Forget tax cuts: Abolish the IRS

WASHINGTON (Talon News) — Speaker of the House Dennis Hastert (R-IL) writes in a new book that Congressional Republicans plan to push for the elimination of the Internal Revenue Service during a Bush second term.

Details are sketchy, and as the Libertarian candidate for President laments, the elimination of the IRS is unlikely.

Founding fathers? The individual income tax was unconstitutional as the founding fathers wrote the constitution. We, in our imperfect wisdom, decided they were wrong. As a result the power of the Federal government has grown like Audrey the bloodthirsty man-eating plant. (Excuse me for equating a Republican congress to a 'Little Shop of Horrors'. I am of course speaking in generalities.)

Our Federal Tax code is so convoluted, so bloated, so filled with tax breaks, loopholes, and arcanity that it fills 60,000 pages of acid free paper. That's 60,000 pages of formerly living trees. Or put another way, that's 60,000 sheets of paper, per copy of the tax code, our school children could be using to practice writing their abc's.

Then there's the cost. Not just the simple cost of employing 101,080 people looking at your personal financial information at $10 billion a year and rising. But also the hidden cost of tax preparation and accounting to comply with the 'voluntary' Federal Income Tax-- in the billions as well. H&R Block's revenues alone for 2003 were $1.9 billion.

In addition the IRS might as well have shredded and burned your money since 1988 as it attemped to modernize and computerize it's tax collection activities to the tune of billions and billions of dollars and has so far failed in that attempt.

In 1988, the Internal Revenue Service put into effect a plan to upgrade and modernize the agency’s technological system. The plan, known as the Tax System Modernization (TSM), was implemented over the course of the next seven years. In 1995, the General Accounting Office released a report that uncovered failures in the program and large financial losses. It called for massive changes in program planning, management and implementation of TSM. Congress, in turn, called on the IRS by May 15, 1997 to produce a plan for correcting and updating its technological capabilities.

Wait it gets better...

WASHINGTON -- The first step in a multibillion-dollar effort to transfer taxpayer records from decades-old magnetic tapes to modern computers will be delayed until next year. The Internal Revenue Service planned to have moved records for roughly 6 million taxpayers who file their taxes using the simplest, 1040EZ tax form, onto new computer systems by August.

Contractors developing the modern computer system determined that the records would not be transferred until late in the year, prompting the IRS to push back the date so it would not interfere with efforts to gear up for the tax-filing season.

The August goal already represented a delay from the original target, December 2001. The first set of records now will not be moved until 2004.

But wait there's even more! Once they do finally get this whole 'computer revolution thing' figured out, your tax information will be vulnerable and at risk to hacking by insiders and outside hackers.

What's to be done? Should we commission a study? Do we need a committee to issue a report? No, we just need to fire 101,000 IRS employees and either go to a flat tax or a national sales tax.

After the GOP assumed power in 1995, Ways and Means Committee Chairman Bill Archer promised to "rip the income tax out by its roots." In a 1996 report, Bob Dole and Newt Gingrich argued: "The current tax system is indefensible. It is overly complex, burdensome, and severely limits economic opportunity for all Americans. We made clear on the very first day of the 104th Congress that our top priority would be to change the status quo . . . there is no status quo that needs more fundamental changing than our tax system."

Unfortunately, it was all talk with little action: The GOP has not moved major tax reform legislation through Congress. Republicans did enact tax cuts in 1997, 2001, and 2003 that included pro-growth reforms. However, many features of these bills increased tax code complexity. For example, the 1997 bill included 11 narrow education tax breaks including a tuition tax credit, an education IRA, and a student loan interest deduction.

So far the Republican party has failed to deliver on it's promises about fundamentally reforming the tax system. Hastert should be encouraged and lauded for bringing it up again. I'll be even more impressed if he brings it up after the election.

...Flat tax or Sales Tax? I frankly don't care at this point so long as we start over with something new. Even if we start over by completely throwing out every copy of those 60,000 page tax code volumes and begin with blank sheets of paper it would be better than the current system.

In fact I'll bet you I could write a more comprehensible tax code with 50 monkeys at 50 typewriters. Come to think of it that might be an improvement over the 500 or so monkeys we have working on it now.

Posted by Eric Simonson at August 12, 2004 2:02 AM