Was Ro Khanna The Only Member Of Congress To Vote No On This Travesty? We'll Never Know

Ro Khanna voted NO but the bill passed Monday by voice vote (so unrecorded and unaccountable, using a fast-track procedure for "non-controversial" bills). The Senate will move as fast as they can-- even without committee hearings-- to pass it there as well. I kind of thought we just elected a Democratic House so that stuff like a ban on free electronic tax filings wouldn't be able to pass Congress. No? I had hoped that Justin Elliott's ProPublica piece, Congress Is About to Ban the Government From Offering Free Online Tax Filing. Thank TurboTax, would shame some corrupt Democrats into withdrawing their support for the misleadingly named Taxpayer First Act (H.R.1957), a bonanza for the for-profit tax preparation industry. In the name of cyber-security, the bill-- whose legitimate purpose is to prevent the use of predatory private debt collectors for late taxes-- permanently bars the IRS from creating a free electronic tax filing system.

"Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system," explained Elliott. "If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry’s profits." Consumer rights advocates were up in arms-- but... it didn't work. It passed the House Ways and Means Committee and quickly got to the floor and passed.

“This could be a disaster. It could be the final nail in the coffin of the idea of the IRS ever being able to create its own program,” said Mandi Matlock, a tax attorney who does work for the National Consumer Law Center.

Experts have long argued that the IRS has failed to make filing taxes as easy and cheap as it could be. In addition to a free system of online tax preparation and filing, the agency could provide people with pre-filled tax forms containing the salary data the agency already has, as ProPublica first reported on in 2013.

The Free File Alliance, a private industry group, says 70% of American taxpayers are eligible to file for free. Those taxpayers, who must make less than $66,000, have access to free tax software provided by the companies. But just 3% of eligible U.S. taxpayers actually use the free program each year. Critics of the program say that companies use it as a cross-marketing tool to upsell paid products, that they have deliberately underpromoted the free option and that it leaves consumer data open to privacy breaches.

The congressional move would codify the status quo. Under an existing memorandum of understanding with the industry group, the IRS pledges not to create its own online filing system and, in exchange, the companies offer their free filing services to those below the income threshold.

One member of the Free File Alliance explicitly told shareholders that the IRS “developing software or other systems to facilitate tax return preparation … may present a continued competitive threat to our business for the foreseeable future.”

The IRS’ deal with the Free File Alliance is regularly renegotiated and there have been repeated, bipartisan efforts in Congress to put the deal into law.

Those efforts have been fueled by hefty lobbying spending and campaign contributions by the industry. Intuit and H&R Block last year poured a combined $6.6 million into lobbying related to the IRS filing deal and other issues. Neal, who became Ways and Means chair this year after Democrats took control of the House, received $16,000 in contributions from Intuit and H&R Block in the last two election cycles.

Last year Intuit hired 53 lobbyists (including the notoriously sleazy Greenberg Traurig LLP) and spent $2,600,000 on lobbying. They also spent just over a quarter million dollars on legalistic bribes (campaign contributions), the biggest iff them going to half a dozen conservative-leaning Democrats, Zoe Lofgren, Bob Casey, Heidi Heitkamp, Joe Manchin, Beto O'Rourke and Jacky Rosen. The three biggest non-incumbents they backed were also conservative-Dems-- Doug Jones, Susie Lee and Ben McAdams.

H&R Block was another big spender. Last year their PAC raised $371,260 and spent $318,950, top recipients all being members known for selling their votes, Kevin McCarthy (R-CA), Kevin Yoder (R-KS), Emanuel Cleaver (D-MO), Blaine Luetkemeyer (R-MO), Jason Smith (R-MO), Mike Bishop (R-MI) and Lacy Clay (D-MO)-- as well as $4,500 to Ways and Means chairman Richard Neal, a co-sponsor of the bill. Their biggest single contribution was a $12,500 check to the New Dems PAC and their second biggest contribution was to Linda Sanchez's PAC. Sanchez was an original co-sponsor of the bill. They also spent $4,040,000 on lobbying last year.