Anonymous wrote: "Ooh, an even better idea? Get rid of the IRS and bring on the Fair Tax or Flat Tax. Either sound better than the IRS's implemented chaos."
I don't know who Anonymous is, but their tone seems earnest, so I thought I'd respond:
1. If the complaint is about the efficiency of processing returns, payments, and refunds, making publications and instructions available, etc, then the IRS may be blamed. However, I think the "implemented chaos" Anonymous refers to is the complexity of the tax code. At least in my experience, that's what makes taxes painful: finding the required information, figuring out what numbers fit into what boxes (even using TurboTax), etc. It's not getting the forms, waiting months for refunds, or being visited by black-suited auditors in the night. The content of the tax code is - rightly - developed via politics, so if one wants to take issue with its complexity, first stop is the Presidents and members of Congress who have filled it with all sorts of special perks and penalties to advance their particular remedies for the ills of the American economy and/or society. For example, I understand that one of the current Presidential candidates - not the Commissioner of the IRS - has proposed a special tax regime for "patriotic" corporations.
2. I'm definitely a flat tax fan (in principle, not dogma, so let's not bother with strawmen of stupidly defined flat taxes that are stupid), but I wonder about the "Fair Tax". It has a suspiciously cheery moniker for a tax, not unlike a special tax regime for "patriot employers". More substantively, George Orwell addressed this years ago: "All [taxes] are [fair], but some [taxes] are more [fair] than others."
Thursday, February 21, 2008
In defense of the IRS
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5 comments:
I don't quite understand your position on the Fair Tax Act. Are you saying you're suspicious of it because of its name? It's definitely simpler and better defined (given that it is a current bill in the House) than the "patriot employer tax deduction" proposed by him who shall not be named.
Chad: Nonsense.
The so-called "Fair Tax" is a national sales tax with month-by-month rebates. To make that system work requires a level of reporting on a transaction by transaction basis and raises the same sorts of tax law questions of recognition versus realization as the current revenue/expenses per tax year. Nor is it at all clear that a transaction based tax code would be any less prone to politicization than the current system.
Trav: It certainly is true that congress and the president have the right, as the the power, to make the tax code the politicized power balance that it has become, but that doesn't necessarily make it right, as in a wise policy.
A true tax code purist (of which I am not) would say that the sole purpose of taxes should be to fund the government and the method of taxation should be solely focused on that. This still leaves the door open somewhat to political question of who pays, what proportion and how much money does the government really need, but: in that context, the criticism which seems to be impliedly levelled at this so-called "patrior employer" stimulus is that its using the tax code to coerce certain decisions about how people operate their business, in a way which is far away from the purpose of taxes.
But I am a tax realist: The tax code is what the tax code is, and American politicans are who they are. The tax code is going to be complicated and politicized out the yin yang no mattter how its structured. So no point being a crybaby about it.
How nice to be anonymous. It's true, I'm a crybaby as Mr. Li puts it. I don't like big government, I don't like the convoluted tax laws and I don't care for how our tax dollars are spent. I can vote, petition, lobby, educate and raise a stink about it all I want (assuming I have no day job, spare time and money). Frankly, I think my head would explode or I might have a heart attack if I pay too close attention to the politics and policies. I like the Fair and Flat tax approaches for a couple reasons: it gets rid of the idiotic claims of inequality in taxation (that baloney about making the rich richer and the poor poorer) and it makes it much more evident (therefore hopefully less neglected) how much we are spending in taxes. It used to be you cut a check to the gov't on a regular basis. This taught budgeting, saving, mindfulness of your tax dollars and what they were used for. We've lost sight of most of those things as a society (just my take). I won't blather on about this stuff because I'm really not that well read on it. It hurts my head. I feel like gov't is the Titanic and it can't be turned around. So sad. Humans are just that, human. This means no ideals will work. I still long for improvement and sensibility to win out over idealism and the ever popular corruption. Maybe I should pick up some books. I've noted a few of interest: Rich States, Poor States; How to Stop the Partisan War That Is Destroying America; Leave Us Alone: Getting the Government's Hands Off Our Money, Our Guns, Our Lives. I may never get around to them...
William,
So, we just give up, then? Your attitude is definitely tempting, and I've subscribed to it from time to time. I just don't think it's very productive. The Fair Tax Act suggests a national sales tax to replace income tax, FICA, Medicare, corporate taxes, capital gains tax, gift taxes, and estate taxes. Reducing the forms of taxes dramatically will simplify the tax code.
I agree that a transaction-based system could be politicized just as well as the current system, but that doesn't mean I'm not going to support legislation today that strives to reduce that complexity. Sure, Congress can make it more complex later, but the possibility of someone screwing something up in the future shouldn't stop us from moving in a better direction today.
Give up? Just the opposite. You play the hand you are dealt. Let's mix metaphors: You don't sell your house simply because its messy. Reagan achieved a huge simplification of the tax code from something like 14 tax brackets to something like 3. But you're right, we should let the tax code revert to something simplier. So I am glad you support letting the tax code revert to where it was in 2000. At least thats something we can agree on.
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