7 ms·

I've often read headlines noting that the tax-prep lobby spends huge sums to preserve the status quo. But the numbers quoted in the article as evidence don't a

I've often read headlines noting that the tax-prep lobby spends huge sums to preserve the status quo. But the numbers quoted in the article as evidence don't appear to support that claim. $6.6m seems low relative to these figures https://www.opensecrets.org/lobby/top.php?showYear=2018&indexType=i https://www.opensecrets.org/lobby/top.php?showYear=2018&inde... * *I can't vouch for this site or its data Relevant quote from the Tech Crunch article: "One reason why folks Congress could be pushing this through is all of the money that H&R Block and Intuit spent to lobby Senators and Representatives. ProPublica estimates that the tax prep industry has spent $6.6 million to advocate for the IRS filing deal. The Ways and Means chair, Neal, received $16,000 in contributions from the two companies in the last two election cycles, according to the ProPublica report."

chillacy 7y ago
$16k to sell out? Don't these people raise millions?
- peteretep 7y ago
  If the marginal cost is zero of raising, raise all the amounts
- diminoten 7y ago
  Not really, no! Most national elections sure, but I think most congressional races aren't nearly as expensive.
  - rootusrootus 7y ago
    As of a few years ago, the average cost for a winning campaign for the House of Representatives was about $1.5M. The average cost for a winning Senate campaign was a bit over $10M.
    - johnsimer 7y ago
      Wow, so this means someone could theoretically buy out the House for <$1b?
      - rootusrootus 7y ago
        Sure, if you think it's that easy. Problem is that there are lots and lots of examples of people spending ridiculous amounts of money in politics trying to sway an election, and losing anyway.
- dgacmu 7y ago
  Big donors are a high return-on-time for busy politicians. I donated the max (2*$2700) to a few candidates during the previous midterm elections, and was (naively) surprised to be invited to have brief 1:1 meetings with each of them. Money speaks depressingly loudly in politics. Corporations have to go through PACs, but many have their own (Intuit has their "21st Century Leadership Fund" PAC, which you can view here: https://www.opensecrets.org/pacs/lookup2.php?strID=C00361741&cycle=2018 https://www.opensecrets.org/pacs/lookup2.php?strID=C00361741... Not all candidates accept PAC funds, but enough do. It's disheartening.
  - rayiner 7y ago
    > Money speaks depressingly loudly in politics. I don't know what's disheartening about it. Here in D.C., Democrats are in an ideological war with Republicans. Money is necessary to fuel the war machine: https://blog.nationalarchives.gov.uk/wp-content/uploads/2015/02/NSC-5_6_1918.jpg https://blog.nationalarchives.gov.uk/wp-content/uploads/2015.... Of course they want to get larger donors more involved.
    - arcticbull 7y ago
      The problem is exactly what you describe, the "war machine." Elections are in the public interest and should be solely publicly funded. Collect taxes for it, distribute it directly to candidates evenly, via some set model. You can look to Canada's system as a basis, although we do still allow some limited private contributions (which I disapprove of, but ~20% of total funding) [1]. That's all they should be allowed to spend. Then they use that money to make their case to the people on merit. No PACs, no contributions, no lobbyists, and equal access to airtime. This eliminates pay-to-play or at least criminalizes it. [1] https://en.wikipedia.org/wiki/Federal_political_financing_in_Canada https://en.wikipedia.org/wiki/Federal_political_financing_in...
      - rayiner 7y ago
        The US is fundamentally more adversarial than other developed countries. Our political system reflects that. The Canadian way is one way to do it, but I don’t see why our way is fundamentally wrong. Also this focus on the “merits” is misguided. The US is too big and diverse for votes to correspond very well to actual policies. By the time you get all the stakeholders on board with something the final result won’t appear anything like the original proposal. So we place a much higher emphasis on people, personality, and party than policy. I’ll give you a concrete example of this: immigration. Canada is much less divided on immigration than the US. Here, you have one side calling immigrants criminals, and the other side calling for open accommodation of hundreds of thousands of low-skill immigrants illegally crossing the border each year. By contrast, Canada’s right is less vitriolic, but it’s left is also far less idealistic. Even Trudeau generally seems to support Canada’s point-based immigration system, which puts a heavy emphasis on English skills and education. That system would be m demonized as regressive and racist were Republicans to propose it here. So what good does it do to vote for policy here in the US? You think anyone will hash out an immigration policy that makes both sides happy? No. So instead we raise money to go to war and try to bury the other side.
peteretep 7y ago
Also add to that: I suspect most people in Congress would need to hire an accountant anyway so it would benefit them in the least
TomMckenny 7y ago
What they receive is only part of the calculation. What your opponent will receive in the next election or primary is a bigger issue. And that implied stick is much cheaper than giving out carrots all the time.
DubiousPusher 7y ago
The perrenial misunderstanding about lobbying in the US is that it's about money. It's not. It's about access. The money spent by lobbying firms is almost always in pursuit of that access. AKA buying a $10,000 plate at this donor dinner gets you a sit down with the Senator. Not only do lobbyists get more accessible they get more credibility. The lobbyists are high paid lawyers at respected firms. They have degrees from respected schools. They have worked on the issue at discussion at lemgth. So when citizens are stacked up against these people they seem comparatively crankish. This provision isn't in the bill because Intuit bribed someone. It's because that 6.6 million bought a lot of sit downs with committee members. Sit downs in which lobbyists told a convincing story of how it would actually be better for everyone of the IRS couldn't do this. Honestly they probably made some process argument for this. Something like it would get challenged in court anyway and be a big waste of money. Or about how you should make it illegal so the Executive Branch won't do it on their own and they'll have to take congressional input. And the lobbyist almost certainly believes whatever line their feeding the politicians. It's like most broken things in life. No one is evil stuff just breaks.
- hbosch 7y ago
  I think this is a very level-headed view of lobbying and I want to say that I appreciate your comment. It’s enticing to imagine that Intuit is building a new pool on Chuck Schumer’s vacation property, and in a dark room somewhere a bunch of fat white guys are lighting this bill in fire with the ends of their cigars. One other factor is that in “government time” we’re not far removed from the Healthcare.gov fiasco and in the middle of a debate over the technical debt of our easily hacked voting machines. Along with that, Premera and Equifax have suffered attacks. I imagine there is nobody inside the actual government that is willing to try and “outdo” Turbotax.
  - brianpgordon 7y ago
    This seems pretty in line with 18F's mission and skillset.
    - Something1234 7y ago
rayiner 7y ago
> Neal, received $16,000 in contributions from the two companies in the last two election cycles[.] This statement is false. If you look at Open Secrets, $16,000 lines up exactly with what H&R Block and Intuit employees donated to Neal in 2016 and 2018. H&R Block and Intuit have tens of thousands of employees--it's not surprising that many donated to a Democrat with a high-ranking committee position. Fun fact: By the article's parlance "Google" gave more to Neal in 2018 than Intuit. Gasp--Google must be in on the tax filing scam too!
cure 7y ago
Those numbers sound about right. It is surprisingly cheap to influence our Representatives and Senators. Maybe it would be within range of a decent crowdsourcing campaign to raise the amount of cash to buy enough influence and lobbying to move the needle on things that are in the public interest, like this issue. Ugh. If only more of our Representatives and Senators actually worked for the people, rather than for whomever promises them the most money...
- snowwrestler 7y ago
  > Maybe it would be within range of a decent crowdsourcing campaign to raise the amount of cash to buy enough influence and lobbying to move the needle on things that are in the public interest This is what PACs and nonprofits do. If you want to participate, there is probably already at least one for whatever issue you care about.
fbonetti 7y ago
As noted by the economist Luigi Zingales in his book "A Capitalism for the People", companies that are receiving subsidies (or other favorable treatment from the government) are highly incentivized to keep receiving those subsidies. For example, if the tax preparation industry stands to lose $100 million if e-file becomes free, they will lobby up to that amount to retain the status quo. The problem is that those who wish to reform the status quo are not as well funded or financially incentivized to create a counter-lobby. Ordinary citizens, who would benefit the most from making e-file free, would have to form a counter-lobby group and put up at least $6 million in order to have the same level of access as the tax preparation companies. Zingales' proposed solution is to do away with subsidies and special treatment for individual companies, as they inevitably lead to cronyism.

chillacy 7y ago

$16k to sell out? Don't these people raise millions?

peteretep 7y ago
If the marginal cost is zero of raising, raise all the amounts
diminoten 7y ago
Not really, no! Most national elections sure, but I think most congressional races aren't nearly as expensive.
- rootusrootus 7y ago
  As of a few years ago, the average cost for a winning campaign for the House of Representatives was about $1.5M. The average cost for a winning Senate campaign was a bit over $10M.
  - johnsimer 7y ago
    Wow, so this means someone could theoretically buy out the House for <$1b?
    - rootusrootus 7y ago
      Sure, if you think it's that easy. Problem is that there are lots and lots of examples of people spending ridiculous amounts of money in politics trying to sway an election, and losing anyway.
dgacmu 7y ago
Big donors are a high return-on-time for busy politicians. I donated the max (2*$2700) to a few candidates during the previous midterm elections, and was (naively) surprised to be invited to have brief 1:1 meetings with each of them. Money speaks depressingly loudly in politics. Corporations have to go through PACs, but many have their own (Intuit has their "21st Century Leadership Fund" PAC, which you can view here: https://www.opensecrets.org/pacs/lookup2.php?strID=C00361741&cycle=2018 https://www.opensecrets.org/pacs/lookup2.php?strID=C00361741... Not all candidates accept PAC funds, but enough do. It's disheartening.
- rayiner 7y ago
  > Money speaks depressingly loudly in politics. I don't know what's disheartening about it. Here in D.C., Democrats are in an ideological war with Republicans. Money is necessary to fuel the war machine: https://blog.nationalarchives.gov.uk/wp-content/uploads/2015/02/NSC-5_6_1918.jpg https://blog.nationalarchives.gov.uk/wp-content/uploads/2015.... Of course they want to get larger donors more involved.
  - arcticbull 7y ago
    The problem is exactly what you describe, the "war machine." Elections are in the public interest and should be solely publicly funded. Collect taxes for it, distribute it directly to candidates evenly, via some set model. You can look to Canada's system as a basis, although we do still allow some limited private contributions (which I disapprove of, but ~20% of total funding) [1]. That's all they should be allowed to spend. Then they use that money to make their case to the people on merit. No PACs, no contributions, no lobbyists, and equal access to airtime. This eliminates pay-to-play or at least criminalizes it. [1] https://en.wikipedia.org/wiki/Federal_political_financing_in_Canada https://en.wikipedia.org/wiki/Federal_political_financing_in...
    - rayiner 7y ago
      The US is fundamentally more adversarial than other developed countries. Our political system reflects that. The Canadian way is one way to do it, but I don’t see why our way is fundamentally wrong. Also this focus on the “merits” is misguided. The US is too big and diverse for votes to correspond very well to actual policies. By the time you get all the stakeholders on board with something the final result won’t appear anything like the original proposal. So we place a much higher emphasis on people, personality, and party than policy. I’ll give you a concrete example of this: immigration. Canada is much less divided on immigration than the US. Here, you have one side calling immigrants criminals, and the other side calling for open accommodation of hundreds of thousands of low-skill immigrants illegally crossing the border each year. By contrast, Canada’s right is less vitriolic, but it’s left is also far less idealistic. Even Trudeau generally seems to support Canada’s point-based immigration system, which puts a heavy emphasis on English skills and education. That system would be m demonized as regressive and racist were Republicans to propose it here. So what good does it do to vote for policy here in the US? You think anyone will hash out an immigration policy that makes both sides happy? No. So instead we raise money to go to war and try to bury the other side.

peteretep 7y ago

Also add to that: I suspect most people in Congress would need to hire an accountant anyway so it would benefit them in the least

TomMckenny 7y ago

What they receive is only part of the calculation. What your opponent will receive in the next election or primary is a bigger issue. And that implied stick is much cheaper than giving out carrots all the time.

DubiousPusher 7y ago

The perrenial misunderstanding about lobbying in the US is that it's about money. It's not. It's about access. The money spent by lobbying firms is almost always in pursuit of that access. AKA buying a $10,000 plate at this donor dinner gets you a sit down with the Senator. Not only do lobbyists get more accessible they get more credibility. The lobbyists are high paid lawyers at respected firms. They have degrees from respected schools. They have worked on the issue at discussion at lemgth. So when citizens are stacked up against these people they seem comparatively crankish. This provision isn't in the bill because Intuit bribed someone. It's because that 6.6 million bought a lot of sit downs with committee members. Sit downs in which lobbyists told a convincing story of how it would actually be better for everyone of the IRS couldn't do this. Honestly they probably made some process argument for this. Something like it would get challenged in court anyway and be a big waste of money. Or about how you should make it illegal so the Executive Branch won't do it on their own and they'll have to take congressional input. And the lobbyist almost certainly believes whatever line their feeding the politicians. It's like most broken things in life. No one is evil stuff just breaks.

hbosch 7y ago
I think this is a very level-headed view of lobbying and I want to say that I appreciate your comment. It’s enticing to imagine that Intuit is building a new pool on Chuck Schumer’s vacation property, and in a dark room somewhere a bunch of fat white guys are lighting this bill in fire with the ends of their cigars. One other factor is that in “government time” we’re not far removed from the Healthcare.gov fiasco and in the middle of a debate over the technical debt of our easily hacked voting machines. Along with that, Premera and Equifax have suffered attacks. I imagine there is nobody inside the actual government that is willing to try and “outdo” Turbotax.
- brianpgordon 7y ago
  This seems pretty in line with 18F's mission and skillset.
  - Something1234 7y ago

rayiner 7y ago

> Neal, received $16,000 in contributions from the two companies in the last two election cycles[.] This statement is false. If you look at Open Secrets, $16,000 lines up exactly with what H&R Block and Intuit employees donated to Neal in 2016 and 2018. H&R Block and Intuit have tens of thousands of employees--it's not surprising that many donated to a Democrat with a high-ranking committee position. Fun fact: By the article's parlance "Google" gave more to Neal in 2018 than Intuit. Gasp--Google must be in on the tax filing scam too!

cure 7y ago

Those numbers sound about right. It is surprisingly cheap to influence our Representatives and Senators. Maybe it would be within range of a decent crowdsourcing campaign to raise the amount of cash to buy enough influence and lobbying to move the needle on things that are in the public interest, like this issue. Ugh. If only more of our Representatives and Senators actually worked for the people, rather than for whomever promises them the most money...

snowwrestler 7y ago
> Maybe it would be within range of a decent crowdsourcing campaign to raise the amount of cash to buy enough influence and lobbying to move the needle on things that are in the public interest This is what PACs and nonprofits do. If you want to participate, there is probably already at least one for whatever issue you care about.

fbonetti 7y ago

As noted by the economist Luigi Zingales in his book "A Capitalism for the People", companies that are receiving subsidies (or other favorable treatment from the government) are highly incentivized to keep receiving those subsidies. For example, if the tax preparation industry stands to lose $100 million if e-file becomes free, they will lobby up to that amount to retain the status quo. The problem is that those who wish to reform the status quo are not as well funded or financially incentivized to create a counter-lobby. Ordinary citizens, who would benefit the most from making e-file free, would have to form a counter-lobby group and put up at least $6 million in order to have the same level of access as the tax preparation companies. Zingales' proposed solution is to do away with subsidies and special treatment for individual companies, as they inevitably lead to cronyism.