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Tuesday, July 1, 2014

Bernstein: Why the GOP Really Wants to Defund IRS

Washington Post op-ed:  Why the GOP Really Wants to Defund IRS, by Jared Bernstein:

In one of the great D.C. key-dangles (“look over here, not over there!”), congressional conservatives have everyone looking the other way while they try to defund the Internal Revenue Service. No question, recent IRS screw-ups are feeding right into their opponents’ plans. But let’s not lose sight of what’s really going on here: This is just a different way to try to shrink government, accommodate tax evasion and even undermine the implementation of health reform. ...

To collect taxes, we need an amply funded IRS, and therein lies the real scandal. The details are in this new Center on Budget and Policy Priorities paper by Chuck Marr and Joel Friedman, who document “…significant cuts that have occurred in IRS funding, which remains well below its 2010 level…. The cuts have led the IRS to reduce its workforce, severely scale back employee training, and delay much-needed upgrades to information technology systems. These steps, in turn, have weakened the IRS’s ability to enforce the nation’s tax laws and serve taxpayers efficiently.” ...

Marr and Friedman identify these additional facts of the real case:

  • The figures below show a 14 percent fall in the agency’s inflation-adjusted budget (figure 1) along with an 11 percent decline in its staffing levels (figure 2), 2010-2014. IRS staff assigned specifically to enforcement is down 15 percent.

Bernstein_IRS_combo

  • The president’s 2015 budget proposes a $1.2 billion increase in IRS funding. While that increase would certainly help, it would still leave the agency 7 percent down in real terms from its 2010 funding level.
  • And House appropriators are predictably pushing in the other direction, proposing a 2015 budget that would leave the agency’s budget about 18 percent down from 2010 levels in real terms.
  • As these cuts have transpired, the IRS has two big, relatively new jobs: 1) implementing the Affordable Care Act, which has large and critical tax components (e.g., the IRS must administer the millions of health insurance premium tax credits) and 2) implementing the Foreign Account Tax Compliance Act, which, according to Marr and Friedman, “seeks to reduce illegal tax evasion by requiring filers and financial institutions to report more information to the IRS about assets held in offshore accounts. More than 77,000 financial institutions in 70 countries have already registered under FATCA.”

The IRS, by failing to stop the ideologically tilted database searches and losing e-mails allegedly related to that case has unquestionably handed its attackers a huge ring of keys to dangle as they go about underfunding the agency and reducing its ability to do its job. But when someone the other day described these developments as “Orwellian,” I was compelled to correct him. They’re “Pynchonian,” as in this Thomas Pynchon quote I find myself recalling almost daily these days: “If they can get you asking the wrong questions, they don’t have to worry about answers.”

Washington Post op-ed:  Stop Starving the Beast of the IRS, by Catherine Rampell

http://taxprof.typepad.com/taxprof_blog/2014/07/bernstein.html

IRS News, Tax, Think Tank Reports | Permalink

Comments

Sorry, but if the Democrats and those who work for the IRS want it to be well-funded, they can deliver up all the proper heads implanted on sharpened stakes. Until all those in the IRS and above who abused their authority get punished in proportion to this most serious of crimes—using the government to censor political free speech and alter elections—the IRS budget not only can but ought to be cut.

Prosecutions are, after all, the responsibility of the DOJ. If it doesn't act, the most effective weapon on Congress's arsenal is budgets not just of the IRS but of the DOJ itself. Do your job or get laid off is a most powerful message. And the answer to those costs of administering all the complex money grabs of Obamacare is no Obamacare to administer. It really is that simple.

Remember, Nixon lost his job as President for merely talking about doing what's been done wholesale under the Obama administration.

Posted by: Michael W. Perry | Jul 1, 2014 2:23:52 PM

Nope, it's Big Brother and he wants to terrorize you into loving him.

Posted by: Otto Maddox | Jul 1, 2014 2:31:51 PM

Don't forget that the IRS has also taken a partisan role in health insurance, rubber stamping the President's illegal amendments of the law passed by Congress. Will the IRS be equally accommodating to a future Republican President who wants to rescind the law piece by piece through executive action, e.g. by "temporarily" suspending the 3.8% additional Medicare tax? I doubt it.

The people in the IRS are partisan. That's the root of the problem. Any credible solution must eliminate the partisanship by moving hundreds of people out of their jobs.

Perhaps most of the operation should be put out for competitive bids. The winning bidder would have a financial incentive to enforce a ban on partisan activities by its employees.

Posted by: AMT buff | Jul 1, 2014 2:41:34 PM

It makes sense that Democrats want more funding for the IRS, because it's their attack weapon against people who exercise freedom of speech to oppose oppression by Democrats . It was also members of the Democratic Party who were members and financially supported the KKK when the Klan was used to beat up people who fought for free speech and rights in the early days of civil rights. It's the same political party that has no principles and knows no legal bounds when it comes to silencing those who challenge their power.

Posted by: Woody | Jul 1, 2014 10:00:10 PM

Woody, that the Democrats who were KKK members were conservatives–mostly southern conservatives–seems to have escaped you. There were no liberal Democrats or Republicans in the KKK.

Posted by: Publius Novus | Jul 2, 2014 8:09:33 AM

Publius Novus, Democrats are neither conservative nor liberal. They are populists, who take any position that helps them at the moment.

They swing from George Wallace saying, “I will never be out-n*****ed again," to LBJ flipping that and saying, “I'll have those n*****s voting Democratic for the next 200 years,” to Obama calling the Tea Party “teabaggers” while claiming that attacks against them are “phony scandals.”

Democrats will say anything, take any position, break any laws, and beat up anyone to retain power. Yes, the Democrats of the Klan are the Democrats of today – populists, only after helping themselves. Democrats are the Chicago political machine that destroys opponents.

Now, they have turned their attacks against conservatives – only because conservatives threaten their power, just like blacks threatened the power of Democrats in the 1960s. They replaced the burning cross with IRS audits and investigations.

That’s the heritage of the Democratic Party. That’s who they are today.

Posted by: Woody | Jul 2, 2014 11:03:31 AM

PN, I agree. The fact that this time it is the Dems who are abusing power is simply not related to the KKK in any way. That said, I also agree with Michael Perry. The IRS's behavior has been shameful, and instead of coming to Congress hat in hand displaying a willingness to cooperate, they send an arrogant snit to tell Congress to bug off and trust them.

Posted by: Mike Petrik | Jul 2, 2014 12:05:32 PM