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Monday, April 26, 2010

Johnston: The IRS Is More Popular Than Sarah Palin and the Tea Party

Tax AnalystsDavid Cay Johnston has published What Polls Tell Us About the Public's View of Taxes, 127 Tax Notes 473 (Apr. 26, 2010):

Readers, here is some terrific news for sound tax policy -- and two related problems. But first, to give context to both the good news and the problems, a little quiz. Based on the latest national polls, how do Sarah Palin, the tea party movement, and the IRS rate with the American people?  ...

Last place in favorable impressions goes to the former governor of Alaska. Fewer than one in four Americans view her favorably. Next up, with a 36% favorability rating, is the tea party movement. Leading the pack by a large margin is the IRS, with an approval rating of 49%.

Wow! Who would have thought that the IRS would have a favorability rating a third higher than the tea party movement's? Or that the IRS would be twice as popular as Palin?

Who would have thought the IRS has a favorability rating just 1 (statistically insignificant) percentage point below President Obama's? The IRS's favorability rating stands much higher than that of House Speaker Nancy Pelosi, D-Calif. (29%), and of Senate Majority Leader Harry Reid, D-Nev. (16%), and four times that of House Minority Leader John A. Boehner, R-Ohio (12%). ...

The poll results are cause to celebrate, not just at IRS offices, but everywhere that people want sound tax policies. Those favorability ratings indicate that sound tax policies -- transparent, simple, equitable ways to raise revenue that grease the wheels of the economy -- can be attained. The public evidently gets that the IRS is only the tax police, enforcing the law Congress makes. Years of carefully crafted demagoguery using slogans polished by Republican pollster Frank Luntz are losing their hold on public opinion as hard facts disprove or discredit them.

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Honestly! Those are the findings of recent surveys, one done for Fox News, the other for CBS News. The polls, notes David Cay Johnston in his Johnston's Take column in Tax Analysts' Tax Notes Today, were conducted "shortly before the dreaded tax day, a... [Read More]

Tracked on Apr 26, 2010 2:21:04 PM

Comments

Obviously this poll was conducted among the readership (Kool-Aid drinkers) of either the NYT or http://www.huffingtonpost.com/. Only they would rate a governmental agency put in charge of taking people's money away a being more favorable than a group of people trying to slow down the governmental highway robbery.

Enough said.

Posted by: TaxGuy | Apr 26, 2010 5:28:20 AM

TaxGuy,

Nothing says right-wing lunacy like denying facts. Did you even read the article before commenting? The poll was taken by Fox News (and confirmed by other polls), which won't show the results on the air. As Stephen Colbert so eloquently put it "facts have a liberal bias."

Posted by: John | Apr 26, 2010 6:19:02 AM

So a poll is more important than at least 30 years of bipartisan Congressional madness?

Excessively optimistic here I do believe.

Posted by: save_the_rustbelt | Apr 26, 2010 6:21:20 AM

Did David Cay Johnston get fired by the Times or did he decide that Tax Notes was a step up?

Posted by: mike livingston | Apr 26, 2010 6:59:58 AM

WHOA THERE COWBOY!

I wonder how the approval rating for the IRS would change if those being polled were aware of IRS's BILLION DOLLAR frauds and swindles related to the tax treatment of (for example) state income tax refunds.

One example of an IRS swindle of taxpayers:

IRS instructions include state income tax refunds in the calculation of taxable Social Security benefits. Social Security benefits are then included in gross income. As a result of IRS's instructions the gross income attributable to the refund can be up to 1.85 times the amount of the refund. Compare this result with section 111(a) of the Internal Revenue Code which limits the gross income, and taxable income for that matter, attributalbe to a recovery to being no more that the recovery entered on Lines 10 or 21 of Form 1040.

Example of an IRS Fraud on the Treasury:

IRS instructions exclude ALL tax refunds entered on Lines 10 and 21 of Form 1040 (2009) from Alternative Minimum Taxable Income even though section 56(b)(1)(D) of the Internal Revenue Code limits the exclusion to refunds of taxes that were not deductible under 56(b)(1)(A)(ii) in a year the AMT was paid. The consequence of the IRS instruction is that neither the income used for a tax overpayment that produced a tax benefit in a year the regular tax was paid nor the refund of the overpayment are taxed if the refund is received in the year the AMT is paid.

Section 56(b)(1)(D)is necessary because there can be a limited long-term capital gains rate based tax benefit in a year the AMT is paid because of the dual capital gains rates that have been in place since 1997. A state income tax overpayment entered on Schedule A can result in more of the capital gains being taxed at the low rate and fewer of the gains being taxed at the higher rate, hence a tax benefit from a state income tax overpayment in a year that the AMT is paid. See page 2 of Form 6251 and IRS Publication 525.

Posted by: WD Kebschull | Apr 26, 2010 7:21:08 AM

David Cay Johnston isn't too bright if he can't see that the current tax protests are more about what taxes will have to become with reckless spending than what they are today under Bush tax rates. On the other hand, if he does see that, then he's bright and dishonest for the way he portrays concerns of Americans.

Paul recently provided a link to tax quotes. Here are those quotes from Johnston, that show, in my opinion, a twisted view of taxpayers and our system. I think we see his attitude towards government and individuals.

There is no moral argument for cheating on taxes, especially calculated cheating that requires the use of tax professionals and planning. If you do not like our tax system, then work to elect a different Congress.

So, using a tax professional to minimize your taxes according to the law is "cheating." And, is it "cheating" to have someone qualified to interpret 20,000 or whatever pages of law? I guess it's cheating when I have someone change my oil for me.

Just as there is an underground economy of gardeners and handymen and petty merchants who get paid in cash and pay little or no tax, there is also an underground economy among the super rich that lets them understate their true income and overstate their tax deductions.

How about naming them, DCJ? If you make such a statement, then surely you can back it up and have them investigated by the same IRS that people love.

The tax system today is not promoting prosperity based on individual enterprise and thriftiness. It is instead working, as all socialist redistribution schemes do, to enrich and benefit those who have access to the levers of power. In America that is the political donor class.

Sort of like "spreading the wealth?"

We have created a tax monster. I don't know anybody who defends our current tax system -- anybody. We have used taxes inappropriately to achieve political, ideological, and social goals.

Somehow, I don't really believe that DCJ is advocating the Fair Tax.

...the phrase "beating it out of you" comes from ancient Egypt where if you could not pay your taxes, you could go to the priests, who were the civil servants of the pharaohs, and they would give you a beating proportionate to the taxes that you owed and could not pay.

I know some people who would gladly accept that option versus years of harrassment and having their paychecks garnished, bank accounts levied, liens placed on their homes, and lives ruined.

...despite having an arsenal of weapons, no IRS agent has ever fired a shot at anyone.

IRS to Buy 60 Shotguns - Did they buy them to go skeet shooting?

David Cay Johnston has a left-wing political agenda. Considering him to be some kind of tax expert is like believing Paul Krugman is an objective economist.

Posted by: Woody | Apr 26, 2010 8:37:15 AM

Krugman is miles ahead of Johnston in his trip down the partisan rabbit hole. Johnston still shoots pretty straight, and he takes justifiable pride in his journalistic skills. Furthermore, Johnston has amply illustrated several examples of politically purchased tax breaks in his book Perfectly Legal.

The only serious technical disagreement I have with Johnston is in his characterization, shared with many others on the left, of income inequality. In my opinion, the whole point of reducing the top marginal tax rates was to promote a large increase in reported taxable income. That's exactly what happened, yet the Income Inequality crowd wants to persuade everyone that this revenue-increasing success was a failure. Raising tax rates to the sky will most assuredly reduce income inequality as measured by reported taxable income, but it will also cost the government a lot of money. That's not a win for anyone except the obsessively envious.

For a much better explanation of this point, see http://gregmankiw.blogspot.com/2010/04/guest-post-from-john-galt.html

Posted by: AMTbuff | Apr 26, 2010 9:56:19 AM

It's a kind of strange way to cite the poll, because it leaves out all the people who answered "no opinion." The IRS, like the President, is one of those things that everyone has an opinion about. The House Speaker, less so, and Minority Leaders even less.

Posted by: John Thacker | Apr 26, 2010 10:49:52 AM

I have not had serious run ins with the IRS. They've noted when I made a mistake which resulted in a decrease in my refund -- I failed to fill in the qualified dividends line -- but they also noted that I failed to take a deduction that I was entitled to take and made the correction and adjusted their totals accordingly. I subsequently submitted a 1040X explaining my goof and they acknowledged and reinstated the (qualified dividends related) amount adjusted.

I don't like paying this amount of taxes -- I have a large estimated taxes to pay over 2010 -- but I have to say that their treatment of me has seemed fair and pretty responsive.

How could I not feel approval over how they are doing their job? Now if I had been subjected to what seemed to me to be arbitrary or capricious or plain stupid (not understandable) actions then I wouldn't feel this way but that has not occurred. IOW they haven't given me a reason to disapprove of the job they do.

Posted by: gfh | Apr 26, 2010 11:00:26 AM

Johnson is making a painfully obvious inferential error, confusing approval of an organization with an endorsement of its policies. Rather than go through an explanation, I'll just do the same thing:

In 2008, public approval of the military was at 71%* (it's at 82% now). According to our law professor, this meant that 71% of the US public approved wholeheartedly of GWB's military policy: Iraq, Afghanistan, etc., Right, Professor Johnston? Right? Why do I only hear crickets?

Remind me not to hire any lawyers who graduated from Syracuse.

*http://www.gallup.com/poll/121214/americans-confidence-military-banks-down.aspx

Posted by: Joe Y | Apr 26, 2010 11:44:22 AM

Since about half the people don't pay income tax, but enjoy the benefits those taxes pay for, why shouldn't they have a kindly view of the folks who collect it?

Posted by: dave | Apr 26, 2010 12:00:33 PM

John says "TaxGuy, bla bla bla Did you even read the article before commenting? The poll was taken by Fox News (and confirmed by other polls), which won't show the results on the air. bla bla bla."

REBUTTAL

John, John, John. The Kool-Aid has shut down your cerebral cortex. Step back and away from the pitcher. Goebbels hit piece stated it was based upon latest national POLL"S" - plural. Meaning the author picked and choose polls from sources that fulfilled his hit piece mission. If he had said a Fox/Opinion Dynamics Poll (singular) had showed these results and then possible compared Palin and Tea Party numbers from similar Fox/OD polls then he, Goebbels, might have credibility, but instead Goebbels' shows his true colors and picks to site CBS/NYT polls on Palin and the Tea Party for comparison to the Fox/Opinion Dynamics QUESTION on IRS favorability. Goebbels hit piece told us nothing and essentially allowed him to spout off at the mouth using stats that essentially tell nothing. Let's do a real poll where these three entities face off against each in the exact same poll and then well see where the IRS really stands. Until then, this was nothing but a propaganda hit piece by a NYT reporter taking a pot shot using flimsy data. Basically another NYT hit piece.

Posted by: TaxGuy | Apr 27, 2010 9:22:42 AM