Wired 14.05: Lessig on stifling competition

Wired 14.05: Lessig on stifling competition:
"In 2005, the state of California conducted an experiment. Hoping to make paying taxes easier, it launched a pilot program for people who were likely to file 'simple returns.' The state already had the payroll information some taxpayers needed to file their returns, so it filled out 50,000 of those forms for them. Way in advance of the filing deadline, the state mailed the taxpayers their completed ReadyReturns. Like a Visa statement, the ReadyReturn itemized the taxes due, making the process easier for the taxpayer and more accurate for the government. People could either file the ReadyReturn or use the information to fill out forms on their own. Of taxpayers who hadn't yet filed, 30 percent used the return; more than 95 percent of that group said they would do so again. Praise for the program was generally over-the-top.

Soon after ReadyReturn was launched, lobbyists from the tax-preparation industry began to pressure California lawmakers to abandon the innovation. Their opposition was not surprising: If figuring out your taxes were easy, why would anyone bother to hire H&R Block? If the government sends you a completed form, why buy TurboTax?

But what is surprising is that their 'arguments' are having an effect. In February, the California Republican caucus released a report highlighting its 'concerns' about the program - for example, that an effort to make taxes more efficient 'violates the proper role of government.' Soon thereafter, a Republican state senator introduced a bill to stop the ReadyReturn program."

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Lawrence Lessig