Monday, April 23, 2012
"I am a firm believer that the true progress of an institution such as the IRS is achieved by standing on the shoulders of those who have preceded us,” [IRS Commissioner] Shulman told a Washington audience. You could almost hear the contrived catch in his throat....
The accountants who prepare millions of tax returns, however, hear something else. They see the IRS standing not on “the shoulders of those who have preceded us,” but on the necks of everyone else. “We’ve been instructed to show no mercy this year, to disallow everything,” says one IRS compliance officer. “It’s frightening.”
Stung by the reluctance of Congress to raise taxes, the Obama administration has obviously set out to use the IRS to do the dirty deed. President Obama has big plans for expanding the federal government once he achieves “flexibility” after the November election. The coming schemes will cost money. Since Congress won’t cooperate and the Treasury is overdrawn at the Bank of China, the only solution is confiscation. There’s still standing room on the necks of taxpayers - even widows, orphans, the disabled and the infirm, some even sick unto death.
One avenue to more revenue (more a boulevard, actually, than an avenue) is the closing of loopholes in the tax law. Everyone in Congress -- Republicans and Democrats, liberals and conservatives -- agrees this is a good idea, as far as it goes. The tax code, as Jimmy Carter said, resembles Swiss cheese, with holes for handouts, carve-outs, subsidies and loopholes for the many, and justice and mercy for the few. Mr. Obama made a show of declaring war on loopholes months ago. “Get rid of loopholes,” he demanded in his State of the Union address last year. “Level the playing field.”
Loopholes are the evasions that everybody in Congress loves to hate, but Congress creates new ones in every tax bill. It’s the love that dare not speak its name, but it’s the way of Washington, where inconsistency is a virtue. Some loopholes are cuter than others, and anyone who wants one must hire an effective (and expensive) lobbyist. An author, poet, sculptor or screenwriter, for an artistic example, must pay taxes on “ordinary income” at rates up to 35%. The Nashville Songwriters Association knows how to lobby, and a songwriter who sells a catalog of songs gets a better deal. The songwriter can report the income as a capital gain and claim a rate of 15%. Sobbing, singing and sighing about disappointment, blighted hopes and hard times is only a pose.
Congress and the IRS are dancing partners in a carefully choreographed ballet. Occasionally a congressional committee will call in a commissioner to make him squirm about abuses of taxpayers, arrogance of the agency and its high-handed interpretation of tax law. But it’s only a ballet, and the IRS is eager to perform a passable pas de chat. The ballet terrifies taxpayers like “Peter and the Wolf” terrifies small children, and there’s a spike in compliance, craven or otherwise. So be grateful for that helpful foot on your neck, and hurry down to the post office.
(Hat Tip: Arlene Holen.)