It is tax season again here in Canada which always makes me angry. A little bit because I have to pay my taxes (who likes that?) but mostly because of tax software. Doing taxes by hand isnâ€™t all that bad but we live in the 21st century and doing taxes like that is old school; we use computers these days.
There are a lot of options out there for software to help with doing taxes. QuickTax, Cantax and, I kid you not, Taxtron are all good options. But there is one piece of tax software which I never see and I should: whatever tax software the Canada Revenue Agency use internally. Let me walk through this:
Every year almost everybody in the country fills in some form of tax filing and sends it to the government. Letâ€™s use a Fermi estimationÂ to figure out how much paper work the government has to do. There are about 35 million people in Canada. Perhaps 25% of them arenâ€™t filing taxes because theyâ€™re too young. A few more people donâ€™t file taxes for a variety of other reasons so letâ€™s say that 25 million people file taxes. Each person is likely to have at least five forms plus the actual tax form themselves, letâ€™s say 20 pages all told. So that means that the government can expect to get something on the order of 500 million pieces of paper.
Thatâ€™s a lot of paper! Even with netfile, the electronic filing system, it is a mountain of data to process. There is no way that this amount of paperwork is being done by hand. There must be some software which is processing this data. Whatâ€™s more every year I receive a notice that theyâ€™ve assessed my taxes and found them to be correct.
This means that not only is their software handling filing the taxes it is also performing a cross checking function. My argument is that Â this software should be made public, whatâ€™s more this software should be open sourced.
By making the software available to everybody we tax payers can perform our own cross check to ensure that our filings are correct. If we wanted we could use the software to actually fill out our taxes. This has the potential to save us millions of dollars spent on buying tax software. For those for whom buying tax software is a burden this could be a great boon. I donâ€™t worry very much that giving away the governmentâ€™s software would necessarily put the traditional tax software companies out of business, either. Their selling feature would be ease of use. Goodness knows that the software the government uses internally isnâ€™t likely to be very user friendly. Whatâ€™s worse is that the software may not be very good.
This software handles billions of dollars every year. Billions of dollars which fund our schools, roads, military and everything else in between. Allowing the population to test and audit this software is quintessentially democratic. For many of us paying taxes is the only time we interact directly with the government all year. If we cannot be sure that the government is getting this most basic interaction right how can we trust them to deal with more pressing issues?
Opening this software up and providing it for general consumption should be a priority. Our taxes paid for the software to be developed in the first place and any government which values transparency should be delighted to open it up.
Free our tax software.