IRS Running Point for Flat Tax


The latest roaches to scramble from the light of disclosure at the IRS comprise the host of employees who are delinquent on their own taxes but have been promoted, and given raises and bonuses. According to the Washington Post, more than 1,100 IRS employees who failed to pay their taxes received discretionary awards of more than $1 million in cash bonuses and more than 10,000 hours of extra paid vacation[1].

From weaponizing the agency through two election cycles, to the Byzantine incomprehensive complexity of our 4-million-word tax code, it’s obvious that nothing short of a clean-paper revamp of our tax policy will restore public trust in the way in which we finance our government. Put simply, our current tax system is irredeemable – nobody understands it; marvelously progressive on its face, it is undeniably regressive in practice; it demonstrably favors those who can afford the best lobbyists; voluntary compliance is largely limited to the degree that one can afford accountants and lawyers; and last but not least, all of this is administered by an incompetent and corrupt agency.

Objectively, the most reasonable solution is to establish a flat tax that could be filled out on an index card (what did you earn? Deduct the poverty line. Multiply by the tax rate. Done), and abolish 90% of the IRS down to those needed to run the computers that verify and calculate the three-line tax returns. Set the standard deduction at the poverty line, and eliminate all other credits and deductions. The function of the income tax should be to help fund government, not social engineering.

All of the agencies are running out of control – HHS clearly demonstrated its operatic incompetence in the ObamaCare rollout debacle; EPA is writing regulations aimed at strangling economic activity night and day; Education is trying to slip the thin edge of the government-takeover-of-school-curricula wedge under the door; Justice, while not gun-running into Mexico, is persecuting journalists; State is fatally ignoring ambassadorial pleas for security in lawless outposts (the fabled 3AM phone call came in and got the answering machine); the one exception, of course, is Defense, which is being budget-cut out of the ability to perform its core mission, let alone run off on any tangent. But the one government agency that touches us all, the IRS, must be reigned-in to have a prayer of restoring faith in government, and the only way I see to accomplish that in real-time is to simplify them out of a job.

This will never be done, however, because, unlike in the real world (where money is power), in Washington, the ability to allocate money is power – who I can take it from and who I can give it to. And our convoluted tax code is the prime benefactor to crony capitalists, overseen by their friends in Congress. These people will never clip their own wings.

[1] Gail Sullivan, IRS gave bonuses to employees who owed back taxes, in Washington Post, April 23 2015.