The Internal Revenue Service has been caught cheating…on your taxes. OK maybe not your taxes. It's our taxes. Taxpayer's taxes. That's not quite it either. No, it's about tax exemptions - those people who don't have to pay taxes. No, that's not it either. It's about letting some organizations get tax exemptions while denying tax exemptions to other organizations, specifically organizations that are opposed to higher taxes, Obamacare, Obama himself, or are interested in patriots and the U.S. Constitution. Along the way, it singled out people of similar attitudes for tax audits and even called in other federal agencies to take a look at these suspicious people. Also along the way, they have been criticized for spending $50 million on 200 plus employe conferences. But that's just money.
The issues, of course, are deeper than that: a federal enforcement agency is targeting political groups which are critical of the government. It goes along with the Justice Department's extraordinary surveillance and intimidation (by threatening espionage charges) of the media to find out who is leaking secrets to the press. Of course, that doesn't include the leaks that the administration itself has made. That a major target was a Fox news reporter is another facet of the inquiry given that the administration has declared from time to time that Fox is the enemy.
However, back to the tax issue. What's the big deal about tax exemptions? Why should anyone get a tax exemption? Supposedly, it's a common good thing or social welfare and so forth. Can't be for political purposes, however. Or, at least most of it has to be non-political: like churches who can't participate in politics but do anyway, indirectly, morally, free speech and all that. OK. It's difficult to determine qualifications for these organizations. At the very least, the IRS has to be unbiased and unpolitical. My question is: should they be put in that position at all?
Why give any tax exemptions? Churches on up or down, if you prefer. Just get out of the tax exemption business altogether. Get out of the tax deduction business altogether. In other words, from the organization standpoint, don't deal with the government at all; and from the government standpoint, don't offer exemptions at all. Separation of state and churches and all causes, let's call it.
That would be a start in hacking away at the 73,000 pages of the federal tax code. Then, move on from exemption to exceptions. Don't think there aren't inequities everywhere. The federal income tax code has been used for social engineering ever since it came about in 1913. All that engineering seemed reasonable at the time, but as time changed the code didn't. It only grew and grew and grew…until we're up to the giants at the top of the beanstalk. Time to chop that beanstalk down. That's one solution.
Here's another one. Do away with the IRS. Of course you can't do that and still collect taxes…unless you adopt what is known as the FairTax. That is a proposal made several years ago by a group headed by a former Georgia congressman John Linder and a radio commentator, Neil Boortz. Boortz quit the radio business and now works advocating the FairTax. It's a serious proposition and it took less than 200 pages to explain it. It does away with the IRS because it does away with the federal income, Social Security and Medicare, business and estate taxes.
It substitutes these with a consumption tax collected, like sales taxes, at the point of transaction. It would be in the neighborhood of 23 percent. It theorizes that when all the taxes of people and business are dropped, prices of goods drop accordingly so that $10 purchase would be only $7 (or something like that) and the tax would be on that. Lower income people would actually receive a monthly federal check to offset the non-progressive nature of the tax. Buy the book or get it at the library. It's an easy read. There are actually two books. One that explains it and one that answers the critics.
There are a number of benefits. It gets rid of the IRS; it simplifies the tax code drastically; you don't have to file anything; it reduces the cost of doing business; it encourages savings; it taxes more those who spend more; it would be revenue neutral. It is not without critics. Some say the math doesn't work out; others think higher earners get a bigger break.
Whatever. It has to be more equitable, fairer, or more honest than a code that requires 73,000 pages to explain and 93,000 employes to enforce.