As much as everyone is going to complain that the tittle is misleading and unfair, this is what the article says. Call it fake news, rail against how the media hates us, but there it is.
The full story. As previously discussed, the tax reform bill currently in the House and widely supported by a bipartisan majority yet somewhat opposed by some, such as potential presidential candidate Beto O’Rourke, prevents the IRS from implementing it own software that would provide common sense simplification to the tax preparation process for the average person. The IRS must instead collaborate with private vendors, such as the predatory tax preparation industry, to provide limited help to the tax payer. This requirement has historically meant that the IRS cannot, for instance, provide pre filled returns to tax payers. This has also historically meant that unsophisticated tax payers go to disreputable tax preparers who then have the opportunity to offer predatory loans.
In the past these tax preparers have even inflated refunds, which they then take a cut, and leave the tax payer in debt.
The argument Lewis makes for the bill, and that AOC apparently accepted, is that there is so much good in the bill. For one, it discourages the IRS from aggressively pursuing low income delinquent tax payers. For another, it provides funds to help low income tax payers file their returns. He also claimed that some of the problem would likely be fixed in the senate
This is like saying a drug prices reform bill is useful because even though it leaves drug prices unregulated, it also requires the drug company to supply coupons. Such bill solves nothing, then tries to trick consumers into thinking it is great with a proverbial bandaid.
Let us look at these alleged benefits. First, the myth that the IRS aggressively goes after and persecutes low income tax payers is a trope that was and is a favorite of Reagan conservatives. They loved to tell the story of the old man that was called down to the IRS and forced to go into audit over a penny he did not pay in taxes. For those of us who are logical, we understand that outside of some unusual circumstance the IRS expending resources over a penny in taxes is not a realistic scenario. While we all likely have received letters with corrections, it is unlikely that we are going to fight, or the IRS is going to expend significant resources, for a penny.
In fact Reagan set out to destroy the IRS because his tax cheating friends were getting audited, and had to pay their fair share of taxes. He, and the generation of conservatives since, have managed to defund the IRS to the point where they can no longer collect the fair share of the taxes of the 1%. The IRS instead expands all their resources monitoring the middle class, receiving diminishing returns for the increasingly depleted stone. It is easy to make sure the middle class pays their taxes. To create a system in which the 1% pays their taxes requires serious funds, and serious redistribution of resources.
This is why the IRS creating their own tax return software scares the shit out of the 1%. In a world where every family with a W-2 and limited deduction received a pre filled tax return with the amount the IRS expects to receive or refund, which the tax payer may then approve or take to their tax preparer, is a world in which no resources are wasted to verifying a tax refund filled out by the unsophisticated taxpayer, In this world no resources are wasted pursuing an honest tax payer who made a simple and hones mistake on their taxes. In this world, no real resources are wasted to verify dealing with unsophisticated tax payer, going back and forth with additional bills or refund. In this world, all IRS resources are used to collect the fair share of taxes from the 1%.
In the world we live in, where the IRS is prevented from providing this obvious service, where they spend all their time dealing with nickel and dimes instead the million dollar tax frauds of the 1%, this bill is a gift equal to the republican tax scam of last year. The IRS can’t go after Trump because they are spending all their time processing and verifying the million of returns from the honest middle class taxpayer. Lewis says the bill protect t the low income tax payer, but isn’t the only reason that the low income tax payer needs protection is that we expect them to fill out taxes themselves, and if they make a mistake it so easy snowball into a unnecessarily big problem?
Which brings us to his second alleged benefit of the bill. The monies that will fund tax payer assistance program. First, I don’t know of a public library that does not provide free tax help for those in need. I have seen retirees with six figure incomes go in and get help on their taxes.
Second, this is simply puts a bandage on a problem the exists only because some value the predatory tax preparers more than the people. The IRS knows what benefits you get from the government. The IRS knows what is on your W-2. The IRS knows the value of the average persons investment account, retirement account and bank account. Unless there is some complicated deductions or the like, the IRS would have no problem providing a pre filled return to the average low income or retired persons.
There would be no need to for tax help because we would not be promulgating the insane assumption that the average person should have the ability to accurately fill out complicated tax forms. Does a car dealer send the consumer home to fill out the auto loan alone? No, they would never sell any cars. I think that any of us would admit we have made mistakes filling out our tax forms.
Again, this bill is a gift to the 1%. It continues a system where the IRS wastes all it time with honest tax payers, which leaves the 1% to commit all the tax fraud it pleases. It promotes the predatory tax preparation industry which gives the 1% a place to invest their money at huge returns. Jackson Hewitt charge 36% interest for a refund advance. Where else will the 1% get that kind of return on their investment?