Regulating an industry tends to add to overhead costs,
which disproportionately affects smaller operators, leading to industry
consolidation. This is why Big Business often supports — or at least tolerates
— regulation.
H&R Block, Jackson Hewitt and Intuit all supported
the Internal Revenue Service's 2010
regulations on tax preparers. Small-time tax preparers, aided by the Institute
for Justice, sued and have helped block the rules.
IJ's Dan Alban alerted me this
weekend to a 2013 study that shows that the regs, nonetheless, seem to be
having their desired effect. The number of preparers is dropping. Returns per preparer
is rising. The number of small preparers fell dramatically, as the full study shows.
The IRS notes that smaller preparers are more likely to
make errors, and so driving them out of business is good from the perspective
of eliminating errors. Another benefit of consolidation, from regulators'
viewpoint: A more stable and readily identifiable preparer base aids
engagement and promotes effective tax administration. In other words, regulators like working with
fewer industry players -- it makes their job easier.
So, some liberals consider industry consolidation an
unfortunate consequence of regulation. The IRS seems to consider it a feature,
not a bug.....This Appeared Here.....
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