Isn't this from precisely the same dynamic that prevents us from getting automatically-generated tax returns, just more extreme?
automatically-generated tax returns
This seems like an issue that could unite Tea Party sympathizers with progressives. (Just don't tell the TPers that it would be good for poor people.)
I seem to recall that Grover Norquist et al are also tireless lobbyists against schemes to simplify the calculation and payment of income tax, on the grounds that public irritation with the needless complexity can be translated into yet more support for lowering taxes.
[T]he Commonwealth Secretary of Transportation droning on about how "public-private partnerships" will solve all of our transportation woes.
It would be hypocritical of me to comment, but I agree that too many public officials view PPP as a free lunch. The infrastructure authority bill that John Kerry has recently introduced might, if pigs fly loops through rings of fire at the next Red Bull Flugtag event it passes both houses, go some way toward updating American attitudes to the form through exposure, if nothing else.
Sifu can vouch for how livid TurboTax makes me. We've got simple returns for which there's no reason to get the upgraded version of TurboTax that costs money, and yet I feel like if I'm not vigilant at every turn they will sucker me into pressing a button that opts into the bells-and-whistles version.
When/If we do ever need the more complicated stuff, I am more likely to do the entire thing by hand than to pay those assholes a cent.
It's a good thing that being THE BEST isn't taxable. Because you guys would be broke!
God damn it. Knut the polar bear died.
I used TurboTax and they claimed I needed the upgraded premier version (capital gains & nanny taxes) and I said screw you and did it just fine with the version I had (deluxe). I refuse to efile the state returns for an extra $20- I'm not paying extra to save them the effort of scanning my paper form. It's like when they used to charge for automatic toll transponders- I'm not paying more so that you can save on toll taker salaries. I got EZPass for free from NY instead.
5: It'll probably be difficult to maintain that kind of anger through more than a year or two of complicated taxes. I get furious and annoyed enough even trying to do them on TurboTax. I'm pretty sure that the worksheets from the IRS would be in tear-stained tatters after hour 3.
We really do need some serious tax simplification in this country. I can come up with all sorts of high-falutin' reasons pertaining to democratic accountability, reducing uncertainty and free rider issues, etc. But really, it's just a giant pain in the ass that doesn't need to be. Fuck Norquist et al.
This seems like an issue that could unite Tea Party sympathizers with progressives. (Just don't tell the TPers that it would be good for poor people.)
Seriously? I thought everyone was more or less agreed that the Tea Party's motivators are the 27% crazification wing's motivators, and to the extent they make any difference, it's with the same proximate goals as Norquist et al.
10: I meant that it would be popular with the Joe Sixpacks who complain vaguely about Big Government. I'd guess that the Armey of Dick wouldn't approve, for Norquisty reasons.
1
Isn't this from precisely the same dynamic that prevents us from getting automatically-generated tax returns, just more extreme?
I don't think automatically generated returns are actually practical (at least for anyone whose return is at all complicated). More thoughts here .
9
It'll probably be difficult to maintain that kind of anger through more than a year or two of complicated taxes. I get furious and annoyed enough even trying to do them on TurboTax. ...
I agree with this. I used to do my own taxes but using TurboTax is really the practical choice.
9
We really do need some serious tax simplification in this country. I can come up with all sorts of high-falutin' reasons pertaining to democratic accountability, reducing uncertainty and free rider issues, etc. But really, it's just a giant pain in the ass that doesn't need to be. Fuck Norquist et al.
Unfortunately I think that horse has left the barn. And it isn't just Norquist. Yglesias argues here it doesn't matter how complicated the calculations are because everyone uses tax software.
... Instead of discrete brackets, we could have infinitessimal brackets, such that going from taxable income to taxes owed would require the use of calculus. ...
But that's not complicated, it's a simple function (one that takes a computer for most people to evaluate, but it's plug a number in, get a number out. No judgment, no thought process) . What's complicated is figuring out what your taxable income is.
God damn it. Knut the polar bear died.
The pwnlar bear lives, Flip.
Also, governments should provide full-function filing software and not prop up private tax preparers. If Turbo Tax et al. go out of business, tough shit. Yes, I'm really irritated about taxes at the moment.
For someone towards the simpler tax situation side of the continuum, I've found the Canadian forms vastly more complicated than the American ones.
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But that's not complicated, it's a simple function (one that takes a computer for most people to evaluate, but it's plug a number in, get a number out. No judgment, no thought process) . What's complicated is figuring out what your taxable income is.
But if you are doing your own taxes (without software) the (unneccessarily complex) calculations are a major portion of the work.
Complex calculations also make tax planning harder and reduce the transparency of the system (in fact a lot of the complexity is deliberate to obscure what the rates really are).
(in fact a lot of the complexity is deliberate to obscure what the rates really are).
Proof of that assertion, JBS?
I know that economists have proposed that opaque calculations of tax liability/boundaries be used to avoid distortative behaviors, but I know of no actual proof that this is done.
governments should provide full-function filing software
Conversations like this always make me hyper-aware of the fact that I grew up in Montana. You mean your first reaction to this idea isn't "But then the government will steal my house and my guns"?
21: Angry Birds is actually a DARPA-led conspiracy to replace all Americans' guns with animated chickens. FACT.
On a more serious (and OP-related) note, Lockheed Martin is running the UK Census?
But if you are doing your own taxes (without software) the (unneccessarily complex) calculations are a major portion of the work.
Not the calculation of your taxes due from your taxable income. Now, it's a lookup table -- not complicated. If everyone had access to a computer, it could perfectly well be a web calculator -- also not complicated. The point is that continuously varying rates don't add any difficulty to the preparer.
I refuse to efile the state returns for an extra $20
The MA online filing system isn't pretty, but it worked fine for me. A million times better than the telefile option they had a few years ago.
What pisses me off is that Stanley is done with his taxes. Last year he was a little better, but still beat me. It's still March; this is completely unacceptable.
20
Proof of that assertion, JBS?
Upper middle class people often pay marginal rates that are more than the stated bracket amounts as various deductions and exemptions are phased out. The marginal rates then drop back (when the phase out is complete) to the stated bracket rates for the very rich. The required calculations are a bit complicated and (in my opinion at least) serve only to disguise the fact that the upper middle class is being taxed at a higher marginal rate than the truly rich.
See here for an idea of how complicated this is. Some of the phase outs in the linked table are for welfare type provisions and mostly affect poor people. The motivation for these is a bit different (trying to keep costs down while avoiding a sudden cutoff of benefits leads to high effective marginal rates).
24
Not the calculation of your taxes due from your taxable income. Now, it's a lookup table -- not complicated.
This is not true, the phase out of exemptions and deductions requires separate worksheets and considerable additional calculation. I suppose you could claim this is part of computing your taxable income but in my view this is the wrong way to look at it.
I tried efiling my VA return a few years ago through VA's own website and found that it wouldn't allocate Fed joint, VA separate properly when there was IRA contributions. So went back to paper.
I do reasonably complicated taxes using a spreadsheet and then copy the numbers onto the form using pen and ink (though this year, I'll do the Federal forms by entering on the pdfs). That way I don't worry about complicated calculations: the worksheets are just sets of columns over to the right. I can look to see how taking a deduction for education expenses vs a credit changes both the Federal and State. I have a column for AMT as well. I have to change the spreadsheet from year to year as the form and instructions change, but it's light maintenance.
26: If it's any consolation, my taxes are very, very straightforward because I (a) don't make a crap ton of money, (b) don't have any children, and (c) don't own a house or have a mortgage.
So, sure, I'm done with my taxes. But I'll probably die poor, lonely, and homeless.
LB and JBS, you two are referring to two different sides of the same damnable tax coin. The agony isn't in taking an income number and getting the implied tax burden for that income. The agony is in calculating the income number as LB says (with all the deductions, special rules about what deduction cancels out which credit, income level phase-outs, and 10,000 other wrinkles) and THEN, even once you have that income number, your implied tax burden gets changed AGAIN by all the potential credits, some of which also affect your deductions, etc etc. And then after all that, you might have to calculate a whole other set of income figures to work out if the AMT affects you, how much can be put into an IRA without tax consequences, and so on...
As Shearer said, it mostly serves to obfuscate tax incidence and the impact of any proposed changes to the tax code. I see this as an unjustifiable ill that reduces democracy's ability to make tax policy reflect the collective will, but I can see that others might feel this is a feature instead of a bug.
But my point remains: fuck those dudes.
31.1: Yes, after having helped a few people with odd-ish tax situations but not huge incomes*, my take is that "ignorance *is* an excuse" to the IRS.
*My father has volunteered for years as a tax helper through some organization--seemed to be a relatively gratifying volunteer activity. Unfortunately not able to do it this year.
31
LB and JBS, you two are referring to two different sides of the same damnable tax coin. The agony isn't in taking an income number and getting the implied tax burden for that income. The agony is in calculating the income number as LB says (with all the deductions, special rules about what deduction cancels out which credit, income level phase-outs, and 10,000 other wrinkles) ...
Your true income number is your "adjusted gross income" which is comparatively easy to understand and compute. Your so called "taxable income" is just an intermediate term in the calculation of your tax liability given your adjusted gross income. It has no economic reality and computing it is not computing your income in any meaningful way.
33: When doing my taxes last weekend, there seemed to be an awful lot of "Modified Adjusted Gross Income" calculations to go with the standard AGI, reflecting different combinations of possible deductions and a lot of different phase-outs.
I agree that's not the same as calculating one's true income from the year, but it definitely has economic reality if only because it's used as the basis for tax calculations. It's also a pain in the ass due to all the moving parts, multiple forms, and interacting rules, which is my main point.
30: Is a hobo consultant eligible for railroad benefits?
JBS, that certainly doesn't establish the intent that you're claiming.
Deductions like charitable donations come after modified adjusted gross income, so there is no gift of the MAGI.
34
I think we are largely in agreement. Some things about an income tax system are inherently complicated, for example if you own and operate a business the rules for calculating your income will be complex (at least in some cases) because the underlying accounting has to be complicated to be reasonably accurate. However for most people it is just a matter of adding up the amounts on your W2 and 1099 forms. In my case I sometimes have to figure a tax basis (to compute a capital gain) which can be a bit complicated but for logical reasons.
But going from income to tax owed does not have complicated, it could just be a matter of finding your bracket and then computing X + Y% of your income over Z. All the complication at this stage is politically driven and a desire to hide what is going on (lowering taxes on the very rich at the expense of the upper middle class in the case of many phase outs) is often part of the motivation.
36
JBS, that certainly doesn't establish the intent that you're claiming.
You believe it is just an accident that the tax code is written in a way that obscures the fact that marginal tax rates are higher on the upper middle class than on the very rich?
38 - I think this is right, but there's no reason that this can't be pre-generated for the majority of taxpayers; people are referring to the idea that the usual suspects are against this because it would lessen the resenment people feel about paying their taxes. (That general idea is explicitly endorsed by this Reason blog post, e.g.)
40
I think this is right, but there's no reason that this can't be pre-generated for the majority of taxpayers; ...
Maybe if you also simplified the tax code. I don't think our current tax code lends itself to automatic return generation. I think people advocating this are underestimating the problems.
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Pitt's run into NCAA Tournament institutional racism reffing at its worst. Fucking protect the white boy from the Hoosierland cinderella. Where's Moby to commiserate?
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I'm not completely sure the issues with household status, undercompliance with income reporting, etc., are quite the barriers you make them out to be on your blog, James - one of the reports I looked at implied a counter to this would be continuing the legal requirement that taxpayers are responsible for their return even if pregenerated, so if certain forms are missing or household status changes you are obligated to reject the IRS-made return and do it the normal way. Without knowing the underlying numbers, that seems workable offhand.
On the other hand, I do see stressed in the Treasury Department's 2003 report on why they didn't want to pursue no-return filing without tax code simplification, and backed up in a GAO report, that most or all of the countries that have similar setups also have much simpler tax systems.
JBS, I would say that it need not be an attempt at hiding the rates, but rather the consequence of the rich buying deductions and the middle class not being good policy recipients of welfare type credits.
More than anything i think it is daft to think the rich disguise their activities..
42: Are you referring to the officiating or did something else happen? I started watching the game with about 5 minutes to go.
44
More than anything i think it is daft to think the rich disguise their activities..
I find this statement a bit baffling. The rich people lobby (like others) often tries to advance their favored policies by misrepresenting who they will primarily benefit. Hence the proverbial family forced to sell the farm because of death taxes.
42, 45: Speaking of basketball and politics: surely I can't have been the only one to read Newt mentioning that Obama knows more about basketball than he does as "Pssst! He's still black!", right?
43
I'm not completely sure the issues with household status, undercompliance with income reporting, etc., are quite the barriers you make them out to be on your blog, James - one of the reports I looked at implied a counter to this would be continuing the legal requirement that taxpayers are responsible for their return even if pregenerated, so if certain forms are missing or household status changes you are obligated to reject the IRS-made return and do it the normal way. Without knowing the underlying numbers, that seems workable offhand.
I am not sure how much we are disagreeing. Of course you could do something like that but sending out a bunch of erroneous pregenerated returns would be bad PR. And actually trying to send someone to jail for relying on one would be a PR nightmare. Whether a pregenerated return system is workable depends on what error rate you are willing to tolerate. I think obtaining an acceptable rate would be more difficult than the advocates expect.
45: Yes,just a couple of ref calls early in the game--not the dramatic stuff at the end which seemed to be correctly called. Standard Big East plays under the basket often turn into fouls in the NCAA tournament (not as bad as in the early 1980s though; my catch line then was that you needed a hot shooting guard and big white center who fell down a lot).
I don't even see fouls.
I am not sure how much we are disagreeing. Of course you could do something like that but sending out a bunch of erroneous pregenerated returns would be bad PR. And actually trying to send someone to jail for relying on one would be a PR nightmare. Whether a pregenerated return system is workable depends on what error rate you are willing to tolerate. I think obtaining an acceptable rate would be more difficult than the advocates expect.
Yes, that's a good summary of our differences right now. Some counterpoints, mostly from this advocate:
* There would probably be a safe-harbor system for errors less than a certain amount, so minor mistakes wouldn't lead to someone going to jail, just leaving out large amounts of income.
* Filers' assertions could actually be more transparent than in the current system: a cover sheet with clearly written checks like "Have you gotten married? Is [the below list] all your last year's income?"
* In the California pilot, people who opted to use the pregenerated returns were extremely satisfied with them, but they also didn't seem intimidated into accepting them - only 27% of those who hadn't already filed used it. (I imagine California's system isn't as complex, but it still uses household status and all forms of income.) And that was enough to produce significant savings, in the agency's estimation.
* Everyone seems to agree that errors would anyway be quite low among users of this system - the GAO estimated 0.5%, and California found 0.3% among the pilot's users compared to 3% among a similar control group that didn't get the return. According to Treasury, the IRS disagreed with the GAO's estimate only in that it saw greater problems stemming from the greater time constraints (which I think are avoidable).
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After a few good early close finishes, the the quality of play at the ends of games in this tournament has really sucked.
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50
Perhaps a system limited to the simplest returns would work ok. But on the other hand it wouldn't help most of the people who are complaining about how complex figuring your taxes is.
51: Yes, Washington and UNC had their own little mistake-fest there, didn't they?
I know the tv people love Duke, but couldn't they have considered that this was likely a blowout, or at least not really going to be in doubt, and so scheduled some other game to overlap with it? Anyway, I have to go do some work, so this will probably be a closer game when I can't watch.
It was 15 when I started writing that comment.
Huh. And now 10. I had just switched back from CNN.
6 near the end ... but don't think the outcome was ever really in doubt. I'd wish.
Kind of in doubt now. Also, I'm late for a meeting.
Dang. Duke hangs on. I've been wrong about everything else this tournament.
Pretty exciting start to the day's games. Go George Mason!
52: That's not the basis I favor it on - minds are pretty much made up. I favor it for saving lower-income people time and money, and because it's more efficient government.
62
...saving lower-income people time ...
The time savings depends on whether people actually check the government's numbers (which you want them to be legally required to do).
I don't think the signature would practically require people to recreate the government's work - any more than I do with my web-prepared tax returns. It would be a much briefer process of making sure it all looks in order. But I'm much less sure about this.
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Taxes! From the Cambridge
Two years later, in 881, a new directive ordered a reduction in the mandated rice revenue from the office fields. This reduction in amounts collectible was entirely for the benefit of the local land managers. Retreating from the original plan of direct cultivation for the entire bloc, the new plan instead provided for leasing, for the legally stipulated rent of 20 percent of estimated yield, of half the area to the managers and direct cultivation, through their agency, of the rest. This concession to the petty gentry was one that, fifty-eight years earlier, had not occurred to the architects of the Kyushu scheme. The land managers, tato, were now, in a sense, sharing the proceeds of cultivation with the government. More important, the price for the management of publicly administered land was now the granting of possessory interests in part of the land to be managed.
This has been one fucking tough chapter. But the point of course, is to explain the rise of the samurai and daimyo, feudalism, by following the fucking rice.
The Cambridge is considered outdated and old-fashioned and than gd for that. At the time it was compiled, or the old farts writing it past their time, there was still enough residual or nostalgic Marxism to enable decent history. We haven't yet been liberated into explaining all of Japan via the oppression of 5000 Ainu or the natural tendency of guys to rape and kill.
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The mention of saving lower-income people time recalls an occasion on which I found myself in a sort of combination convenience store-adult video rental-vehicle registration-tax preparation establishment (with a friend who was registering a used vehicle purchased next door to the place):
Person after person sat at the consulting desk near which I waited, absolutely confounded by her or his tax paperwork, telling tale after tale about the daughter who'd lived at home for a while last year -- a dependent -- but then she left to get work, but her daughter (the granddaughter) now lived at the house, and there'd been some welfare for a while, and government support of some kind for the granddaughter, and some child support payments, and for a while the grandmother -- who looked to be all of 40 years old -- had worked at CVS for 20 hours/week before they let her go ....
An absolute mess, it seemed to me; I have trouble imagining that auto-generated tax returns would get anything right there. From what I could tell, people were spending the entire day at that place (going home to get more documents, then returning), and whatever was assembled was a rough guesstimate.
Speaking of privatizing government services, has the brouhaha over Lockheed Martin processing UK Census forms been linked here yet? I admit to confusion over this statement:
The ONS [British government office] has dismissed this claim, stating: "Under the contractual and operational arrangements we have put in place, no employees of Lockheed Martin UK or of its US parent or of any other US company will be able to access personal census data. The US Patriot Act could not therefore, be used to access such data." The spokesman added that a recent independent review had declared: "the public can be assured that the information they provide to the 2011 census will be well protected and securely managed".How on earth can Lockheed Martin be doing data processing and not be able to access personal census data? Even if they had robots opening the census forms and scanning them into a computer, those are still going to be individual records.
23 to 67. But yeah, it's curious, right?
I'm not saying I buy it or anything, but it seems perfectly possible to design a system where no user has access to full, unencrypted records.
I mean, in a typical multi-user arrangement nobody (including the superuser) has access to unencrypted passwords. This is not fundamentally a different technical problem than that is.
I'm also not convinced that IBM (say) is categorically better than Lockheed Martin.
Go George Mason!
Well, that didn't turn out. I'm amused that something like half my FB feed is suddenly dedicated to fierce partisans of the VCU Rams. I suppose I, too, am an alum of sorts. I took Statistics there during high school. Go Rams!
VCU killed the hell out of my already dead bracket, boy.
it seems perfectly possible to design a system where no user has access to full, unencrypted records.
I don't meant to be dense, but how is that possible? I mean, even if my imaginary robots exist, there must still be people there who have to unjam the scanning machines when they foul up, right?
I get how you can restrict access (theoretically, anyway) after the records have been scanned in, but I don't get how they can be guaranteed not to be seen before that. And what about shredding the paper forms after input?
I mostly agree that one large corporation is not inherently more untrustworthy than anothe (although I think some have bigger built-in incentives to do creepy things with the data). I was reacting to the privatization at least as much as to whom it was privatized.
The Census has been largely run by private enterprise since ever; the reason I used IBM as an example is that they got their start running (well, designing and operator the machines that tabulated) the 1896 (or something) census in this country.
As far as the issue of paper forms, I don't think physical jamming of scanning machines is particularly likely to be a common problem, but sure, if that happened, somebody would have to come in and unjam it; they say that "contractual" safeguards are involved, which I think probably means that people aren't supposed to look at the forms, and there are people who watch the people who aren't supposed to look at the forms, and if there is form-looking discovered they forfeit some large chunk of money. But in terms of ordinary operation it's perfectly possible to design a system where nobody need ever look at a complete, unencrypted form.
Defense contractors/arms manufacturers do a huge amount of document processing, as their technical material and other paperwork involves millions of pages of stuff. This isn't to say that they are the best places to do things like census processing, but it does help explain why they show up in what seem like odd places outside of the industries they're known for. I can't remember the examples, but I've recently come across a few other places where government contracts were with similar companies for non-military related stuff.
Also, I'm sure there's an inertial force of already having close government/private relationships, so why look elsewhere? This is not a defense.
On the issue at hand, the Patriot Act continues to be a huge blot on this country. From what I've learned about other countiries' (well, in Canada and Europe) access to information and privacy laws, the US is just a huge shithole of violations of their rules, mostly because of the Patriot Act, so they have to take extra steps to keep domestic private information within their borders.
Also, 1896 census? Every 10 years, numbers ending in zero.
Furthermore. I think "Pantograph Punch" should be the name of a drink.
Fine, 1890 census. But at the time they took years to tabulate, so... well, I'm still wrong.
Also, having looked at the linked article now. I suspect that Office of National Statistics employees will be able to access the data if needed, not that no one will be able to access the data. I wonder if the UK requires the terms of public contracts to be disclosed, but not enough to go looking myself.
64
... It would be a much briefer process of making sure it all looks in order. ...
I think technically you would be legally required to verify all the input values were correct. Which would mean comparing them to your W2 and 1099 forms. Which would eliminate a lot of the time savings.
During the 1896 census, William Jennings Bryan refused to be quantified on a crosstab of gold.
I've heard tell that the 1890 census marked the end of the American frontier (with all enumerated counties in all enumerated states showing significant signs of European, or European-based, settlement and so on). Given the loss of the 1890 census to fire and flood and etcetera (and there was no 1896, you bunch of fantasists), I can only take this hypothesis of the frontier-thesis on hearsay.
Also, governments should provide full-function filing software and not prop up private tax preparers.
Like the software the Dutch tax service provides?
Just did my taxes this weekend and it was a doddle. Got this year's tax programme from the link above, logged in with my DigiID (which provides access to all available online government and semi-government services/databases) to get my employer's statement on my earnings, then spent about an hour filling in the rest of the form. Because employers and lenders and everybody else official you get or loan money from (banks, mortgage providers etc) are obliged to provided you with a financial statement, it just becomes a question of plugging in the numbers and getting back the result.
In my case, it's another year of having paid too much taxes in advance plus having a reasonably high mortgage (half of the interest of which is deductible) which means I get money back. There is an option to get your mortage interest deduction monthly, but in that case you won't get the interest on the money you paid too much in the first place -- which is five percent so nothing to sneeze at.
I have the feeling though that this sort of solution won't be popular in the US, what with actually having to trust the government not to fsck you over with these tax programmes. Which, in the US, I would not be confident about either...
I can't get worked up about Lockheed Martin (or CACI). Any company big enough to run the census collection is likely to be fairly evil by definition, and it isn't as if the government was unaware of the security concerns (see pp. 10-11 here, pdf). It's presumably possible that information could be leaked by imaginative malice, but that would be the case equally if the thing was being run exclusively by civil servants or Trappist monks. I think this is borderline tinfoil hat territory.
On the other hand, the PATRIOT Act is an act of gross international aggession and should be recognised as such more widely.
Alternative 84.1: If the CIA wants British census data badly enough, the government will give it to them without all this other nonsense. But it's wildly unlikely that they would want it. They don't have the resources to process it, whereas the British government does, and will publish the results.
I've been ins tudent laon interest hell. MA lets you deduct undergraduate interest separately from grad school interest.
The Federal form just tells you total interest paid, so I called them about a month or so ago asking them to send me the amount broken down. The supervisor said that they would do it, but I haven't received anything yet.
I also went online and added up all of the stuff from their website by grad loans and undergrad loans plus some stuff from when I was in default resolution.
The numbers don't match what they said on their form. I paid over $6,000 in interest (and the federal grad student stuff maxes out at $2500), so I want to be honest while maximizing the undergrad interest and probably $3500 of that is grad student taht wasn't claimed on the Federal return, but getting the information right is screwy.
They're going to get a pile of print-outs from the department of education's loan site.
I'm not going to e-file my return with the state for $20 either.
I'm also really concerned about how you support the e-filing info.
My boyfriend's company uses a major payroll company, so Turbo Tax was able to upload all of his information with his social security and employer IN.
My rinky dink operation requires that I enter every line manually. Wouldn't they need me to mail them the paper return with the W-2?
Speaking of withholding, dumb budget move or dumbest budget move?
From what I've learned about other countiries' (well, in Canada and Europe) access to information and privacy laws, the US is just a huge shithole of violations of their rules, mostly because of the Patriot Act, so they have to take extra steps to keep domestic private information within their borders.
The Patriot Act is part of it, but the US fell foul of European privacy rules long before it. In the UK (and I understand that other countries, especially Germany, are even stricter) the basic rule is that you can only use personal data for the reason stated when you collected it, and holders of personal data have a legal obligation to protect it and not store it for longer than necessary. You also can't send that information outside the EU unless the place you're sending it to has equivalent data protection laws, although I suspect that part is enforced extremely selectively.