Our tax system is, at its core, a voluntary system. Since World War II we have had mandatory payroll withholding and quarterly estimated tax payments for the self-employed but it must be remembered this is not the payment of taxes. It is only a down payment on what we voluntarily self-assess ourselves when we file a tax return. We all know that some people voluntarily self-assess themselves large credits at the expense of the other taxpayers.
A voluntary tax system is dependent on the credibility of the agency that is collecting the self-assessed taxes and making sure that the self-assessments are correct. In the 60s the IRS was held up as a model government agency, a place you wanted to work. The credibility of the IRS has sunk to new lows due to the latest scandal to rock the Obama administration.
Today morale in the IRS is very low. Some of the reasons are that the IRS is under-staffed, under-funded and watching the revolving door as senior, experienced, people retire. The agency is grossly underfunded to handle its current workload, let alone the addition of the astounding amount of additional requirements imposed on it by Obamacare.
This hasn’t been a great week for the IRS — what with reports IRS functionaries targeted conservative groups that had applied for tax-exempt status with extra scrutiny. It’s a scandal the likes of which the IRS hasn’t seen in decades, and it has shed light on an agency that wasn’t in great shape to begin with.
To even pretend that there was nothing political about what happened at the IRS is, at best, disingenuous. Short of directly asking federal agencies to investigate these groups, the President and Vice President demonizing anyone who spoke against them by making comments, such as “All around this country there are groups with harmless-sounding names like Americans for Prosperity, who are running millions of dollars of ads against Democratic candidates . . . And they don’t have to say who exactly the Americans for Prosperity are”. Especially as top congressional Democrats were putting in their own versions of phone calls, sending letters to the IRS that accused it of having “failed to address” the “problem” of groups that were “improperly engaged” in campaigns. Because guess who controls that “independent” agency’s budget?
The IRS is easy to demonize, but it doesn’t exist in a vacuum. It got its heading from a president, and his party, who did in fact send it orders—openly, for the world to see. The way to limit Romney money was to intimidate donors from giving. Donate, and the president would at best tie you to Big Oil or Wall Street, at worst put your name in bold, and flag you as “less than reputable” to everyone who worked for him: the IRS, the SEC, the Justice Department. The president didn’t need a telephone; he had a megaphone.
In his Tuesday press grilling no question agitated White House Press Secretary Jay Carney more than the one that got to the heart of the matter: Given the president’s “animosity” toward Citizens United, might he have “appreciated or wanted the IRS to be looking and scrutinizing those . . .” Mr. Carney cut off the reporter with “That’s a preposterous assertion.” Ah, if only that were true. Why would the IRS look into the very groups that the President has spent years claiming were shady, undemocratic, even law breaking?