“ReadyReturn” a Bad Idea That’s Hard to Kill

October 7, 2009

Some bad ideas are hard to kill, and one of those is California’s “ReadyReturn.” That’s the state’s name for a program that has state employees filling out citizens’ tax returns in advance. According to the ads, you the taxpayer will just receive your filled-out tax return in the mail, sign and mail it back.

Many smart people continue plugging this idea, and today’s plug is from law professor Dennis Ventry writing in the Sacramento Bee, which is echoed in the TaxProf Blog. What neither Prof. Ventry nor Prof. Caron mention is that when the state mailed out 50,000 filled-out state income tax returns (the simplest single-person, wage-earner returns), 39,000 thousand recipients threw them out and filled out their own. We’ve reminded people of these inconvenient facts and quoted tax experts who disagree with the ReadyReturn concept here and here.

Prof. Ventry spends most of his commentary bashing tax software company Intuit (maker of TurboTax) for its self-interested opposition to ReadyReturn. Perhaps he can name a company in any industry that wouldn’t oppose a government plan to provide their product “for free.”

Of course, ReadyReturn isn’t really free because when governments develop or update software, they often do so at greater cost than private firms like Intuit. And government employees who use that software to fill out people’s tax returns are paid more than the average private certified tax preparer. So the cost is in compulsory taxes instead of a voluntary payment of about $30 for software.

California has always taken seriously its mission to experiment with novel programs so that the country can learn from its successes and mistakes. Yet even when failure is proven, as with ReadyReturn, they keep coming back to life. How can we put a stake through the heart of this bad idea?


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