Today the boss forwarded a newsletter she got and said "Read the "Say What?" Article!" (As soon as she reminds me what the newsletter was, I'll cite that source ... I did *not* write the following, but I wanted to be sure to pass it on to my friends):
Say
What?? - Proposals for Government-Prepared Tax Returns
In November,
then President-Elect Obama named Austan Goolsbee as Staff Director and Chief
Economist of the President’s Economic Recovery Advisory Board and Member of the
Council of Economic Advisers. In 2002, he wrote “The
Turbo-Tax Revolution? Evaluating the Ability of Technology to Solve the Tax
Complexity Dilemma.” The paper argued that commercially available tax
software programs would do little to simplify tax filing for the majority of
taxpayers, and called for replacing 1040 EZ filings with “automatic return free
filing through the employer.” Goolsbee later
refined the proposal in a Brookings
Institution paper published in 2006, as “The Simple Return,” which “would
have the IRS take the information about income directly from the employers and
banks and, if the person’s tax status were simple enough, send that taxpayer a
return prefilled with the information.”
Goolsbee’s thinking is aligned with other policymakers who are pushing for government-prepared tax filing. This “thinking” is apparently also aligned with those who are purposely oblivious to the problems that the IRS has had in implementing current record-keeping and withholding requirements. Could we please have some ice cream with our pie in the sky?
The proposal, and variations on it, would obviously entail a significant, even historic, change in federal tax policy, with serious implications. Some thoughts immediately come to mind:
§ Having the IRS take over preparation of individual income tax returns would fundamentally alter the U.S. tax system.
§ Extending the proposal to cover all taxpayers would represent the largest change since the beginning of automatic withholding, shifting the system from voluntary compliance with taxpayers controlling their ability to claim legitimate credits and deductions to a confiscatory system with taxpayers appealing the government’s claims to their hard-earned money.
§ This
shift in the burden of claiming legitimate deductions and credits could
potentially subject all taxpayers to audit-like experiences just to claim
money that is rightfully theirs.
§ The IRS’ past history of abuses, including those that required enactment the Taxpayers’ Bill of Rights, raise questions about granting the agency such far-reaching powers.
§ Implementation of this system could lead to a stealth tax increase, if the system constrains the use of legitimate deductions and credits.
§ The IRS has a troubled track record in maintaining and modernizing the technology needed to administer the current system.
§ This concept has compiled a broad record of failure wherever it has been tried:
o England: Systemic and catastrophic breakdowns that include the failure to deliver tax credits.
o Canada: The government’s Netfile system crashed in 2008 and was offline for ten days preventing individuals from filing their taxes. The Canadian Parliament has expressed concern about single points of failure in a system that would be vulnerable to cybercrime.
o California: The state’s “Ready Return” system had 11,000 users, far short of its goal of 2 million users.
Can you just see the potential for governmental abuse, political power plays, and cybercrime???
The author says that no one would believe that any individual with any degree of actual knowledge about the current state of our tax system would take this proposal seriously ... but our elected officials often don't have any knowledge about what they vote on. Didn't they prove that with the recent spending "stimulus" plan? So they'll look to other countries that have done this as an excuse a good example of why we should try it. ...
And if the examples of England and Canada, who’ve tried this pre-filled returns thing and
had such problems ….. never mind, our gov’t wants to go to socialist medicine
with the apparent failures of England and Canada as a “good example”
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