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Episode 760: Tax Hero

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Joseph Bankman, the Stanford professor who lobbied for ReadyReturn.
/ Courtesy of Joe Bankman
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Courtesy of Joe Bankman
Joseph Bankman, the Stanford professor who lobbied for ReadyReturn.

Doing your taxes doesn't have to be a pain. In many countries around the world, filing taxes is so easy and painless, "tax day" isn't even a thing.

Back in 2005, a little group of California tax experts were talking shop and they figured, we could do that here in the U.S. A lot of people in California get all of their income from their paychecks, and taxes are already withheld from those paychecks. In those cases, California could just fill out the W-2 for the taxpayers, who could check for errors and just send them back in. Easy as 1-2-3. (That was the slogan the state came up with). They named it: ReadyReturn.

A tax law professor, Joseph Bankman, thought this was such a no-brainer, he offered to help test out the idea with a small group of California taxpayers. He ran a little trial and ReadyReturn was such a huge success. Taxpayers raved about how great it was. Other states started paying attention to see if they could use the plan, too. California's governor at the time, Arnold Schwarzenegger, supported the plan.

Bankman thought getting ReadyReturn through the California legislature would be smooth sailing. He thought wrong.

Today on the show, what happened when one mild-mannered professor took on the tax system.

(Today's episode was reported with Priceonomics. Read a version of this story on their website.)

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Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money. She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.
Alex Mayyasi