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The SNAFU Economy: People Who Profit When Things Go Wrong

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It seems self-evident to say that a SNAFU -- "Situation Normal, All Fouled Up," as the polite version has it -- is a problem.

Or is it?

If SNAFUs are nothing but bad, why do we encounter such resistance to fixing them? Why is fouled-up so normal?

Sometimes, of course, it's just inertia or ignorance. But some people, on being confronted with a hot mess, work hard not to clean it up.

Are they just jerks?

Maybe, but it may also be because they're enterprising. For some folks a SNAFU is not a problem, it's a business opportunity. In fact, a whole economy has grown up around profiting from things that don't work right.

The SNAFU economy.

Once you start looking for it, you can find examples of the the SNAFU economy everywhere.

One of them is the blocking of a neat idea for cleaning up one of the biggest SNAFUs we have: filing taxes.

The idea is return-free tax filing. It's based on the fact that, despite the complexity of the tax code overall, the average working person's return is straightforward -- so much so that the IRS could fill it in automatically and offer the taxpayer the choice of accepting the default values or not.

ProPublica researcher Liz Day has been studying return-free filing, which has succeeded in other countries and in a test program in California. She described it this way last March to NPR's Morning Edition:

President Ronald Reagan supported it and talked favorably about it in 1985. And President Obama has spoken also favorably about it on the campaign trail in 2007. The idea is that you would get a pre-filled return from the government, using the information they already have, to send a pre-filled return to you that you could either accept or throw away. It's completely voluntary.

It's like auto-paying your bills. It would save time, money and stress, and you'd always be able to monitor and control things yourself. What's not to like?

Well, for one thing, it would interfere with a couple of very profitable industries.

One of them is the business of tax preparation software, like that made by Intuit. According to a recent report by Day, co-produced by ProPublica and NPR, Intuit has been spending a lot of money to stop return-free filing:

Intuit has spent about $11.5 million on federal lobbying in the past five years -- more than Apple or Amazon. Although the lobbying spans a range of issues, Intuit's disclosures pointedly note that the company "opposes IRS government tax preparation."

Intuit claims it's trying to save taxpayers money. The company is also a member of a tech industry campaign called STOP IRS TAKEOVER, which argues that return-free filing is a "massive expansion of the U.S. government through a big government program."

I guess so, if by "massive government expansion" you mean using computers to give people more choice while saving them time and money. Sounds kind of like the original promise of Intuit.

Tax preparation software isn't the only business that would suffer if return-free filing were adopted. Human tax preparers would also take a hit. Some of them, of course, provide a valuable service to those whose returns really do need professional attention. But some of them exploit low-income people, by over-charging -- for a service volunteers provide for free -- or by taking a hefty share of a refund that was guaranteed to come even without their "help."

Fighting to preserve an inefficient, painful tax filing system is just one example of the SNAFU economy. There are more, many more.

Can you think of some? I'll bet you can.