New official takes office with three fires, Musk is going to 'liven up' again!
On November 20th Beijing time, it was reported by American media that the Department of Government Efficiency (DOGE) led by Tesla CEO Elon Musk is considering developing a free mobile tax filing application. Affected by the above news, the stock prices of US tax service providers H&R Block and Intuit have fallen sharply.
As of the close of the US stock market on Tuesday, Block Tax fell more than 8% and Caijie fell more than 5%, with market values shrinking to $7.6 billion and $180.6 billion, respectively. It is understood that Block Tax earns nearly $4 billion in revenue annually from its tax preparation services, while nearly one-third of Caijie's revenue (approximately $5 billion) comes from its online tax filing platform TurboTax.
Developing free tax reporting software?
According to sources familiar with the matter, the Department of Government Efficiency (DOGE) led by Musk is discussing the development of a free mobile tax filing application.
According to reports, last week Trump appointed billionaire Elon Musk and former pharmaceutical executive Vivek Ramaswami to lead the Government Efficiency Department, giving them two main tasks: cutting government spending and reducing federal regulations. People familiar with the matter said that the leaders of the organization also discussed reforming the tax system, allowing Americans to file taxes through mobile applications, and saw it as an opportunity to improve the way millions of taxpayers interact with the federal government. This idea is not considered the core of the work of the Government Efficiency Department Committee, but it may still become one of its work goals after taking office.
Last weekend, the US Department of Efficiency released a tweet on X highlighting how complex US tax laws have become. Twitter emphasized that since 1955, the number of words in the US tax law has surged by nearly 1000% to 16 million words. The lengthy and complex tax rules make Americans spend 6.5 billion hours every year on preparing and filing tax forms. The post concludes by saying, "This must be simplified
After the news of the US Department of Efficiency considering developing free tax filing software spread, the stock prices of tax service companies plummeted, with Block Tax falling nearly 9% and Caijie falling over 6% during trading. As of the close of the US stock market on Tuesday, Block Tax fell 8.2%, Caijie fell 5.1%, and their market values evaporated by $679 million and $9.7 billion, respectively. Currently, these two companies dominate the tax preparation industry in the United States, earning billions of dollars annually by providing digital and face-to-face services. Analysts point out that the government efficiency department plans to create a free mobile tax declaration application, which may have a significant impact on several companies in the tax preparation department.
Block Taxation is a well-established financial services company with over 70 years of history, providing global tax reporting services through the mobile application Spruce; Caijie has an online tax declaration platform TurboTax and also provides professional tax products for accounting professionals. It is reported that Block Tax earns nearly $4 billion in revenue annually from its tax filing services, while nearly one-third of Caijie's revenue (approximately $5 billion) comes from its TurboTax platform.
However, Wall Street has different views on the potential impact of government intervention in tax reporting. Analyst Andrew Silverman stated that DOGE's tax filing application theoretically poses a threat to Block Tax and Caijie's revenue.
Jefferies analysts have released a report stating that investors selling Caijie stocks due to this news is "unfounded" as the tax filing application of DOGE in the United States is "unlikely to take priority in a long list of measures". The US Internal Revenue Service has previously launched a tax filing pilot program, but it has been "almost unsuccessful".
Will federal agencies be reduced to 99?
On November 13th local time, the "Government Efficiency Department" opened a social platform account with the username DOGE, which has been certified as an official government entity. The first post posted by the account reads: "Work overtime to ensure that your taxes are used reasonably
Musk stated that the new department will send a shockwave throughout the entire system, affecting anyone involved in government waste. He said he wants to streamline government departments. He posted on social media that the number of federal government agencies in the United States needs to be reduced by about 75%, and 99 out of 428 agencies will be enough.
Another leader of the Department of Government Efficiency (DOGE), Vivek Ramaswami, stated on November 17th that some federal agencies will be "completely removed" and that funding for contractors may also be "significantly reduced" after the new government takes office next year.
Ramaswami said, "There is currently a lot of waste, fraud, and abuse in government agencies, and federal contractors are also exploiting the federal government." Ramaswami said, "We expect to make massive cuts. We expect some agencies to be completely removed, and bloated departments of the federal government will experience massive layoffs. We expect to significantly reduce all federal contractors and other people or departments that charge the federal government excessively. So, yes, we look forward to all of this happening
It is reported that Trump has set a deadline for Musk and Ramaswami to complete the "reduction" work before July 4, 2026, when the United States will celebrate its 250th anniversary and only a few months before the midterm elections.
Trump announces multiple personnel appointments and nominations
On November 19th local time, US President elect Trump nominated Howard Lutnick, CEO of Cantor Fitzgerald, a financial company, as Secretary of Commerce.
It is reported that Lutnik was appointed by Trump as the co chair of the presidential transition team in August this year, helping Trump review and provide advice on cabinet nominations
On the same day, Trump announced that he would appoint Linda McMahon as the next Secretary of Education for the United States federal government. McMahon served as the Director of the Small Business Administration during Trump's first presidential term and was also a co-founder and former CEO of World Wrestling Entertainment (WWE). She was previously considered one of the strong competitors for the position of Minister of Commerce by the outside world.
It is worth noting that the position of US Treasury Secretary is one of the key cabinet positions that the new Trump administration has not yet announced. The new finance minister candidate has sparked public debate and has yet to be named by Trump. According to US media reports, Trump is about to interview two potential candidates.
Bloomberg News reported on the 19th local time, citing insiders, that Trump is scheduled to interview former Federal Reserve Governor Kevin Walsh and Apollo Global Management CEO Mark Rowan for the position of Treasury Secretary on the 20th.
After winning the 2024 US election, Trump recently nominated several candidates for important positions in the cabinet. Fox News television host Pete Hagerce has been nominated as the "second in command" Defense Secretary of the United States Armed Forces; Florida Republican Senator Marco Rubio has been nominated for Secretary of State; Former special forces member and Congressman Mike Waltz has been nominated for the position of National Security Advisor to the President; Robert Francis Kennedy Jr. has become a candidate for Secretary of Health and Human Services.