John Edwards for President-Edwards Launches "Saturday Morning E-Cast" Series; In First Podcast, Lays Out Plan To Overhaul Tax Filing System

Edwards Launches "Saturday Morning E-Cast" Series; In First Podcast, Lays Out Plan To Overhaul Tax Filing System

Apr 6, 2007 5:00 PM

John Edwards for President
Apr 6, 2007

Chapel Hill, North Carolina – On Saturday, April 7th, 2007, Senator John Edwards will release the first in a series of podcasts detailing his plans to change America. In his "Saturday Morning E-Casts," Edwards will discuss the challenges facing our nation and his specific plans to meet those challenges and bring about bold change in our country. On the first E-Cast, Edwards will announce his "Form 1" plan to overhaul the tax filing system by having the IRS calculate millions of families' tax bills and mail it to them on a "Form 1."

As tax day approaches, millions of Americans are trying to navigate the needlessly complex and confusing tax filing system or paying tax preparers to help with their taxes. Edwards believes we should make it easier for Americans to pay their taxes, so in his E-Cast he will announce his Form 1 plan to simplify the tax filing system.

For as many as 50 million Americans, the IRS gets all the information it needs to calculate taxes from employers and financial institutions. As part of Edwards' plan, the IRS would calculate the tax bill and mail it to them on a Form 1, where they could verify and recalculate it or simply sign and return it. Form 1 is a step toward Edwards' vision of a tax code that is simpler and fairer and that rewards work.

Edwards' Form 1 plan would also:

Make filing easier for taxpayers. The IRS will make filing taxes easier for taxpayers by sharing its information, reducing the need to gather documents and by creating a free interactive web site that eliminates the need for data entry, calculators and tax tables.
Help low-income workers by informing working families about their eligibility for the Earned Income Tax Credit, which lifts more than 4 million people out of poverty every year.
Take on the tax preparation industry, which continues to fight against simplification initiatives.

For more information on the plan, please see the fact sheet below.

The Saturday Morning E-Casts are a continuation of Edwards' efforts to use new technology to bring more Americans into the democratic process. Edwards was one of the first public figures to podcast, releasing his first podcast in March of 2005.

Click here to listen to the first podcast in the Saturday morning series.

Reducing The Burden Of Paying Taxes With "Form 1"

"Hard-working families who pay their taxes shouldn't have to pay tax preparers too. With 'Form 1,' there is only one thing you have to do - sign and return it." -- John Edwards

The American tax code is unnecessarily complicated and full of shelters and loopholes that favor wealth over work. While corporations and wealthy families can hire expensive accountants and lawyers, ordinary families face unnecessary obstacles in calculating and paying their taxes. It takes seven hours to complete even the simplest tax form, the 1040EZ. One-third of EZ filers pay tax preparers. Meanwhile, for tens of millions of taxpayers who file simple returns, the Internal Revenue Service already has all the data it needs (such as household size, wages, and interest income) to calculate the tax or refund due. [IRS, 2005; GAO, 2006]

In the first of a series of Saturday Morning E-Casts, John Edwards describes his plan to overhaul the tax filing system. Under his plan, the IRS will calculate millions of families' tax bills and mail it to them on a new "Form 1." Like a credit card bill, families could verify and recalculate it or simply sign and return it. Form 1 is part of Edwards' vision of a tax code that is simpler and fairer and rewards work.

Completing Tax Forms for Up to 50 Million Americans: For as many as 50 million Americans, the IRS gets all the information it needs to calculate their taxes from employers and financial institutions. Under Edwards' plan, the IRS will calculate these taxpayers' bill and mail them a completed return. Families would only need to do one thing with Form 1: sign and return it. Families with more information - such as charitable contributions, capital gains, or other more complex transactions - will not be able to use Form 1. Form 1 would save taxpayers an estimated 225 millions hours a year. [Goolsbee, 2006; Gale and Holtzblatt, 1997; Treasury, 2003; GAO, 1996]

Making Filing Easier for All Taxpayers: Each year, both taxpayers and the IRS get information returns from employers and financial institutions (on W-2 and 1099 forms) showing wages, interest and mortgage interest paid. Taxpayers who lose a piece of paper and do not correctly report their income faces audit, additional taxes, interest, and penalties. Under Edwards' plan, the IRS will mail the information it has collected to taxpayers, eliminating the need to gather duplicative documents. The IRS will also provide a free interactive web site for all taxpayers that eliminates the need for data entry, calculators, and tax tables. Of course, families could also choose to continue calculating their taxes as they do today.

Helping Low-Income Workers: The Earned Income Tax Credit (EITC) lifts more than 4 million people in working families out of poverty every year. However, due to its complexity, as many as one out of four eligible families fail to receive it. By informing families of their eligibility for the credit, Form 1 will significantly increase the EITC participation rate. [CBPP, 2006; Brookings, 2006]

Taking on Special Interests: Form 1 could save families $2 billion in tax preparer fees, and the tax preparation industry has fought similar efforts. In California, one company spent over $500,000 in a failed effort to derail the successful ReadyReturn program. At the federal level, the IRS agreed with the tax software industry to limit free online filing to low-income taxpayers. Its barebones "Free File" program for low-income taxpayers has a history of hidden fees and bait-and-switch advertisements. [Goolsbee, 2006; L.A. Times, 5/5/2006 and 12/5/2006; Bankman, 2005; Cal. Franchise Tax Board, 2005; Accounting Today, 1/8/2007]