A weaponized tax code

  • 15 April 2019
  • NormanL

Federal income taxes are due April 15 and, even for those who will not owe Uncle Sam this year, tax day still brings anxiety, doubt, and a little grumbling. But something else appears to be going on among taxpayers rather than the usual gripes about how their money gets used. Noncompliance with the tax code is on the rise:

In the latest IRS figures, voluntary tax compliance for 2008–10 is 81.7 percent of the revenue the federal government believes it’s entitled to collect. That’s down from 83.1 percent in 2006. The slide “does not support concluding that noncompliance has increased,” say the tax men. But that’s pretty much what they said when disappointing numbers prompted then–Sen. Max Baucus (D–Mont.) to call, in 2004, for 90 percent compliance by 2010—a deadline he later extended to 2017. That’s not the direction things moved.

There are likely any number of reasons for the rise in noncompliance (and we strongly suggested you do not try skimping on your own taxes). However, the way the tax system has been used -- especially as a political weapon -- gives us reason to wonder whether the whole system should be scrapped and replaced with something else entirely:

The tax agency itself has a long history of politicization in high-profile cases, including the recent targeting of Tea Party groups and President Richard Nixon’s harassment of political enemies through the “Special Services Staff.”

“It never occurred to me at the time that the IRS could be used as a political tool,” former Revenue Officer Richard M. Schickel wrote of tips about alleged tax evasion in his self-published 2015 memoir, IRS Whistleblower. “Every case in the IRS is coded as to the source of information. As you can imagine if you got a code that said the case was from the White House or Congress that got top priority.”

Adams, the tax historian, agreed. “The executive branch of the government has used the IRS to harass, punish, and even destroy businesses, prominent individuals, unpopular political organizations, senators, congressmen—just about anybody,” he wrote. “Even more threatening and dangerous to the nation is the abuse of power by the IRS itself against those people it doesn’t like.…Senators Edward Long and Joseph Montoya were both toppled from power when they sought to have the Senate hold hearings on IRS misdeeds.”

“To some employees, the taxpayer is the enemy,” Schickel said.

That is deeply troubling.

Governments need revenues to function. How much revenue and what functions are open to debate. But what cannot be debated is a tax system that lends itself to ends having nothing whatsoever to do with funding is destructive -- to liberty, and to government.

Were the IRS and the tax code not used as tools of political destruction, perhaps the voluntary compliance rate might be heading closer to 90 percent.