Improving Ohio’s business user interface

Ohio spends millions of dollars trying to “create jobs” and “attract business” to our state. Then we spend millions of dollars persecuting those very same companies because our bureaucrats don’t know how to build an efficient system with a smart user interface to collect fees and taxes.

Overly complex systems, spread out over multiple divisions do nothing but create extra overhead for business, small and large. We create work for an entire industry of “payroll companies” and accountants, all because we allow so many different taxing districts and authorities. We give them funky names too- like the “Department of Jobs and Family Services”- instead of “Unemployment” and “Garnishment”- and require forms to tell the State how much we already sent in (that Ohio gives the same number as a Federal form- just to make things confusing).

Sure your accountant will know the difference between a IT-501 and a State 941, but why can’t we call them by descriptive names- like a Quarterly state withholding form, or an Annual State withholding report?

My absolute favorite is the “Bureau of Workers Compensation”- what exactly is that? Isn’t my business what provides my workers’ compensation? Nope, these are the people who take care of workers who are compensated for on-the-job injuries. Should we call them “Broken Workers Compensation”?

About once a year, I get mailings from 15 different MCOs  (don’t ask) that want to enroll me in their plan? Why is there “competition” for a State-run insurance pool? Who knows, but it sure adds to the confusion of running a business- why are “private companies” acting on behalf of our State? And, all those mailings? Who pays for them? If we are looking for cost savings- wouldn’t it be more efficient to have one plan administrator?

Why do we have to deal with City, County and State levels of tax collection with different sites, processes and procedures? Why not one integrated tax gateway (and why can’t it also include the Federal collections as well)? Australia tried tackling the problem with a “Simplified Tax System” for companies with revenues under $2 million AU- as an alternate offering in 2001. For all the world’s brilliance, when I search for tax simplification- I find a lot of FairTax propaganda, but not much much about simple interface/user experience simplification. Even the Federal Forms- like the 1040ez could get a design overhaul (it was last done by Siegel and Gale in 1979 but that was the form look more than the actual process). You can also see a design charrette for overhauling the IRS site–  which demonstrates how user friendly/personalized sites may actually make collection more accurate and less painful.

Better yet- why don’t employers just ACH (that’s another overly fancy term for “Automated Clearing House” that banks use to describe electronic funds transfers) our payroll money to the State- by SSN for each employee- and let them ACH what’s left back to the employees’ bank account- guaranteeing all the funds go to the right people at the right time? One stop payroll/tax collection/garnishment etc.?

Does it sound like too much big-brother to you? Considering the failure to file an annual reporting form- even if you OVERPAID your withholding which was a couple of hundred dollars- brings a flat $500 fine, it seems that our government has the ability to smack down any small business quite easily (while having no problem handing out our tax dollars like candy to large firms that promise the moon yet don’t deliver cheese- UltraCell anyone?). Speaking of the grants and tax breaks- why are politicians and bureaucrats allowed to take our hard-earned tax dollars and hand them out capriciously to one business or another? Aren’t tax dollars collected to provide services for all- not to finance friends and family? If you’re wondering why political campaigns have become so expensive- it’s because getting preferential treatment by the State requires huge payola to the politicians. Maybe we should just add a flat campaign tax to everyone’s tax bill- and fund the dissemination of political platforms with our own money- so we stop having the “best politicians money can buy.”

If our government is truly interested in creating jobs and empowering businesses to grow in Ohio- it’s time to come up with a new simpler way of doing business.

We could trim State employees who cost us bundles re-mediating the confusion, while increasing collections because of the simplicity of it, and stop playing favorites with our tax dollars.

Then maybe we’d have more money to build and fund all these roads, trains, bike paths, parks, schools, police departments, jails, firehouses and information superhighways that provide for everyone- so Ohio can be a great place to live.

If you know of any good resources that talk about a complete overhaul of the tax collection interface, please share the links in comments.

Further reading:

A discussion of collecting sales taxes http://mthink.com/content/benefits-certified-tax-systems

Australia’s simplified tax system: http://www.yo2go.com/simplified-tax-system/

Cleveland uses Sybase to increase efficiency in tax collection: A press release from a third party aggregator- can’t find original release

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5 Responses

  1. truddick December 4, 2010 / 4:41 pm
    Bravo.  You’ve hit a nail on its head.  The problem isn’t taxes per se, and just blindly cutting tax rates doesn’t improve the economy or it would have worked by now.
    No, the problem is too many types of taxes, too many loopholes, too many credits/deductions/adjustments.
    And no, the FairTax will not resolve the problem, just make it worse by creating a national sales tax that will not, in fact, replace the IRS–rather double it in size.
    I’d favor a few intelligent reforms, such as:
    : You only pay income taxes for entities where you work.  If you work in Oakwood but reside in Dayton, Oakwood gets to collect taxes from you.  Dayton, of course, will still get your property taxes, and any sales taxes if you shop in the city, and all of the garbage/water/sewage fees, etc.
    : Move to eliminate multiple forms of taxation.  Sales and property taxes are regressive in that they require lower-income people to pay a higher percentage of their incomes than the wealthy.  The only fair form of general taxation is a progressive income tax.  Yes, income tax rates would go up.  But you wouldn’t be nickled and dimed to death at the cash register, at the auto dealership, or at the county treasurer’s office.  Think how many properties might not be lost to owners if back taxes never built up?
    : Remove all exemptions, deductions, credits, etc.  If you earn X dollars, you automatically pay Y taxes.  This not only makes the tax more fair, it removes almost all of the clerical and administrative staff that’s necessary to double-check long tax returns.  While we’re at it, make it illegal for any government to pass legislation that cuts taxes for individual citizens or corporations.
    Now, who’s going to spearhead this movement?
  2. David Esrati December 4, 2010 / 6:08 pm

    @Truddick- nice of you to agree with me for once.

  3. truddick December 6, 2010 / 10:46 am
    I tend to agree with ideas, not people :-)

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