Intuit’s Million Dollar Check: Pay to Play Politics at its Worst

by Richard Holober, Executive Director, Consumer Federation of California

Software giant Intuit just gave us a textbook case of pay to play politics at its worst.

When the State Franchise Tax Board offered taxpayers a free on-line tax
preparation program, it ran afoul of Intuit, a Mountain View-based
company that makes a billion dollars a year selling tax preparation
software, including its ‘TurboTax’ program.

Intuit struck back at Board of Equalization member John Chiang last
week. Chiang is a Democrat running for the State Controller. If
elected, Chiang would have a seat on the Franchise Tax Board. Chiang
supports the free tax filing program.

Intuit just dumped a million dollars into an independent expenditure
committee to help Republican Tony Strickland win the Controller’s job.
Strickland doesn’t want the state to offer free software to make tax
filing easier or cheaper for the taxpayer. Strickland’s election would
let Intuit rake in millions at the taxpayers’ expense.

A few years ago, the Franchise Tax Board, California’s tax collector,
pioneered a free on-line tax program called ‘Ready Return.’ State
Controller Steve Westly championed this program. The program enabled
taxpayers with the simplest forms (single, no itemized deductions, and
no tax schedules to fill out) to go to a secure website, obtain their
tax information from the state, fill out a tax form and, if the
taxpayer desired, calculate the amount of tax owed or refund due.
Taxpayers had the option of doing the calculation themselves.

program eliminated tax filing headaches for thousands of Californians,
allowed low income taxpayers to more easily collect earned income tax
credits, and increased compliance with state tax filing requirements.

Ready Return was a smash hit with taxpayers who were selected to test
the program. 98% of users surveyed said they would use it again. This
threatened Intuit, a highly profitable company whose Turbo Tax
preparation software dominates the market along with H & R Block’s
‘Tax Cut.’

Intuit lobbied hard to kill the free state program. It introduced ‘do
no math’ legislation to stop the free state software from performing
calculations, thus rendering the program useless for taxpayers. It
lobbied successfully this year to strip the funding needed to keep the
free tax filing program alive.

John Chiang has been supportive of Ready Return. He wants to re-establish and expand the Ready Return project.

Intuit prefers a State Controller who will kill Ready Return, so
taxpayers will keep on paying through the nose for the company’s
software. The company dumped a million into the ‘Alliance for
California’s Tomorrow’, an independent expenditure campaign committee
running ads to help Tony Strickland win the Controller’s seat.

Intuit’s big donation is perfectly legal under California campaign law.
It is a perfect example of corporate meddling in our democracy.
Taxpayers have good reason to be upset with a system that allows a
business to buy the election for the state’s tax collector, simply to
make sure that paying taxes continues to be difficult and costly for
the rest of us.

Public financing of elections would stop big businesses like Intuit from purchasing
the government for their private profit motives. We need Clean
Money reform now.