Joe Windish, tech editor at The Moderate Voice, posted today about a California program called “ReadyReturn,” which takes the information that banks and your employer already are required to send to the state and plugs it into a tax return for you, eliminating the most onerous part of filing. It also has cost-saving benefits:
California does it, and it’s a real money saver. They say it costs $2.59 to process a paper return; 34 cents to process a “ReadyReturn.” Funny thing, though. The state only spends $10,000 to promote it.
The New York Times offers an explanation as to why the program is so under-touted:
“Publicity remains one of the most formidable obstacles,” said John Chiang, the state’s controller.
California has budgeted only $10,000 for getting word out. The meagerness of the funds allotted for the ReadyReturn program reflects the strength of its political opponents, Mr. Chiang said. The most vigorous opposition comes from companies that sell tax-preparation software, “principally, Intuit,” he added.
INTUIT, which publishes TurboTax, does not dispute this description.
“We’re a California company and actively participate in the political process,” said Julie Miller, a company spokeswoman. “Our position has consistently been that ReadyReturn duplicates what is already available.”
I, for one, would love to have a simpler tax filing process in place. This is, unfortunately, a circumstance in which a market inefficiency is present – California is providing a service free of charge, but political opponents are doing everything they can to prevent consumers from accessing full and complete information. Intuit would rather keep taxpayers ignorant in order to fleece them for another $35, rather than see the market for tax filing be truly free, thus leading to the demise of TurboTax and their other products.
This is a pretty clear example of a market inefficiency promoted by a dominant industry player…

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