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par Ralph NADER
The Internal Revenue Service has been under loud scrutiny as of late by House Republicans regarding the agency’s role in targeting conservative-leaning political nonprofit groups applying for tax exempt status. Representative Darrell Issa (R-CA) has led the charge in these fiery hearings, earlier this week accusing Internal Revenue ServiceCommissioner John Koskinen of “game playing” by failing to produce key emails from a senior Internal Revenue Service official. Ranking minority Committee member Rep. Elijah Cummings (D-MD) provided a very different account of the entire episode, apologizing to Koskinen for having to “go through this hell”.
All of this political gamesmanship is, however, a distraction, from the real issue facing the Internal Revenue Service : funding. Many Americans dislike the Internal Revenue Service and will paint you a vivid picture of the tax man knocking down your door for a slice of your hard earnings. Those Americans might be surprised to learn that the current Internal Revenue Service annual enforcement budget has been cut to about $11.3 billion. As a comparison, that’s less than the $14 billion Apple Inc. used to buyback its own stock in one month this past February, a move that only serves to provide meager benefits to its shareholders. The Internal Revenue Service simply does not have the budget to do its lawful job effectively, which is to collect revenue for the U.S. government.
What does that mean for taxpayers ? According to an April article from The Associated Press : “This year, the Internal Revenue Service will have fewer agents auditing returns than at any time since at least the 1980s”. The Internal Revenue Service loses an estimated $300 billion a year due to tax evasion —a key contributor to deficits. A proposal by the Obama Administration claims that the Internal Revenue Service could bring in an additional $6 for every dollar it adds to the enforcement budget. Internal Revenue Service Commissioner John Koskinen, a highly regarded veteran public servant, said that he pushes this rather convincing point in Congress to little reception or reaction. “I say that and everybody shrugs and goes on about their business”, he told AP. “I have not figured out either philosophically or psychologically why nobody seems to care whether we collect the revenue or not”.
Congress certainly seem to care when it comes to heated party politics, however. The U.S. tax code has long been perforated by corporate lobbyists and corporate tax attorneys whose primary purpose is to circumvent its laws so that their profit-rich companies can avoid paying their fair share to Uncle Sam. In many states, it is a literal race-to-the-bottom for elected officials to offer corporations sweeter tax deals to keep jobs in-state, as illustrated by the Boeing controversy in Washington State earlier this year. Notably, besides getting a state tax holiday, Boeing paid zero in federal income tax on large U.S. based profits last year —along with many other major U.S. corporations such as GE and Verizon. Some of these Fortune 500 companies even get a rebate check ! (See “The Sorry State of Corporate Taxes” report from Citizens for Tax Justice.(1))