I don't have a source on this, but I've commonly heard that tax software companies (intuit, hrblock, etc) lobby for not having simpler taxes because it would take away from a large part of their business. Again, no sources. Just something that is commonly thrown around.
Unfortunately Intuit (Turbotax) and the CPA trade groups lobby against any tax simplification whenever it comes up. Regulatory capture of our political process has corrupted it at every turn.
Unfortunately, at this point, the number of accountants/tax-lawyers dependent on tax-complexity for their livelihood does create a pressure against simplification. Their and their clients' lobbying creates plausible-sounding rationales to keep every advantageous wrinkle in the code.
One particularly vivid example is Intuit's lobbying against federal and state efforts to make individual tax-filing easier:
Intuit's position isn't necessarily pro-complexity, they'd actually prefer the tax code simplified somewhat, because they'd need far fewer employees to update the tax code information in the software every year. The lobbying is to keep the IRS from A) releasing free 1040EZ/A software and B) keep the IRS from simplifying even further and just sending you a bill, like HMRC does.
The worst part is that a large portion of the push back against improving the tax system here in the US is all the tax software companies. Intuit (and H&R Block) spend millions every year lobbying against tax code simplifications or at least simplifying how you interact with the IRS.
I disagree on one point. Block and Intuit are also lobbyists against all sorts of code simplification programs. Anything that makes the filing process easier, and having fewer deductions and penalties available makes it easer, they are against.
Most people don’t think twice about it. Tax simplification is supported so long as everyone’s tax bill goes down, but huge swaths if the population are utterly convinced that paying an accountant to do their simple W2 taxes is way better than using software or doing it themselves or letting the IRS do it because they think they have a magical ability to get more back by their arcane knowledge of mystical loopholes.
I have had this discussion many many times with many people.
I question the idea that the government could build better tax prep software than Intuit or other private companies. I don't think the Feds are known these days for performant, efficient, easy-to-use large scale consumer web applications. At a minimum I think discussion along those lines should wait until federal IT procurement is reformed.
It's also worth noting that the article is not talking about the actual complexity of the tax code itself. As far as I know, Intuit is lobbying on the subject of tax preparation technologies, not lobbying against tax simplification in general. (As some comments seemed to imply.)
It's not really a credible idea that an industry accounting for 0.05% of U.S. GDP somehow manages to out-lobby the industries representing the other 99.95% of GDP, so as to keep tax filing complicated when otherwise there would be a critical mass in favor of simplification.
Or do what the rest of the world does and make the (tax) environment simpler for the average person.
Turbotax, Quicken, etc, is a great warning, those companies lobby to increase complexity of trivial matters (like personal tax returns). The same companies will do this with 'trivial' legal matters, and the only way forward is to buy their software.
The article doesn't present any evidence that Intuit is lobbying to keep the tax code complex, just tax filing. The code complexity, as I have already stated multiple times, stems from a myriad of special interests.
This is more a meme than a reality. I'm sure that they do spend money to protect their business but it's a bit silly to think that they have a measurable effect on the tax code complexity compared to the money that comes from other special interests. People with simple tax situations could very easily full out the forms from the IRS. The 1040ez lives up to it's name -- doing it with software is in most cases just more convenient. And people with complicated tax situations have a tax accountant.
There's a middle ground with upper middle incomes and small businesses which have somewhat reasonably nontrivial tax code that applies. In the absence of software they would probably be pushed the accountant route. Generally people want this complexity because they pay less compared to proposed simpler systems.
You got me "almost 0" was hyperbolic, I'll be more specific: In multiple countries personal taxes can be completed with little more than a signature, and most are simpler in general... the US ranks near the bottom in terms of complexity.
I didn't say that Intuit caused complex taxes, I said they actively lobby to keep them complicated.
Intuit spends millions on lobbying every year (against simplification efforts, as well as efforts for the government to create its own free digital tax filing system) and has recently pulled out of a federal free tax filing program, and are being sued by the FTC for their use of "free" in their marketing and performing bait and switch.
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