Tax Time as an Experience Design Opportunity
While many Americans scramble to get their income tax returns ready to send into Uncle Sam tomorrow, I'm thinking about why this has to be such an unpleasant experience.
I filed my taxes back at the beginning of February the day I got my W2. I have one job. I don't itemize. I don't own a home. And I'm not alone.
Tens of millions of Americans files their taxes without adding any information that the government doesn't already have from their employers.
Yale Law Professor Ian Ayres wants you to think about it like your relationship with the credit card company. Visa or Mastercard don't expect you to keep your receipts and send in a check hoping that you get it right. Instead, Visa sends you a bill telling what you owe or if you have a credit. Why can't income tax be this simple?
It can. In California they piloted a program called Ready Return in 2004 and '05. The program sent out pre-filled tax forms to ten thousand taxpayers who merely needed to sign their name or make small adjustments.
Sadly, they didn't run the program this year because of heavy lobbying by Intuit but feedback from participants was so good that it will make an expanded comeback in 2007.
Last Saturday, Democratic presidential candidate John Edwards proposed a similar program at the federal level. His "Form 1" would be sent to Americans like me who just fill out the basics and send it back. Instead I would get form that already has all the information filled out correctly. This is particularly important for the one out of four eligible families who miss out on the Earned Income Tax Credit.
Moreover, it would save average Americans the cost of seeing a tax preparer and would open up opportunities for simple online filing directly with the IRS.
And this is where I get really interested. This kind of solution is the perfect application of design thinking to a seemingly intractable problem.
I am a professional designer who has a political ideology that hold that the government should provide helpful services to people, it should be in the business of making our lives easier.
Taxation is an example of an interaction between us and the state that almost ends badly. I think this has a great deal to do with the low opinion people hold of our government.
In the United Kingdom, the UK Design Council has worked with the National Health Service to solve exactly this problem: how do you take unwieldy bureaucracies and make them pleasant to deal with? Better yet, how do you make them genuinely helpful?
You do it by thinking like a designer. It might seem pie in the sky but why can't going to the DMV be as streamlined and simple as going to Starbucks?
But let's stick to the issue at hand: taxes. What California and John Edwards have struck on is what we designers call low-hanging fruit.
- The information required to send out a RedyReturn or a Form1 already exists at the IRS. Even better, the IRS has enough information to send a pre-filled state form as well.
- The IRS already prints and mails out forms so you merely need to tweak that workflow to adapt to the new form.
- This is an opportunity to bring online filing back in house at the IRS. The outsourced FreeFile program doesn't make anything easier than a web-based Form1 would. Moreover, FreeFile opens up citizens to being duped by scammers claiming to participate in the federal program.
Implementing this project at the IRS would be a quick win both with huge returns for the people who would benefit directly and a more subtle benefit in an improved reputation for the IRS.
As you take your form to the post office tomorrow think about why the system is set up the way it is and how it could be made better without too much work. As designers, this is what we can give back to society.
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