Paul L. Caron
Dean





Tuesday, September 15, 2009

TurboTax Tries to Kill California's ReadyReturn

Ready Return The Los Angeles Times, California GOP Legislators Blocked 20 Bills After Demands Were Unmet:

Republicans in the Senate blocked more than 20 bills -- all needing GOP votes to pass, many approved by the lower house with bipartisan or near-unanimous support -- to leverage a trio of unrelated demands. Chief among those was the elimination of a program that allowed mostly low-income Californians to have the state do their tax returns free, something the maker of TurboTax has been trying to achieve for years. ...

[Senate leader Darrell] Steinberg did not dispute that he promised Republicans that the Senate would consider scrapping ReadyReturn, the state tax program, which in the end the upper house refused to do. But Steinberg still bristled at the GOP obstruction.

"The inside political game here does not matter to the people," he said. It matters a great deal to interest groups.

Intuit, which makes TurboTax, has spent $618,000 on lobbying in Sacramento since 2007 and donated to the campaigns of 29 of the 40 state senators since 2005. In 2006, the company spent $1 million trying to elect Tony Strickland (R-Moorpark) as state controller. He lost that race but is now a senator who took part in Friday's blockade.

Strickland said he did not see any conflict of interest in holding out for the dismantling of ReadyReturn. "I've always thought it was wrong to use taxpayer dollars to compete with private enterprise," he said.

Calitics, Intuit Aims to Kill Californians:

Intuit makes the popular tax software, TurboTax. You'll see that they give away the federal software, but then charge $30.95 to buy each state version that you need. It's like the drug dealer giving away the first hit. And ReadyReturn, which is a great program that Steve Westly championed, got in the way. It allowed Californians with relatively simple taxes to basically fill in most of the data that is needed on the Form 540. It made short work of the process and made people question why they would pay $31 for something that basically does nothing.

TurboTax sucks blood from the population. It thrives on taxes being confusing, and they are opposed to anything that would simplify them. ... Just like the drug dealer doesn't want drugs legalized, Intuit doesn't want taxes made easy.

(Hat Tip: David Sweet.)

https://taxprof.typepad.com/taxprof_blog/2009/09/turbotax.html

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Comments

Curt: "Why should the govt pay for people to have their taxes done?" Maybe because it's the gov't demanding their money!

Posted by: Neshobanakni | Sep 16, 2009 5:53:56 PM

Strange - it seems as if this story lost some paragraphs when it was placed here. The part about how the Democrats had made some promises to the Republicans, and then waited until the last minute to break them, leaving the Republicans with few options unless they felt like simply rolling over and saying "okay, screw us, we're idiots" isn't here. Instead, this story makes it appear that all of those legislators must work for Intuit - that there was nothing else behind this situation.

Computer glitch, maybe? Certainly it can't be that TaxProf shares the bias of the LATimes and wishes to present only those facts which are beneficial to one political philosophy?!

That would be disappointing. But, then, it would also be consistent with how many of us allow ourselves to be used by people with megaphones, and papers and TV stations and blogs - people who no longer think it at least honorable to present truth when they're claiming to present truth.

Posted by: bobby b | Sep 16, 2009 2:35:28 PM

Intuit is a pretty big company which makes a variety of different financial management software products besides tax handling software. They occupy a large are to the north of Shoreline Lake along Marine Way and Garcia Av., bounced by Bayshore Parkway - basically across the street from Google, and I've ridden my bike through parking lots numbered into the 30's. And that's just the HQ. I'm not sorry for their lobbying efforts gone to waste except they probably felt it was money well spent.
In California, apart only from a few things, Republicans and Democrats are nearly indistinguishable in the feeding-frenzy that regularly occurs in Sacramento. The only power each side seems to exercise is when they block each others' bills in an effort to secure their own campaign donations or other favors, whether from businesses or Unions. In one aspect, by holding out for the dismantling of ReadyReturn Strickland is playing a card against the Govt. Employee Union membership who process those returns and fund Democrats with their Union dues. With the bill stalled, the Legislators involved on both sides can work to extract further concessions from various supporters, later as it comes to another vote... And the size of Big Government continues to grow.

Posted by: DirtCrashr | Sep 16, 2009 1:17:23 PM

Next, I suppose the Intuit Turbo Tax people will be demanding an end not only to California's electronic filing system but to any government-supplied printed forms that compete with Turbo Tax, instruction booklets, etc.

Next election, I hope the Real Republicans strike one Strickland from the GOP roster.

Posted by: Micha Elyi | Sep 16, 2009 12:27:29 PM

Quote:"Could this possibly be why the GOP is doing so poorly in CA?"

Absolutely

Another Reagan Conservative sick of the Ca. GOP

Posted by: ed c | Sep 16, 2009 12:27:20 PM

Why should the govt pay for people to have their taxes done? California is broke, so why is it wasting millions of dollars on something that people are responsible for doing themselves? The main reason is that every return that is filed electronically is AUTOMATICALLY AUDITED. Those filing electronic returns are much more likely to get an official audit than those who mail in their returns.

BTW, tax forms are FREE. You don't need any electronic software at all to prepare you taxes. All you need is a pencil.

Posted by: Real American | Sep 16, 2009 12:26:41 PM

My question is: Who would bother to buy TurboTax if they qualified for ReadyReturn? Your tax situation has to be dirt-simple to use ReadyReturn. All it really does for you is automatically fill in your personal details for you.

I use TurboTax for my own taxes, which get quite complicated, but I also do my housekeeper's (very simple) taxes each year, just by filling in a PDF form. It takes me about half an hour for both federal and CA. I print it out for her to sign and mail. My TurboTax purpose allows me to do another return at no additional cost, but it is actually quicker to just fill in the PDF.

Posted by: Curt | Sep 16, 2009 12:22:05 PM

Instead of making the federal income tax ever more complicated, Congress ought to pass laws radically simplifying it. And quit creating "credits" (welfare) that are the only reason the poor need to turn in a tax form anyway! We're almost at the point where everyone's income can be tracked and IRS could just send out bills. But think what that would do to the TurboTax, H&R Block, Acorn, financial planning and legal industry! Massive unemployment. No wonder TurboTax, etc... are lobbying like mad; their existence depends upon it.

Posted by: Mom | Sep 16, 2009 12:08:06 PM

Republicans frustrate the heck out of me. They complain that the poor don't recognize they are being used by the Democrats, but they do nothing to burnish their own image to the poor. Instead their leadership in California champions the profit-motivated Intuit over a valuable free service that is actually helping to generate revenue's for the state. It's this type of action by the Republicans that spurred me to drop my voter affiliation with that group.

Posted by: East Coast Blue Dog | Sep 16, 2009 11:42:27 AM

I think it's more an indictment of an over-complicated tax system than anything else. Flat tax, anyone?

Posted by: BigBob | Sep 16, 2009 11:40:18 AM

Could this possibly be why the GOP is doing so poorly in CA?

Posted by: jon | Sep 16, 2009 11:40:05 AM

That's the new California GOP... driving former Republicans from being independents into the arms of Democrats. This Tony Strickland is a supreme a-hole and as a California resident, I gladly donate a bundle to whoever runs against him.

Reagan republican who left the party.

Posted by: mkunert | Sep 16, 2009 11:21:01 AM

Wow, and I suppose the tax software that TurboTax creates just writes itself--they have no employees to pay or overhead to maintain. The federal government and the state governments already squeeze concessions from businesses to provide for low-income filers, but it never seems to be enough. Does the Post Office allow you to mail in your tax returns for free? No, so why should TurboTax, who spends millions on servers, pay for you to file your return electronically for free? Anyone who wants can go the the library, get their tax forms, fill them in, and mail them to Sacramento. E-file is a service, not a right.

Posted by: californiaGold | Sep 16, 2009 11:08:40 AM

Well it's just tax money.

And if there’s one thing Californi has plenty of it’s …

Going to be hard to balance that budget.

Posted by: JoeInVegas | Sep 16, 2009 10:53:42 AM

Wow, and I suppose the tax software that TurboTax creates just writes itself--they have no employees to pay or overhead to maintain. The federal government and the state governments already squeeze concessions from businesses to provide for low-income filers, but it never seems to be enough. Does the Post Office allow you to mail in your tax returns for free? No, so why should TurboTax, who spends millions on servers, pay for you to file your return electronically for free? Anyone who wants can go the the library, get their tax forms, fill them in, and mail them to Sacramento. E-file is a service, not a right.

Posted by: californiaGold | Sep 16, 2009 10:51:43 AM