November, 2003

The Internal Revenue Service has a new broom, Commissioner Mark Everson, who's declaring war on low income tax cheaters.

C'mon, Mark, we don't need another war. The IRS has brought this upon itself and would love to blame the taxpayer, but it just won't wash.

Tax avoidance is as understandable as the nationwide abuse of the old 55mph limit--- based on bad law and bad law will be ignored by any citizen with a sense of justice. The Tax Code is bad law by virtue of the fact that it's a compendium of every fiddling, fussing, special interest concession Congress could dream up over the past eighty or so years. A book of arcane additions and subtractions. The IRS can't even give a straight answer anymore to its own requirements, so boggled is this document.

What stands out in the public mind is that corporations headquarter themselves offshore to avoid being taxed and the taxman lets them do it. What galls the public is that, if they're on a payroll, their taxes are not only inequitably administered, but deducted ahead of time without recourse. Businessmen deducting the cost of $80,000 SUV's while the payments on the old Chevvy are paid after tax, don't help. So-called "company meetings" in Barbados that are tax writeoffs, don't go down well with the average Joe who takes his family to Disneyworld with taxed income.

Call it what you will, if it looks like an inequity and it smells like an inequity, it probably is one.

Tax paying in America depends upon voluntary compliance, even though there are penalties for not complying. More and more American citizens feel like idiots if they don't take every available advantage and some that are unavailable. Americans, above all else, have a sense of personal justice. It's unjust to make somebody drive at 55mph on a lonely country road and it's unjust to make a work of fiction of the Tax Code.

According to the Associated Press, an IRS survey showed that the number of persons who believe it's okay to cheat "a little here and there" on their taxes, increased over the past four years from 8% to 12%. That figure worries Mark Everson, but it stuns me. Stuns me that it's so low. I'd have guessed 50%.

Every presidential candidate steps up to the plate on the issue of tax equity and rewriting the impossibly complicated tax code, until they're elected, when it mysteriously takes a back burner. An entirely new code needs to be written, by a non-political commission of economists and ordinary citizens and would probably take five years to accomplish. It's findings should be voted up or down without amendment by the House and Senate. No lawyers, bankers or tax consultants need apply. The commission would be locked away from lobbyists, with access to any sources they select to testify.

I'll digress a bit ton my own personal tax gripe, the break that homeowners get on their mortgage interest. In my mind, it keeps renters renting and stifles the homebuilding it was meant to support. If equity were applied, renters would be allowed to escrow a tax deduction on their rent, which could be used on a one-time basis for the down payment on home ownership. That would turn the rental trap into an entry to owning, supporting both the lower middle class as well as homebuilders.

Even so, it's gerrymandering and becomes its own instruction into the danger of special interest taxation. Taxation without representation, that old clarion call has never been more evident. Anyone who thinks we are represented without malice on these issues would no doubt also agree that Humvees and Chevvys are alike.

Get out of the Archives and read what Jim's writing today