Income tax was first introduced in the United States during the Civil War. Ten years later, it was repealed and not re-introduced until 1894. The following year, the Supreme Court struck it down as unconstitutional. Today, The Internal Revenue Service (IRS) admits that the current tax code is so costly to enforce that it requires an ever-increasing, multi-billion-dollar budget.
According to the Government Accountability Office (GAO), the President’s Internal Revenue Service budget request for the fiscal year 2009 was $11.4 billion. The IRS website states that the budget request for fiscal year 2013 is $12.8 billion: An increase, therefore, of $1.4 billion in just four years. The IRS itself gives us the reason it requires such huge funding. In their Fiscal Year 2013 Budget Proposal Summary, it states “This request is designed to provide the resources necessary to administer and enforce the current tax code,” In the same summary, the IRS claims the following: ” A significant portion of the increase from FY 2012 represents the Administration’s request to restore lost revenue resulting from reductions in IRS funding made over the past two years.” However, a study of documentation from the Office of Management and Budget (OMB), the GAO and the IRS itself shows that its budget has increased every year.
The question is not whether the IRS should have such an enormous budget but, rather, why the federal tax code is so incredibly complex that it requires a budget of this size to enforce it. Even more disturbing is the recent revelation that some of this money has been spent on pursuing organizations that were singled out by the IRS on political grounds. The federal government – through the IRS – demands that individuals and corporations give an accurate and honest accounting of the money they earn. The IRS, like any other federal agency, does not earn any money; it lives off of the welfare of the taxpayer. As such, it should be required to give an accurate and honest accounting of how it spends every dollar of its budget. This principle should most certainly overrule any individual IRS employee’s claim to a 5th Amendment Right.
Lois Lerner, who heads the IRS unit responsible for overseeing tax-exempt organizations – the unit that has been exposed as singling out Conservative groups for “further review” – has informed the House oversight committee, via her attorney, that she refuses to testify, according to an Associated Press report. Citizens of the United States can go to jail for refusing to pay their taxes. In the spirit of egalitarianism so admired by President Obama, it would seem only just that Lerner, along with any other government official who refuses to answer reasonable questions about their conduct, should be dismissed and face criminal charges.
As for the tax code that requires billions of dollars to enforce; the fiscally responsible thing to do would be to replace it with a flat tax, or at least a fairer and simpler system. Millions of Americans pay little or no income tax, while the top earners account for the lion’s share of federal tax revenues. The “fair share” argument so often touted by President Obama seems hollow when one looks at the breakdown in income tax revenues. According to the National Taxpayers’ Union, which sites the Internal Revenue Service as a source for its figures, the top 10% of earners in the U.S. contributed 70.47% of total income tax revenue, for the year 2009.
It is inconceivable to argue that revenue would be lost by replacing the current tax code, when billions of dollars a year would be saved, merely by doing away with this code; the one that the Internal Revenue Service admits is costing the country a fortune to enforce.
Written by Graham J Noble