26 March, 2013

Return-free filing and interest-free politics | RedState

Return-free filing and interest-free politics | RedState:
An interesting story at ProPublica, prepared with assistance from NPR, chronicles efforts to bring “return-free tax filing” to the United States.  It’s a system already used in a few other countries, and more-or-less duplicated by a few business partnerships in the U.S., but it’s something the Internal Revenue Service could implement nationwide.

Basically, the idea is to have the IRS prepare the equivalent of a 1040EZ or simple 1040 return for every taxpayer.  They’ve already got the data needed for this – the sort of simplified return submitted by about 40 percent of Americans is based entirely on W-2 forms, state tax information, and standard deductions.  Much of the public would be spared the drudgery of plugging these numbers into “simple” tax forms that many nevertheless find confusing and intimidating.  Everyone else would be free to ignore the pre-filled form from the IRS, or incorporate its data into the more elaborate returns they prepare.  The idea would be to offer a shortcut to the sizable number of people who don’t really do anything except add up the numbers from a couple of standardized printouts, pray to God they got it right, and send it off to the IRS.

While acknowledging the reasonable objections some have raised to the concept of return-free filing, the ProPublica article judges that the major reason it’s not happening is lobby