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taxes
Exposed: Republicans Trying to Kill Free 'Direct File' Program Funded by For-Profit Tax Prep Industry
"Direct File should be expanded, kept permanent, and be held up as a model for government programs enacted to help average Americans—not corporate America."
Jan 30, 2025
The popular, free Direct File program introduced by the Internal Revenue Service in 2024 is being expanded this tax season despite the objections of dozens of congressional Republicans—but an analysis released Thursday reveals why GOP lawmakers are so intent on ensuring the Trump administration ultimately eliminates the program and forces taxpayers to rely on services from private tax filing corporations.
The 29 Republicans who sent a letter to President Donald Trump in December asking him to end Direct File with a "day-one executive order" have received more than $1.8 million in campaign contributions over the course of their careers from "Big Tax Prep and their proxies," said the consumer advocacy watchdog Public Citizen.
The companies that have donated to the lawmakers include Intuit and H&R Block, as well as the American Coalition for Taxpayer Rights—a group of lobbying firms that work on behalf of the tax filing industry.
With Direct File offered to taxpayers in 25 new states starting this week—after being available in 12 states last year—Public Citizen revealed that in 2024, the industry and its lobbying firms contributed more than $700,000 to the Republican lawmakers who wrote the letter.
Lobbyists and lobbying firms contributed most of the money detailed in the report—more than $1.5 million of the total. The remaining money was donated by political action committees (PACs) for H&R Block, Intuit, and the lobbying firms.
"The new administration must stand up to greedy Big Tax Prep giants and their army of hired lobbyists by continuing to build on the popular Direct File program beyond this tax season."
U.S. Rep. Adrian Smith (R-Neb.), who spearheaded the letter claiming Direct File poses a "threat to taxpayers' freedom from government overreach," received the second-most campaign donations of any of the signatories.
The tax filing industry and lobbying firms have given Smith $224,350 over the course of his career, second only to Rep. Darin LaHood (R-Ill.), who received $242,256.
Both also received more money from tax filing interests in 2024 than any other lawmaker.
Public Citizen noted that 12 of the signatories represent five of the states with Direct File pilot programs in place last year.
"According to data from the Economic Security Project, a combined 15.2 million taxpayers in these states were eligible for the program in the first year," reads the report. "Had they all used the program, these taxpayers would have saved more than $2.4 billion in filing fees."
With the 12 lawmakers having taken more than $640,000 from "the Direct File opposition and their proxies throughout their career... these Republicans are putting the interests of their donors ahead of their constituents," said Public Citizen.
"Direct File is a commonsense government program that was overwhelmingly well-liked by the filers who used it during its 2024 pilot," said Susan Harley, managing director for Public Citizen's Congress Watch division. "Eligible filers in 25 states now have an option to directly e-file their taxes for free to the IRS. The new administration must stand up to greedy Big Tax Prep giants and their army of hired lobbyists by continuing to build on the popular Direct File program beyond this tax season."
According to the report, donations from the tax filing industry have particularly flowed toward Republicans who sit on the House Ways and Means Committee, which has jurisdiction over the IRS and taxation.
"Together, these signers have received more than $1.3 million over their careers including more than $500,000 during the 2024 cycle," said Public Citizen. "These members account for nearly two-thirds of the Republican majority on the committee."
People in 25 states will be able to save hundreds of dollars by filing their taxes without paying a private company or giving a cut of their refund to Intuit or H&R Block, noted Public Citizen.
"These savings can provide some financial relief at a time when budgets are stretched thin," said the group. "Direct File should be expanded, kept permanent, and be held up as a model for government programs enacted to help average Americans—not corporate America."
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Bernie Sanders Says Defeating Oligarchy Now Most Urgent Issue
"My friends, you don’t have to be a PhD in political science to understand that this is not democracy. This is not one person, one vote. This is not all of us coming together to decide our future. This is oligarchy."
Dec 14, 2024
Sen. Bernie Sanders of Vermont is escalating his fight against the U.S. oligarchy with a new campaign directed at the nation's wealthiest individuals—including Elon Musk, Jeff Bezos, and Mark Zuckerberg—who he says are key culprits in a global race to the bottom that is stripping people worldwide of political agency while impoverishing billions so that the rich can amass increasingly obscene levels of wealth.
Announcing a new series that will detail how "billionaire oligarchs" in the U.S. "manipulate the global economy, purchase our elections, avoid paying taxes, and increasingly control our government," Sanders said in a Friday night video address that it makes him laugh when mainstream pundits talk openly about the nefarious oligarchic structures in other places, but refuse to acknowledge the issue in domestic terms.
"Strangely enough, the term 'oligarchy' is very rarely used to describe what's happening in the United States or in fact, what's happening around the world," said Sanders. "But guess what? Oligarchy is a global phenomenon, and it is headquartered right here in the United States."
Bernie Sanders talks about the oligarchy
While rarely discussed in the corporate press or by most elected officials, argues Sanders, the reality is that a "small number of incredibly wealthy billionaires own and control much of the global economy. Period. End of discussion. And increasingly, they own and control our government through a corrupt campaign finance system."
Since the victory of President-elect Donald Trump in November, Sanders has been increasingly outspoken about his frustrations over the failure of the Democratic Party to adequately confront the contradictions presented by a party that purports to represent the interests of the working class yet remains so beholden to corporate interests and the wealthy that lavish it with campaign contributions.
In a missive to supporters last month, Sanders bemoaned how "just 150 billionaire families spent nearly $2 billion to get their candidates elected" in this year's elections, which included giving to both major political parties. Such a reality, he said, must be challenged.
As part of his new effort announced Friday, Sanders' office said the two-time Democratic presidential candidate would be hosting a series of discussions with the leading experts on various topics related to the form and function of U.S. oligarchy and expose the incoming Trump administration's "ties to the billionaire class," including their efforts to further erode democracy, gut regulations, enrich themselves, and undermine the common good.
"In my view," said Sanders, "this issue of oligarchy is the most important issue facing our country and world because it touches on everything else." He said the climate crisis, healthcare, worker protections, and the fight against poverty are all adversely affected by the power of the wealthy elites who control the economy and the political sphere.
"My friends, you don’t have to be a PhD in political science to understand that this is not democracy," he said. "This is not one person, one vote. This is not all of us coming together to decide our future. This is oligarchy."
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On Taxes, a Sharp Campaign Contrast Between Harris and Trump
The Harris campaign seems eager to tax the rich and corporations while Trump vows to preserve and expand tax cuts for the wealthiest and says little about how to pay for that.
Sep 09, 2024
As U.S. Vice President Kamala Harris and former President Donald Trump get ready to debate for the first time this week, what can we expect from their campaigns in terms of taxes?
Harris endorses multiple proposals to generate revenue from the richest people and the biggest corporations and deliver a middle-class tax cut—with the former paying for the latter. Trump would cut some middle-class taxes but promotes a new tariff tax on imports that would hike the price of nearly everything Americans purchase and, doubling down on past practice, he’d slash taxes for millionaires and corporations. He hasn’t identified a single business or billionaire that should pay more.
When Trump and congressional Republicans passed the 2017 tax law, they made massive tax cuts for corporations permanent but set the individual cuts, which were heavily skewed to the extremely wealthy, to expire at the end of 2025. This means taxes are on next year’s policy agenda in a way that rarely comes along. The approaches articulated by the campaigns would pull the nation in profoundly different directions.
Trump Proposals
Trump says he would again slash corporate tax rates, keep all corporate cuts from the 2017 tax law, extend 2017’s expiring cuts for everyone including the uber-wealthy, and impose large tariffs that fall on everyone who spends money on anything.
Trump’s tariff tax proposals—60% tariff taxes on imports from China and 20% on all other imports—would cost the typical American household over $2,600 a year according to economist Kim Clausing. Earlier analysis of a previously-discussed 10 percent worldwide tariff tax shows an increase in inflation resulting from the plan, which would also generate $2.8 trillion in revenue over the next decade, raised from consumers.
Much of that revenue would go to corporations. When lawmakers cut the corporate rate from 35% to 21% in 2017, corporate tax payments plummeted, and huge, profitable corporations continued to pay far below the statutory rate. We’d see this on steroids if Trump slashed the corporate rate to 15%. Such cuts increase income and racial inequality and send a massive windfall—40 cents of every dollar—to foreign investors.
The law that the Trump administration passed in 2017 delivered enormous tax cuts to those in the top 1%, a narrow sliver of well-off people with income over $800,000 a year. These individual cuts for the rich expire in 2025, but the Trump campaign wants to make them permanent, sending almost two-thirds of that money to the richest fifth of Americans. This would cost more than $280 billion in 2026 alone, slashing revenue that could otherwise provide tax cuts for middle-income Americans, reduce the national debt, or fund childcare, healthcare, or infrastructure.
Republican Vice Presidential candidate J.D. Vance has mentioned more than doubling the Child Tax Credit but has provided few details and Trump has not signed on.
Harris Proposals
Harris backs most of the revenue raisers and middle class tax cuts laid out in President Joe Biden’s 2025 budget. The revenue components raise nearly $5 trillion over a decade, entirely from wealthy people and corporations, reducing inequality, both economic and racial, and generating funds for things the American people need.
Harris plans to boost revenue from corporations by raising the corporate rate, increasing the corporate minimum tax, increasing the stock buyback tax, and reining in corporate offshore tax avoidance. She’d better tax the wealthy by allowing expiration of the parts of the 2017 tax law that exclusively help those making more than $400,000. For those who make over $1 million a year, Harris would eliminate tax breaks on capital gains and dividends. For incomes exceeding $100 million a year, she’d tax currently exempt investment income that many billionaire CEOs receive. These provisions would do much to reform a tax code that most Americans say raises too little from corporations and the wealthy.
Harris would fully extend temporary tax cuts from the 2017 tax law for people earning less than $400,000 and try a new down-payment assistance program for some first-time homebuyers. She’d also expand the Child Tax Credit to $6,000 for newborns, $3,600 for children up to age five, and $3,000 for older children. This is one of the best and most well-proven ways to cut poverty, reduce inequality, and help middle-class families.
Tip Gimmick
Both campaigns support eliminating taxes on tips. This could encourage wealthy professionals to reclassify fees as tips and there are better ways to help workers—raising the minimum wage, eliminating the paltry $2.13 sub-minimum wage, and increasing the Earned Income Tax Credit. Harris would limit her exemption to workers earning less than $75,000—an improvement Trump leaves out—but this doesn’t redeem a fundamentally flawed proposal.
In Sum
Campaign proposals reveal two very different paths. The Harris campaign seems eager to tax the rich and corporations, cut taxes for middle-income taxpayers, reduce poverty, reduce inequality, and raise revenue for public spending. Trump vows to preserve and expand tax cuts for the wealthiest people and corporations and says little about how to pay for that beyond a tariff that raises much less than Harris’ plans and falls on consumers. His proposals would inevitably force cuts to important public programs or run up the national debt.
The entire tax code is up for debate in 2025. Our system asks far too little of wealthy people and corporations. Americans should listen closely to both campaigns and push for policies that raise more from those most able to pay, give tax cuts to those who most need them, and generate resources to invest in public priorities.
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