a criminal conviction nor a history of mental illness. The core of his book is an analysis claiming to show that as a result of the passage of concealed weapons laws in 31 states, crime rates in those states have fallen dramatically.

Lott's critics have pointed out fatal flaws in his methodology. …

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