Connect with us

UNCATEGORIZED

COUNTERPOINT: IRS Should Not Be Trusted With Direct File

Published

on

By David B. McGarry, InsideSources.com (TNS)

Tax Day looms, and the taxman cometh. It is a certainty, as Ben Franklin said.

This year, the IRS has launched a pilot program dubbed “Direct File” through which Americans can opt to have the IRS prepare their taxes for free (well, except for the billions of taxpayer dollars used to create the program).

The IRS wants to eliminate Americans’ reliance on private-sector tax-preparation services. Despite its recent trendiness in certain circles, Direct File has little potential for good—and much for bad. In addition to the pilot program’s dubious legality, there are many fiscal and prudential reasons not to trust the IRS with this new responsibility.

Adding a federally operated competitor to a market does not equate to providing or promoting competition, as some of its advocates have argued—not in any traditional usage. Nobody would consider creating a federal grocery store, a federal airline or a federal movie studio as a pro-market or pro-competitive policy. State-run enterprises enjoy the profoundly anti-competitive advantage of bearing the imprimatur of the state, and they are not subject to the ordinary competitive pressures to which private businesses must remain sensitive and respond.

Neither does a Direct File system seem likely to provide a valuable service to taxpayers. The proposed system’s very conceit clangs against the American legal and political tradition, in which adversarial actors’ opposition to one another is an indispensable guardian of liberty and good governance. This combative friction—the defense lawyer against the prosecution, Congress against the presidency, the states against the federal government—ensures (in theory, at least) that no one faction or institution has a smooth route to self-interested injustice.

The IRS proposes to excise such friction. The agency wants to file the citizen’s taxes, collect that money, and double back to conduct audits—without any mediating institution to gainsay potential (nay, likely) abuse. Washington politicians and bureaucrats certainly should not promote its adoption. Low-income and minority taxpayers—whom IRS auditors target disproportionately and whom the IRS would likely market Direct File most energetically—have perhaps the most significant interest in retaining private intermediaries such as TurboTax or TaxSlayer.

What’s more, Direct File would not be “free,” as its advocates aver. Americans might not pay when filing their taxes, but those tax dollars would fund the digital infrastructure, personnel and other resources undergirding the system.

The IRS estimates Direct File to cost $64 million to $249 million annually, which seems wildly low. In 2021, researchers at Govini analyzed Direct File’s likely price tag against the experience of Healthcare.gov, concluding that the former’s costs would dwarf the latter’s. Govini reported the Obamacare website cost taxpayers $20.2 billion through October 2021.

An audit by the Treasury Inspector General for Tax Administration (TIGTA) could not confirm the IRS’s cost assumptions—nor could the agency meaningfully defend them. “When we asked the IRS for documentation supporting how it arrived at these various cost estimates,” TIGTA said, “it could not provide us with any.” This lacuna elicits no confidence in the IRS’s figures.

Besides such fiscal qualms, the IRS is an agency ill-suited to ameliorate the private-sector harms that proponents of Direct File have identified.

Consider the taxman’s record.

The IRS has failed routinely to prevent data breaches, including a 2022 incident in which the agency briefly published the personal data of 120,000 taxpayers. According to a 2022 Government Accountability Office report, from 2012 to 2021, “the IRS completed 1,694 investigations into the willful unauthorized access of tax data by employees.” The agency substantiated 462 cases as “violations” and left 380 cases unresolved.

Some say private tax preppers have targeted minority communities. But the IRS cracks down on such populations with gusto, auditing counties in predominantly Black and rural regions of the Deep South most frequently. “Audit rates are also very high in the largely Hispanic communities in south Texas, the counties with Native American reservations in South Dakota, and the poor, White counties in Kentucky’s Appalachia region,” MarketWatch reported in 2019. “In fact, the audit rates in these areas were more than 40 percent above the national average.”

The IRS is the ultimate economic bully. Its audits are notoriously ferocious and burdensome, and it has, at times, deployed its vast powers for unethical and politicized ends. What’s more, the agency’s customer-service capacity has proven painfully dismal, erecting further obstacles for would-be law-abiding taxpayers. Offering Direct File at scale would substantially increase the demand for customer and technical support, a demand the IRS could not likely meet.

The proper remedy to any issues with private tax preparation companies is to address discrete problems where they exist. Instead, advocates of Direct File propose to centralize still more power in one of Washington’s least responsible agencies, injecting a fully socialized competitor into the market and mucking up the basic principles of American governance.

ABOUT THE AUTHOR:

David B. McGarry is a policy analyst at the Taxpayers Protection Alliance. He wrote this for InsideSources.com.

_______

(This essay is available to Tribune News Service subscribers. TNS did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of TNS or its editors.)

©2024 Tribune Content Agency LLC

Continue Reading

Leaders

Mark Cuban is The Maverick Entrepreneur Changing Business and Beyond

Published

on

Mark Cuban's journey embodies the American entrepreneurial spirit

From selling garbage bags door-to-door as a child to becoming a billionaire tech pioneer and beloved “Shark,” Mark Cuban’s journey embodies the American entrepreneurial spirit. His straight-talking approach and business acumen have made him one of the most recognizable business figures of our time.

Early Life and Education

Born in Pittsburgh on July 31, 1958, to working-class parents, Cuban learned the value of hustle early. His grandfather, a Russian immigrant, sold merchandise from the back of his car—perhaps planting the entrepreneurial seed that would define Cuban’s future.

After graduating from Indiana University in 1981 with a degree in business, Cuban didn’t follow a traditional career path. Instead, he moved to Dallas with just $60 in his pocket, sleeping on the floor of a friend’s apartment while working as a bartender.

Building His Fortune

Cuban’s first major success came in 1990 when he sold his computer consulting firm, MicroSolutions, for $6 million. However, his true financial breakthrough arrived during the internet boom of the 1990s. Cuban and his business partner Todd Wagner founded Broadcast.com, an internet radio company that streamed audio of sports events and other content.

In 1999, Yahoo acquired Broadcast.com for $5.7 billion in stock—a deal that instantly made Cuban a billionaire and cemented his place in tech history.

The Dallas Mavericks Era

In 2000, Cuban purchased a majority stake in the NBA’s Dallas Mavericks for $285 million. Under his passionate and sometimes controversial leadership, the team transformed from a struggling franchise into NBA champions in 2011.

Unlike traditional team owners, Cuban sits courtside at games, openly criticizes referees, and maintains close relationships with players. His hands-on approach revolutionized NBA ownership culture and turned the Mavericks into a billion-dollar franchise.

Beyond Business: Media and Philanthropy

Cuban’s charismatic personality made him a natural fit for television. Since 2011, he has been a main investor on ABC’s “Shark Tank,” where his no-nonsense approach and investment savvy have helped launch numerous successful startups.

Behind the public persona lies a dedicated philanthropist. The Mark Cuban Foundation supports various causes, including entrepreneurship programs for at-risk youth and research into treating rare diseases. Following the COVID-19 pandemic, Cuban launched Cost Plus Drugs, aiming to dramatically reduce prescription medication prices for millions of Americans.

Looking Forward

Today, Cuban continues to disrupt industries through his forward-thinking investments in AI, cryptocurrency, and healthcare. Despite his billions, colleagues describe him as remarkably approachable and genuinely passionate about helping entrepreneurs succeed.

Cuban remains focused on making healthcare more affordable through Cost Plus Drugs and exploring new frontiers in digital technology. His commitment to transparency in business practices and creating opportunities for others forms the cornerstone of his ongoing legacy.

For aspiring entrepreneurs, Cuban’s advice remains consistent: follow your passion, outwork the competition, and always be learning. As he often says, “Work like there is someone working 24 hours a day to take it all away from you.”

Mark Cuban’s journey from selling garbage bags to building a multi-billion-dollar empire proves that with determination, innovation, and a willingness to challenge the status quo, extraordinary success is possible.

Continue Reading

Technology

Quantum Computing is Transforming Industries, Security, and Future Technologies

Published

on

Quantum Computing is Transforming Industries, Security, and Future Technologies

Quantum computing is rapidly emerging as one of the most transformative technologies of the 21st century. Unlike classical computers, which use bits to process information as either 0s or 1s, quantum computers leverage qubits, allowing them to exist in multiple states simultaneously. This property, known as superposition, along with entanglement and quantum tunneling, enables quantum computers to solve complex problems exponentially faster than traditional systems. As this technology advances, industries across the board are exploring its potential to revolutionize computing, security, and data processing.

Real-World Applications of Quantum Computing in Industries

Several industries are already benefiting from quantum computing’s capabilities. In healthcare, quantum algorithms are accelerating drug discovery by simulating molecular structures at an unprecedented scale, significantly reducing the time required for pharmaceutical research. Financial institutions are leveraging quantum computing to optimize trading strategies, portfolio management, and risk assessment. In manufacturing, quantum simulations enhance material science, leading to the development of stronger and more efficient materials. The logistics sector is also utilizing quantum computing to optimize supply chain management, reducing operational costs and improving efficiency.

Key Developments from Tech Giants in Quantum Research

Leading technology companies such as Google, IBM, Microsoft, and Intel are at the forefront of quantum computing research. Google made headlines with its claim of achieving quantum supremacy in 2019 when its quantum processor completed a calculation in 200 seconds that would take a classical supercomputer thousands of years. IBM continues to advance its quantum computing roadmap with cloud-accessible quantum computers and the development of a 1,000-qubit processor. Microsoft is investing heavily in topological qubits, a novel approach aimed at creating more stable quantum processors. Meanwhile, Intel is working on silicon-based quantum chips, striving to make quantum computing more scalable and accessible.

Quantum Cryptography and Its Potential to Redefine Security

As quantum computers advance, they pose a significant threat to current encryption methods. Traditional cryptographic techniques, such as RSA and ECC encryption, rely on the difficulty of factoring large numbers, a challenge that quantum computers can overcome almost instantly. Quantum cryptography, particularly quantum key distribution (QKD), offers a solution by leveraging the principles of quantum mechanics to create theoretically unbreakable encryption. Governments and cybersecurity firms are actively researching post-quantum cryptographic solutions to safeguard sensitive data against potential quantum attacks.

Challenges in Scaling Quantum Technologies

Despite its immense potential, quantum computing faces several challenges before it can become widely adopted. One of the biggest hurdles is qubit stability, as qubits are highly sensitive to environmental disturbances, leading to errors in computations. Error correction mechanisms are still in their early stages, requiring significant advancements before quantum computers can handle large-scale, practical applications. Additionally, quantum hardware is expensive and requires extreme cooling conditions, making commercialization difficult. Researchers and tech companies are actively working on solutions to address these challenges, but widespread implementation remains years, if not decades, away.

Conclusion

Quantum computing is poised to revolutionize industries by solving complex problems beyond the reach of classical computers. From pharmaceutical research and financial modeling to secure communications and logistics optimization, its applications are vast and transformative. However, challenges related to scalability, stability, and cost must be addressed before quantum computers can become mainstream. With continued advancements from tech giants and research institutions, the future of quantum computing holds immense promise, paving the way for groundbreaking innovations in computing and security.

Continue Reading

Technology

Reddit CEO Steve Huffman Unveils Monetization Strategy for 2025

Published

on

Reddit CEO Steve Huffman Unveils Monetization Strategy

In a strategic move to diversify revenue streams and enhance user engagement, Reddit CEO Steve Huffman has unveiled plans to introduce paid subscriptions for select subreddit content by the end of 2025. This initiative aims to offer exclusive, subscriber-only content within certain communities while maintaining the platform’s foundational free access.

During a recent “Ask Me Anything” session, Huffman described the paid content model as a “work in progress,” emphasizing its significance as one of the “new, key features” slated for rollout this year. He reassured users that the introduction of paid subreddits would not compromise the availability and growth of free content on the platform. This approach seeks to balance monetization efforts with Reddit’s commitment to open access, ensuring that the core user experience remains intact.

In addition to paid subscriptions, Reddit is exploring the development of marketplace features within subreddits. This would enable users to conduct transactions directly on the platform, facilitating the buying and selling of goods and services without the need for third-party platforms. Such a marketplace could significantly enhance user interactions and create new monetization avenues for both Reddit and its users. However, Huffman noted that this aspect of monetization is still under development and may take time to fully implement.

These strategic initiatives come in the wake of Reddit’s financial performance in 2024, where the company reported a net loss, prompting a reevaluation of its monetization strategies. Despite the financial setback, Reddit experienced a 39% increase in daily active unique visitors, totaling 101.7 million users. This growth, although slightly below market estimates, underscores the platform’s expanding user base and the potential for monetization through diversified offerings.

Reddit’s foray into paid content and on-platform transactions reflects a broader trend among social media platforms seeking sustainable revenue models beyond traditional advertising. By introducing exclusive content and facilitating user-driven commerce, Reddit aims to enhance user engagement, attract new audiences, and provide content creators with opportunities to monetize their contributions. As these plans unfold, the platform will need to navigate potential challenges, including user reception and the integration of new features, to successfully balance monetization with its community-driven ethos.

Continue Reading

Trending