A victory for taxpayers

The Washington Examiner brings us this news:

After H&R Block released its latest sales forecast, its stock price plunged by 18 percent on Wednesday.

Normally, such a decline in stock price based on projected earnings would be viewed as a bad sign for the economy. But in this case, the tax preparers’ loss is definitely America’s gain.

Not to say that H&R Block isn’t a fine business or that we don’t want it to succeed by serving its customers well. We hope it keeps finding new ways to be valuable to more people.

But if you could do without a tax preparer next year and instead spend the money on, say, a vacation, or season tickets to see your local minor league baseball team, or even invest it in your small business, you would surely do it in a heartbeat.

The only reason paid tax preparation is necessary at all is that the tax code is too complicated for individual earners to file for themselves.

This is a problem that President Trump and Republicans set out to fix late last year. And the plunge in H&R Block’s forecasts demonstrates that the tax experts think they at least partly succeeded.

The Tax Cuts and Jobs Act wasn’t a tax reform in the purest sense. It didn’t really simplify the code. But it did simplify filing for a huge portion of taxpayers.

One of the most important things the tax reform bill does is to double the standard deduction beginning next spring. This means that unless you have more than $24,000 in write-offs (or $12,000 if you’re single), you don’t need to bother with the complicated and arduous process of itemizing deductions.

This is why H&R Block projects that fewer Americans will need their services. To be specific, an estimated 29 million additional households will be able to file their taxes next year the easy way and come out ahead.

…The most obvious and immediate effect of tax reform will be that people and businesses stop making financial decisions based on considerations that would be irrelevant but for tax considerations. For corporations, this means that instead of investing their money in accountants who can milk the tax code for extra dollars and cents, businesses will do what they’re supposed to be doing: invest in providing better goods and services to their customers.

For individuals, it means that the dead-weight cost to them of tax season has suddenly been dramatically reduced.

Nothing against the good people of H&R Block, but this is a victory for taxpayers. They are being liberated from an expensive hassle. It’s also a victory for the economy as a whole, whose tax code-induced inefficiencies are being ironed out at last.

Read more here.