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California's "ReadyReturn" Filing Program Could Trap Taxpayers, Citizen Group's Study Warns
For Immediate Release April 15, 2005
(Alexandria, VA) -- It's being touted as a way to make income tax filing easier, but California's state-funded "ReadyReturn" program is a boondoggle, not a bargain, for taxpayers: that's the conclusion of a new study from the National Taxpayers Union (NTU), a non-partisan citizen group with 350,000 members nationwide and more than 51,000 members in California.
"ReadyReturn is proving to be a concept not even worthy of its own name," said NTU Policy Analyst and study author Jeff Dircksen. "The program is neither ready for broader application to the tax filing population, nor will it return many discernible benefits to taxpayers."
This year California's Franchise Tax Board (FTB) initiated a test program in which 50,000 taxpayers were sent government-completed tax returns based on previous filing and income data. The recipients may then sign and accept the return, make adjustments, or file their own taxes. But according to Dircksen, who formerly served as a revenue policy analyst with the Commonwealth of Pennsylvania, the FTB's ReadyReturn scheme is not the model of simplicity and convenience that officials would have taxpayers believe it is. Aside from a paltry 3.6 percent participation rate as of mid-March, other problems plague the program:
Dircksen suggests that another motive behind the possible expansion of the ReadyReturn program -- to 4 million taxpayers next year -- might be the FTB's own institutional interest. Bigger workloads from the program could justify higher staffing levels and even greater budgets.
"If legislators want to meet Governor Schwarzenegger's call for a 21st Century government, they should replace the state's tax system with a simple, low-rate income tax or broad-based consumption tax," Dircksen concluded. "Otherwise, taxpayers will soon learn a costly lesson: the false luster of the ReadyReturn program hides a bureaucratic desire for more gold from the taxpayers of the Golden State."
NTU was founded in 1969 to work for lower taxes and smaller government. Note: NTU Issue Brief 153, California's ReadyReturn Program: Fool's Gold in the Golden State, is available at www.ntu.org.