Updated: Jan 22, 2021
Recently, a Washington Post author promoted Elizabeth Warren’s tax filing legislation. In this article, we will disclose what the Washington Post hid from our eyes, and repudiate the author’s propaganda techniques. The stakes are high – if Trump loses in 2020, democrats have a chance at passing this indirect tax increase and erosion of our liberty.
The Tax Filing Simplification Act (TFSA) was sponsored by Democrats: Elizabeth Warren, Jeanne Shaheen, Al Franken, Bernie Sanders, Tammy Baldwin, Tom Udall, Sheldon Whitehouse, Eldon J. Markey, Patrick Leahy, Tammy Duckworth, Margaret Wood Hassan, and Jeff Merkley. There is a new incarnation working its way through our legislature as well, which is the object of the Washington Post article.
Opposing the legislation is The Free File Alliance, a coalition of 13 leading tax software companies, which have donated $1.4 billion in free services to 50 million Americans through the Free File program. The government asked them to do this in order to shepherd people towards e-filing from paper forms. These companies have also reduced administrative cost for the IRS as a result of their excellent work, and provide this corporate charity to citizens who earn less than $62,000 in a year.
Tim Hugo, Executive Director of The Free File Alliance, stated eloquently the case for liberty:
“Not only would the legislation create a tremendous and potentially harmful conflict of interest for the American people by enshrining roles of tax preparer, tax collector, tax auditor and tax enforcer together in one entity, the IRS, but the system’s very creation would also be a huge burden for taxpayers. The IRS has cut 13 percent of its full-time workforce since 2011, and government budgets are shrinking, not expanding. The proposal would make the essential tax administration work of the IRS impossible, while disadvantaging the taxpayer.”
But conflicts of interest and government staffing shortages are only the beginning of the problem with this legislation.
Cybersecurity – which organizations are more resilient?
With the TFSA, the government will reduce the security of Americans by centralizing more of their private data in highly targeted government databases. Currently, only thousands of records out of millions of private tax software customers have been breached – a proud track record of success. By contrast, government failures in cybersecurity have compromised hundreds of millions of citizens’ private information. Do I trust banks and private tax software firms more than the government databases? Unless that database is hosted on JWICS, I’ll prefer the banking and software companies every time.
Reinventing the wheel – enterprise software systems are expensive to build
Beyond the administration work that Tim Hugo envisages, what would it take the government to duplicate the sophistication of companies like Intuit? Read their latest annual report. The TFSA will force us to finance a government-run superfluous software company (i.e. expansion of the departments of the IRS, and its contractors).
At the present time, privately competing tax software companies employ dozens of thousands of accountants and engineers to efficiently deliver complex services. The amount of taxes required to duplicate their efforts would be wasteful. It could cost a few billion dollars, if Intuit’s annual report is a yardstick. Where will they recover such money?
Subversive tax increase – the true agenda of TFSA
They will recover such money from tax overpayments. Currently, the Committee for a Responsible Federal Budget estimates $400 billion per year in underreported taxes, which they call the “tax gap.” Yet the “tax gap” is a good thing with which we should not bother.
The “tax gap” is a consequence of disputes in the grey areas of the tax code, and unenforceable edict. Americans should keep that money in such disputes, where there is ambiguity and an accountant is willing to stake their license on such filings.
How does our current system work? The current filing system obligates taxpayers to assert what they owe, and puts the onus on the government to verify it. Banks and employers report to the government what they paid to us. In the middle is yet another check – the accountant and the tax software. Their measure of success is accuracy. They do not benefit when their customers get audited. Their customer will choose their competitor next year after such an unpleasant experience.
Income-earners, employers, banks, accountants, sophisticated software, and government working together to verify their dues – what a great system and conquest of liberty! In America, we prefer self-reliance and checks-and-balances to centralized power. Our current filing system stands on those values.
By contrast, the TFSA erodes these checks and balances, putting the onus on the taxpayer to tell the government it is wrong, and encouraging taxpayers to let the government do their accounting for them. Consequently, it errs on the side of overpayment of taxes.
Even worse, a taxpayer has to fear de-facto auditing should they opt to tell the government they are wrong. The least motivated and least equipped citizen would become more likely to be overcharged by the government, simply by trusting the government, laziness, fearing worse conflict, or preferring to avoid the hassle rather than giving the government meager sums it is not entitled to. When there are inevitable disputes – would we rather allow the government to be overpaid, or for citizens to keep more of what they earned?
I have personal experience with state business tax schemes that impose such demands. The state demanded sales tax, and when lethal illness of the owner disallowed compliance, they presumed what we owed, which was around 3000% of what we actually owed.
After the demand for undue tax came to us, we tried to get someone on the phone. They refused to communicate through email because they don't want to be accountable on the record. Would we need to spend money on a lawyer to correct the government’s imposition? We remained in a state of intimidation, wondering if the government would harm our business because of its assertion of what is not true. A more un-American arrangement I could not imagine. Now, realize that the TFSA multiplies this intimidation by the millions for individual wage earners.
Communists send dissidents to labor camps. Democratic socialists weave a gigantic web of intimidation and indirect coercion with a populist smile and claims of benevolence. In this case, they deceive the public into loss of liberty, and a tax increase that could rise to hundreds of billions using coercive methods, with false promises of simplicity and security. They effectively increase taxes without having to take responsibility for an overt tax rate increase.
Disqualifying low-income Americans from welfare
Wouldn’t it be convenient for democratic politicians, if a policy mitigated budget strain on the welfare programs of democrat-dominated urban areas? The TFSA will have that effect. By inspiring low-income Americans to forego private tax software Free File options with cheap add-on services that help them minimize their tax burden, they will inadvertently trick vulnerable Americans into paying more than they owe, and potentially disqualify them from means-tested welfare. A higher adjusted gross income (AGI) has that effect in many cases.
The Washington Post Propaganda Machine
With the concepts and facts laid out, a person would feel a great sense of anger reading the Washington Post article on this same topic. They will feel as though critical information and logic was withheld from them. They would also feel nannied by the propaganda techniques employed by the author. She wrapped her unjustified advocacy of the TFSA in the emotive sugar of race- and poverty-despair.
Here are her claims:
CLAIM: Tax returns are daunting and complex for Americans.
REPUDIATION: Only one in three Americans have complex returns, with itemized deductions. Those Americans have the resources and wherewithal to navigate the government’s Byzantine maze of coercion which incentivizes and deters particular activities. The other two-thirds of Americans have tax returns that are simpler than the basic algebra education they received in high school. With 70% of Americans eligible for Free File, and software doing the complicated work for them, this claim is nonsensical.
CLAIM: Other nations pre-populate tax forms or preclude filing altogether. Her implication is that those other nations are more enlightened than the USA in this regard.
REPUDIATION: Russia, UK, Denmark, Germany, Japan, Chile, and some others have policies similar to the TFSA. The UK’s Ummah immigration red carpet has doubled their attempted murder rate in ten years. Russia censors political dissidents. Germany had years of brown-outs because of their environmentalist green energy zealotry. Should we adopt every bad idea from foreign nations? Why does such an invocation of the exotic arouse persuasion at all?
If a person believes America is exceptional, they would be skeptical of foreign policies. We have proven TFSA policies to be inferior for those who value liberty and peace. Foreign failures are not impressive simply because they are foreign. Xenophilia – the emotive favoritism of foreigners – is an irrational disposition, as much as jingoism.
CLAIM: Low-income and racial minority Americans are targeted for audits by virtue of their race and impoverishment.
REPUDIATION: She cites a report on an absurd website called “The Root” which presents anti-white racial propaganda (warning: profanity in the link). If we inverted the instances of “black” and “white” on The Root’s content, Facebook would be banning them as a “white nationalist” site.
Dissecting The Root’s absurd report, which claims that blacks are audited more frequently because of racism, we find that the reason is quite simple – black dependency on welfare is 600% that of whites. Wealthy people were audited in 2017 up to seven-times as much as people with very low income.
Those low- and high-income taxpayers have something in common – they utilize a mountain of rules that give them government benefits, or allow them to keep more of their own money. Black counties are audited 30% more than the national average according to The Root’s study. It’s shocking that they’re not audited 600% more because of their welfare exploitation.
In other words, people like WaPo’s brilliant Princeton graduate see a fabled KKK hat behind every shadow, but in reality, the IRS audits wealthy people the most, and people who use the tax code for welfare redistribution as a very distant second. Black people happen to use welfare much more than white people proportionally to their share of the US population. A higher auditing rate should be expected.
CLAIM: Poor households miss out on deductions and credits
REPUDIATION: A much worse fact is that crimes go unsolved. We can set out a bounty of goodies for all to enjoy, and it is not a tragedy if a small fraction lack the motivation to partake. It’s a great thing that tax software companies offer free tax returns for poor people to access those credits and deductions. It is even more encouraging that they find value in buying cheap services to advise them further. The government will not more effectively help poor households reduce their tax burden – it is the definition of conflict of interest.
CLAIM: Poor households need to spend an unacceptable amount of their money on tax services
REPUDIATION: Unacceptable to whom? The wealthy democratic socialists trying to tell poor people what choices to make? The fact that poor people willingly purchase additional services that cost them less than their monthly internet, phone, or television bills, tells us that it is acceptable to those “poor” people choosing between free and cheap.
CLAIM: The wealthy buy tax services that enable them to pay lower rates or no tax at all
REPUDIATION: The tax code – a great maze of incentives and deterrents is, itself, a product of institutionalists. We Americans who disavow socialism, dirigisme, zwangswirtschaft, and indicative planning are the victims of those policies, not the beneficiaries.
The wealthy are no more at fault to minimize their tax obligation by classifying their expenses and income, than low-income Americans are at fault for taking deliberate steps to qualify themselves for redistribution. Outside of this tyrannical system of control are we, the valorists. We are the ones who repudiate the injustices of dirigisme – the economic policy which makes acrobatic schemers out of the rich and poor alike.
CLAIM: Opposition to the TFSA, introduced in bipartisanship by a Democrat and Republican, is a result of Intuit and H&R Block lobbyists.
REPUDIATION: Having disproven the validity of the TFSA, we should all be very grateful for the lobbying efforts of The Free File Alliance. Of course, lobbyists for Planned Parenthood, SEIU, AFL-CIO, AFT, and the NEA are always welcomed by Elizabeth Warren and her friends. Lobbyists are only dirty business when they oppose the activists complaining about them.
The TFSA will threaten welfare qualification for vulnerable Americans, increase taxes, intimidate people, reduce liberty, enlarge bureaucracy, duplicate private sector business, and create new cybersecurity risks. Those who support such an awful bill should not be elected to office.
And how did such a credentialed author for the Washington Post get the story so wrong? Her assessment is an example of the extreme danger that follows irrational visions of xenophilia, racial paranoia, and hatred of the wealthy.
The Democrats who support this policy have elite educations from Ivy League schools like Princeton. Yet they are not intelligent and knowledgeable enough to analyze very basic evidence. It tells us something about the legitimacy of “elite” college degrees in the modern day.
Contrasting Alvarism articles to the Washington Post, people learn much from our articles, as they think critically. The effects of the Washington Post article are false perceptions about taxation, racial animus, wealth shaming, and xenophilia. It is a wonder that people continue to read such publications. We do hope that the lessons learned from this analysis will assist our readers in their future civic participation.