Ever wondered why we file taxes the way we do? According to Elizabeth Warren, we can thank the GOP

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If the government makes one thing complicated, it’s paying taxes. That’s especially true if you rely on tips, are a gig worker (like through DoorDash or Uber), or if you have non-traditional or multiple forms of income. No one wants to mess up their taxes and be penalized with fines or headaches later, so many people use software to make the process easier. One issue, according to the Federal Trade Commission (FTC), however, is that not all of these software companies are upfront about the costs of these services, as covered by Market Watch.

According to the FTC, TurboTax allegedly misleads customers into believing they can file income taxes for free when in reality, there are caveats as to who is eligible for the free service. Customers with certain incomes are eligible to file their taxes for free, both with TurboTax and in general, but the FTC wants to see an end to TurboTax’s use of words like “free” in advertising. 

According to Democratic Sen. Elizabeth Warren, though, the picture needs to be bigger. As she explains in the video below, Warren wants to see the Internal Revenue Service (IRS) offer free and easy-to-use tax filing tools for all people, period, instead of lining the pockets of corporations to do it for them.

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Here is that clip.

“So, here’s something that tax prep companies don’t want you to know,” Warren begins. “You could be filing your taxes for free. We just need a fully-funded IRS to make it happen. So let me break it down.”

Warren explains that when we receive our W-2s and 1099s in the mail, our employers have already sent copies to the government. (If you’re a freelancer or self-employed, this process is a little different, but I digress.) 

“The government already knows how much you make before you file your taxes,” Warren continues, adding that it’s no secret. Because the IRS already has this information, the government could just lessen a whole lot of work and stress for us and send us pre-filled tax forms instead, which we could review and then send back. Sounds simple.

“So,” Warren poses. “Why hasn’t it already been done?”

Like most things in our capitalist hellscape, it comes down to lining the pockets of big business. According to Warren, big companies like H&R Block and TurboTax lobbied the government to stop the IRS from doing just that. Republicans got on board and corporations basically got a nice deal that would make them money… but promised they’d have options for low-income filers, and thusly (allegedly) we wouldn’t need free options from the government.

Warren alleges that these free options are “flimsy,” difficult to find, and not easy or useful. 

“Tax filing is a multi-billion dollar industry in the United States,” Warren says, adding that pretty much everywhere else in the world does have a pre-filing option. 

And now? Warren describes the Biden administration’s mission to give the IRS an $80 million boost over the next decade. Congress could authorize it, and, according to Warren, the investment would pay for itself, as well as help fund progressive goals like paid family leave and child care, in addition to finally having free, easy-to-use tax services for all people. Obviously, everyone wants to save money, but this could also save people stress and guessing games when it comes to making sure their taxes are accurate—something that can be especially useful for low-income folks or people who have multiple jobs, or are in school, or live with disabilities. From that perspective, this is an equity issue.

There is no reason to spend money on stressful activity when the government already knows what they need to know—we should just be able to confirm (or amend) it. 

You can catch the same video below via YouTube.