An IRS Trojan Horse

I’ve written before about why a return-free tax system is a bad idea (here and here). Under a return-free system, the IRS collects information on you and fills out your 1040 for you, so all you have to do is cut a check. The conflict of interest in having your tax collector also be your tax preparer is obvious.

A new proposal from the IRS, called a real-time tax system, looks benign, if only by comparison. It’s still a bad idea. But as my colleague David Deerson and I explain in The Daily Caller, the worst aspect of real-time is that it uses very similar technology to return-free. In other words, it’s a step on the way to a return-free system:

A return-free tax system is a terrible policy that has little appeal to anybody — except the IRS itself. Progressives see it as an encroachment on privacy; conservatives consider it an assault on economic freedom. They should oppose a real-time tax system with equal vigor. Once the databases and reporting software are in place, it will be easy for the IRS to implement return-free. A better solution for increasing compliance and making it easier for taxpayers to fill out their returns is actually quite simple — simplify the tax code.

Read the whole thing here.

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