Bolstering the I.R.S.

        Robert A. Levine    5-14-12

 With federal budget deficits and the national debt as major problems for the country going forward, why have Republicans been unwilling to fund more I.R.S. agents to pursue tax cheats and increase federal revenue? The 2012 Obama budget asked for an increase in funding for the agency, much of which would have been dedicated to hiring more agents and enforcement initiatives. However, Congress in its infinite wisdom instead cut the I.R.S. budget, forcing the agency to offer buyouts to over 5000 of its employees.

 A report by the internal monitor of the I.R.S. in January noted that the cuts in funding and an increased workload made the agency unable to adequately collect taxes or provide reasonable service to the public. In fact, staff reductions resulted in an inability to obtain billions of dollars annually owed to the government, but not paid. One estimate from I.R.S. data had tax cheating costing the federal government $3 trillion over the last decade. In addition, every tax filer has to pay an extra $2200 to the government to compensate for those taxes that are evaded. The great bulk of the tax avoidance is by wealthy individuals or small businesses. If with more agents I.R.S. audits rose significantly, much of the money now owed could flow into federal coffers, a good deal of it voluntarily through tax dodgers’ fears of being caught.

 The recent GOP House budget proposal emphasized cutting tax rates, while closing loopholes and deductions, but did not provide the I.R.S. with additional help to improve enforcement of the current tax laws. And in a cynical maneuver, the loopholes and deductions to be ended were not specified in the GOP bill, so that no estimate could be made of whether the revenue generated would be equivalent to what was lost with the tax cuts. Last year when the additional money was requested for the I.R.S., one Republican Congressman declared that no money would be forthcoming for “I.R.S. goons.” This is emblematic of the way many Republicans view the I.R.S; an agency whose powers should be reduced rather than expanded. And when service from the I.R.S. is not up to par, citizens’ hostility to the agency grows, which is probably what Republicans want.

 One would think that in this time when shrinking the federal budget deficit is so important to both parties and the electorate, the idea of collecting more money from tax cheats would be a no-brainer for the deficit hawks in the GOP. Not only would it bring in additional revenue to reduce the deficit, but it’s also an issue of fairness for those who pay their share. And getting it done would be relatively painless. Do Republicans hate the I.R.S. so much that they are willing to let fraud go unpunished and tax-evaders keep their ill-gotten gains?

 Republicans appear to be hostile to anything that has to do with taxes. While there’s little question that the tax code needs changing, the tax laws now in place need to be maximally enforced for the good of the nation. This should be done independently of cutting taxes, or reform of the tax code.

 Resurrecting Democracy
www.robertlevinebooks.com

A Reminder- How Government Helps Make the "Self-Made" Man

                                    Robert A. Levine   April 30, 2012

There are myths proclaimed by some right-wing partisans and Ayn Rand acolytes that “rugged individualists” working alone have been responsible for America’s great accomplishments and that government is the enemy of progress. In their quest to reduce taxes, particularly for the wealthy, and cut the size of government, this myth has been promulgated by ideologues to gain support from the middle-class, needed to elect legislators who share their vision.

Unfortunately, many Americans have accepted this narrative and because of it, often vote against their own interests. In a recent essay, The Future of History, Francis Fukuyama noted “individuals are not sovereign entities, but beings heavily shaped by their surrounding societies.” Pounding away at the failings of “big government,” conservatives have ignored the positive effects of government and the fact that no one in the modern interconnected world is able to make it on his or her own. Aside from its role in national security and protecting Americans from foreign threats, the federal government is a necessary part of citizens’ everyday lives and provides the internal fabric that holds the nation together. Unlike the 18^th century, for an individual to be successful in this day and age, government help is essential.

Businesses could not function without the nation’s infrastructure (though it currently needs work). Building the interstate highway system, bridges and tunnels and maintaining them, was and is a federal concern. The integrity of America’s ports and airports, and air traffic control, all comes under the aegis of federal agencies. Products and people could not move if it were not for the government. Apportioning the broadcast spectrum for TV, radio, cell phone companies and so forth, insuring the safety of transmission lines, pipelines, and so forth, are all functions of the federal government.

In addition to regulating interstate commerce, international trade agreements negotiated by the federal government set the ground rules for US trade with other nations, and have opened up markets for American products. American businesses are also protected by the government when foreign companies dump their goods in this country. Intellectual property rights, here and abroad are nominally safeguarded by the government, though in this area federal agencies have fallen short. The Export-Import Bank helps American companies sell their products to other nations.

Funds for research and development, since WW II, have come from the federal government over and above the private sector and have resulted in many benefits. The development of much of the Internet, global positioning systems, drones, came from work funded by DARPA (Defense Advanced Projects Research Agency). The NIH and funds for medical research have led to many advances, including treatments for cancer and other diseases.

Educational standards are promoted by the federal government and funding is provided to support K-12 schools and higher education, in addition to Head Start. Pell grants, Stafford loans and other programs allow many students to attend colleges they would otherwise not have been able to afford.
The safety of the foods Americans eat and the medications they use are federal government responsibilities. Federal regulators protect investors from financial predators and uphold the integrity of the banking system.
The government provides a safety net for older people and the disabled through Social Security, keeping them from impoverishment. Medical care for seniors and those who can’t afford it is covered by Medicare, Medicaid and other programs.

Businessmen and entrepreneurs need government to help them communicate with their suppliers and customers, receive materials and get their goods to market. The educated work force that businesses require depends on the local, state and federal governments, with federal agencies providing a supervisory role and extra funding. A large part of the health and safety of their workers is a federal responsibility. People who claim to have made it on their own are either unwilling to acknowledge the actions of government for ideological reasons, or are engaged in self-promotion.

The federal government is inefficient in many of its operations, but its expansion has occurred during both Democratic and Republican administrations. Those who rail against the government should focus on fixing it and not just making it smaller so they can pay less in taxes. And the money saved should go to paying down the deficit. For different reasons, both the weak and strong among us need a robust federal government in today’s world.

Resurrecting Democracy
www.robertlevinebooks.com