Your Taxes Are Complicated Because Corporate Lobbyists Want Them That WayPhoto by Joe Raedle/Getty Politics Features Taxes
Taxes are needlessly complicated because billion-dollar companies invest millions in making them that way. A 2009 study estimates that increasing lobbying expenditures by 1% lowers effective tax rates for that company by 0.5 to 1.6%. The tax code isn’t just a symbol for how the super-rich trample all over our democracy, it is a central tool in the oligarchy’s war on the populace. While spending money to buy favorable politicians is a common understanding of how lobbying works, a new ProPublica investigation reveals how the tax code itself is the product of intense lobbying that produces “bipartisan” outcomes like this:
Just in time for Tax Day, the for-profit tax preparation industry is about to realize one of its long-sought goals. Congressional Democrats and Republicans are moving to permanently bar the IRS from creating a free electronic tax filing system.
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.
The IRS—the most functionally democratic entity we have (because without it, we couldn’t pay for any of our democracy)—is being blocked from providing a free service to people that already exists because it would threaten the profits of the industry who exists thanks to our tax-season malaise. If that doesn’t prove to you that private profits are more important in America than public well-being, I don’t know what will.
This is nothing new. This most recent example is simply a comical version of the garden variety corruption that defines the time of year where America collects money to pay for America, as ProPublica wrote in 2013:
Intuit has spent about $11.5 million on federal lobbying in the past five years — more than Apple or Amazon. Although the lobbying spans a range of issues, Intuit’s disclosures pointedly note that the company “opposes IRS government tax preparation.”
The disclosures show that Intuit as recently as 2011 lobbied on two bills, both of which died, that would have allowed many taxpayers to file pre-filled returns for free. The company also lobbied on bills in 2007 and 2011 that would have barred the Treasury Department, which includes the IRS, from initiating return-free filing.
There is no better example of how pathetically inadequate the American system is at serving the people than taxes. In 2017, there were about 11,000 active lobbyists in Washington D.C., and over half of them worked on taxes. America’s oligarchy invests its profits in the government in order to fossilize their power and insulate them from any kind of responsibility to their workers or customers. When it comes to the upper echelon of corporate America, you and I are not treated as humans, but as resources to exploit for profit.
There is no reason that tax season has to be complicated. Ronald Reagan knew this. So did President Obama. Denmark, Sweden and Spain have a system where the government sends you a pre-filled return estimating what you owe, and then you make any necessary changes and send it back to them. The aforementioned Republican and Democratic presidents both endorsed a similar system in America, but it died because of why most good things die in U.S. government: powerful corporate interests killed it because it threatened their profits.
What’s the non-profit-driven argument against the IRS providing everyone a free and easy way to file their taxes? (hint: there is none) This is quite literally why government exists, and paying your taxes could not be more elemental to democracy. Instead of being the “freedom-loving” country we purport to be, we farm out this very simple process to profit-driven companies that functionally impose a tax on the rest of us in order to pad executives’ bank accounts.
An entire industry exists thanks solely to lobbying. There will always be a need for accountants, and no matter what tax system we set up, the more money and assets you have, the more complicated the system is going to be—but H&R Block and Intuit exist because they have lobbied themselves into mass existence. In a normal, non-dystopian world, these would be niche companies serving the complexity of taxing assets and savings, but instead they have become nearly ubiquitous, as we all have filed our taxes through one of their services, being unnecessarily taxed by the private market along the way. You and I are basically subsidizing billionares’ yachts with an additional tax every time we pay our annual tax to the government.
Americans need to start thinking about the insatiable chase for corporate profits as a kind of tax. We hate paying taxes because our tax dollars go to Lockheed Martin to build bombs that blow up school buses in Yemen, and we need to extend that truism to the more brazen, “private” uses of our public funds. It’s rational to feel like you don’t get anything out of your taxes, and that feeling should also extend to subsidizing the profits of the oligopolies who have insulated themselves from competition in damn near every major industry.
America is not a democracy. It is a corporatocracy. A more familiar term would be feudalism, whose definition via Encyclopedia Britannica sounds very similar to modern-day America:
As defined by scholars in the 17th century, the medieval “feudal system” was characterized by the absence of public authority and the exercise by local lords of administrative and judicial functions formerly (and later) performed by centralized governments; general disorder and endemic conflict; and the prevalence of bonds between lords and free dependents (vassals), which were forged by the lords’ bestowal of property called “fiefs” and by their reception of homage from the vassals. These bonds entailed the rendering of services by vassals to their lords (military obligations, counsel, financial support) and the lords’ obligation to protect and respect their vassals.
We are all trapped inside a byzantine private property empire that is controlled by less than 150 private businesses, or lords. Our collective humanity is given secondary consideration to profit for our capitalist monarchs, and the next time you find yourself frustrated with tax season, remember who made it that way.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.