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The IRS will do your taxes for you (if that's what you prefer)
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This Saturday (May 20), I’ll be at the GAITHERSBURG Book Festival with my novel Red Team Blues; then on May 22, I’m keynoting Public Knowledge’s Emerging Tech conference in DC.
On May 23, I’ll be in TORONTO for a book launch that’s part of WEPFest, a benefit for the West End Phoenix, onstage with Dave Bidini (The Rheostatics), Ron Diebert (Citizen Lab) and the whistleblower Dr Nancy Olivieri.
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America is a world leader in allowing private companies to levy taxes on its citizens, including (stay with me here), a tax on paying your taxes.
In most of the world, the tax authorities prepare a return for each taxpayer, sending them a prepopulated form with all their tax details — collected from employers and other regulated entities, like pension funds and commodities brokers, who must report income to the tax office. If the form is correct, the taxpayer signs it and sends it back (in some countries, taxpayers don’t even have to do that — they just ignore the return unless they want to amend it).
No one has to use this system, of course. If you have complex finances, or cash income that doesn’t show up in mandatory reporting, or if you’d just prefer to prepare your own return or pay an accountant to do so for you, you can. But for the majority of people, those with income from a job or a pension, and predictable deductions, say, from caring for minor children, filing your annual tax return takes between zero and five minutes and costs absolutely nothing.
Not so in America. America is one of the very few rich countries (including Canada, though this is changing), where the government won’t just send you a form containing all the information it already has, ready to file. As is common in complex societies, America has a complex tax code (further complexified by deliberate obfuscation by billionaires and their lickspittle Congressjerks, who deliberately perforate the tax code with loopholes for the ultra-rich):
https://pluralistic.net/2021/08/11/the-canada-variant/#shitty-man-of-history-theory
That complexity means that most of us can’t figure out how to file our own taxes, at least not without committing scarce hours out of the only life we will ever have to poring over the ramified and obscure maze of tax-law.
Why doesn’t the IRS just send you a tax-return? Well, because the tax-prep industry — an oligopoly dominated by a handful of massive, ultra-profitable firms — bribes Congress (that is, “lobbies”) to prohibit this. They are aided in this endeavor by swivel-eyed lunatic anti-tax obsessives, like Grover Nordquist and Americans for Tax Reform, who argue that paying taxes should be as difficult and painful as possible in order to foment opposition to taxation itself.
The tax-prep industry is dominated by a single firm, Intuit, who took over tax-prep through its anticompetitive acquisition of TurboTax, itself a chimera of multiple companies gobbled up in a decades-long merger orgy. Inuit is a freaky company. For decades, its defining CEO Brad Smith ran the company as a cult of personality organized around his trite sayings, like “Do whatever makes your heart beat fastest,” stenciled on t-shirts worn by employees. Other employees donned Brad Smith masks for selfies with their Beloved Leader.
Smith’s cult also spent decades lobbying to keep the IRS from offering a free filing service. Instead, Intuit joined a cartel that offered a “Free File” service to some low- and medium-income Americans:
https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
But the cartel sabotaged Free File from the start. They blocked search engines from indexing their Free File services, then bought Google ads for “free file” that directed searchers to soundalike programs (“Free Filing,” etc) that hit them for hundreds of dollars in tax-prep fees. They also funneled users to versions of Free File they were ineligible for, a fact that was only revealed after the user spent hours painstaking entering their financial information, whereupon they would be told that they could either start over or pay hundreds of dollars to finish filing with a commercial product.
Intuit also pioneered the use of binding arbitration waivers that stripped its victims of the right to sue the company after it defrauded them. This tactic blew up in Intuit’s face after its victims banded together to mass-file thousands of arbitration claims, sending the company to court to argue that binding arbitration wasn’t enforceable after all:
https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks
But justice eventually caught up with Intuit. After a series of stinging exposes by Propublica journalists Justin Elliot, Paul Kiel and others, NY Attorney General Letitia James led a coalition of AGs from all 50 states and DC that extracted a $141m settlement for 4.4 million Americans who had been tricked into paying for Turbotax services they were entitled to get for free:
https://www.msn.com/en-us/news/us/turbotax-to-begin-payouts-after-it-cheated-customers-new-york-ag-says/ar-AA1aNXfi
Fines are one thing, but the only way to comprehensively end the predatory tax-prep scam is to bring the USA kicking and screaming into the 20th century, when most of the rest of the world brought in free tax-prep for ordinary income earners. That’s just what’s happening: the IRS is trialing a free tax prep service for next year’s tax season:
https://www.washingtonpost.com/business/2023/05/15/irs-free-file/
This, despite Intuit’s all-out blitz attack on Congress and the IRS to keep free tax-prep from ever reaching the American people:
https://pluralistic.net/2023/02/20/turbotaxed/#counter-intuit
That charm offensive didn’t stop the IRS from releasing a banger of a report that made it clear that free tax-prep was the most efficient, humane and cost-effective way to manage an advanced tax-system (something the rest of the world has known for decades):
https://www.irs.gov/pub/irs-pdf/p5788.pdf
Of course, Intuit is furious, as in spitting feathers. Rick Heineman, Intuit’s spokesprofiteer, told KQED that “A direct-to-IRS e-file system is wholly redundant and is nothing more than a solution in search of a problem. That solution will unnecessarily cost taxpayers billions of dollars and especially harm the most vulnerable Americans.”
https://www.kqed.org/news/11949746/the-irs-is-building-its-own-online-tax-filing-system-tax-prep-companies-arent-happy
Despite Upton Sinclair’s advice that “it is difficult to get a man to understand something, when his salary depends on his not understanding it,” I will now attempt to try to explain to Heineman why he is unfuckingbelievably, eye-wateringly wrong.
“e-file…is wholly redundant”: Well, no, Rick, it’s not redundant, because there is no existing Free File system except for the one your corrupt employer made and hid “in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.’”
“nothing more than a solution in search of a problem”: The problem this solves is that Americans have to pay Intuit billions to pay their taxes. It’s a tax on paying taxes. That is a problem.
“unnecessarily cost taxpayers billions of dollars”: No, it will save taxpayers the billions of dollars (they pay you).
“harm the most vulnerable Americans”: Here is an area where Heineman can speak with authority, because few companies have more experience harming vulnerable Americans.
Take the Child Tax Credit. This is the most successful social program in living memory, a single initiative that did more to lift American children out of poverty than any other since the days of the Great Society. It turns out that giving poor people money makes them less poor, which is weird, because neoliberal economists have spent decades assuring us that this is not the case:
https://pluralistic.net/2023/05/16/mortgages-are-rent-control/#housing-is-a-human-right-not-an-asset
But the Child Tax Credit has been systematically sabotaged, by Intuit lobbyists, who successfully added layer after layer of red tape — needless complexity that makes it nearly impossible to claim the credit without expert help — from the likes of Intuit:
https://pluralistic.net/2021/06/29/three-times-is-enemy-action/#ctc
It worked. As Ryan Cooper writes in The American Prospect: “between 13 and 22 percent of EITC benefits are gulped down by tax prep companies”:
https://prospect.org/economy/2023-05-17-irs-takes-welcome-step-20th-century/
So yes, I will defer to Rick Heineman and his employer Intuit on the subject of “harming the most vulnerable Americans.” After all, they’re the experts. National champions, even.
Now I want to address the peply guys who are vibrating with excitement to tell me about their 1099 income, the cash money they get from their lemonade stand, the weird flow of krugerrands their relatives in South African FedEx to them twice a year, etc, that means that free file won’t work for them because the IRS doesn’t actually understand their finances.
That’s a hard problem, all right. Luckily, there is a very simple answer for this: use a tax-prep service.
Actually, it’s not a hard problem. Just use a tax-prep service. That’s it. No one is going to force you to use the IRS’s free e-file. All you need to do to avoid the socialist nightmare of (checks notes) living with less red-tape is: continue to do exactly what you’re already doing.
Same goes for those of you who have a beloved family accountant you’ve used since the Eisenhower administration. All you need to do to continue to enjoy the advice of that trusted advisor is…nothing. That’s it. Simply don’t change anything.
One final note, addressing the people who are worried that the IRS will cheat innocent taxpayers by not giving them all the benefits they’re entitled to. Allow me here to simply tap the sign that says “between 13 and 22 percent of EITC benefits are gulped down by tax prep companies.” In other words, when you fret about taxpayers being ripped off, you’re thinking of Intuit, not the IRS. Just calm down. Why not try using fluoridated toothpaste? You’ll feel better, and I promise I won’t tell your friends at the Gadsen Flag appreciation society.
Your secret is safe with me.
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Catch me on tour with Red Team Blues in Toronto, DC, Gaithersburg, Oxford, Hay, Manchester, Nottingham, London, and Berlin!
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If you’d like an essay-formatted version of this thread to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/05/17/free-as-in-freefile/#tell-me-something-i-dont-know
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[Image ID: A vintage drawing of Uncle Sam toasting with a glass of Champagne, superimposed over an IRS 1040 form that has been fuzzed into a distorted halftone pattern.]
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halles-comet · 2 years
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I think an easier thing to do is start a basic “business” and use it as a tax shelter. For instance, if you own or lease a car, pay for auto upkeep, and car insurance - earn any money a year off giving rides and all of those expenses become tax deductible. Have a side writing business that uses your home, including its Internet and your cellular plan? Tax deductible. A lot of the tax loopholes billionaires abuse are available to everyone. (This is all if your objection is to paying income tax, if your actual objection is just to having to *file* income taxes, blame tax preparer companies and Grover Nordquist for keeping the IRS from doing it for you lol.) I mean, disclaimer that this tumblr anon is not a cpa and this is not like legal advice lmao, just something I’ve been thinking about
mfers out here trying to goad me into tax evasion
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itsalycenotalice · 5 years
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Hawaii Five-0 - Episode 9.23 - Ho‘okāhi no lā o ka malihini - Press Release
WHILE MCGARRETT HELPS HIS VISITING SISTER SPY ON HER SHADY NEIGHBOR, FIVE-0 INVESTIGATES THE MURDERS OF A RIDE-SHARE DRIVER AND HIS PASSENGER, ON “HAWAII FIVE-0,” FRIDAY, MAY 3 Taryn Manning Returns as Mary McGarrett “Ho‘okāhi no lā o ka malihini” – While McGarrett helps his visiting sister, Mary (Taryn Manning), spy on her shady neighbors, Five-0 investigates the murders of a ride-share driver and his passenger. Also, the team teases the youngest members of Five-0 when Junior escorts Tani to a wedding, on HAWAII FIVE-0, Friday, May 3 (9:00-10:00 PM, ET/PT) on the CBS Television Network. (“Ho‘okāhi no lā o ka malihini” is Hawaiian for “A Stranger Only for a Day”) CHEAT TWEET: #H50 fans, @TarynManning is back as Mary McGarrett and when it comes to sniffing out the bad guys, the apple doesn’t fall too far from the McGarrett family tree. @HawaiiFive0CBS 5/3 9pm http://bit.ly/2Krh5U0 REGULAR CAST: Alex O’Loughlin (Steve McGarrett) Scott Caan (Danny “Danno” Williams) Chi McBride (Lou Grover) Ian Anthony Dale (Adam Noshimuri) Jorge Garcia (Jerry Ortega) Meaghan Rath (Tani Rey) Beulah Koale (Junior Reigns) Taylor Wily (Kamekona) Dennis Chun (Sgt. Duke Lukela) Kimee Balmilero (Noelani Cunha) RECURRING CAST: Taryn Manning (Mary McGarrett) GUEST CAST: Andrew Tinpo Lee (Sam Pukahi) Scott Nordquist (Carter Hill) John Patrick Jordan (Ben Miller) Amy K. Sullivan (Aubrey Miller) Miles Emmons (Blake) Amber Lamarca (Kira) Nikki McKenzie (Bailey) Brianna Hope (Jodie) Michael Steuber (Manager) Christie Brooke (Drunk Woman) Mary Ann Perreira (Elderly Lady) Gabriel Miranda (Queasy Guy) David Cunningham (Landlord) WRITTEN BY: Zoe Robyn DIRECTED BY: Gabriel Beristain SOURCE:CBS
MY SOURCE: https://www.spoilertv.com/2019/04/hawaii-five-0-episode-923-hookahi-no-la.html
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Tax prep services send sensitive financial info with Facebook
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If you were unfortunate enough to e-file your US tax using HR Block, Taxact or Taxslayer, your most sensitive financial information was nonconsenually shared with Facebook, where it was added to the involuntary dossier the company maintains billions of people, including people who don’t have Facebook accounts.
A blockbuster investigative report from The Markup and The Verge reveals that major tax-prep services illegally embedded the Facebook tracking pixel in their sites, configured so that it transmitted as much data as possible to the surveillance giant.
https://www.theverge.com/2022/11/22/23471842/facebook-hr-block-taxact-taxslayer-info-sharing
In their defense, the companies say that they didn’t know that they were sending all this data to Facebook, and that they were using Facebook’s surveillance pixel to “deliver a more personalized customer experience.”
The companies had set the Facebook tracking pixel to use “automatic advanced matching,” which scours any page it’s embedded in for personally identifying information to harvest and transmit to Facebook.
https://www.facebook.com/business/help/611774685654668?id=1205376682832142
Facebook claims that it doesn’t want this data and won’t use it, though the company has been previously caught violating fair finance laws by using finance data to discriminate against Black families:
https://www.cnbc.com/2022/06/21/doj-settles-with-facebook-over-allegedly-discriminatory-housing-ads.html
But it’s possible that Facebook isn’t using this data — or that it doesn’t know whether it’s using this data. Facebook’s own internal audits show that the company doesn’t know what data it collects or how it uses it:
https://www.vice.com/en/article/akvmke/facebook-doesnt-know-what-it-does-with-your-data-or-where-it-goes
Remember, Facebook claims that it collects your data based on your consent; somehow it thinks that you can consent to collecting and using your data in ways that even Facebook can’t describe.
As infuriating as Facebook’s role in this data theft is, the real scandal is that Americans have to pay for tax preparation at all. In most of the world’s wealthy countries, the tax authorities send taxpayers a precompleted tax-return every year. You can modify this return (on your own or with the help of a tax-prep professional), or you can just mail it back. For free.
This makes sense. The tax authorities already know how much you’ve made. They know what deductions you’re entitled to. It is surreal that you have to pay a professional to fill in a form to tell the IRS a bunch of things it already know about you.
Every attempt to bring free tax prep to America has been scuttled by an unholy alliance of anti-tax extremists like Grover Nordquist (a sadist who wants to make paying your tax as cumbersome and painful as possible) and the multi-billion-dollar, highly concentrated tax-prep industry.
Companies like HR Block and Intuit have spent millions lobbying against free tax prep. It’s money well spent, because tax prep makes billions for these companies. The biggest tax prep companies formed something called “the Free File Alliance” that purported to offer free tax-prep to low- and medium-income Americans.
In practice, “free filing” turned out to be a marketing funnel that tricked people into paying for services they were entitled to get for free. Intuit alone stole billions this way:
https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks
The monopolists who run America’s tax-prep services claim that “government can’t do anything well” and insist that the private sector will bring “efficiencies” to tax-prep. In reality, these companies literally have no idea what they’re doing — they don’t know what data they’re collecting, nor who they’re sharing it with.
Same goes for Facebook. Companies that are not disciplined by competition or regulation don’t have to be good at their jobs. These companies’ major competence is lobbying Congress to prevent the passage of meaningful privacy laws and laws that would save Americans billions through IRS-prepared tax-returns.
As Harvard tax-law prof Mandi Matlock told Simon Fondrie-Teitler, Angie Waller, and Colin Lecher, this data Valdez is the “almost inevitable consequence of relying on for-profit companies to handle a government requirement. It’s a process that provides users little choice but to hand over their data to Facebook if they want to comply with the law.”
Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg
CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en
Social Woodlands (modified) https://commons.m.wikimedia.org/wiki/File:H%26R_Block_%285424899168%29.jpg
CC BY 2.0 https://creativecommons.org/licenses/by/2.0/deed.en
[Image ID: An H&R Block storefront; the 'o' in Block has been replaced with the glaring red eye of HAL9000 from 2001: A Space Odyssey. Mark Zuckerberg's metaverse avatar peeks out from behind a pillar.]
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VICTORY! New Free File rules ban tax-prep firms from hiding their offerings, allow IRS to compete with them (a love-letter to Propublica)
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Six months ago, Propublica began beating the drum about "Free File," a bizarre, corrupt arrangement between the IRS and the country's largest tax-prep firms that ended up costing the poorest people in America millions and millions of dollars, every single year.
The scam is one of those baroque, ultimately boring and complex stories that generally dies in the public imagination despite its urgency, because "boring and urgent" is the place where the worst people can do the worst things with the least consequences.
With that warning, here's a short summary: in most wealthy countries, the tax authority fills out your tax return for you, using the information your employer already has to file every time it pays your wages. If all the numbers look right to you, you just sign the bottom of the form and send it back, without paying a tax preparer. If, on the other hand, you want to claim extra deductions, or if something complicated is going on with your finances, you can throw away that free tax return and fill in a form from scratch, either on your own or with the help of a professional.
When Americans asked to have the same courtesy extended to them -- a move that would save the vast majority of Americans millions and millions of dollars they were currently paying to the likes of HR Block and Intuit/Turbotax, every single year of their entire working lives -- the tax-prep industry mobilized to kill the proposal. The industry (which is highly concentrated and dominated by a small handful of firms whose top execs have mostly done time in all their competitors' board rooms, making them into essentially one giant company whose different divisions have different shareholders) lobbied the IRS very hard, and won a resounding victory.
That victory is called "Free File." Under Free File, each tax prep company is required to serve a slice of working Americans with free, online tax-preparation. The arrangement was hailed as a victory for public-private partnerships, harnessing the efficiency of the private sector to perform this public duty of the state. Importantly, it meant that the IRS would not expand its headcount or budget, both of which had been slashed by successive right-wing presidents and their legislative enablers. The move was cheered by anti-tax extremists like Grover Nordquist, who was delighted by the "efficiency" of you saving a bunch of pieces of paper the government already had, typing them into an online form, and hoping that a company's website came up with the same calculations that the government had already made about your tax-bill.
Part of the Free File deal banned the IRS from creating a competing offer and it banned the IRS from advertising the existence of the program or telling people where to find the free offering.
As soon as the ink was dry on Free File, the tax-prep companies set about to sabotage it. Intuit -- a massive company led by a bizarre cult figure -- and its competitors hid their Free File offerings deep in their sites, and used the "robots.txt" system to instruct search engines to hide them. They took out search ads for the phrase "Free File" that directed users to paid offerings with the word "free" in their names. They created "Free File" systems that would make you go through hours of work entering your data before surprising you with a notice that you didn't qualify for Free File because you'd paid interest on a student loan (or some other normal thing) and then ask you if you wanted to pay to keep your work and finish your tax-return in the non-free system.
There's a simple name for this kind of activity: fraud.
But it was a fraud in plain sight, one that went on for years and years, and which created a stealth tax on the majority of Americans, which they had to remit not to the IRS, but to the tax-prep companies, which used the money to lobby to make it even harder to get away from handing them your money every year.
Enter Propublica, whose relentless reporting did the seemingly impossible: it made a complicated, boring important thing into something that millions of Americans cared about. Something they cared about so deeply that they actually managed to shame the IRS into taking action.
Remember, the IRS is an administrative agency, under the direct control of the Trump administration. That means its commander-in-chief is a guy who said dodging his taxes means that he's "smart." While the IRS has many good, hardworking staffers, it has also been demoralized and gutted by the right, who have convinced millions of poor people that it's somehow in their interests if it's easier for rich people to duck their taxes.
Despite all this, the IRS has enacted new Free File rules: first, these rules ban tax-prep companies from hiding their Free File offerings, and it bans them from using deceptive names for non-Free File offerings (Turbotax will no longer be allowed to confuse Americans by offering "Turbotax Free" -- which is not free -- as a competitor to "Turbotax Free File," which is).
Second, the rule allows the IRS to develop its own competing Free File product, which means that the government agency that already knows how much tax you owe will allow you to review its findings each year and then either challenge them, or simply click OK, without paying a single cent of tax to Intuit or HR Block, and free you from filling in lengthy, bureaucratic forms.
This outcome is nothing short of miraculous: it did not come as the result of Congressional action. It did not come as the result of the Trump administration's inattention (the release came out the same day that the Trump administration revised its tax rules to allow money launderers to retain billions in the loot they've stashed offshore).
It came about as the result of fucking journalism. Propublica wrote its way into a better world, with relentless, deep, accessible reporting that made this boring, important thing come to life.
I am sympathetic to the idea that talking about politics isn't doing politics, but that's not entirely true. Learning about what's going on and telling the people you know about it and getting them to tell others is part of how we make change. Propublica's excellent reporting wouldn't have mattered if people hadn't read it -- and talked about it.
And Propublica has done this repeatedly over the past year, deeply reporting on naked, grotesque corruption in ways so vivid and undeniable that they actually changed things, and not in some abstract, boring way, but in ways that matter to the immediate, lived experience of real people who had been brutalized and poisoned and jailed and mistreated with impunity, for years, until Propublica wrote about it.
Here are some examples, just from the stories I paid attention to this year (Propublica does so much good work that I can't manage to cover all of it):
* Reformed South Carolina's "magistrate judge" system that let "judges" with no legal background and less training than barbers sentence poor people (most of them Black) to prison in defiance of their constitutional rights;
* Dismantled Illinois's system of Quiet Rooms where special ed kids were put into solitary confinement, sometimes for days at a time;
* Shamed a "Christian" hospital into ending its practice of suing thousands of patients, many of them its own employees, for inability to pay their medical debts, and forcing it to jettison the private army of debt collectors it kept on its payroll.
* Killed an Illinois scam whereby affluent parents temporarily gave up custody of their own children so they could steal college grants earmarked for poor children;
* Got two Louisiana cops fired for encouraging people to murder Alexandria Ocasio-Cortez;
In addition, Propublica has done lots of reporting that hasn't yet created political transformations, but has changed our debate and laid the groundwork for change to come: called attention to the penniless hero of the ransomware epidemic; discredited a "walking polygraph" system used by police forces to frame their preferred suspects with sheer junk science; documented the link between pharma company bribes and doctors' prescribing; named every former lobbyist in the Trump administration; tracked every penny of the 2008 bailout money; documented Wayne LaPierre's self-dealing from the NRA's war-chests; documented the grifty conservative PACs that scammed millions out of scared old white people with racist Obama conspiracies and then kept the money for themselves; published a blockbuster story on the theft of southern Black families' ancestral lands through a legal grift called "heirs' property"; debunked the "aggression detection" mics being installed in America's classrooms; outed a "ransomware consultant" that was working with ransomware crooks to simply pay the ransom, while pretending that they were able to get you your files back without enriching the crooks who locked them up; named and shamed Alabama sheriffs who lost their re-election bids and then spent thousands of public dollars on frisbees or stole discretionary funds, or destroyed food earmarked for prisoners, or drilled holes in all the department computers' hard-drives in a form of "vindictive hazing"; followed the payday lender industry to a Trump hotel where it staged an annual conference, funneling millions to the president's personal accounts shortly before Trump reversed Obama's curbs on predatory lending; documented how TSA body-scanners single out Black women for humiliating, discriminatory hair-searches; revealed the secret history of wealthy people destroying the IRS's Global High Wealth Unit; and did outstanding work on the Sackler family, a group of billionaire opioid barons whose products kickstarted the opioid epidemic that has now claimed more American lives than the Vietnam war.
2019 was a dumpster-fire of a year and 2020 could be worse -- or it could be the dawn that breaks after our darkest hour. Finding Propublica's victory lap on Free File on New Year's Day was just the sunrise I needed to give me hope for the year to come. Sometimes, simply finding the truth and telling it to the people can make a change.
I'm a Propublica donor, and an avid reader. I admit that sometimes when I see that PP has published another 15,000-word expose, I am slightly dismayed at the thought that I'm about to lose 1-2 hours of my life to digesting and writing up the new story, but that dismay is always overcome by excitement at the thought that they have turned over a new rock and found something genuinely awful beneath it, and that, with all our help, we can sterilize that foetid sludge with blazing sunshine.
https://boingboing.net/2019/12/31/go-propublica-go.html
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