Daniel Boguslaw: Intuit, Owner of TurboTax, Wins Battle Against America’s Taxpayers

Even when the Biden administration broke through in the Inflation Reduction Act to fund a pilot program for Direct File, which expanded to 25 states this tax season, Intuit didn’t stop fighting. Instead, it continued cajoling lawmakers and the White House into forcing millions of Americans to shell out hundreds, sometimes thousands, of dollars to file with expensive and confusing tax prep software.

I was talking with a relative over Easter weekend about doing our taxes (fun, I know) and this relative was talking about how good an experience TurboTax was for them. They weren't happy about paying to file their taxes, but they thought it was worth it for the convenience. For what it's worth, this family member is pretty darn conservative and doesn't love the concept of taxes in the first place. I suppose from their perspective, TurboTax is an example of a private company taking something that was complicated in government and making it easy through the power of the market. I nodded along and didn't make a big deal of it. And who am I to say anything? I also used a different company's tax filing service, and I paid for it as well.

Obviously, the irony here is that Intuit, the maker of TurboTax, has spent decades and hundreds of millions, if not a billion dollars, lobbying the government not to create a free alternative to the private solutions that they offer. Unless you're getting a fat refund, I don't think anyone enjoys doing their taxes. And certainly even fewer are excited about paying for the privilege. Companies like Intuit are strongly invested in the system staying the same, so that you do have to keep paying them.

For most of my life, this has always been a theoretical discussion. There wasn't a government-created, software-based solution for filing your taxes easily, so we could have arguments over how terrible the government would be at making a product like this, no one would want to use it, and would show why the private market always does this better. But a few years ago, this moved from theoretical to practical, as some legislation finally made it through that allowed the government to start beta testing a free filing solution with some taxpayers. Did they like it?

Customer satisfaction with Direct File was high, with over 90 percent of users ranking it as excellent or above average in surveys.

To be clear, I think it's fine if private companies like Intuit and Square continue to make tax software and compete on delivering the best experience at the best value to consumers. Despite all my complaints with how we got here, I genuinely do think these companies make great products that do deliver a simpler, faster experience than we had years ago. I just think there should be a free option managed by the government to file your taxes as well.