But the success of TurboTax rests on a shaky foundation, one that could collapse overnight if the U.S. government did what most wealthy countries did long ago and made tax filing simple and free for most citizens.
For more than 20 years, Intuit has waged a sophisticated, sometimes covert war to prevent the government from doing just that, according to internal company and IRS documents and interviews with insiders. The company unleashed a battalion of lobbyists and hired top officials from the agency that regulates it. From the beginning, Intuit recognized that its success depended on two parallel missions: stoking innovation in Silicon Valley while stifling it in Washington. Indeed, employees ruefully joke that the company’s motto should actually be “compromise without integrity.”
It always surprises me just how badly designed and openly corrupt US politics really is. Even something as banal as filing taxes is made a complicated, outdated mess just so some scumbags can earn some money.
What ? Has Thom ran out of news from the Chinese front ? Something happens out of China ? Moaners, stand up !
Competition! That’s exactly what you need to trim some fat and get agile again or you’ll be outdone real fast.
The interesting part here is why politicians make choices that are clearly not in the interest of the voters but companies who are not allowed to vote.
And why people still vote for those politicians who do that.
– Douglas Adams, So Long, and Thanks for All the Fish (1984)
You know, I think the lizards could actually write a better tax code. Maybe I’ll vote for one.
xylifyx,
That’s a good question. I’m no psychologist, but I think most voters become associated with a political party much the same way spectators associate with a sports team. It’s not rational, but they become biased and have a tendency to tolerate alot more crap just to “protect their own” even when it’s not really in their interests. They’d rather have their party on top to say they’re “winning” than having an opposing party actually doing a better job to make their lives better.
I think back to the 2016 US election, there was no question that trump was (and is) one of the most ill-prepared candidates and it showed in every one of the debates. He was clearly the dumb one there easily outclassed by his rivals, but we all learned a lesson that voters don’t vote on qualifications, merit, selflessness, or integrity. They voted on partisanship, and trump is by far and away the most partisan politician I’ve seen. Trump put his WWF (staged wrestling entertainment) experience to use in politics, and remarkably it worked. It shouldn’t be a surprise that he puts off more educated voters and they tend to be democrats, haha. Alas, I wouldn’t put it beyond him to start a partisan civil war for his own personal gain.
Voter psychology aside, there are a lot of technical problems with our democratic implimentations. It takes a tremendous amount of money to run in politics even for local government, we’re talking millions., which eliminates lower/middle class candidates. They can’t stay afloat without going to corporations to finance their campaigns. Corporations for their part often don’t care which candidate wins, so long as they’re corruptible. It is in corporate interests for campaigns to be so expensive that politicians have to be dependent on them in order to campaign. And this problem never goes away even once someone is elected, the income from their political office is still not going to be anywhere close to fund their next campaign – so corporate money is always going to be in their minds.
I find it troubling for democracy that there are only two viable parties here in the US. There are a lot of problems with both parties and voters have few opportunities to differentiate themselves from the platforms of either party. It also doesn’t help to have devices like the electoral college & gerrymandering changing the weight of a vote based on where one lives. I hate to say it, but many people’s votes in the US aren’t being counted fairly.
And even assuming we did start to count votes fairly, the way our primaries select candidates ironically has a tendency to promote the opposite of what voters want. The four most popular candidates may get 70% of the primary vote such that 70% of voters would take any of those four over an unpopular fifth candidate. The unpopular candidate might only have 30% of the vote, but the more representative candidates can largely cancel each other out and only get 17.5% on average. By the time we get to general elections, the better candidates can be eliminated and the party’s candidate is largely wanted by it’s own party. Sound familiar? It’s easy to see when this happens in hindsight, but solving it in the future requires us to change the way we vote. We would achieve much better political representation through rank voting, or maybe a tournament ladder like they have in sports, something so that the best candidates don’t end up dividing the vote artificially inflating the rank of bad candidates.
These are all critical to solving the political representation problem, but the biggest reason it won’t happen is because it would hurt those in power. They don’t want people to be well represented.
Correction: “the better candidates can be eliminated and the party’s candidate is largely unwanted by it’s own party”
When Americans (neolibs) ask the question “who gets to decide?” when talking about socialism vs capitalism, they tend to come down on the side of “the capitalists” – here defined as those who own capital. They then turn around and call this meritocracy. The idea being that ideas are tested in the marketplace, and those with the most “merit” rise to the top. This is of course nonsense, as anyone who has studied any corner of technological progress knows, it’s not the best most inventive engineers who rise to the top, but the best marketers (Tesla vs. Edison, Xerox PARC vs. Apple, and on and on). In other words, those who are best at and demonstrate the ability of stuffing the most money into their own pockets rise to the top. Then the capitalists in America say, they are best able to make all the decisions for society – there’s lots of personal profit in American medicine, but very little care. It’s fundamentally broken ideology – and it really has nothing to do with psychology, though I suppose we can use the Just-world Hypothesis to explain why so many people are fooled by the stories told to support such an exploitive system.
I guess the lesson to learn from 2016 election is “Nominate Hillary if you want to get a competing cucumber get elected.”
hdjhfds
I’m concerned for 2020 because I don’t know that democrats have learned that lesson. Obviously they can choose whoever they want in the democratic primaries, but if they don’t choose a candidate that some conservatives are willing to vote for to get trump out (and polls show many want to get him out), then election is lost. I don’t see any reason a president cannot/should not be female, however I predict that conservatives will be extremely resistant to females front-runners in the general election. Due to the electoral college, conservative states have significantly more weight in the election. It’s not really fair, but them’s the rules. Blue leaning states are going to decide the democratic candidate, but they’re not going to decide the general election.
Trump lost the popular vote at 46.1%, but won the weighted electoral college vote at 55.5%.
It’s no coincidence that all presidents that are elected with a minority are republicans because the rural states that lean republican have a disproportional say in US elections.
https://en.wikipedia.org/wiki/United_States_presidential_elections_in_which_the_winner_lost_the_popular_vote
Early prediction models based on historical analysis suggest a second trump win is very likely.
https://www.cnbc.com/2019/10/15/moodys-trump-on-his-way-to-an-easy-2020-win-if-economy-holds-up.html
I can’t underscore this enough: due to the electoral college bias, residence of blue states will not & cannot decide the election. Mathematically the only winning strategy is to encourage residents of red states to convert and vote democratic in large numbers. I understand why some people want to push candidates to the left, but in doing so they can decrease the chances of a win.
Some quick number crunching from Wikipedia figures:
https://en.wikipedia.org/wiki/List_of_states_and_territories_of_the_United_States_by_population
The majority of the USA population live in 9 states: California, Texas, Florida, New York, Pennsylvania, Illinois, Ohio, Georgia, and North Carolina. A straight popular vote could see them dictating to the other 41 who would be the next President. (Actually, splitting the vote evenly between most-populous and least-populous states would see the division land in North Carolina.)
Going by the Electoral College, again pitting the most-populous against the least-populous, adds Michigan and New Jersey to the majority vote, with New Jersey being the decider.
Looking at the next-most-populous states, Virginia, Washington, Arizona, Massachusetts, Tennessee, one can see how the cultures become more varied. VA, WA, and MA trend liberal, while AZ goes conservative, and TN is usually conservative. The red-blue division starts to turn purple, the farther down the line one looks.
I tried, once upon a time, to explain the reasoning behind the Electoral College, to a couple Spaniards, and I failed. Of course, back then, I didn’t have Wikipedia, and census numbers at my fingertips.
gus3,
If someone doesn’t fully believe in democracy, then I can see the appeal of the electoral college, but it’s inherently undemocratic through and through. People unfamiliar with US civics probably don’t realize just how convoluted the electoral college process is. As originally created, the electoral college delegates aren’t even technically required to submit their state’s majority vote. The constitution & federal law doesn’t require delegates to vote along with the state they represent.
https://www.archives.gov/federal-register/electoral-college/electors.html
And to make matters even more complex, there were contentious issues with how to count slaves in terms of delegate representation. Not to mention women’s rights.
Our democracy origin story is quite tarnished, the electoral college was a result of this. I try to put myself in the moment to understand that territories at the time were not completely on-board with full democracy. In order to continue with the formation of a united states, these undemocratic compromises were a necessary evil at the time. However, over time, people would go on and fight for more civil rights, like abolishing slavery, the right to vote, etc. And in time we may come to see the electoral college as an undemocratic institution that has impeded civic progress throughout it’s existence.
This is so off topic on every level, haha 🙂
I understand the concerns about the tyranny of the majority and the electoral college. Of course, another solution would be to reduce centralized power, particularly of the executive branch, so that it matters less what the president decides.
The issue is that you either need those in power to agree to give up power, which is a losing proposition since they largely attained those positions by seeking it in the first place, or you need the people to demand it. But the US doesn’t seem up to the task of the latter.
That is the only long term viable solution. As long as 300 million people’s fate is decided in a district made of 633 thousand people, there would be a gravity to pull more and more power to that central location.
However I do not see the trend reversing anytime soon.
There are so many things wrong with the current system, it’s just to much work to even list them all. 🙂
You definitely touched on a good number of them.
electoral college, I’m less convinced that is the problem, it’s not at the top of the list and it’s hard to change and it’s part of the system for a very good reason. Although maybe the ratio is wrong: 1 voter in Iowa is roughly equal to 1000 voters in California.
I would say the mean issue is: in the US the Republicans are pretty much fully funded aka corrupted by special interests (to say the least). And the Democrats more than half which includes the leadership.
Most of the voters, something like 90%+ (if I remember the polls/studies correctly) agrees that it needs to be fixed.
That is the highest priority subject, without it nothing else can be fixed.
About the 2020 Democrats and getting votes from former trump voters: only Bernie and Yang can steal those votes. All polls, etc. show this.
Lennie,
I would have really liked to see Bernie had a run in the 2016 general election. But realistically if he and Hillary had both run, they would have largely divided the democratic voter base. A rank vote would solve this dilemma and doesn’t punish voters for having more choices. But I agree with you about some things being far more urgent to fix than others. Corporate corruption is behind just about every policy and loophole, I would also place gerrymandering extremely high on things that need to be fixed urgently!
“The interesting part here is why politicians make choices that are clearly not in the interest of the voters but companies who are not allowed to vote.”
The companies dole out large campaign contributions, and the politicians need to curry favor with the companies to secure lucrative private sector positions after they leave office. It’s very much a quid-pro-quo system.
It takes a lot of money to run for office, and part of being a politician is personal enrichment.
“And why people still vote for those politicians who do that.”
They largely don’t know and don’t care. Theses things are public record, but they largely don’t get reported on outside of a few watchdog groups. People also don’t see anything wrong with it. If they did, Citizen’s United would have gone the other way and companies would be barred from making campaign contributions.
“Even something as banal as filing taxes is made a complicated, outdated mess just so some scumbags can earn some money.”
Inuit is not a good player here, they clearly have been fighting an electronic government provided way of filing taxes. However… US Taxes are used to influence behavior, that’s why they are so complicated. There are tax credits for green energy projects to try to curb greenhouse gasses, there are tax credits to encourage home ownership, to save money for college, to save money for healthcare costs, to encourage small business growth, etc, etc,etc.
So to make “taxes simpler” means not encouraging citizens with taxes/ deductions from taxes. I don’t know that’s such a great idea, outside some other legislation to accomplish the same goals. (Like a sane healthcare system would remove the need for HSA’s, etc) I would, however like to see it be automated to a greater extent by the government to make it easier, and reduce tax fraud especially the scammers that fraudulently file to collect refunds.
None of the incentives you mentioned have anything to do with the government being able to write their own program to file taxes for free. None of it.
I take it you’ve never seen the quality of coding that the U.S government uses for public-facing websites. If the tax code isn’t simplified first, there’s no way they’re going to be competent enough to write a tax filing program for the average American citizen. Come to that, I wouldn’t bet on them pulling it off even if the tax code were simplified. They’ll probably just contract that out to Intuit ;).
Worse, they’ll give oracle a call again.
darknexus,
To be fair though, the commercial offerings we have today can be pretty bad as well, so I don’t think it’s fair to presume a government program would be worse. In fact I think it would be a fantastic opportunity to invest in open source software, after all there’s no reason this software needs to be proprietary, the tax code is supposed to be public. It would cost them a minuscule fraction of the fees we currently pay every year to file our taxes through the private industry..
It’s truly insane for a country to rely on middlemen to pay taxes, and I don’t think it’s an exaggeration that taxpayers really would be better off without the middlemen. However the US government is too corrupt and insiders are making too much money, they won’t allow things to improve.
I didn’t say they did. I’m just arguing against the idea that a simple tax form is a good one.
What’s truly surprising is Intuit’s stronghold on the market despite them not owning some kind of golden patent or some crucial bit of technology that others don’t have (like Microsoft owns the win32 stack for example). Guess tax-filing is too boring for the rest of Silicon Valley and they prefer making yet another Tinder clone.
It’s not only boring, it needs knowledge of the subject and someone already has a big head start and is in the lead.
Capitalism. Duh.
I remember watching this video a year or so ago about how American politics is easily corrupted. Accordingly, It’s not initially the fault of the representatives, since it’s not possible to get elected without he huge amounts of money that vested interests can provide. But by fixing up how lobbying, donating and corruption are handled the system might get better outcomes for people.
https://youtu.be/5tu32CCA_Ig
I don’t think corruption is enough to explain this. Somehow the idea that the interests of common people, the voters, outweighs those of coorporations is viewed as extremist or “socialist”. Voters don’t have the confidence to insist that elected representatives are exactly that, their representatives.
Because they were able to do it in the US, a similar corruption was created in the EU Parliament. 🙁
How is this related to OSes in any way?
Tax software runs on OSes, duh.
Thom:
The thing that gets lost is that journalism outlets both in written as well as broadcast are also owned by a conglomerate of corporations that don’t allow them to do journalism, it’s just corporate propaganda.
The USA is a dystopia and it should serve as an example of how not to have a “democracy”.
It’s really just a corporatocracy.
Poseidon,
I totally agree, we set a bad example, but I have to ask, who sets a good example?
Our primary problem is not that we don’t have solutions, but implementing them under the current power dynamics is politically non-viable. 🙁
Meanwhile, here in Brazil we’ve been doing our taxes for free using a software provided by Receita Federal (our equivalent of the IRS). We’ve been doing them electronically for a long time (first, by a floppy you’d turn in at a bank; then, over the internet), so much we discontinued paper forms many years ago.
All the information you need is provided by your employer or, if you’re self-employed, your accountant will often do your taxes for you.
The software is a little buggy and clumsy e.g. if you’re a trader, but it works well enough and it’s a multiplatform Java software.
I thought a “first-world” country would be better than a “third-world shithole”.
We all thought the richest of the first-world” countries wouldn’t be plagued with so many flaws and be far more efficient in every aspect of its inner working. Would have universal health care, not be so dependent on military like any dictatorship (do Sweden depend on military to be efficient?) and not that much rampant poverty in its citizenship.