He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School. He is author of The Obamacare Disaster, from the Heartland Institute, and President Obama's Tax Piracy, and his latest book: America's Ticking Bankruptcy Bomb: How the Looming Debt Crisis Threatens the American Dream-and How We Can Turn the Tide Before It's Too Late.
Latest posts by Peter Ferrara (see all)
- Tax Reform Would Modernize How U.S. Taxes Global Business Income - June 24, 2017
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- A Principled Tax Reform Allows Expensing of all Business Costs - June 23, 2017
The IRS proved during the 2012 Obama reelection campaign that taxpayers could not trust them. Indeed, the IRS bent over backwards to help Obama’s reelection, even to the point of committing openly illegal acts.
It was the IRS that illegally knee capped Tea Party groups, discriminatorily holding on for years to the tax exempt applications from Tea Party related organizations, and other “right wing” groups that apparently would oppose Obama (such as pro-Israel, pro-family, pro-life and pro-taxpayer organizations).
This was content based discrimination, which the U.S. Supreme Court has repeatedly held unconstitutional as a violation of First Amendment Free Speech rights.
But Senator Elizabeth Warren (Socialist, Massachusetts) proposed a bill last year, while the IRS was still stonewalling TeaPartyGate, to let the IRS calculate tax liability for taxpayers, supposedly for “free.”
Except that Warren’s legislation is not going to be free considering all the extra tax liability the IRS is going to calculate that you owe.
Because you can be sure the IRS is never going to be as aggressive as private tax lawyers or competing tax preparation services would be in ferreting out the maximum deductions and tax shelters available to taxpayers.
Taxpayers today can even get private tax preparation services to help them with their tax filings for free with online apps.
Based on hard experience, taxpayers would be foolish to give that up. Yet that is the first thing Sen. Warren’s bill proposes to do. She proposes that taxpayers could get the IRS to calculate their tax liability for them, as long as the taxpayer discloses all their tax shelters and strategies up front.
That is why the bill is scored as providing an increase in revenues. Obviously, that means the IRS would not be providing a good deal for taxpayers, but taking their information in advance and using it to send them higher bills overall on net.
Some worry that Warren will sell this as non-controversial and try to sneak it into Trump’s tax reform effort. Transparently, this would create a conflict of interest for the IRS.
Indeed, Congress enacted a bipartisan “Tax Free File” program in 1998 requiring the IRS to implement a “return free” option for the 70% of taxpayers with relatively simple tax filings.
Yet, this option remains underdeveloped almost a decade after the legislation’s 2008 deadline. Today, only 3% of taxpayers use this “Tax Free File,’ supposedly return free choice.
The National Taxpayer Advocate Office at the IRS, which represents the interest of taxpayers, has repeatedly recommended abolishing this failed option.
But instead, the IRS has repeatedly signed binding Free File agreements with private tax preparation companies, pledging that the federal government will “not enter the tax preparation software and e-filing services marketplace.”
Because market-based solutions are better than government based solutions, private tax preparation services, fighting for survival in the competitive marketplace, are obviously going to give taxpayers a better deal than the IRS, supposedly serving taxpayers through an option that is already scored as increasing revenue overall.
Warren’s bill, however, just follows the socialist motto “if the government fails once, try try again.” After 20 years of failure, Senator Warren wants to try the same failure over again. Senator Cruz had a much better idea, “Abolish the IRS.”
[Originally Published at Investor’s Business Daily]