Original subtitles

(MAN SHOUTING ON TV)

Ah, you worry too much about me, sis.

No, I'm sure I'll find work

as soon as the economy gets back to normal.

No, no, I appreciate the invitation,

but I'm gonna stay right here in town. Yeah.

Factory's gonna be open, you'll see.

Yeah.

Yeah, well, look, I gotta get back to my taxes,

much as I hate 'em.

Yeah. All right, love you too.

Yeah, bye.

?

W-w-welcome to HulkoTax.

A-a-are you salaried or self-employed?

Well, I was working at the toaster factory 'til March,

but since the layoffs, I've been driving for Uber, so...

Enter all W-2s and 1099s.

Oh, okay. Well, which do I, uh...

Now enter all double-2-Us and 9-10dy-10s.

Well, does, does the bank send you that or...?

Do you have any commercial fishing income?

(SCOFFS) I wish.

You have done every part of this incorrectly.

Now entering m-m-manual mode.

Hope you like math-math-math-math...

- Oh, come on! - ...math...

Why do taxes have to be so hard?

Actually, taxes don't have to be hard at all.

Did I kill a man?

Nope. You summoned a TV host.

Hi, I'm Adam Conover

and this is "Adam Ruins Everything."

Oh! Ugh.

(SCREAMING)

Corrected & Synced by Bakugan

(GRUNTS)

Hey, you scared the fudge out of me.

Oh, that's nothin'.

One time I made my friend Emily give birth.

I don't know what that means, but I hate it.

Almost as much as I hate doing my taxes.

Now, what's that you were saying about how taxes could be easy?

Well, think about it.

Taxes are a bill the government charges you,

so why do you have to do all the math?

Imagine if we did that with any other bill.

(DOORBELL RINGS)

How much do I owe you?

You tell me.

Divide number of toppings by cheese consumption?

$12?

Wrong! Now you're goin' to jail!

Bogus.

Instead of making you fill out a complicated return,

why doesn't the government just tell you how much you owe?

Well, 'cause they need to know my income,

my interest on my savings...

all the numbers that are on those forms.

News flash! They already do.

Employers, banks, and other financial institutions

already send detailed records to the IRS.

Okay, we just got Hank's W2s and 1099s.

I could calculate his tax bill myself...

Nah, I'll just wait quietly

while he sends me the exact same information.

D'oh!

The government could quite literally

do your taxes for you.

It's an idea called return-free filing.

Instead of the government checking your work,

you'd check theirs,

and it would make taxes more like this.

Ooh, honey, our taxes came.

Oh...

Just need to deduct that work trip to Toledo and we're done!

Hey, think we have time for some wild, bedpost-rattling sex?

Why not? Our April's wide open.

Return-free filing is already used

by countries around the world

and could allow millions of Americans like you

to do your taxes for free in just five minutes.

Yeah, well, those bozos in Washington

would never go for an idea that makes that much sense.

Actually, return-free filing bills

are introduced in Congress all the time,

and both Barack Obama

and Ronald Reagan pushed for it.

Yes, we can.

Tear down this wall...

of paperwork.

(CHEERING AND APPLAUSE)

Wow... that must be the only thing those guys would agree on.

Okay. I'm sold.

- Give me return-free filing. - Sorry.

The makers of tax software like TurboTax and H&R Block

spend a butt-load of money to make sure it never happens.

T-t-tax software industry.

You p-p-pay us to make your taxes easier,

so we pay lobbyists to make sure they stay c-c-complicated.

Citizens, we feel your pain!

Filing your taxes is just too... darn...

(CASH REGISTER RINGS)

fun! Everything's great.

We're changing nothing.

(INHALING DEEPLY)

Ooh...

These calculating companies have lobbied

to kill multiple return-free filing bills

over the past decade.

And they're using my money to do it?

Well, that's shameless.

And it gets worse.

This is Jessica Huseman,

a reporter at ProPublica who's covered this story.

The tax prep industry actually created a front group

called the Free File Alliance

that lets you file your taxes for free.

It's supposed to be available

to two-thirds of the taxpaying public,

but almost no one uses it.

That's because the system is confusing,

the IRS doesn't market it,

the tax companies have no incentive

to push it themselves,

and a sneaky opt-in option

allows them to push their paid products.

Don't use the f-f-free option.

It's too hard.

Pay me instead.

But I want return-free filing, like you were talking about.

(HUSEMAN) Well, here's the worst part.

The tax industry negotiated an exclusive deal

that prevents the federal government

from offering return-free filing

or any free system of tax filing

so long as the Free File Alliance exists.

So you're saying the government could be doing my taxes for me,

for free, but TurboTax and H&R Block

are working like crazy to stop that from happening?

Exactly.

Instead, you're stuck doing your taxes yourself

with this guy.

Get ready to spend all your Aprils with m-m-me.

Gah!

See, this is the problem with the economy.

The government and the CEOs get rich

and the rest of us get screwed by something

that takes three degrees to understand.

Yeah, you pretty much nailed it.

See, that's why I like this guy.

Bad news comin' in from Wall Street!

The Dow is down 500 points,

which means we're headed into the icy depths of poverty!

Joe "Cray-Cray" Krasowitz.

He makes the economy so simple.

Yeah, he does, and that's what makes him so wrong.

I'll show you.

Hey, don't come into a man's house

and teleport him against his will.

(DOG WHINES)

(BELL CLANGING)

Welcome back to "Demented Dollars,"

America's loudest and therefore best

financial advice show!

The Dow Jones Industrial Average

is down in the dumps, just like me after every date!

(FEMALE VOICE SFX) I think we should see other people.

And that means the economy is ruined,

so it's time to panic!

(CROWD SCREAMING SFX)

Actually, no, it isn't.

The American economy

is an incredibly complicated system

that even experts spend a lifetime

trying to understand, so when the news media

dumbs it all down into how a single number

changed that day, it tells you

a lot less than you think.

Okay. Who the heck are you?

Hi. Name's Hank, big, famous Krasowitz.

Can I call you Cray-Cray?

And can you tell him that he's full of it?

The Dow tells us how the whole stock market is doing.

Nope. It tells you how a tiny part

of the stock market is doing,

and its methodology is deeply flawed.

The US stock market is an enormous system

with over 3,000 publicly traded companies

in the US alone,

but the Dow includes just 30 of them

and it's basically designed

to go up over time.

If a stock does too poorly,

it gets dropped and replaced.

What? You mean the whole thing's rigged?

Yep. And it's not adjusted for inflation.

(MALE VOICE SFX) Yeah, yeah, yeah, yeah, right.

Well, if that were true, then how come

all of us in the media report on it constantly?

Maybe because that's what you've been doing

for a century.

See, the Dow became popular

during the economic panics

and depressions of the early 20th century,

when people were desperate for any sign

of how the economy was doing.

Are we ruined or ain't we?

I just need some kind of sign.

There's the Dow and it's just gone bust.

Thanks. Guess it's curtains for me.

Now, back when our economy was simpler,

the performance of 30 big companies

was actually pretty useful information,

but as our economy grew and became more complex,

the Dow started to tell us less and less,

and today, financial insiders

don't even pay attention to it.

Dude, don't jump. The Dow's, like, sick.

It's, like, up 1,000 points.

Who cares about that meaningless number?

My wife cheated on me with a pottery instructor.

Hey, please don't make light of suicide.

It's insensitive. Sorry.

Today, despite the fact that the Dow tells us

less than ever, reporters like Cray-Cray

keep using it out of sheer habit.

Yeah, well, I have another habit!

Doing my show! You two done?

'Cause it's time for the Jobs Report!

?

I know I was just screaming that the economy is through,

but it's actually great

because the unemployment rate is down to 4.5%.

(WHISTLE BLOWING SFX)

So, 96% of folks are making a living?

That's great!

(SFX) Ac-ac-actually...

The number you hear reported as the unemployment rate is...

(SFX) The female hymen.

Wrong button. Old episode.

The unemployment rate is a flawed number

that excludes tons of people

who you and I would consider unemployed.

Well, I find that hard to believe.

You're either working or you're not.

Well, let's play America's least-favorite game show,

- "Who Counts As Unemployed?" - (SFX) (CHEERS AND APPLAUSE)

Up first, we have Trista.

I'm 24, I got laid off a few months ago,

and I've been so depressed that I haven't looked for work.

- She's unemployed. - (BUZZER)

Not according to the government.

Hi, I'm Charles, I'm 52,

and this week, I mowed my neighbor's lawn for $25.

That's all the work I've had in months.

Well, he must count as unemployed.

- (BUZZER) - No, again.

And finally, we have Hank.

Me? Well, I drive Uber some nights

since the factory closed,

but I'm barely making by.

- I'm unemployed. - (BUZZER)

Wrong again. You don't count either.

Thanks for playing,

and remember to spell and grammar check your resume.

Wait. Why don't I count as unemployed?

Well, the number we always hear reported

as the unemployment rate only counts people

who are actively looking for work

and excludes anyone who's earned

more than $20 in the past week.

Now, that doesn't make it totally useless,

but if you hear that number and think

that's how many people are out of work,

you're wrong. Many more are struggling.

Yeah. Like me.

That's enough for bloated Anderson Cooper here.

Time to whip out the big guns!

- Let's talk G... D... P! - (AIR HORN BLARING)

Yes! GDP. The bigger it gets,

the better economy it is, right, Cray-Cray?

Absolutely! Let's take a look

- at the latest figu... - Sorry!

Even though politicians and the media

act like GDP or Gross Domestic Product

is a measure of our overall economic well-being, it ain't.

GDP really only tells us how much we make

and how much we consume.

In other words, it goes up when spending does.

I got a raise. I'm gonna buy a catamaran.

- That's good for me, Mr. GDP. - (CASH REGISTER RINGS)

But the problem is,

spending isn't always a good thing.

GDP could also go up because something bad happened

and we had to spend money to fix it.

My house was destroyed in a hurricane

so I need to buy a tent to sleep in.

Here's all my savings.

All spending is good spending for Mr. GDP.

(CASH REGISTER RINGS)

Yeah, but she lost her house and her savings.

That can't be good for the economy.

No, but she spent money, so GDP goes up.

I thought when GDP rose, that meant things

were getting better for everybody.

Sadly, a strong GDP doesn't guarantee

the average person feels any benefit.

In the last two decades, GDP has steadily risen,

but the average American's earnings haven't.

It's actually possible to have the highest GDP

and the most poverty at the same time.

- ? Money, money ? - Terrible.

? It's all about the money ?

Useless number.

Well, it has its uses.

You just can't expect one number to tell you the truth

about our gargantuan global economy.

Despite what the media says,

it's just not that simple.

I can't believe you, Cray.

I listened to you, trusted you,

sat through all those erectile dysfunction

commercials for you!

(LAUGHING) Just wait one second.

Well, I don't need simple.

I learned how to use a backward extrusion press.

I can learn a little economics.

Maybe it'll even help me figure out

when my old factory job is coming back.

Uh, about that...

Hey, Mr. Magic Man,

why don't you let me show you

why they call me Cray-Cray?

You know what?

I'll tell you in a second.

For now, I'm gonna run. (LAUGHING)

You ruined my show!

My fellow Americans, For now, I'm gonna run. I know you're hurting.

You're in your den right now, thinking,

where did my high-paying manufacturing job

that doesn't require a college degree go?

Yeah. That's, like, eerily accurate.

Well, I'm here to tell you we only lost those jobs

because of bozo politicians.

Once you elect me, I will bring the Golden Age

of American Manufacturing back again.

(MAN) Paid for by Americans Against Bozos.

Now, that's what I'm talking about. Right, Max?

Sorry, Hank, but as tempting as it is

to blame bozos, they're not why America lost those jobs.

It was the result of massive historical forces.

Well, now, hold on a second.

My dad came to this town looking for opportunity,

and he and everybody here

worked their entire lives at the toaster factory.

They're in a middle-class income,

they bought houses,

and they retired on a pension,

and I'm gonna do the same

just as soon as this country gets back to normal.

Actually, that wasn't normal at all.

It was a historical anomaly.

Here, I'll show you.

(MAN) The Story of American Manufacturing.

Between 1945 and 1973, American manufacturing

gave us the greatest period of economic growth

in human history.

Economic historians call it the Golden Age,

but it wouldn't have been possible

without the help of World War II.

During the war, every other industrialized nation involved

was devastated.

That meant that when the war ended,

the US had a huge temporary advantage.

From the end of the war through the 1960s,

America made 50% of the world's stuff

and it made great things for Americans.

By the '70s, we more than doubled

the standard of living for the average American family.

Next up, a third baby.

Not unless it's coming out of you.

Ah! Now, that's the life!

The problem was,

this monopoly couldn't last forever.

As time marched on, other nations rebuilt,

their economies recovered,

and they started bolstering their own manufacturing.

(SPEAKING NATIVE LANGUAGE)

The real reason America's Golden Age ended

is because of history.

But you're ignoring the fact

that American companies are choosing

to make stuff overseas.

Like, why is the iPhone made in China?

We could make all that stuff

they build over there over here.

Oh, actually, we couldn't, because of...

(MAN) Unique Chinese advantages that America cannot recreate.

Well, it's not quite as simple as "China beat America,"

but China does excel at certain kinds of manufacturing.

This is Dr. Penelope Prime, economist,

professor at the Institute of International Business,

and director of the China Research Center.

(DR. PRIME) First of all, China has a vast,

relatively inexpensive workforce.

They have about 80 million manufacturing workers alone.

That's double the population of California

and the Chinese factories that assemble the iPhone

are massive.

Just one can employ up to 350,000 people

and produce 1/2 million iPhones a day.

And historically, China's workers

have been willing to accept relatively low wages.

Before 1978, China had zero trade with the US

and was closed to most foreign investment.

When they finally opened their doors

after years of economic isolation,

they were an ideal location for low-cost manufacturing.

Well, we have workers too.

But our government today does not invest heavily

in infrastructure and education like China does.

The Chinese government even helps recruit

and train workers for jobs like this.

Apple estimated it would take up to nine months

to find enough engineers

to oversee a factory in the US,

but in China, they found them in just 15 days.

Come on, people! I'm offering free Frisbees!

Well, what if we did train enough people?

Could we build the iPhone then?

No. China sits at the center

of a global supply chain, which means

they're physically closer to most of the parts

needed to make the iPhone.

That means, even if we did build

a giant iPhone assembly plant in the US

and somehow staffed it with cheap, well-trained labor,

it would still be faster and cheaper

to build iPhones in China

than ship all the parts and assemble them here.

The fact is, when it comes to certain types of manufacturing,

China has unique advantages that we just don't.

So, what? We're just screwed?

No matter what we do, we're falling behind?

Actually, it's a misconception

that the US is falling behind in manufacturing.

There are a lot fewer people working in those jobs,

but we produce more than ever,

thanks in large part to...

(MAN) Automation!

Oh, no! Robots!

These are monsters! They'll kill us all!

Hyah!

Well, that's an exaggeration,

but it's true that automation

has transformed our economy.

Heavy industry jobs like car manufacturing

were lost almost entirely to advances in technology.

For example, General Motors still makes tons of cars

in America, but today, they only need

a quarter of the workers it took to do

the same amount of work in the '50s,

and it's not just manufacturing jobs.

Bank tellers have been replaced by ATMs and apps,

video store employees have been replaced by streaming sites,

and even lawyers and accountants have been replaced by software.

I'm ba-ba-ba-back.

(GROANING) Get out of here!

That is why these jobs disappeared...

the last half-century of technological progress.

And the story is much bigger

than just the US and China.

The value of manufacturing itself

is actually falling across the globe.

Today, goods are worth less than services.

The part of the iPhone that's a manufactured good

is actually worth very little,

but the services that go into it...

the software, the design, the marketing

are much more valuable

and we do all those things in the US.

Even though there are fewer manufacturing jobs

than there used to be,

new services jobs are being created here all the time,

especially in fields like software development,

healthcare services, and education services.

So instead of making impossible promises

to reverse history and bring the old jobs back,

our politicians should have been taking action

to help us adapt to these changes,

like by lowering the cost of higher education

so more people would have access to these new jobs.

But I'm looking for a job in manufacturing.

That's all I know.

I know it's hard, but the truth is,

economies change. That's just what they do.

Even if we wanted to, we can't turn back the clock

to the economy we had half a century ago,

and anyone who tells you otherwise is wrong.

Now, there are things that you can do to...

Aw, forget it.

I guess there's no place in a shiny new economy

for a guy like me.

Hank, no!

This goes in the recycling! A guy like me.

Sorry, Max, can't find work.

Gonna lose the house.

I guess I'm gonna have to shack up with you.

Okay, that's a tad dramatic.

What am I supposed to do?

The economy is so complicated.

We've got no control over it.

It changes right under your feet

and it puts good people out of work.

It just makes me feel so powerless.

Well, you're right.

The economy is insanely complex

and it's always changing,

but that doesn't mean there's nothing you can do.

What do you mean?

Well, you could take steps to adapt along with it.

Yeah. My sister's been telling me

there's more jobs down by where she is

and she knows a good night school

if I want to try something new.

I guess I could think about doing that.

But, come on, not everybody can afford to move.

That's true. Adapting to all these changes

is a huge, daunting, expensive investment for workers,

and our government could help people more with that investment

with things like relocation vouchers

and especially higher education and skills training,

like how in Georgia, where I live,

there's state-subsidized skills training

that's coordinated with new factory openings

to encourage companies to set up there.

We can't control whether or not the economy changes,

but we have a responsibility to help ourselves

and each other adjust to those changes.

Uh-huh. Well, thanks, Dr. Prime.

No problem.

Uh-oh. I forgot I was two-dimensional.

Hank, you may not win the golden toaster,

but you can go after new opportunities

just like your dad did.

Thanks, Adam.

You know, I'm gonna give my sister a call.

It might be a big change, but I think,

with her help, I can swing it.

And don't you worry.

I know one day,

you're gonna find a job too.

I have a TV show!

You've been on it for 20 minutes!

Hello, everyone. I am using

the power of the Internet to talk to Jessica Huseman

from ProPublica's office in New York.

Jessica, thank you so much for being here.

Thanks for having me.

Can you tell a little bit more about the Free File Alliance

and the role that they play

in changing how all of us do our taxes?

Sure. So, the Free File Alliance

is a group of 13 tax filing and preparation companies,

and you've probably heard of a lot of them.

They're places like Intuit and H&R Block.

This Free File Alliance spends thousands

and thousands of dollars every year

to lobby individual members of Congress,

many of whom then write bills to insure that the government

doesn't offer its own system of free filing for taxes.

It's just so crazy, the idea that they're taking the money

that we pay them to make our taxes easier

and they're using it to lobby Congress

to make our taxes more difficult

or to keep them difficult.

Yeah. This is not a Republican issue.

This is not a Democratic issue.

That money tastes good to both parties

and they both take it.

The system that we have set up,

as confusing as it is,

as much help as you need to file your taxes,

that is entirely within

the Free File Alliance's best interest, right?

In every single one of their corporate reports

that they give... their quarterly reports

that they give to investors... they list the risk

that the government could come up with a free system

as an inherent risk to their business.

You can see that every quarterly report

that Intuit files, they list that specifically,

so they're very concerned

about something like this happening,

and they're paying thousands of dollars

so that it won't.

Yeah. They want the problem to stay in place

so they can keep selling us the solution.

They don't want the problem to be fixed.

Right. Exactly. And, you know, they've done

a lot of tricky things to make you think

that they're on your side, so the Free File Alliance

a couple of years ago got a bunch of community members

to write... like, they handed them

prewritten letters to the editor

that they would send in to all of these newspapers

across the country. So, like, rabbis did this,

city councilmen did this,

because they'd get a call from the Free File lines

with this great pitch being like,

"We provide free tax services

for the lowest two-thirds of Americans."

They leave out that they're making your taxes

more complicated, and the only reason the government

doesn't provide it to everyone for free is because of them.

Well, going back to return-free filing,

I'm sure that, you know, a lot of people in America

would be suspicious of that at first.

Like, wait a second. If the government

is the one doing my taxes, how am I gonna know

that they're doing it right, etcetera.

I mean, what's the response to that?

Right. So, this, in system, would be entirely voluntary.

So, the government already knows

quite a lot of information about you,

which I don't think that most people

who pay taxes realize.

You might as well use that to your advantage.

And I say, use that to your advantage

because there are a lot of situations

in which the government might not actually be aware

that you have some income, and so if they say,

"Here's what we know about you,"

you could probably choose whether or not

to volunteer that you had this extra income

that they don't know about

that you might or might not want to pay taxes on.

So this is actually quite a powerful thing

for the American taxpayer to know about themselves,

because as it stands, right, I have no idea

what the IRS already knows about me.

I have no idea what the federal government

is aware that I make every year,

even though they probably know

just about everything.

That's a good point,

because, yeah, we don't actually know

the information that they've been given.

It's like this weird test that we don't have to take.

Just tell me what you want

and then we'll use that as a starting point.

Yeah. For sure, for sure.

Well, Jessica, thank you so much

for your work uncovering this story,

and thank you so much for coming onto the show

to talk to us about it.

Thanks so much. I enjoyed it.

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