Is it just a double-edged sword that we have to thank for making us (one of) the economic powerhouse(s) of the world? At the same time, it feels like it to blame on why we can't have anything nice when compared to European countries. Am I out of line/uneducated on this matter? I very well could be.
I hate just chalking the root of problems up to some massive unbeatable evil force (like lobbying).
Among other reasons, America has a uniquely loose political fundraising / election spending system. If all else fails, a company like H&R Block can directly take out election ads -- with business funds -- to campaign against candidates who would support simplified filing measures. This would be somewhere between illegal and heavily curtailed in other countries.
The net effect is to give greater policy weight to issues that give concentrated benefits to (or avoid concentrated costs on) small, well-funded groups at the expense of diffuse costs (or foregone benefits) to the general public.
I do think the FPTP system in the US and UK concentrates power. And that makes them better able to exploit foreign countries (Arms deals, coups etc). But that seems less about lobbying it's more that the concentration of power makes lobbying more profitable.
My guess would be the will to collect taxes is stronger than the lobbying to make it more difficult. In Europe there is far less opposition to taxation as well.
In the 2020 election, pretty much every ballot measure to increase taxes failed, including in blue states like Illinois and Colorado.
Other countries have lobbying too. What they don’t have is a huge population that hates taxes with a passion.
Our origin story is literally a tax revolt.
“No taxation without representation” — they weren't looking to get a couple of new members elected to Parliament. Definitely focused on the no taxation part.
- Tax prep companies like Intuit have a vested interest in keeping tax prep difficult.
- Grover Norquist (Americans for Tax Reform) believes that making filing taxes easier will make people more okay with paying taxes, and as a result, many conservative policymakers won't bite. (It's slightly more complicated than this, but I believe this assessment to be accurate.)
Here's a Planet Money podcast: https://www.npr.org/sections/money/2017/03/22/521132960/epis...
And a ProPublica series on Intuit: https://www.propublica.org/series/the-turbotax-trap
It's tinfoil hat, but my only conclusion is the actual reasons for the policy are so incredibly unpopular that they invent these realities to obscure them.
I love paying my taxes and support higher taxes with more government services. But I agree with Norquist that it’s a useful exercise for people to go through once a year and write down how much they make and what part of that the government is taking. I don’t like the idea of socializing people to accept higher taxes by deducting them automatically and making it so they never have to think about how much they’re paying.
Yet investment in the IRS is highly likely to result in recapturing the huge amount of legal taxes they miss, if they were only able to. Clearly the status quo is insufficient to actually collect the taxes currently on the books.
Of course tax law in the US is also politically designed to make policy that results in favored industries and organizations and to make this as obfuscated as possible, resulting in crazy complexity, which of course also benefits the tax prep industry.
