Third Party & Independents Archives

The IRS Got It Wrong ... Again

As far was Washington is concerned, $5.2 billion is petty change as the beltway joke about a billion here, a billion there and suddenly you’re talking real money, cynically states. As far as the average taxpayer, it is a lot of money. So when the IRS reveals that it gave out $5.2 billion in fraudulent tax returns, it does not sit well with taxpayers who are still waiting for a check for amounts overcharged by the tax authorities. But the larger question is, why do you have to give money to Washington in order for them to decide how much you overpaid and then send you back all, or some, or none, of the amount overpaid? The reason of course, is that the tax system is a huge and complex redistribution mechanism for transferring wealth between interested parties and achieving specific political goals for the benefit of some and at the expense of many. It is created by legislation which is created by lawyers, public service economists and policy wonks in general. It is a deliberate intrusion meant to affect behavior and outcomes. And if deemed necessary, violent force is applied to achieve those goals.

A simplified tax code, unfortunately, seems to be an increasingly remote possibility, and Steve Forbes' idea of a tax return that you could fit on a large post card remains a distant dream for those who are tired of the complexity and invasiveness of the IRS. And at times that seems like the overwhelming majority of the tax-paying population. There is another factor as well. Effective lobbying by business interests means a tax code that gives larger corporations an advantage over individual taxpayers as their K street lawyers help them successfully negotiate the tax code and gain benefits and reductions in taxes due. While it is any company's right to lobby Washington to make sure taxes don't take an increasing share of profits, a simplified tax code would make a lot of lobbyists in Washington unnecessary. Unfortunately, when angry tax payers demand corporations behave a certain way, no outsourcing, no moving of head offices or plants overseas, limits to bonuses, etc they are ensuring that complex legislation is put in place to at least give the appearance that offending corporations are being required to be "good citizens."

The simpler way to solve the problem would be a simple and transparent tax code with no or little loopholes so corporations would have to pay the going rate without getting all sorts of exemptions and reductions. A reasonable tax rate for all tax payers would encourage participation and simple clear rules would discourage rule bending by tax consultants. And a simpler tax code means less likelihood of the IRS sending money to fraudsters, money collected from overworked taxpayers. And this idea needs to be kept alive, despite the current reality. Things can change, even if its seems impossible at times.

Posted by AllardK at October 7, 2014 7:06 PM
Comment #384014

Not only do you have the bureaucracy with thousands upon thousands of people employed by the IRS, you also have the working people using the tax return as a christmas club account with the return at the end of the year. (that never made sense to me to let the government use your money, interest free, and then have to waive your fifth amendment to get it back) You also have the free-loaders who file a tax return just to get the earned/unearned income credit that nets thousands of free dollars each year.

The IRS is effectively paying people to keep it in business. That’s what happens when you put all your faith into the federal government instead of yourself and your local community.

Posted by: Weary Willie at October 8, 2014 12:24 PM
Comment #384019

FAIR TAX. It’s been mentioned before.

Posted by: tdobson at October 8, 2014 7:39 PM
Comment #384020

Allardk, we all recognize that the tax code is the product of some 70 years of lobbyists working for a larger piece of pie.

To call for a flat tax, fair tax, VAT or just some fringe reform of the current tax code is tilting at windmills, IMO

You may want to get in line and wait it out for the 2nd American revolution.

With this Corpocracy the risks always remains with the taxpayer. Good example in today’s Chicago Tribune. An article relates that the new farm bill puts an even higher premium price on farm grown commodities like cotton. Brazil/WTO cries ‘subsidy’ and fines the US/taxpayer some more millions to include a yearly payout of millions more to Brazil. This, so the corpocracy can continue to subsidize big farmers, and so on - - -

Otherwise - - -

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Comment #385346
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